The Outfit (20 page)

Johnny Rosselli, meanwhile, continued to ingratiate himself with Hollywood’s movers and shakers, performing favors for them that only a man with his resume could undertake. In 1935, Johnny was given a delicate task by Will Hays, who now ran the AMPP. It had long since become customary for thugs to attempt to shake down Hollywood’s glitterati through blackmail. Now a case had arisen where some freelance extortionists had put their hands on a pornographic film, one of several made by a starving nineteen-year-old actress who was now one of MGM’s hottest upcoming stars. Her name was Joan Crawford. Although the blackmailers demanded $100,000 to turn over the negative, the studio would go no higher than $25,000. Rosselli was asked to be the “negotiator.” Now the freelance hoods were in way over their heads. Rosselli met with them and calmly explained who he was and whom he really worked for, the Outfit. Unless the print was handed over, Rosselli told them, their corpses would make those of the St. Valentine’s Day massacre victims seem unscathed. Sooner than they could say “Chicago typewriter,” the amateurs handed over the print, never to be heard from again. And Johnny Rosselli pocketed the $25,000.

In New York, Joe Schenck’s brother Nick was now also about to cut a deal with the devil. The producers readily agreed to pay the gangsters $150,000 for a seven-year no-strike contract, two thirds of which went to the Outfit. But it was anything but simple extortion. Not only would producers profit from a no-strike, low-wage deal, but it gave them a buttress against the National Labor Relations Act (the Wagner Act), passed just weeks earlier on July 5, 1935. The act was a pro-worker bill that codified their rights to collective bargaining. Just as the movie industry was beginning to come out of its Depression-era financial doldrums, the Wagner Act threatened to derail its progress. Schenck and his peers also feared the recent establishment of the Congress of Industrial Organizations, or CIO, by John Lewis and Sidney Hillman. Worried that new labor organizations would demand profit-sharing, producers were ready for a savior in the form of the Outfit. Thus the deal also held that Browne would reduce worker wage-increase demands by two thirds.

But Schenck and friends feared that somebody might get wise if the deal was arrived at too quickly, so the Outfit offered the skittish producers an ingenious way out: In typical Hollywood fashion, it decided to “put on a show.” Browne would call a phony strike, forcing the moguls to “capitulate” and grant IATSE total control over the studio’s workforce. The producers would grant IATSE the first “closed shop” agreement in the history of the entertainment business. In return, the Outfit-backed Browne and Bioff would suppress any worker calls for wage increases.

The sham walkout was triggered in late November 1935, when a non-IATSE Paramount film crew arrived in New York to film aerial footage for the movie
Thirteen Hours by Air.
On Saturday night, November 30, with date-night crowds filling movie theaters, a seemingly irate Browne ordered his IATSE projectionists to walk out of more than five hundred Paramount theaters from Chicago to New York. According to later testimony by Bioff, the double-dealing allies then staged an “emergency” closed-door meeting at the Union League Club in New York to settle the strike. Since the deal had been cut in advance, one can only wonder what went on behind the closed doors - perhaps a discussion of the most recent New York Giants game. When the partners emerged from their confab, it was announced that IATSE would be granted a closed shop, 100 percent labor jurisdiction on the studios’ lots. This of course presupposed that the producers had legal rights to make such a pronouncement; they did not. In later testimony involving the estate of Frank Nitti, the studio executives sheepishly admitted that their labor-racketeering partnership with the Outfit had saved the studios approximately $15 million.

Variety
and the rest of the national press were completely hoodwinked by the charade. No one suspected that greedy producers had formed an unholy alliance with embezzling union leaders willing to sell out their own membership in exchange for bribes. Of course, the Outfit’s backstabbing of the workers was only a temporary stepping-stone to the its real goal: double-crossing the conniving producers once the gangsters were granted complete control of the studio shops.

