The Outfit (50 page)

The Sunrise Hospital conglomerate was but a prelude to an even bigger moneymaker, the Paradise Development Company. Employing great foresight, the Sunrise partners began developing the adjacent land tract, with the kind assistance of $5 million in government-guaranteed Federal Housing Authority (FHA) loans. With names like Paradise Homes, Desert Palms, and Paradise Palms, the consortium’s homes, in the $22,000-$42,000 range, sold by the hundreds. In fact, during one two-year stretch, the abodes were selling at a rate of one per day. Authors Roger Morris and Sally Denton wrote accurately that the “Paradise Development Company shaped the emerging commercial and residential map of the city.” The company’s profits would be used to underwrite even more massive withdrawals from the pension fund, the result of which transformed Las Vegas from a gambler’s getaway into a vibrant Western city. The U.S. Department of Labor estimated that the pension fund’s, loans in Las Vegas ultimately totaled $300 million, or one sixth of the fund’s total assets, all of which was repaid. Since the underworld began to develop the town in the early fifties, the city’s population has exploded from under fifty thousand to 1.5 million today. Clark County sheriff Ralph Lamb succinctly summarized the importance of the underworld on the development of Las Vegas. “Don’t forget this town owes something to these people,” Lamb said. “Without them there wouldn’t be a Las Vegas.” And none of it would have happened if Joe Accardo and Curly Humphreys had not put their man in charge of the pension fund.

Perhaps in celebration of his gang’s successful hijacking of the pension fund, Joe Accardo took his wife, Clarice, and longtime friends Mr. and Mrs. Anthony DeGrazia on a European holiday. The trip featured a stop in Zurich, where Joe probably made a deposit in his Swiss account. What made the vacation even more newsworthy back in Chicago was that DeGrazia was a lieutenant in the Chicago police department. When the press reported the story, the chagrined police commissioner quickly suspended the thirty-seven-year veteran and later fired him upon his return. However, few worried about the financial health of DeGrazia, with his police pension and the friendship of Joe Accardo.

Before the Outfit could continue to siphon pension fund treasure into the development of Las Vegas, it was distracted by the pull of dramas on the national stage. On the less significant side, some gang members were, like many of the country’s Italian immigrants, in a lather over the fall 1959 debut of the ABC television series
The Untouchables,
a less than accurate retelling of Eliot Ness’ battles with Al Capone and Frank Nitti. The show was a virtual slander of all things Italian and quickly elicited howls of protest from concerned Italian-American organizations across the country. Angered by the “goombah of the week” theme of the show, the protesters pointed out how the show conveniently ignored all upperworld corruption.

The backlash started even before the show’s two-hour pilot aired, after word of producer Desi Arnaz’s purchase of Oscar Fraley’s book of the same name hit the press. In Hollywood, Arnaz braced for the inevitable. “Having gone to high school and been such good friends with Sonny Capone [Al’s son],” Arnaz wrote in his autobiography, “I knew damn well, even though I hadn’t seen or heard from Sonny in years, that I was going to get a call from him.” Coincidentally, Desi and Sonny had attended St. Patrick’s High School in Palm Beach together, and Desi described his basketball teammate Sonny as “my best friend there.”

On the very day the story hit the papers, Sonny Capone called Arnaz. “Why you? Why did you have to do it?” Sonny asked.

“Sonny, if I don’t do it, somebody else is going to do it, and maybe it’s better that I’m going to do it,” Arnaz answered. Arnaz wrote that he “couldn’t get to first base with Sonny.” Soon, Arnaz’s Desilu company heard from lawyers for Al’s widow, Mae Capone, who filed a multimillion-dollar libel and unfair-use-of-image suit against the studio. Although Capone lost her case against Arnaz, the story was far from over. In New York, Albert “Tough Tony” Anastasia organized demonstrations outside ABC’s corporate offices and saw to it that the longshoremen under his control would leave crates of cigarettes made by the show’s sponsor Liggett
&C
Meyers untouched on the docks. Within days, Liggett withdrew its sponsorship of the show. In Chicago, however, the Outfit, especially the volatile Mooney Giancana, was far from satisfied.

According to information received by the Chicago Crime Commission’s chief investigator Wayne Johnson, Mae Capone called Mooney Giancana, who ordered Sinatra to pay a visit to Arnaz. When Arnaz refused to fold, Sinatra became enraged. In their history of Desilu, Coyne Sanders and Tom Gilbert wrote about the confrontation:

Frank Sinatra abruptly moved his production company off the Desilu-Gowar lot to Samuel Goldwyn Studios. “What started as a discussion about Italians on Desilu’s TV series,
The Untouchables,
ended up close to fisticuffs,” said one observer, who noted that Arnaz inflamed the altercation by calling Sinatra a “television failure.”
Variety
reported, “Frank Sinatra and Desi Arnaz almost came to blows at Desi’s Indian Wells Hotel when Frank looked him up after midnight to discuss the depicting of Italians as ruthless mobsters on the
Untouchables
programs.”

