The Outfit (23 page)

McLane: “I must refuse to answer on the grounds that it might tend to incriminate me.”

And so it continued, with Curly Humphreys “beaming at the witness,” as reported by the
Chicago Tribune.
With the state’s only witness to the threats suddenly gone mute via the Fifth Amendment, the case against all of the defendants was dropped. But more important, with the charges heard in open court, the defendants could not be tried again on the same complaint. Humphreys let the world know he had studied the “double jeopardy” clause of the Constitution. Ricca and Campagna could return to the Windy City and show off their tans with knowing smiles. They proceeded to successfully infiltrate the bartenders’ union. After the receivership was rescinded, James Crowley, the man who won the union presidency at the 1941 convention, quickly appointed Outfit members to key union posts.

Two decades later, the FBI learned what had happened behind the scenes at the McLane trial; thanks to a hidden microphone in one of the Outfit’s headquarters, the G-men heard Curly brag repeatedly about his 1940 legal triumph. According to one of the agents, after the trial was announced, Humphreys warned McLane that if he uttered a word in court, “his wife, Christine, would be abducted and kept alive as her husband was daily sent one of her hands, then her feet, then her arms.” Humphreys added, “I not only had McLane, I had the prosecutor, and I even had a juror for good measure. I was taking no chances.” Humphreys then instructed McLane in another legal maneuver he had been studying: the Fifth Amendment’s protection against self-incrimination. Of course, McLane had done nothing wrong, but the court could not know that. It is one of the first times that the underworld sought refuge behind the Fifth Amendment.
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Thanks to Humphreys’ masterstroke, Ricca and Campagna had dodged one legal bullet. But even Curly could not entirely defuse the situation that confronted his pals as a result of their West Coast operations. However, his intercession would greatly reduce the damage to his partners in crime.

The Taxman Cometh

While George Browne and Willie Bioff frantically treaded water in their fight against the IA Progressives, three more adversaries were creating tidal waves for the beleaguered hoods. In fact, things were happening so fast that accounts vary as to which came first. One opponent was the ubiquitous taxman. Elmer Irey, the IRS chief who had relished using the tax code against Big Al Capone, suddenly became interested in
Vaffaire
Bioff. Irey had been looking into Hollywood tax dodgers since the 1920s, when many movie stars were regularly evading taxes. One tax consultant named Marjorie Berger represented seventy celebrity clients, simultaneously teaching them how to pad their expense accounts. In that investigation, twenty-two stars pleaded guilty, and Berger went to jail for three years, eventually paying $2 million in back taxes.
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In the end, the IRS did not adjudicate its tax case against Bioff, but it did get Schenck, and Schenck’s trial would throw a bright spotlight on Bioff’s more serious infractions. Meanwhile the trades began reporting in earnest on the IATSE boss’ travails. Moreover, a California grand jury had begun delving into Bioff’s $5,000 payoff of the General Assembly.

Another ominous event was the recent involvement of a member of the fourth estate, a journalist with a terrier’s tenacity. In Connecticut, syndicated columnist Westbrook Pegler followed
Variety’s
coverage of the unfolding SAG and California Assembly investigations. One version holds that it was Pegler who tipped off SAG’s investigators as to Bioff’s true background. According to that telling, Pegler was introduced to Bioff at a Hollywood party. Having worked the crime beat in Chicago for years, Pegler immediately recognized the notorious whore-beater and leaked the information to the authorities. In the best gumshoe style, Pegler journeyed back to Chicago, and with the assistance of police lieutenant Make Mills, began poring over dusty old police records. They hit paydirt, for which Pegler later earned a Pulitzer Prize, when they located a 1922 “open” conviction of Bioff for beating a whore. The bottom line: Bioff owed the state of Illinois six months in the slammer. In November 1939, Bioff received by telegraph a warrant for the 1922 conviction. A battery of high-priced lawyers delayed but could not prevent Bioff’s incarceration. While the stalling tactics ensued, Elmer Irey’s IRS indicted Willie for underestimating his 1937 tax bill by $69,000. George Browne responded by inviting right-wing Senator Martin Dies to Hollywood to ferret out Communists, and while perorating at the 1940 IATSE convention, Browne stepped up his attacks on the alleged Communists in the IA Progressives. In
Hollywood’s Other Blacklist,
a study of Hollywood’s union struggles, authors Mike Nielsen and Gene Mailes described Browne’s presentation: “In Browne’s remarks the line was blurred between communism and fascism . . . Browne maintained that communism ’not only exists within the country, but within the ranks of our organization as well’ . . . Browne mixed the motives of the communists with those of the producers, as if the two groups had somehow conspired to overthrow IATSE. Why the communists would want to help Louis B. Mayer or Joe Schenck was never clearly explained.”

