The Outfit (16 page)

In 1960, the Immigration and Naturalization Service (INS) was considering deporting Factor back to England to face the massive mail-fraud charges brought against him decades earlier. Also in 1960, Jake Factor contributed $22,000 to the presidential campaign of Joseph Kennedy’s son Jack, becoming JFK’s single largest campaign contributor. In 1962, the INS moved to deport Factor, but was thwarted when Attorney General Bobby Kennedy brought Factor to Washington to speak with him and review the INS case. Factor later told the press that Bobby Kennedy slyly brought up that he needed donations to help secure the release of 1,113 Cuban Brigade soldiers captured by Castro’s forces after the disastrous April 1961 Bay of Pigs invasion. Reports had been circulating for months that Bobby Kennedy was placing threatening calls to business leaders with tax or other pending legal matters, practically extorting the funds from them. In conversations monitored by the FBI, the Outfit was clearly impressed by Kennedy’s mastering of the “velvet hammer” extortion approach. On one occasion, the agents reported that Giancana aide Chuckie English “pointed out that the attorney general raising money for the Cuba invaders makes Chicago’s Syndicate look like amateurs.” After a number of meetings with the Barber in December 1962, Bobby Kennedy recommended to his brother that Factor be pardoned. Factor told reporters that he had contributed $25,000 to Kennedy’s “Tractors for Cuba” fund.
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President Kennedy granted Jake’s parole on Christmas Eve, 1962, the same night the prisoners landed in Miami, and just one week after the INS had announced its decision to deport Factor.

But soon after, the inexperienced attorney general began to have misgivings about what he had done. Jack Clarke, who worked in the investigative police unit of Chicago’s Mayor Daley, recently recalled what happened next. “Bobby Kennedy called me and asked if there would be any problem if Jake Factor were pardoned. When I explained the details of Factor’s Outfit background - Capone, Humphreys, the Sands, et cetera Bobby went, ’Holy shit!’ He then explained that he had already approved the pardon.” Clarke adds that Bobby’s dealings with the Factor case were not atypical. “RFK didn’t know what he was doing in the Justice Department. He had no idea of the subtleties, the histories of these people.”

It is impossible to know if Bobby Kennedy grasped the historic and complex relationship between the upperworld barons, such as his own father, and the hoods with whom the barons consorted. If he did, he may have thought twice before launching his full-scale assault on the underworld.

Eventually settling in Los Angeles, the much traveled Factor took particular interest in the welfare of underprivileged black youth in the Los Angeles district known as Watts. In the 1960s, after bestowing a million-dollar endowment (allegedly through the Joseph P. Kennedy Foundation) on a Watts youth center, a
Los Angeles Times
reporter brought up his ties with the Outfit. Factor broke into tears, asking, “How much does a man have to do to bury his past?” The reporter could easily have countered, “Perhaps an apology to Roger Touhy’s family, for starters.”

Factor died of natural causes in 1984 in Beverly Hills. His
Los Angeles Times
obituary headline read JOHN FACTOR, NOTED PHILANTHROPIST, DIES AFTER LONG ILLNESS.

On June 27, 1933, “the Man” finally caught up with Curly Humphreys and his labor racketeering. Apparently the Milk Wagon Drivers’ Union business manager, Steve Sumner, was not intimidated by the Humphreys muscle. Although Sumner could not prove who actually snagged his partner, Doc Fitchie, he was certain who collected the $50,000 ransom: Curly Humphreys. Without a witness to the actual kidnapping, the court found itself in a quandary and was forced to indict Humphreys on the only charge that seemed to stick in 1930s Chicago: federal tax charges. Thus Humphreys earned the distinction of becoming the only man known to have been charged with not paying taxes on a ransom he received for a kidnapping of which he was never accused.

Instead of answering the charge, Humphreys took the opportunity to pursue one of his favorite hobbies: traveling. After hiring a manager to look after his affairs at the “Century of Progress,” Curly fled the Windy City, “lamming it,” as he put it, for sixteen months. This period gave the first hints of trouble in the Humphreys’ marriage. According to conversations overheard by FBI bugs planted years later, Humphreys spoke of how he was accompanied by “a little blonde I used to have” on his escape. Among other locales visited by Curly and his mistress was Mexico, where Humphreys pursued his passions for fishing, reading, and photography. In future years, Curly expanded into documentary filmmaking.
⁵
The Chicago Crime Commission quickly named Curly its new Public Enemy Number One. In its previous list of twenty-eight hoods, the Commission had failed to even name Humphreys, who now leapfrogged the competition to gain the top spot.

