The Mob and the City (5 page)

Big business could counter the gangsters by pulling strings and hiring its own thugs. When the labor racketeer Max “The Butcher” Block was organizing for the Amalgamated Meat Cutters Union, he found that “it was big businessmen…who tried to get tough guys.” He complained that “cops gave us trouble because they were being paid off by the bosses.” So Block always started with the small, independent butcher shops. “The industries now have chain operations, and they're spread out all over,” Block later lamented.
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Nor was it just a matter of muscle. In the $60 million racketeer-plagued kosher chicken market, the A. L. A. Schechter Poultry Corporation was the single biggest company and, not coincidentally, the last holdout from the price-fixing cartel. With $1 million in annual revenues, the Schechter brothers
could endure harassment, as when emery powder was poured into their trucks’ engines. When the industry was legally cartelized under the National Industrial Recovery Act during the New Deal and the Schechters were prosecuted for such new crimes as cutting prices, their lawyers could litigate the law's constitutionality all the way up to the Supreme Court, where they won a 9–0 decision striking down the law in 1935.
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It is no accident that the Detroit Mafia never gained control over the Big Three auto plants. On the one side stood Walter Reuther, president of the United Autoworkers of America, a strong union with a well-deserved reputation for integrity. On the other side stood three of the most powerful corporations in the world.
Mafiosi
had little desire to confront either of them. To the contrary, it was Harry Bennett, the head of Ford Motor Company's Internal Security Department, who retained convicts to act as union busters on occasion.
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CONSPIRING AGAINST “RUINOUS COMPETITION”

Along with the stick of violence, the Mafia held out the carrot of restricting competition. Joe Bonanno was candid about his aim of limiting competition: “If two Family members are bakers, they are not allowed to own bakeries on the same block, for that would be bad for both their businesses. They would be competing against each other,” he explained.
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Bonanno's views fit comfortably with the prevailing sentiments of the business community at the time. From World War I through the New Deal, business leaders orchestrated a campaign to reduce competition throughout the economy. They often singled out the “ruinous competition” or “cut-throat business” in New York City. Businesses commonly used “trade associations” as fronts for efforts to restrict competition.
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Joining the chorus of the captains of industry were their counterparts in the labor unions. Though adversaries on other issues, business and labor agreed on the need to “stabilize” industries by artificially limiting competition. The International Ladies’ Garment Workers’ Union (ILGWU) declared that “only the strong and responsible associations of employers can be of assistance in stabilizing the industry.” The ILGWU decried the “situation that permits an easy
entry into the business, and makes for the chaotic competition that has been the source of so many evils.”
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The Cosa Nostra engineered collusive agreements between trade associations and labor unions to limit competition. Bonanno boasted of his “connections” in the garment merchants association
and
the International Ladies’ Garment Workers’ Union
and
the trucking companies. “By putting all my connections in touch with one another, I could harmonize our activities in a mutually advantageous way,” Bonanno asserted.
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What Bonanno left out from his rosy account (and the collusive arrangement) are the would-be competitors shut out of the industry and the consumers who would have benefitted from lower prices. Nor does Bonanno mention the rank-and-file workers whose interests were often sold out by corrupt union leaders.

Trade associations with respectable names like the Brooklyn Fish Dealers Association, the Metropolitan New York Dry Wall Contractors Association, and the Boxing Managers Guild sprung up around the city. These were each fronts for organized crime.

RACKETLAND

By the time Sicilian “men of honor” arrived in New York City, there already existed an entire underworld of professional criminals. Gotham had long had a subculture of
gonifs
, confidence men, and extortion artists. Supporting them were professional fences for stolen goods, and the new specialty of criminal defense lawyers of varying degrees of ethics (more later on these “mouthpieces for the mob”). A popular booklet dubbed it all “racketland.” But the members of this criminal fraternity proudly called themselves “Good Fellows,” which
mafiosi
shortened to “goodfellas.”
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Indeed, many of the rackets that we now associate with the Cosa Nostra were actually variations of schemes used by earlier criminals.

The Cosa Nostra “bust-out” operation had its origins in arson scams of the early 1900s. Torching businesses to collect insurance was so prevalent on the Lower East Side that the press dubbed it “Jewish lightning.” In 1912, the New York City Fire Commissioner issued a report titled
Incendiarism in Greater New York
, which estimated that fully 25 percent of fires were due to arson. It called the area of East Harlem the “fire-bug” district where “more fires of a suspicious origin occur than [
sic
] in any other single territory in Manhattan.”
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The Mafia “protection racket” was a refined version of extortion ploys. In early Italian neighborhoods, “Black Handers” mailed letters to businessmen threatening harm unless they paid money. On the Lower East Side, merchants found their horses poisoned unless they paid tribute to Jewish gangsters.
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Extortion artists became subtle over time. “The fellow would go in there and simply remove his hat. It was understood that if the businessman didn't hand it over, they would retaliate,” said Peter Rofrano of East Harlem.
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Before
mafiosi
perfected them, “price-fixing territories” were organized by other groups. At the turn of the century, Chinatown tongs (quasi-fraternal organizations) helped to enforce a scheme to raise prices among Chinese laundries. When dissident laundrymen tried to cut their prices or encroach on the territories of other Chinese laundries, Chinese businessmen and their allies in the tongs sent agents to “persuade” the dissidents to honor the unwritten code of competition.
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THE POLICE DEPARTMENT

Crime syndicates flourished because the New York City Police Department (NYPD) as a whole did little to stop them. It was often difficult to separate the cops from the crooks.

