Five Families: The Rise, Decline, and Resurgence of America's Most Powerful Mafia Empires (8 page)

F
or millions of Americans, the 1930s was the paradigm of hard times, the decade of the Great Depression. Justifiably known as “the Dirty Thirties,” it was an era clouded by unprecedented economic impoverishment, bank failures, shuttered factories, violent strikes, abandoned farms, homeless wanderers, bread lines, and soup kitchens. At the nadir of crisis in 1931, about fifteen million people, almost 25 percent of the nation’s workforce, were unemployed.

The newly hatched Mafia families, however, had no financial worries. The decade was the onset of unparalleled prosperity and cooperation that would extend far into the century. At the 1931 Chicago conclave of top mobsters, Lucky Luciano, the Mafia’s visionary criminal genius, installed the organizational foundations that each of the score of existing borgatas used to construct networks of illicit enterprises.

Joe Bonanno, one of the bosses present at the creation of the modern American Mafia, was gratified by the long period of serenity that Luciano’s grand scheme inaugurated. “For nearly a thirty-year period after the Castellammarese War no internal squabbles marred the unity of our Family and no outside interference threatened the Family or me,” Bonanno marveled in his autobiography.

Luciano’s managerial revolution was intended to build bulwarks that would protect and insulate himself and the other bosses from implication in
the transgressions committed by their families. Thereby, each chieftain or godfather would reap the profits from his family’s criminal activities without risking indictment or imprisonment.

Ironically, while Luciano’s blueprint safeguarded most of his fellow bosses, he was the only New York mobster of his era to suffer a long prison sentence.

Prohibition had been the catalyst for transforming the neighborhood gangs of the 1920s into smoothly run regional and national criminal corporations. Men like Luciano, Bonanno, and Lucchese began as small-time hoodlums and graduated as underworld leviathans. Bootlegging gave them on-the-job executive training in a dangerous environment. It taught them how to plan and run the intricate machinery necessary for producing and supplying huge quantities of beer and whiskey. Still in their twenties and thirties, this new breed of mafiosi became expert in marshaling small armies of smugglers, truckers, cargo handlers, and gunmen. The young millionaire mobsters also became adept at laundering money to dodge tax-evasion problems, and learned how to bribe and manipulate political and police contacts to forestall law-enforcement headaches.

The Chicago meeting was a success. A power structure was in place. The nation’s Mafia leaders tacitly agreed to assemble every five years at a national crime forum—much like a political party convention or a religious synod—to fraternize and review mutual concerns.

Within the new Luciano and Bonanno families, their ranks had enlarged as a by-product of the Castellammarese War and the need for reinforcements in a costly campaign. While the Luciano plan and the Commission united all of the country’s borgatas in generally recognized rules and concepts, there were regional distinctions about membership. Joe Bonanno refused to subscribe to the idea of his borgata as a melting pot for all Italians. Only men of full Sicilian heritage, he insisted, could be faithful to Cosa Nostra culture and obligations.

None of the families would permit the utterance of the name
Mafia
to identify their organizations. The New York families adopted Cosa Nostra (the Mafia code name in Sicily), Chicago called itself “the Outfit,” Buffalo chose, “the Arm.” Others, especially in New England, preferred the neutral sounding “the Office.”

Eventually, among mafiosi the most popular mode for identifying a “made man” was the simple expression, “He’s connected.”

As the gangsters dispersed from Chicago, most of them realized that Prohibition—the lush money machine—was on its deathbed. A majority of the public
and most politicians wanted to rescind the law as unenforceable, unpopular, and a corruptive influence on law-enforcement agencies. The worsening Depression provided another anti-Prohibition argument for the new administration in 1933 of President Franklin D. Roosevelt; supporters of “Repeal” contended that it would revive the legitimate alcohol industry and generate thousands of new jobs.

In December 1933, the Twenty-first Amendment to the Constitution was adopted, repealing the Eighteenth Amendment that had outlawed the production and sale of alcoholic beverages. On the first night that the thirteen-year dry spell ended, in New York tens of thousands of revelers poured into Times Square in a spontaneous celebration. The huge throngs required the emergency mustering of almost the entire city police force of 20,000 officers for crowd control.