December 1935 was a festive month for the Outfit, starting with the release from prison of its accounting wizard, Jake Guzik. According to Outfit tradition, a lavish “coming out” party was thrown whenever one of its members was sprung from the big house, and the venerated Guzik undoubtedly received the full treatment at one of the gang’s favorite restaurants. Within days, the Outfit’s leadership, including Rosselli from Los Angeles, headed to the Sunshine State where their itinerary included both business and pleasure. The business involved the annual IATSE executive board meeting at the Fleetwood Hotel in Miami. With the Outfit brain trust by his side, Browne introduced the IATSE executives to their new bosses, adding that Bioff would now head the Hollywood local. After leaving the grim IATSE officials to contemplate their new lot, the Outfitters repaired to Big Al’s Palm Island estate, where Ralph Capone hosted his Chicago pals. George Browne, the legendary quaffer, was stunned by the Outfit’s work ethic, even here in Florida sitting by Al Capone’s pool. He later remarked to Bioff, “These guys don’t know how to relax. They just work all the time, day and night, and never take time to spend their money.” The frustrated Browne implored Nitti, “Jeez, Frank, we just got here. I haven’t had a dozen bottles of beer today. Nobody has been in the pool. Nobody went over to look at Miami Beach. Can’t I get a little bit of this sun?” Nitti was stunned by Browne’s backward priorities. Nitti sternly informed Bioff that Rosselli would be his overseer, and that he must also find a way to put Rosselli on the union payroll. He then said, “OK. Go ahead. Have a night on the town.” But it would soon be back to work, with assaults to be mounted on movie business fronts in New York and Hollywood.

The new year, 1936, brought more good news for the Outfit. On January 8, its legal and political shaman Curly Flumphreys was released from Leavenworth, mandating yet another coming-out gala. Almost before recovering from his welcome-home party, Humphreys got back to work, quickly taking over the Individual Towel Company, which had a $45,000 annual contract with the Chicago Board of Education, and becoming an executive with an entity known as the Mid West Oil Corporation. With his brother, who went by the name Jack Wright, Humphreys seized control of a number of local movie houses, where the duo were known as the Wright Brothers.

With Curly and Jake back in the game, the gang was now fully armed for its assault on the entertainment industry. Simultaneously, Willie Bioff and his wife, the former Laurie Nelson, relocated to Hollywood, where their cruise ship was met on arrival by Rosselli and Browne. In short time the scheming trio tended to the key first item on their agenda: informing the local IATSE rank and file that the Outfit was now in charge. Bioff muscled the holdout unions into joining IATSE. Having been granted the franchise by the studio bosses, Bioff presented the twelve thousand studio technicians with both the carrot and the stick: sign on with IATSE and get a 10 percent raise; otherwise, get no work at all. Writer George Dunne, who closely studied Bioff’s time in Hollywood, described one pivotal meeting at the union’s headquarters: “Bioff walked into a meeting of the union officers on Santa Monica Boulevard with these two hit men from Chicago, one on either side. Each one had a violin case under his arm, just like they do in the movies. Bioff stood up and said, ’We’re taking over the union - the international is,’ and they dismissed the local officers right there.”

With Bioff as its front, the Outfit set up its West Coast headquarters in the penthouse of Hollywood’s twelve-story Taft Building, previously notable as a locus for movie star dentists. Although comfortably ensconced, Bioff continued to receive his marching orders from Chicago, including one directive that resulted in Browne and Bioff obtaining still more personal income for their efforts. In this instance, Nitti instructed the duo to hire one Izzy Zevlin to manage their books. “Izzy has forgotten more about accounting than those Internal Revenue Service guys ever knew,” Nitti boasted. Upon meeting Bioff and Browne, Zevlin enlightened the thugs as to how they could reap vast sums that Nitti and the gang would not have to learn about. With Zevlin maintaining two sets of books, one supposedly hidden from the Outfit, Bioff and Brown wasted no time in levying a new 2 percent surcharge on the IATSE members’ paychecks - for the strike insurance fund, they claimed. Of course, Bioff and Browne were being paid by the producers
not
to call a strike, but there was little chance the workers would learn of that subrosa compact. Bioff assumed the Outfit had little chance of discovering the secret surcharge connived by Zevlin. This “assessment” income was noted in the second set of books, kept in a vault, supposedly below the Outfit’s radar.

It is not known how Nitti learned of the rip-off - perhaps Zevlin was merely his agent provocateur - but when he did, he exploded. In Chicago, Nitti confronted Browne. “Nitti got so mad he backed me into the bathroom,” Browne later testified. “I thought he was going to push me out the window.” To Browne’s feeble protestations, Nitti yelled, “There’s a lot of guys in the Outfit that have to be taken care of.” Then, like a scolding parent, Nitti announced their punishment: “From now on, whatever money we get won’t be split fifty-fifty. You keep one third for you and Willie, and I’ll take two thirds for my people.” According to court testimony, the surcharge scam eventually netted the conspirators over
$6.5
million, two thirds of which was sent back to Chicago. The surcharge was merely a hint of things to come. With all the pieces now in place, the time had at last arrived for the “Chicago crowd” to apply the coup de grace.