The IATSE chief then praised his secretary, Willie Bioff, evoking images of a saintly and tireless advocate of the downtrodden rank and file. “William Bioff is the victim of a merciless series of scurrilous attacks,” Browne decried. “It was not hard to see that instead of the legislature being investigated, the IATSE was being investigated, and it became apparent that this was another fishing expedition to embarrass my personal representative, William Bioff.” The speech remains the only time on record that Willie the pimp was referred to as “William.” The nation’s talking heads joined the fray, with many castigating Pegler as a front for the Communists. Even Eleanor Roosevelt, the wife of the president, sided with George Browne when she wrote critically of Pegler in her daily newspaper column (years earlier, President Roosevelt had invited Browne to relocate his IATSE headquarters to Washington).

While Browne was spewing his rhetoric at the IATSE convention, an eventful proceeding was quietly taking place in New York, as Joseph Schenck was indicted for fraud. On April 15, 1940, Bioff entered Bridewell Prison on the pandering charge, from which he was released five months later. While in jail, the Outfit sent Charles “Cherry Nose” Gioe (pronounced
joy)
to check on Willie, who was near the breaking point. Bioff informed Gioe that he was going to quit the Outfit. The next day, Gioe’s immediate superior, Louis “Little New York” Campagna, appeared at Willie’s jail cell. It came out in later testimony that Louis Campagna educated Willie Bioff to one of the Outfit’s bylaws: “Anybody who resigns from us resigns feet first.” Willie Bioff then headed back to Hollywood, oblivious to the ramifications of the Schenck indictment, and continued his IATSE racketeering as if nothing had changed.

In April 1940, the same month Willie Bioff entered prison on the pandering charge, Johnny Rosselli married actress June Lang (born Winifred Vlasek), one of the many starlets he had been escorting on the Hollywood party circuit. Within two years, after fights over Johnny’s jealousy and weeklong disappearances, the marriage ended. (After his 1943 divorce from Lang, Johnny never remarried.)

In New York, young federal prosecutor Boris Kostelanetz (younger brother of famed New York Philharmonic conductor Andre Kostelanetz), using the $100,000 transaction as leverage, cut a deal with Joe Schenck: In return for a reduced sentence, the movie mogul agreed to rat out Bioff, Browne, and Circella. At the same time, Elmer Irey indicted Bioff on tax charges, for allegedly underpaying his 1937 tax bill by $69,000. A still feisty Bioff posted bond on this charge, declaring “big business” was out to get him. The tax charge would soon be dropped, in favor of a much more damning complaint, the first hint of which surfaced during the Schenck fraud trial.

Joseph Schenck knew the tax charges could be just the tip of the iceberg: If the jurists sussed out the full extent of his labor racketeering, gambling, illicit cash transfers, and collusion with the Outfit, the mogul might never see the light of a Beverly Hills day again. He decided to cooperate with his prosecutors, but disclosed only enough to guarantee a reduced sentence. In essence, Schenck would admit his payoffs to IATSE, via Bioff, Browne, and Circella, and pray that they would leave it at that (in terms of Schenck, they did). When Johnny Rosselli was called before a New York grand jury, he knew from the tenor of the inquisition that someone was going to have to take a fall. Hopefully, with sufficient damage control and a little luck, the bleeding could be stopped before proving fatal to the gang leaders back in the Windy City. After emerging from the inquest, Rosselli telephoned Willie Bioff in California. “Everybody you have done business with has squawked,” scolded the gangster. Within days, on May 23, 1941, Bioff and Browne were indicted on tax and racketeering charges, while Circella was sought as a material witness. (After some tense intramural squabbling, Elmer Irey’s IRS was persuaded to drop the tax charges, since they would most likely run concurrently with a racketeering sentence.)