The five New York Mafia families were prepared for the cosmic change. Prohibition had enriched them so handsomely that they had sufficient startup money and muscle to bankroll new rackets and crimes or to simply take over existing ones from rival ethnic Irish and Jewish gangsters. As an example of the Mafia’s financial resources, movie producer Martin Gosch said that Luciano told him that his gross take from bootlegging alone in 1925 was at least $12 million, and that after expenses, mainly for a small army of truck drivers and guards and bribes to law-enforcement officials and agents, he cleared $4 million in profits.

Prohibition was barely in its grave before the New York Mafia was feasting from a smorgasbord of new and expanded traditional crimes: bookmaking, loan-sharking, prostitution, narcotics trafficking, robberies, cargo hijackings, and the numbers game. “Racket” became the popular term for these new Mafia endeavors. The use of “racket” as slang to describe an underworld activity can be traced back to eighteenth-century England. Its exact derivation is unclear, though it might be related to alternate definitions of racket: a clamor, a social excitement, dissipation, or gaiety. In the mid- and late nineteenth century, the term came into use as a raucous private party held by Irish-American gangs in New York. To subsidize their “rackets,” the gang members demanded or extorted contributions from merchants and individuals whose property and lives would otherwise be endangered.

“Racketeer” is a totally American invention, probably coined by a newspaper reporter to describe the innovative 1930s breed of mobsters.

One shake-down the post-Prohibition mafiosi borrowed from the defunct
Black Hand was setting up phony “security” companies to protect businesses from arsonists and vandals who might damage their properties. Merchants and restaurateurs who declined to sign up with these spurious watchguard services often found their windows smashed or their premises ravaged by suspicious fires.

Jewish gangsters in New York had invented the art of industrial racketeering in the Garment Center, which had a large percentage of Jewish workers and sweatshop proprietors. The Jewish thugs had been invited into the industry by both sides during fierce strikes in the 1920s. They worked as strikebreakers for manufacturers and were employed by some unions as gorillas to intimidate factory owners and scabs during organizational drives. When the confrontations ended, the gangsters who had worked illegally for both sides stayed on, gaining influence in the unions and in management associations. Their alliances with union leaders gave the Jewish racketeers the power to extract payoffs from owners by threatening work stoppages and unionization drives. Alternately, the unions paid them off by allowing Mob-owned companies to operate nonunion shops. Some mobsters muscled into companies as secret partners, getting payoffs from the principal owners in exchange for allowing them to operate nonunion shops or for guaranteeing sweetheart labor contracts if they were unionized.

Lucky Luciano, the only godfather with close ties to top Jewish gangsters during Prohibition, had little difficulty in absorbing Jewish Garment Center rackets into his own dominion. Jewish hoods became junior partners and vassals of Luciano in one of the city’s largest and most profitable industries. According to Joe Bonanno, who shunned mergers and deals with the Jewish underworld, Luciano in the mid-1950s was the dominant Mob figure in the garment industry. “Luciano had extensive interests in the clothing industry, especially in the Amalgamated Clothing Workers Union,” Bonanno wrote later. Charlie Lucky offered to place Bonanno’s men in important positions in the Amalgamated, which was the principal union involved in manufacturing men’s and boys’ clothing. Once empowered in the union, Bonanno, like Luciano, could control vital jobs, set union contractual terms, and share in kickbacks from the manufacturers.

Luciano’s offer was politely turned down because Bonanno did not want to be obligated to another family. The independent-minded Bonanno had another good reason to go it alone: he had his own connections to the other vital clothing industry union, the International Ladies Garment Workers Union.

Like the other New York bosses, Bonanno had numerous traditional criminal activities and new “front” enterprises to keep him busy and affluent. He had taken over a variety of legitimate businesses: three coat manufacturing companies, a trucking company, laundries, and cheese suppliers. There was also a Joe Bonanno funeral parlor in Brooklyn that was suspected of being used to secretly dispose of victims murdered by the family. The ingenious Bonanno was said to have used specially built two-tiered or double-decker coffins with a secret compartment under the recorded corpse that allowed two bodies to be buried simultaneously. Income from these fronts was a handy means for warding off tax audits and justifying his above-average lifestyle.

Bonanno’s underlying capitalist philosophy rested on a basic theory that guided him and other bosses: eliminate all competition. “One must remember that in the economic sphere one of the objectives of a Family was to set up monopolies as far as it was possible,” he explained in A
Man of Honor.