Returning to Chicago some fifteen months later, Humphreys pled guilty to the tax charge, adding that he alone was responsible for the financial misunderstanding. His performance as a “stand-up guy” succeeded in securing the release of others who had participated in the scheme. Curly paid his taxes (with interest and penalties) and calmly headed off to Leavenworth Federal Prison on October 31, 1934. Some knowledgeable observers perceived Humphreys’ acquiescence as reminiscent of Capone’s tactical vacation spent in the Philadelphia lockup. That conclusion was bolstered by the grand schemes to be undertaken by Humphreys upon his release from prison fifteen months later. On his departure for jail, Humphreys informed the press: “While I’m down there, I intend to study English and maybe a little geometry.” For Curly, the term
college
was not a just a cute euphemism.

The Big House was not such a cavalier subject, however, for the gang’s original architect, Al Capone. Initially placed in the overcrowded Atlanta federal penitentiary, Al displayed gallows humor mixed with some sense of optimism. “Uncle Sam got me busted on a bookkeeping rap,” Al told a fellow prisoner. “Ain’t that the best!” He added hopefully, “If I could just go for a walk. If I could just look at buildings again and smell that Lake Michigan, I’d give a million.” Any optimism Capone might have harbored was quickly tempered by the awful truth of his current situation. Soon after arriving in Atlanta, the Big Guy received a triple whammy: he was diagnosed with central-nervous-system syphilis, gonorrhea, and a perforated septum due to chronic cocaine abuse. He was only thirty-three years old.

As Al’s health went downhill, so did his temperament. He became prone to mood swings and long-winded boasting about his accomplishments. He was constantly harassed by some of the nation’s most violent miscreants, who were more than a little jealous of Capone’s previous life. “Where’re the broads and booze now, fat boy?” they taunted. The Big Guy was resented by low-life inmates, who dismissed his soup kitchen endeavors, instead perceiving him as an ostentatious rich bloat. He was practically a white-collar criminal locked up with child rapists. For the most part, the threats led to nothing and evaporated. Capone spent his days in the shoe repair shop and settled in as best he could. Just as Capone seemed to be coming to terms with his plight, his world was rocked by news that presaged Capone’s total descent into hell. In the fall of 1934, Capone was informed that he was being transferred to the penal system’s newly completed monument to sadism: The Rock, aka Alcatraz. This bleak institution, situated on a small island in San Francisco Bay, was already being whispered about in the mess halls of America’s prisons.

Although inmates are prone to exaggeration, there was no way they could inflate the truth of this torture chamber. One prisoner transferred to Alcatraz said, “The buildup makes Alcatraz pretty bad, but the reality is worse.” The prison sat above an abandoned military garrison on a 120foot promontory. Prisoners were housed in single-occupancy, five-by-nine- foot cells, not allowed to communicate with one another, or the guards for that matter. With the exception of cafeteria time, the prisoners were kept in silent confinement. Men were routinely driven over the edge by the boredom alone. Rule infractions landed a prisoner in D Block, or solitary confinement, in which the cells were completely devoid of light, and the prisoners received only bread and water through a slit in the door. This sadistic chamber broke down some men in six minutes, others in a couple days, yet some were kept in for as long as six months, exiting into the light of day clinically insane. One unhinged inmate, assigned to chopping wood on the dock, suddenly began chopping the fingers off his left hand. After removing them all, he begged a guard to amputate his chopping hand.

When Capone got the news of his transfer, he was fully aware of what it meant, as were his prison tormentors. “You’re going to the Rock, Al, have a nice long ride to Alcatraz,” someone teased. Capone exploded in all directions. His cellmate, Red Rudensky, later wrote about the event: “All the fire and hate and strength and torment erupt[ed] suddenly.” Capone let loose a profanity-laced tirade at the guards, attacking them with all his might. “You’ll never take me out of here!” he shouted before flinging himself at a guard, who signaled for help. When it arrived, the Big Guy was thrown into a wall, slumping to the floor unconscious.

