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Authors: Tim Newark

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The agent returned on Luciano’s last day in Brooklyn docks at the Bush Terminal at 6:00 A.M. “Upon my arrival there, I saw a gang or mob of 60 to 80 men and about 20 to 30 cars. I have no idea to their identity or their purpose for being on hand.”
When the ship left the pier at 8:50 A.M., a launch followed them for three miles. The agent guessed it was members of the press trying to get one final shot of Luciano. The agent left the ship at 2:00 P.M. when he caught a ride on a fishing ship returning to the Brooklyn docks.
The FBI were generally cynical about the deal with U.S.
Naval Intelligence, and J. Edgar Hoover’s suspicions were confirmed when on March 1, 1946, he received a letter from FBI Special Agent E. E. Conroy stating that “Haffenden admitted he was friendly with Costello and had played golf with him” at the Pomonok Country Club in Flushing. To this was added the allegation that “there has been talk around the city that $250,000 would be paid for the release of Luciano from State Prison. This money, however, would probably not go to Haffenden, but rather to others in political circles. It is observed that Haffenden has already been rewarded with the position of Commissioner of Marine and Aviation.” This key position gave Haffenden jurisdiction over the docks of the city of New York as well as LaGuardia and Idlewild airports. “When the latter airport is completed there will be a tremendous number of concessions to be leased and the possibilities of graft are said to be great.”
A letter dated March 6 from FBI Assistant Director A. Rosen said the newspaper stories about Luciano’s assistance to navy and army authorities “might be laid to a fraudulent affidavit on the part of Commander Charles Radcliffe Haffenden.” In the same letter, Rosen said that despite Haffenden receiving a Purple Heart for wounds in combat, Special Agent Conroy said that Haffenden had received no such wounds and was “hospitalized as a result of a large gun going off near him thus renewing a stomach ailment.”
In a later FBI report of March 13, it was alleged that Frank Costello had Haffenden appointed to his new role, “as it is generally felt that Frank Costello has considerable control in the present city administration.” It was said that Haffenden, after returning from Iwo Jima, where he had been wounded, was visited in the hospital by “his good friend” Moses Polakoff and “that Polakoff had induced him, Haffenden, to write a letter to Charles Breitel, Counsel to the Governor of the State of New York. Haffenden explained to the informant that he was not feeling very well and he wanted to do a good turn and he did not
see anything wrong about writing the letter on Charles ‘Lucky’ Luciano.”
As the FBI investigation delved deeper, U.S. Naval Intelligence sought to distance itself from the affair by claiming that its files failed to indicate that Luciano had ever furnished assistance or information to them. On April 17, 1946, Hoover expressed a personal interest to Rosen in wanting to know the details behind Luciano’s parole. As Rosen explored further, he dispatched a memorandum on April 18, 1946, saying that he had spoken to a key witness for the prosecution in the Luciano trial who admitted that “he had perjured himself when he testified against Lucky Luciano” and “states that considerable opinion exists to the effect that Luciano was not guilty of the charges for which he was convicted and that Governor Dewey’s parole of Luciano was motivated partially as an easing of Dewey’s conscience.” He then added in his own handwriting—“so sorry.”
On May 17, Rosen reported that he had received a letter from the office of the chief of naval operations acknowledging that “Luciano was employed as an informant” but “the nature and extent of his assistance is not reflected in Navy records, and further that Haffenden was censured officially for his actions.”
Hoover’s comment on the whole affair was noted in a memorandum of June 6, 1946, to Rosen: “A shocking example of misuse of Navy authority in interest of a hoodlum. It surprises me they didn’t give Luciano the Navy Cross.”
Rosen was later informed that Haffenden had paid the price for their investigation, when he was forced to resign as commissioner of the city’s Department of Marine and Aviation by Mayor William O’Dwyer in May 1946. The excuse for this was that the mayor had not been satisfied with Haffenden’s administration of the position following an item appearing in a New York newspaper. “Unless advised to the contrary by the Bureau, no further action is contemplated by the New York Division in this matter,” concluded the FBI.
For the moment that was the end of the FBI’s involvement in Luciano’s affairs, but Hoover was itching to match Dewey by nailing the mobster. That opportunity would come a year later.