So far as the Outfit was concerned, the trio were small potatoes, and highly expendable. What was most important was that the grand scheme, the virtual shadow government known as the Commission formed with the New Yorkers, survive. The stakes were too high. Immediately after the indictments were announced, Rosselli raced out to Rancho Laurie to engage in some witness tampering. To save his own skin, Gentleman Johnny came armed with Bioff’s script. A submissive Bioff agreed to testify that, although Rosselli was a good friend of George Browne, Bioff had met Rosselli only once, in 1936. With Rosselli’s role seemingly obfuscated, the likable gangster took his leave. Willie probably knew that this session was merely a prelude to the day when the knock on his door came from the big boys back East. In Chicago and New York, the Commission met to decide how best to limit the damage, but there was really only one choice for the role of Bioff’s handler: Sidney Korshak.

Damage Control by the Liaison Extraordinaire

With the erratic Bioff now dangling in the wind, the Outfit and the Torrio-Lansky New Yorkers needed a legal expert who would guarantee that Bioff and Browne would not take down the entire enterprise with them. That role would be assumed by a man who would go on to rank among the most shadowy and influential power brokers of the twentieth century. A 1930 graduate of Chicago’s DePaul University Law School, Sidney R. Korshak was a well-spoken, dapper young criminal attorney who was rumored to have earned beer money during his college years as a driver for Al Capone. An aging New York boss recently said, on condition of anonymity, that he knew for a fact that Big Al Capone had paid Korshak’s law school tuition, hoping Korshak would later care for Capone’s legal needs. Upon passing the bar, Korshak indeed began defending young thugs, quickly moving up to represent Outfit bosses who were being harassed with vagrancy arrests.

Korshak had numerous associations that gave him purchase with Chicago’s hoodlum crowd. Chief among Korshak’s connections was his friendship with the state’s attorney’s office, run by Tom Courtney and his investigator from the police labor detail, Dan Gilbert. With such important consorts, Korshak not only controlled the city’s Outfit- unionized workforce, but was able to negotiate practically all gang criminal citations down to misdemeanors. Before long, Korshak had no need of the courts at all, since his clients had their cases resolved with a phone call. As one of his fellow lawyers said, “Sid Korshak is a lawyer who tries few cases - but he has one of the most important law practices in town.” Rising swiftly in the local business wrorld, the personable Korshak maintained a fitting lifestyle: He lived in a $10,000-a-year suite in the Seneca Hotel, owned by Frank Nitti’s investment adviser, Louis Greenberg.

By 1939, Korshak had formed a law partnership with Harry Ash, together setting up their office in the same building that housed the Outfit-ruled First Ward Democratic Headquarters; Curly Humphreys and Jake Guzik practically lived there, orchestrating their local political corruption. During those years, as Korshak settled strikes at Outfit-controlled racetracks, he became close friends with a native of horse country and future vice president to Harry Truman, Alben Barkley of Kentucky.
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Experts believe that it was either Guzik or his bodyguard, Gus Alex, who recommended Korshak for the role of West Coast fixer for the Outfit. Since 1935, Korshak had been making frequent trips to visit his fiancee, an actress who was a friend of Longy Zwillman’s girl, Jean Harlow. As overheard by FBI bugs planted years later, Curly Humphreys approved Korshak’s recruitment. The Bureau also learned that Korshak communicated with Humphreys in code, referring to his superior as Mr. Lincoln. Given his talent and suave sophistication, Korshak was the perfect front for the gang’s California expansion.

Sidney Korshak would never practice law in California; his task was more subtle, more shadowy. He was the fixer for both the Outfit and the Commission, his role being that of dealmaker or dealbreaker, depending on what Mr. Lincoln or Mr. Lansky ordered.
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With the studios at the mercy of the mob-controlled craft unions and talent agencies, dealing with Korshak became the first order of business for any studio that wished to stay solvent. Korshak’s indispensable mediating skills set a trend in Hollywood that exists to this day. As many a producer can attest, in modern Hollywood, the entertainment business is now virtually run by attorneys. One Hollywood insider recently joked, “In Hollywood, they cast a lawyer like they cast an actor.” And they probably cast the lawyer first.