Capone had good reason to be frantic over the news. His tenure on the Rock, coupled with his insidious illness, was nothing short of a prolonged nightmare. Initially, Capone’s work assignment was on the bucket brigade, mopping the bathhouse floor, where he earned the nickname The Wop with the Mop. After a year of begging, Capone persuaded the warden to allow him twenty minutes a day to form a band with other prisoners. Al
had
his family send him top of
the
line banjos, mandolins, and music charts and he succeeded in teaching himself some rudimentary songs. On drums was “Machine Gun” Kelly, while sax chores were handled by kidnapper Harmon Whaley. The ensemble was disbanded after a violent row erupted during a rehearsal.

After the disbanding, things went quickly downhill for Capone. As in Atlanta, there were factions who hated Capone simply because he was Capone. He was a racketeer businessman imprisoned with two-bit thugs. One Alcatraz clique known as the Texas Cowboys made it their mission to kill the Big Guy. After one of the gang stabbed Capone repeatedly with a scissors from the barber shop, Capone was rushed to the hospital. The offender was given an incredible six months in solitary. Meanwhile Capone’s sexual paresis had spread to his brain, and he became increasingly delusional and disoriented. Physically, he lost his impressive girth, his hairline, and his Italian-olive complexion. After one frightening bout of delirium in 1938, Capone was placed in a mental ward, but it was clearly too late. When Capone got into a disgusting feces-throwing battle with a patient in an adjacent cage, officials knew it was only a matter of time before he would be remanded to his wife’s custody.

In 1935, with Curly, as well as Jake Guzik, now imprisoned, Frank Nitti, Paul Ricca, and Joe Accardo were left to oversee the Outfit’s business. Although Nitti had seniority, it was Ricca, as liaison to the Commission, and Accardo who took charge behind the scenes. Ricca seized the moment and nourished private relationships with Meyer Lansky and Lucky Luciano. Although Nitti was allowed to sit on his leather throne at the Bismark Hotel, the Ricca-Accardo-Humphreys triumvirate created a power fusion that far exceeded Nitti’s own designs. While Ricca’s work was mostly ambassadorial, Accardo’s talents, which differed from Humphreys’, drew him to a racket much more suited to his tough-guy exterior: gambling.

1
. The Chicago Crime Commission’s director, Virgil Peterson, described the Fair: “[It] epitomized a new age - an age of steel, electricity, chromium, aluminum, and modernistic architecture. Most of the buildings were completely without windows. Day and night they were illuminated by electricity. At night, colored illumination added to the beauty of the exteriors of the futuristic buildings. The Travel and Transportation Building was a block and a half long. Inside were locomotives, multiple-motored transport planes, and a cross section of an ocean liner.”

2
. Max Factor single-handedly reinvented Hollywood’s look with his development of Pan-Cake makeup. Prior to this, stars were painted with vaudeville-style greasepaint. Factor was also the originator of the pouty-lip look and is widely considered the father of the cosmetics industry. When his products went commercial, they dominated stores for decades. Factor, who was immortalized in the Johnny Mercer song “Hooray for Hollywood,” died in 1938.

3
. Joe Accardo saw to it, however, that Teamster truckers would refuse to ship the book, and that Chicago bookstores were frightened off from carrying the memoir.

4
. It was reported that Factor’s payoff to RFK was an Outfit practical joke: The money came from the skim the gang was taking from Las Vegas casinos, about which more will be seen.

5
. Humphreys shot one such epic on location at Alcatraz, sarcastically dubbing the sound track with the popular song “Hail, Hail, the Gang’s All Here.” (His heirs still proudly display examples of Curly’s photographic prowess, including 8mm footage from Hawaii, Europe, Africa, Havana, and Asia.)

4.