Former New York mayor La Guardia—he had finished his third term in 1945—was less than generous when he heard of Luciano’s departure. “I’m sorry Italy is getting this bum back,” he told a radio audience and added that he was shocked that Frank Costello should be allowed to visit him on Ellis Island. “What is the limit of Costello’s power in the city?” he asked, indicating that that mobster was now the real head of the American Mafia.
The terms and conditions of Luciano’s deportation were very clear—if he ever reentered the United States he would be deemed an escaped convict and would be required to serve out the maximum of his original prison sentence. He could never again set foot on American territory. For the forty-eight-year-old Luciano, it might have marked the end of his reign as Mob ruler of New York, but he merely viewed it as a challenge to his ingenuity. There were many points of entry back into the United States, and the authorities couldn’t keep him away from his criminal pals.
CUBA FIASCO
A
fter a seventeen-day voyage across the Atlantic, Lucky Luciano arrived in Naples on February 28, 1946. He was required to visit the local police station, where he explained that his stay in Naples would be brief and that he was to be accommodated by a relative. He would then travel on to Sicily, where he would visit members of his family. A reporter asked him whether there was any truth to his working with the American government. “You know I can’t talk about those things,” he snapped back. That was the last thing he wanted Italians knowing—that he’d been singing to the authorities.
Once in Sicily, Luciano visited his hometown of Lercara Friddi—just fifty miles south of Palermo—and was treated like a king. The main piazza of the town was crowded and a feast laid on for the mobster, featuring dishes cooked by local women. Like an old-style mafioso—like the Mustache Petes he’d executed in New York—Luciano distributed money and was greeted by people bowing and kissing his hand. He also donated money
to build a cinema where they could watch gangster movies from America like
Little Caesar,
always popular with the Sicilians.
Luciano enjoyed this reception in his hometown, among members of his family still living there, but he soon had enough of his enforced vacation. He was itching to get back to the United States and make contact with his old friends, especially Lansky and Costello.
“I’m a city boy,” he told a reporter. “Italy’s dead—nice, but dead. I like movement. Business opportunities here are no good. All small-time stuff.”
He said the same thing about Italian horse racing.
“The action at these joints is no good. I need New York. There’s the true action. They don’t speak my language here,” he concluded.
Luciano knew that his continued absence meant that rivals like Genovese would soon muscle in on his territory back in New York. He was also conscious that at forty-eight years old he wasn’t getting any younger. He wanted to enjoy his investments and catch up on all the pleasures he’d missed during a decade in jail. Italy just didn’t suit him that well. As he endured the dusty heat of Sicily, recoiling at the stink of the sulfur mines his father had left behind half a century before, he plotted his return.
 
 
On July 10, 1946, FBI Assistant Director A. Rosen reported that he had received information from the Los Angeles division that exiled mobster Charles Luciano was staying in Tijuana, Mexico. The vicinity of Tijuana was known as the “free zone” because no tourist card or legal permit was needed to enter that portion of Baja California on the border between Mexico and the U.S. FBI Special Intelligence Service (SIS) agents were sent to investigate. They belonged to an elite wartime division of the FBI tasked with tracking down foreign agents who posed a threat to the United States They’d identified some thirteen hundred
Axis spies and prosecuted many of them. With the war over, they were a valuable resource and given the mission to make sure Luciano didn’t sneak back into the United States.
The FBI agents searched the whole of Tijuana, giving special attention to the locations Luciano liked to haunt, such as the racetrack, casinos, exclusive hotels, and fashionable nightclubs. They spoke to local gangsters, heard lots of rumors, but got nowhere. Further investigation revealed that the tip-off stemmed from a headline appearing in the Mexico City daily newspaper,
Excelsior,
on March 26, 1946, which ran the story “Vice Czar Intends to Return to Mexico.” The reporter claimed that two of the mobster’s associates were staying in a prominent hotel in Mexico City in order to establish Luciano in the country. The Mexican journalist was interviewed by the FBI’s SIS but could not name the henchmen involved and claimed he got the story from a press release coming from the Associated Press in the United States.
A later AP story quoted in the New York
Daily News
on September 3 said that it had received information from Naples saying Luciano was “plotting a return to power in the North American underworld.” It claimed that “Neapolitan stoolpigeons reported to the Italian police that he wangled illegal passage to Mexico on a freighter.” In any event, Luciano had disappeared, not having been seen in the previous six weeks since an appearance in Salerno. U.S. Army CID (Criminal Investigation Command) agents compounded the rumors by privately agreeing that “it’s very likely he skipped the country, probably hoping to contact some of his old henchmen from Mexico or actually smuggle himself into the States.”