In addition to the garment industry, the five Mafia families used strong-arm tactics and their influence in unions to control and obtain kickbacks from stevedore companies on the Brooklyn waterfront, the Fulton Fish Market, the wholesale meat and produce markets in Manhattan and Brooklyn, construction and trucking companies, and hotels and restaurants.

The Sicilian-Italian gangs even forced out Jewish racketeers from their pioneering roles in the $50-million-a-year kosher chicken business. New York’s large Jewish population and its Orthodox dietary rules guaranteed a steady demand for the interrelated poultry industry. The Jewish hoods were content with simple, old-fashioned protection tactics. They engaged in small shake-downs of frightened and defenseless businessmen trying to keep their companies and their bodies intact. Inspired by Tommy “Three-Finger Brown” Lucchese, the Mafia had more grandiose plans. Lucchese’s gunmen pushed aside their Jewish counterparts and, in what would become a classic model for industrial racketeering, established a cartel among live-chicken suppliers, wholesalers, and slaughtering companies. Lucchese formed a supposed trade group, the New York Live Poultry Chamber of Commerce, and through a combination of subtle intimidation and promises of ample profits, forced most kosher-chicken businesses to join. Prices were fixed to put an end to normal competition and each company was assigned a share of the market. In return, the company paid a fee depending on gross sales to the Mafia-front poultry association. Lucchese and his helpmates, of course, took a hefty cut for establishing the cartel and preventing new companies from competing in New York. The companies that
kicked back part of their profits to Lucchese simply passed along the “crime tax” through higher prices to their customers.

Within the industries they controlled, from the garment center to the waterfront, the mafiosi profited further from illegal gambling and loan-sharking rings that fleeced wage earners.

No competition was allowed by the five families. Jewish and Irish gangsters, who had run their own powerful Prohibition-era gangs, offered little resistance to the Mafia’s drive for absolute control. Even Meyer Lansky, the most influential Jewish gangster of his time in the 1930s and ‘40s, needed the approval of his Mafia partners for most of his projects. Lansky accompanied Luciano to Mafia conventions but was never allowed to sit in on discussions.

Before the Mafia takeover, the undisputed Jewish criminal virtuoso of the 1920s was Arnold Rothstein. His omnibus activities included international bootlegging, labor racketeering, stock frauds, fencing stolen diamonds and bonds, narcotics trafficking, and gambling schemes.

Rothstein’s legendary coup was engineering “the Black Sox Scandal,” by fixing the 1919 baseball World Series in which the heavily favored Chicago White Sox were defeated by the Cincinnati Reds. Known along Broadway as “the Brain” and “the Big Bankroll,” Rothstein was an unthreatening-looking figure, soft-spoken, and a spiffy dresser. His authority was enforced by an entourage of brutal henchman, and he tutored a crop of future Jewish and Italian underworld stars, including Lansky and Luciano. The charismatic Rothstein is believed to have been the inspiration for F. Scott Fitzgerald’s gangster Meyer Wolfsheim in
The Great Gatsby.

Whatever obstacles Rothstein might have created to the Mafia’s takeover of New York rackets were eliminated before Prohibition ended. On the night of November 4, 1928, he was found staggering on a sidewalk in Midtown Manhattan, shot in the stomach. Rothstein survived two days but, true to his own code
of omertà
, refused to identify the shooter or the motive. “I’m not talking to you,” a detective quoted him as saying from his hospital deathbed. “You stick to your trade. I’ll stick to mine.” He was dead at age forty-six.

George Wolf, a Jewish lawyer in New York who represented Cosa Nostra and Jewish gangsters in the 1930s and ‘40s, had a close-up view of the new ethnic underworld relationships. “The two groups have always worked in surprisingly good harmony,” Wolf commented. “The Italians respecting the Jews for their financial brains, and the Jews preferring to stay quietly behind the scenes and let the Italians use the muscle needed.”

Mafia strength stemmed partly from the ultimate organized-crime weapon—murder. At the 1931 Chicago meeting, the bosses figuratively set in concrete the rule that only mafiosi could kill mafiosi. And while they could kill outsiders, other criminals would face death for even threatening a made man.