Joe’s Racket: Running the
Games (The New Booze)

B
ootlegging was always seen by the gangsters as a temporary cash cow. When the Eighteenth Amendment’s repeal became imminent, the Outfit kept a watchful eye for new sources of treasure, such as the union invasions that were scripted by Curly Humphreys. Or perhaps the new windfall would come from the groundwork being laid by Johnny Rosselli in the embryonic Hollywood “dream factory.” But while Curly and Johnny concocted grand schemes, looking for the “new booze” as Curly called it, someone had to tend to the relatively mundane task of keeping the ship of crime afloat. The job required a decisive executive who understood the importance of instilling fear in rivals, but who nonetheless appreciated that violence had to be kept to an absolute minimum. Much as the smooth-talking Humphreys was the only choice for the role of union mastermind, streetwise Joe Accardo topped the short list of Outfitters equipped to oversee the universal staple of gang rackets: gambling.

Joe’s World

At the time Joe Accardo took control of the Outfit’s “games,” Chicago gambling was a multiheaded hydra that included card and dice games, slot machines, and sports betting, especially on horse racing. (See the Appendix for a detailed history of gambling in Chicago.) In a few years, Accardo would expand his gambling empire to include the forerunner of the now legal lottery, “numbers,” also known as policy, and the jukebox racket. The Outfit made certain each game was rigged in its favor; the gamblers knew it but played on regardless. Although they assumed many forms, the Outfit’s gambling endeavors were not as closely scrutinized as their union machinations. By the time Accardo took the reins, there was little need for early-morning bombings that were guaranteed to invite newsprint.

Thus details are scarce regarding Joe’s day-to-day exploits during this period. However, much is known about the gambling world he lorded over. Joe’s responsibilities consisted of having his crew police the poolrooms, barrooms, and secret gambling parlors, keeping the proprietors in line, making sure they paid a cut to the Outfit. A compulsive gambler himself, Joe was known to attend many of the floating games, where surprisingly he often lost. Joe also became a devout billiards enthusiast, albeit with mixed results. On one occasion, Accardo was hustled by a pool shark who had rigged a table to be slightly off-kilter. After adjusting his own stroke accordingly, he challenged the Outfit boss, who accepted and was soundly beaten. When the subversion was detected, one of the Outfit’s enforcers offered to whack the foolish pool shark. “Nah. Leave him alone,” decreed Accardo. “He cheated me fair and square.” Although there existed numerous permutations of the games, the key variations were as follows:

1. Card Games

Throughout much of the history of card gambling, the games of choice fell into two categories: percentage games, such as poker, where the players challenge one another equally, with the house keeping a fixed percentage of every winning pot; or banking games, such as blackjack, faro, and baccarat, where the player is pitted against the house directly. Both percentage and banking games can be further subdivided into contests largely determined by chance, or those by skill.

By far the most popular card game for both the professional gambler and the house is the game of chance known as blackjack, the object of which is to draw cards whose face value is as close to twenty-one as possible without exceeding it. The gambler likes it because the action is fast, with a lucky streak bringing in a few minutes what it might take a poker player all night to amass. The house prefers blackjack because it allows a multitude of ways to gain a cheater’s advantage: Cards can be marked in numerous ways; shills can drive up the stakes against the “mark” (victim); the dealer would be hired by the gang for his skills of prestidigitation, which permitted him to to palm or insert cards into the deal at will; a well-positioned mirror kept the dealer informed of what the mark was holding. The mathematics of the game, even without cheating, affords the house an average 10 percent advantage over the player. In other words, the house will always win in the end.

An example of a skill game is poker, wherein the players make continuous mathematical calculations attempting to improve their hands and discern the hands held by their adversaries. Unlike many card games that can be played purely for social enjoyment, poker is virtually nonexistent outside the realm of gambling. Poker is the most intense card game, with gamesmanship (”poker faces” and “bluffs”) a key component of success. Due to its antisocial, adversarial nature, poker attracts rugged individualists, willing to do anything to defeat their opponents, including waiting them out: The poker champion must possess great patience, given that a marathon game can last for days. All the above factors add up to make poker the passionate interest of a relatively small minority. (Studies conducted in Las Vegas casinos showed that poker accounted for only 1.7 percent of total gambling revenues.)

2. Dice Games and Roulette

Dominating the many variations of dice games is craps, in which two dice are thrown in hopes of rolling a 7 or 11. The house wins on rolls of 2, 3, or 12, with the remaining numbers being rollovers, or “points.”
¹
When played honestly, the lightning-fast craps game can be among the fairest, with the house holding only a 5 percent advantage. The trouble was that the Outfit, and other hoods, rarely played it straight. Craps is among the easiest games to manipulate, or “gimmick”: Dice can be “loaded” (weighted), with the fixed die inserted into the game by a shill adept at palming; tables and dice can be manufactured with magnets installed to force the winning house numbers 2, 3, or 12.