A curious story reported in the
New York Journal American
for September 5, 1946, claimed that this was all part of a plot by Luciano to become one of those legends “with everyone declaring he is dead, but no trace of a body.” It said that “Luciano would be very happy to have everybody—particularly Government immigration authorities—believe that a sailor who had
agreed to smuggle him out of [a South American] port gave him what may be known as ‘the Chinese treatment’—in other words, took him aboard ship and, after getting his money, drugged him and dropped him over the side during the night … .”
The FBI pursued this lead and found it to be fallacious. Forced to wind up these dead-end investigations, the FBI requested that the State Department ensure that no American consulate ever grant Luciano a visa to enter the United States. The next sighting of the mobster, however, was a hundred percent true.
 
 
In early 1947, FBI Assistant Director Rosen passed a memorandum saying that Luciano had been observed by two FBI SIS agents on February 8 in Havana, Cuba, at the Oriental Park Racetrack. He was chatting with various American tourists and Cuban residents while seated at a table in the Jockey Club. Among the Cubans who recognized and talked to Luciano were a wealthy Cuban sugar merchant and a member of a socially prominent Cuban family. He was traveling under the name of Salvatore Lucania and had received his visa through a Cuban congressman who had a financial interest in the local racetrack and Hotel Nacional casino.
Cuba was the perfect playground for Luciano, just an hour’s flight from Miami. Meyer Lansky had been exploring its numerous attractions since the early 1930s. With the growth of cheaper, more available air flights, he understood it was the perfect destination for well-heeled American tourists who liked to gamble and dabble in illicit pleasures. To this end, he invested a great deal of Mob money in acquiring underworld assets there. Joseph “Doc” Stacher was an old associate of Lansky and became closely involved with the Cuban operation.
“[Lansky] said we needed somewhere safe to put the cash from the bootlegging,” remembered Stacher. “Our biggest problem was always where to invest the money. It didn’t appeal to
any of us to take it to Switzerland and leave it there just earning interest. What Lansky suggested was that each of us put up $500,000 to start the Havana gambling operation.”
Luciano and Siegel, plus a few other mobsters, each put their half-million dollars into the pot, and Lansky took the cash to Cuban military dictator Fulgencio Batista. In return for guaranteeing him an income of $3 to $5 million a year, Batista protected their monopoly on casinos at the Hotel Nacional and Oriental Park Racetrack—the only two places in Cuba where gambling was legal. It looked as though the Mob had bagged its own resort in the Caribbean. But in 1944, a new president, Dr. Ramón Grau San Martín, took over and the native Cuban crime syndicate combined financial power with close political contacts that could ultimately mobilize the army to protect its interests. Always welcoming to outside investors, Cuban mobsters were not completely in awe of Lansky and his Mafia associates and were well aware of where the ultimate power lay.
On February 15, 1947, a photograph appeared in the
Havana Post
showing thirty-two-year-old pop singer Frank Sinatra at the casino of the Nacional Hotel talking to Captain Antonio Arias, president of the casino. The same newspaper claimed on February 23 that Lucky Luciano was seen nightclubbing by New York gossip columnist Robert C. Ruark with Frank Sinatra and Ralph Capone, brother of the late Al Capone.
At the time he was first spotted, Luciano told the
Havana Post
reporter, “This is terrible. I came here to live quietly and now all this blows up in my face.” He said he had money saved from better days and had the ability “to get along most anywhere.”
Spurred on by the unwelcome publicity, the Cuban secret police picked up Luciano for questioning as he sipped coffee in a Vedado café. The Cuban police revealed that Luciano had $4,000 when he arrived by plane in October and still had $1,000 in his bank account, so they surmised he was receiving an income from somewhere.
Gossipmonger Ruark saved his full fury for the popular singer hanging out with Luciano. “I am frankly puzzled as to why Frank Sinatra, the lean trust and the fetish of millions,” he wrote, “chooses to spend his vacation in the company of notorious, convicted vice operators and assorted hoodlums from Miami’s plush gutters. This is, of course, none of my personal business. If Sinatra wants to Mob up with the likes of Lucky Luciano, the chastened panderer and permanent deportee from the United States, that seems to be a matter for Sinatra to thrash out with the millions of kids who live by his every bleat.”