In April 1936, the studio heads were thunderstruck upon learning that their wicked alliance had backfired: The moguls themselves were but mere pawns in the Outfit’s game. On April 16, Willie Bioff, George Browne, and Nick Circella showed up at Nick Schenck’s New York office, and Browne let the other shoe drop. “I want you to know that I am the boss,” Browne intoned, “and that I want two million dollars out of the motion picture industry.” Schenck turned pale. He later testified that he thought Browne had lost his mind and was talking nonsense. “At first I couldn’t talk,” remembered Schenck. He recalled Bioff’s saying, “You know what will happen. We gave you a taste of it in Chicago. We will close down every theater in the country. You couldn’t take that. It will cost you many millions of dollars over and over again. Think it over.” George Browne then chimed in and assured Schenck that Bioff and he were serious and gave Schenck a few hours to ponder his fate. During the break, Nick Schenck met with Sidney R. Kent, the chief of Loew’s sister company, Twentieth Century-Fox. Kent begged the entrapped Schenck, “Talk them out of it. They’ll wreck the industry.” But Kent was probably unaware of Schenck’s previous deal with the Outfit that now tied the industry’s hands.

When the gangsters returned that afternoon, Schenck told them there was no way he could raise the $2 million. Willie Bioff cut him off, countering, “All right. I’ll take one million.” Schenck again tried to spar with Bioff, who ended all discussion when he stood up to leave, saying, “One million. That’s my final offer.” Sidney Kent’s objections aside, the studio heads really had no choice; they had happily allowed the Outfit to take over and reinvigorate IATSE, and now they had to pay the price. It was now impossible to operate the studios without IATSE. The next day, the gang returned and Bioff dictated the payment schedule: $50,000 per year from each of the four major studios (Fox, Warner Bros., MGM, and Paramount), and $25,000 from the smaller firms (RKO and Columbia, for example). Making matters worse, Willie the pimp was in a hurry: “Oh, yes, and I want one hundred thousand up front.”

Within three days, the beleaguered Kent and Schenck raised the cash and delivered it to Bioff and Browne at their suite at the Waldorf-Astoria. Although the two gangsters nervously harbored the thought that the movie executives might turn up with the feds, their fears were quickly dispelled. As per Bioff’s instructions, both producers carried plain brown-paper bundles, each containing $50,000 in hundred-dollar bills. Adding to their indignity, the studio heads were forced to cool their heels while the gang meticulously counted the one thousand individual C-notes. “There were twin beds right there in the hotel suite,” Schenck later told a jury. “I put my money on the right-hand side of the bed. Bioff took half the money and started counting it. He put the other half on the other bed and told Browne to count it.” As Willie Bioff later said, “I had Hollywood dancing to my tune.”

With Fox and Loew’s in line, Bioff headed back to Los Angeles to inform the other studio chiefs of their fate, while Browne took care of business in Chicago. Willie Bioff knew no other game than hardball, and one by one, the studios surrendered to the gang. When studios balked at the extortion, there were threats. Louis B. Mayer, of MGM, later testified that he capitulated only when Bioff threatened to kill him before dawn. In some cases, such as the deeply in debt Warner Bros., Bioff had to settle for less than he demanded. Major Albert Warner cut a deal for $10,000 in advance plus regular installment payments. Financially strapped Paramount produced $27,000. Books were juggled routinely to keep the arrangement from the prying eyes of stockholders. Albert Warner’s brother Harry noted one $12,000 payment as “Christmas presents for critics.”

Only Columbia studios was protected from Bioff’s strong-arm ways. Recall that Columbia’s head, Harry Cohn, was Johnny Rosselli’s best friend in Los Angeles. When Bioff put pressure on Cohn’s studio with a wildcat strike, Cohn immediately picked up the phone and called his buddy, Gentleman Johnny, who raced over to Bioff’s office, despite being told by the secretary that he was out. Finding Willie behind his desk as expected, Rosselli raged, while Bioff pleaded that he had Frank Nitti’s blessing. For Johnny, that did not matter where a close friendship was involved. Besides, Nitti was only a figurehead. The real power was with Accardo, Ricca, and Humphreys. They would understand the difference between business and personal loyalties. “To hell with you and Nitti,” Rosselli screamed. Bioff refused to bend and Rosselli stormed out. But later that night, Rosselli turned up at Bioff’s home with the “Al Capone of Los Angeles,” Jack Dragna, and read Willie the riot act. Bioff called Cohn to announce the strike was canceled. “The strike is off,” Bioff said. “You can thank Johnny - nobody but Johnny could have done this for you” It was Cohn’s last problem with IATSE,