Roulette is another game of chance favored by some weekend gamblers. With thirty-eight slots on a spinning wheel ready to catch one ball, the game has two slots (0 and 00) reserved for the house, thus giving the player 36-1 odds of winning on a single-number bet. But the house pays out only 34-1, giving it a guaranteed profit. In addition, like craps, roulette is easily gimmicked with magnetic circuits or mechanical pins that pop up to block a slot while the wheel is spinning. Although estimates vary, it is safe to say that illegal profits from dice and roulette games netted crime gangs in the hundreds of millions per year nationally.

3. Coin-Operated Devices

Conveniently for the Outfit, slot machines (also known as one-armed bandits) and pinball machines were mass-produced in the Chicago environs, arguably the capital of those games. The slot machine was invented in California by Charles Fey at the turn of the century with the introduction of the Liberty Bell device. It was improved in 1906 by Stephen Mills of Chicago. From that time on, all ten slot-machine manufacturers set up shop in the Windy City, where by 1931 they fell under the control of the Outfit. Not merely content to control the devices’ distribution, the Outfit created more revenue by manufacturing the machines. For this enterprise, they employed the services of former boxer and Outfit wheelman Joey Aiuppa. Aiuppa set up shop in Cicero, where he ran Taylor and Company, ostensibly a furniture manufacturing shop. In reality, the only furniture they produced were slot machines. When Taylor’s bookwork was later confiscated, it was determined that the Outfit was pulling down an extra $300,000 per year from selling their one-armed “furniture.”

The slot machine was a brilliant distillation of all the requisite gambling elements into a cheap mechanical beast: it took the money in, set the game in motion, and made the payouts. The typical arrangement had the Outfit splitting the profits fifty-fifty with the bar hosting the device. Added to its allure was that an initial investment of $100 for the purchase of the machine was typically paid off in its first ten days of operation. A Senate investigation estimated that a gangster who placed two hundred slot machines realized at least $5,000 per week after splitting the take with the storefront owner. The slot was attractive not only to the hoods, but also to the gambling masses, since it allowed Depression-era players, who could ill afford the high stakes of horse racing, to take their chances one nickel at a time.

The fundamentals of the slots are elegantly simple: When a coin is inserted and a lever pulled, three cylinders of twenty characters each (displaying pictures of bars, bells, cherries, lemons, oranges, and plums) begin spinning. When the reels stop, a player wins if all three cylinders show matching icons. Although the player has a reasonable chance to win, the payout odds change constantly, from a 1-1 prize to the exceedingly rare jackpot. Of course the machine’s criminal owners make certain the payout is dwarfed by the amount wagered. The machine is also preadjusted so that its profits are guaranteed: typically from 25 to 50 percent of all moneys inserted. Even so, the one-armed bandits, like craps, were a huge success with both the player and the Outfit, which grossed untold millions of tax-free dollars.

Crime gangs like the Outfit subverted the antigambling laws by asserting that the machines were “for amusement purposes only.” However, the machines could easily be rigged to dispense tokens, chewing gum, or free plays to a winner, but then with a secret pull of a lever by the proprietor, pay out cash. Payouts could also be made on the sly, with patrons stealthily exchanging their worthless chips and trinkets for cash.

Nationally, estimates put the gross take from slots at over $100 million annually, with 20 percent of that earmarked for official corruption. With so much at stake, only the most trusted Outfit associates were given the slot machine racket. Of course, Joe Accardo was the overall boss, but directly under him was Eddie “Big Head” Vogel, who had started running slots during the waning days of Al Capone’s regime. Under Accardo and Vogel, the Outfit spread one-armed bandits to many other states. Often these extra-Illinois ventures solidified the Outfit’s association with other crime gangs, especially those of New York, led by Lucky Luciano, Ben Siegel, and Meyer Lansky.
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By the 1940s, an estimated 140,000 slot machines were in operation nationwide, grossing an astonishing $540 million per year, with only half the machines legal, taxpaying “amusement” gadgets.