The NYPD's large, decentralized patrol force became a font of corruption in the city. With sixteen thousand patrolmen by 1930, the NYPD was described as a “vast and complicated machine maintained in the City of New York.” Before computerized oversight tools like CompStat, supervision over this sprawling force was weak, and the opportunities for graft were vast. The police had authority to enforce any of the array of state and municipal regulations. Any cop on the beat could shut down a business for supposed regulatory violations, large or small, real or contrived.
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Patrolmen shook down small businesses for petty infractions. In 1894, the Lexow Committee investigation on corruption found that “men of business were
harassed and annoyed in their affairs, so that they too, were compelled to bend their necks to the police yoke, in order that they might share that so-called protection which seemed indispensable to the profitable conduct of their affairs.” The Committee described the myriad ways small businesses were extorted:

Boot-blacks, push-cart and fruit venders, as well as keepers of soda water stands, corner grocerymen, sailmakers with flag-poles extending a few feet beyond the place which they occupy, boxmakers, provision dealers, wholesale drygoods merchants and builders, who are compelled at times to use the sidewalk and street, steamboat and steamship companies, who require police service on their docks, those who give public exhibition, and in fact all persons, and all classes of persons whose business is subject to the observation of the police, or who may be reported as violating ordinances, or who may require the aid of the police, all have to contribute in substantial sums to the vast amounts which flow into the station-houses.
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Seventy years later, the Knapp Commission (made famous by Frank Serpico) identified similar patterns. “The heart of the problem of police corruption in the construction industry is the dizzying array of laws, ordinances, and regulations governing construction in the City.”
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GANGSTER DOMINION OVER PUBLIC PLACES

The Mafia also learned how to game New York's sprawling, opaque, and unaccountable bureaucracy. By World War I, the city had 85,000 municipal employees; the number ballooned to 200,000 by the 1950s. Efforts by good-government progressives (derided as “goo goos”) to reform city agencies were frequently thwarted or backfired. In 1919, reformers lamented that “the effort to protect employes [
sic
] from removal for political reasons has resulted in giving them so much security of tenure that they have little or no motive to fear losing their jobs.”
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A later study found that “neither the city's civil servants nor Mayor…possessed much influence over the city's personnel system. In a sense, nobody did.”
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Perhaps the biggest failure of the city agencies toward organized crime was
losing control over public property. On a congested island, taking dominion over public spaces was a means of power in itself. Time after time, the city lost control of public properties to gangsters. In 1922, a legislative committee lambasted the Department of Docks for issuing berthing permits to companies that did not own any ships. Shippers had to make extortionate payments to shady companies just to berth on the docks. Issuance of permits to sell on city streets and marketplaces was a source of abuse, too. “It has been the apparently arbitrary power, which they give to the Commissioner to revoke permits and to approve transfers, which has facilitated the collection of graft and the attempts to do so,” concluded a committee on the wholesale food markets. Between 1930 and 1933, not a
single
person who applied for a newsstand license in the legal manner ever received one.
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NEW YORK'S FRAGILE INDUSTRIES IN SERVICES

All of these factors conspired to create fragile industries throughout New York City. Fragile industries can be defined as sectors of small businesses with characteristics that make them vulnerable to extortion and racketeering.
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Gotham had a wide spectrum of fragile industries that were preyed upon by gangsters. Small, local-service businesses were frequently targeted.

The most fragile was the pushcart peddler, who everyday fought for a spot on the street. An 1875 report warned that peddler overcrowding was “a great source of political corruption.” Pushcart owners paid graft to police to overlook regulatory violations and paid tribute to thugs to leave them alone.
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Mafioso
Joe Valachi remembered the extortion of his own father by neighborhood thugs: “They would shake down the push cart peddlers…my father used to pay a dollar a week.”
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Manhattan's many small bars and restaurants were sitting targets for extortionists. Racketeers would toss “stink bombs” into lunchtime crowds to drive off customers and bring resistant owners into line. In the mid-1930s, the mobster Dutch Schultz and union leaders forced restaurants into the Metropolitan Restaurant and Cafeteria Owners Association; the owners paid $1,500 in “associational dues” to protect themselves against sham strikes.
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Mafiosi
also liked to acquire hidden interests in restaurants through coercive partnerships. While Tommy Morton was the owner of record of a restaurant called The Azores, his silent partner was mob boss Thomas Lucchese. “[Tommy] must have fronted for lots of wiseguys. But he also had to pay back a certain amount every week to his partners,” explained Henry Hill, a Lucchese associate. “That's the way it is with a wiseguy partner. He gets his money, no matter what. You got no business? Fuck you, pay me.”
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The taxicabs that drove the restaurant goers back to their apartments or hotels were easy targets for gangsters as well. Roughly 5,600 cabs in New York belonged to single-cab companies, where the owner was typically the driver himself. “Mobsters try to bully you and order you around,” complained a cabbie during the 1940s.
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Mafioso
Frankie Carbo actually killed a taxi driver.
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Racketeers were so pervasive that even the International Brotherhood of Teamsters refused to issue union charters to taxis. The Teamsters’ top official in New York warned that the industry was full of “all sorts of gorillas.”
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NEW YORK'S FRAGILE INDUSTRIES IN FOOD

Many of the foods supplied to those restaurants, and to the dinner tables of New Yorkers, were subject to illegal cartels. Nearly all their food was grown elsewhere, shipped by freight trains, and trucked through the narrow streets of the city. In 1913, a report cautioned that New York's food-distribution facilities were misplaced and outdated, but “the downtown terminals have developed into well recognized markets.”
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