Ruark said Sinatra spent four days in Havana at the racetrack and casino in the company of Luciano, Luciano’s bodyguard, and a rich collection of high-rolling gamblers. He says he was also informed that they attended a party with Ralph Capone, hosted by Jorge Sanchez, a sugar merchant. Sinatra’s presence was really not that surprising, as the Mafia were keen on the singer.
“The Italians among us were very proud of Frank,” said Doc Stacher. “They always told me they had spent a lot of money helping him in his career, ever since he was with Tommy Dorsey’s band. Lucky Luciano was very fond of Sinatra’s singing.”
Sinatra’s concert at the Hotel Nacional was, in fact, a welcome-home party for Luciano, in which all of America’s top mafiosi gathered in Havana.
“Everybody brought envelopes of cash for Lucky,” remembered Stacher, “and as an exile he was glad to take them. But more important, they came to pay allegiance to him. A number of the younger guys were doubtful about paying allegiance to the old-timer, as they called him, but Meyer backed him a hundred percent and nobody wanted to cross the Little Man.”
All the top mobsters flew into Havana to greet Luciano, including Lansky, Frank Costello, Joe Adonis, Albert Anastasia, Joe Profaci, Joe Bonanno, and Vito Genovese. Lansky had many private conversations with Luciano about joint projects. They hoped that Governor Dewey would run for president again in
1948 and that would allow them to contribute to his campaign. Although Dewey had put Luciano behind bars, they believed that his understanding of Luciano’s war record meant there might be a bargaining chip there for future relations between the two. Personal enmity should never be allowed to cloud the possibility of business.
Generally, when all the mobsters sat together, they listened to Lansky and Luciano expound on how they wanted to turn Cuba into the Monte Carlo of the Caribbean. It would make Las Vegas look like small potatoes.
But alongside the socializing there were tensions. A strong hostility existed between Luciano and his former underboss, Vito Genovese. Not only was it a matter of personal rivalry, but it also went back to an incident during the war, when Genovese organized a hit on a key opponent of Mussolini in New York—the outspoken journalist Carlo Tresca.
In the late 1920s, Tresca, editor of the anti-Fascist
Il Martello,
had been a favorite of the New York Mafia, who protected him against the Blackshirts. Come the war, however, Genovese wanted to demonstrate the extent of his power to his new Fascist patrons in Italy. When word got through to Genovese that Mussolini was offended by Tresca’s constant criticism of him in his newspaper, he put out a contract on the editor. The Brooklyn gunman Carmine Galante was ordered to shoot him down in January 1943. The
New York Herald
described what happened next.
The Fifth Avenue intersection was dark in the dimout. There was little traffic, and few people were about. As Mr. Tresca and Mr. Calabi [his friend] turned the corner into Fifth Avenue the killer suddenly materialized in the dimout, whipped out a gun and shot four times. Two bullets went wild, but one struck Mr. Tresca in the head, passing through his cheeks, and another lodged in his back. He fell into the Fifth Avenue gutter, the oversize
hat he customarily wore dropping beside him, and he was dead when Mr. Calabi bent over his friend.
The gunman ran across Fifteenth Street to the getaway car and sped off toward Union Square. Luciano was furious when he heard of this abuse of Mafia power. He strongly disapproved of Genovese’s new loyalty to the Fascists—these were the allies of Hitler and the wartime enemies of the United States. He later offered to give up the names of the Mob assassins who killed Tresca in return for his outright parole and permission to stay in the United States. The U.S. government refused.
Some sources say that a face-to-face meeting between Luciano and Genovese in Cuba ended in blows, but this seems unlikely. Despite Luciano’s distaste for Genovese’s wartime record and suspicion of his ambition, he probably followed the Mafia dictum of keeping your friends close but your enemies closer.
There was one item of personal business, however, that could not be ignored. Bugsy Siegel was Meyer Lansky’s oldest mobster friend. They had grown up together and formed their own gang. Lansky criticized his hotheaded approach to problems—Siegel was too keen to reach for the revolver—but Lansky had managed to remove him from causing trouble in New York by sending him to the West Coast. There, he took care of their business in Hollywood and their new investment in Las Vegas.

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