4. Pinball

With the slot games coming under scrutiny by officials, some bar owners installed another game - this one a descendant of the Victorian parlor game bagatelle - known as pinball. In this variation, a ball is released into a glass-covered table, while the player uses hand-operated flippers, and more than a little body English, in an attempt to force the ball to knock over as many “pins” as possible. Although initially conceived as an amusement game, the hoods appropriated the game for gambling purposes, with machines that paid off in cash instead of free games and sundries. The machines cost approximately twice as much as slots to manufacture, and the table’s large size (fifty by twenty inches) made them harder to ship and less easy to fit into bars. Thus, pinball was a distant runner-up in popularity to the slots. Games of lesser importance included 26, faro, keno, the punchboard, and chuck-a-luck. No matter how trifling the profit, the Outfit missed no opportunity to run a game.

5. Dog and Pony Shows

Equal in importance to “parlor game” gambling rackets for Joe Accardo was the game known as the sport of kings. Horse racing itself did not provide direct income - the Outfit did not aspire to own horses - but the ancillary world of “making book” on the race results provided staggering amounts of easy-to-skim hard cash.

Even before the Outfit assumed the reins, their father figure, Al Capone, had already made inroads into the race game, first with dogs, then later with horses. (For details, see the gambling appendix.) Once entrenched in the sport, the gang learned that racetracks provided them important benefits that eclipsed those derived from race fixing.

Although the races themselves brought great profits to the Outfit according to his own paperwork, Paul Ricca’s cut was $80,000 per year from two tracks alone - the real allure of the racetracks for the Outfit has never been grasped by the public. According to Jim Ciatola, who worked for Unione Siciliana consigliere Joseph Bulger (Imburgio), “The tracks provided truckloads of cash, which made them an ideal setup for money laundering.” Previous to the track ploy, members of the Outfit made so much cash during the bootlegging days that, fearing tax problems, they often buried it in their backyards or in other parts of their homes. “Very often they put the money in five-gallon cans in which they drilled air holes,” says Ciatola. “What the Outfitters failed to realize was that after a few years the money got moldy and developed a stench. They were worried that if they took it to the bank or tried to spend it, the bank tellers or the IRS would get suspicious. In addition, the Treasury had just changed the size of U.S. currency, so old bills were conspicuous. So they used the tracks to exchange the bills. Sometimes they paid the winners with old bills, but most of them were sent to the Federal Reserve. It was hilarious. The G was laundering money for the Outfit and didn’t know it.”

One Outfitter with a huge cash overflow was Paul Ricca. Knowledgeable sources assert that the Waiter hid half a million dollars in a hidden space under his roof. In fact, the gang stashed so much bootlegging money that it is a virtual certainty that there are still undiscovered stashes throughout Chicagoland.

6. Bookmaking

The racetracks became a money mill in every sense of the word. Not only were the fixed races generating profits and the tellers laundering money as fast as they could count it, but the racetracks provided the scaffolding for the real profit machine known as bookmaking. The bookmaker’s key function is to allow gamblers to place offtrack bets on sporting events (predominantly horse racing), then illegal in every state except Nevada. (Decades later, when state-run offtrack betting was legalized, bookmakers expanded their domain to cover other sporting events such as football, basketball, and boxing.) Although the upperworld barons saw to the enactment of legislation such as the 1894 Percy-Gray Law in New York, which outlawed offtrack bookmaking, the bookies continued to flourish. The Internal Revenue Service estimated that by 1940 there were fifteen thousand individual bookmakers nationwide. Joe Accardo and his associates even dabbled, albeit briefly, with the idea of “going legit” with their bookmaking enterprise. At the Outfit’s urging, Mayor Ed Kelly sponsored a state bill to legalize racing handbooks in Illinois. Not only would the Outfit benefit from legislation that legitimized one of the “games” they already controlled, but Kelly could multiply his income as a result of the graft that would accompany the licensing procedure. During the period of debate in the state legislature (1935-36), two representatives strongly opposing the bill were shot to death. Although the bill passed, Governor Henry Horner vetoed it. It didn’t matter. With the Kelly-Outfit arrangement, there were soon more than one thousand bookie joints in the Windy City.