Unsatisfied, Giancana wanted Arnaz whacked. In his biography,
The Last Mafioso,
Los Angeles hood Jimmy “the Weasel” Fratianno described one conversation with Johnny Rosselli:

Johnny: Have you seen that TV show,
The Untouchables}
Jimmy: A couple of times, but I don’t have time to watch that shit.

Johnny: Let me tell you something, Jimmy. Millions of people all over the world see this show every fucking week. It’s even popular in Italy. And what they see is a bunch of Italian lunatics running around with machine guns, talking out of the corner of their mouths, slopping up spaghetti like a bunch of fucking pigs. They make Capone and Nitti look like bloodthirsty maniacs. The guys that write that shit don’t know the first thing about the way things were in those days. Eliot Ness, my ass. The tax boys got Al, not Ness. And what did he ever have to do with Frank Nitti?

Jimmy: Nobody pays attention to that shit. It’s like a comic book, a joke. Who cares?

Johnny: I’ll tell you, Jimmy. Sam [Giancana] cares. Joe Batters [Accardo] cares, Paul Ricca cares, and I care. Jimmy, what I’m about to tell you has been decided by our family. The top guys have voted a hit. I’ve already talked to Bomp [San Diego hood Frank Bompensiero] about it. We’re going to clip Desi Arnaz, the producer of this show.”

Bompensiero and his boys, however, were not as excited about the Arnaz situation as Giancana and made only one cursory attempt to track the producer. Bomp informed Fratianno that his hit men “got disgusted and went back home, so the [Desi Arnaz] deal is down, the drain.” They also knew that Giancana was moody and that this tantrum would likely soon pass. The situation was further resolved, according to Wayne Johnson, when Mae Capone vetoed the hit against her son’s former best friend. For his part, Arnaz defused the situation by making Sinatra a standing $1-million offer to produce any film of his choice at Arnaz’s studio. “That concluded the contract,” Fratianno wrote. “Desi Arnaz never knew how close he came to getting clipped.”

Of far more import was the charged political climate that was encroaching on the Outfit’s world. With the 1960 presidential campaign looming, the war rooms of both major parties were appreciative of the clout now wielded by Al Capone’s heirs. Their influence stretched from Miami to New York, through the major Midwestern cities, on to Las Vegas and Hollywood. Their sway over the nation’s Teamsters and other labor unions alone made the Chicago gang impossible to ignore. Thus, the Outfit would soon be courted by both Vice President Richard Nixon, the Republican candidate, and Joe Kennedy, the father of the Democratic candidate, Jack Kennedy. It now appears likely that Vice President Nixon simultaneously oversaw a 1960 operation that also needed the Outfit’s help, an escapade that, if successful, would have all but guaranteed his electoral success: He wanted new Cuban strong-arm Fidel Castro overthrown and, if possible, murdered. Thus, just as it had done repeatedly since the days of FDR, the upperworld White House enlisted the underworld Outfit.

1
. Accardo took the “out” 152 times; Giancana read the oath from his Humphreys-supplied index card 34 times. Rosselli, not deemed by the committee to be in the labor racket, was not called to testify.

2
. During his imprisonment Ricca was not only visited by his cohorts, but also on numerous occasions by Libonati, who astounded prison officials with his lavish displays of affection, hugging the Waiter repeatedly. According to Jeanne Humphreys, Ricca’s release mandated a massive coming-out party, attended by the likes of Libonati and Frank Sinatra.

3
. Roemer and the Bureau apparently never learned of another bug planted at Celano’s three years later. At the time, the Illinois Crime Commission, under Charles “Cigars” Siragusa, hired a local detective to plant a microphone at the tailor shop. Unlike the G’s mike, this one was not hardwired; instead it was planted with a transmitter and broadcast on an FM frequency to anyone who knew where to set the dial. The broadcasts were monitored for an unknown period by the commission’s Ed King and James Kelliher.

4
. After the 1968 assassination of Dr. Martin Luther King Jr., John Ray, the brother of assassin James Earl Ray, told authorities that James had hid out in an East St. Louis gambling joint owned by Wortman.

5
. It is also believed by some that John Carr, who died a multimillionaire, may have grabbed some of the loot.

6
. When the questionable procedure was challenged in the Supreme Court, the court ruled in favor of the Gaming Board, explaining that gambling was a privilege, not a right.

7
. Other Lorimar credits include
Eight Is Enough, Knotfs Landing, Family Matters, Vll Fly Away, Falcon Crest,
and
Alf,
all for television. On the big screen, Lorimar produced
Billy Budd, Sybil, Being There,
and
An Officer and a Gentleman.

Merv Adelson was briefly married to TV journalist Barbara Walters. He has become great friends with the high and mighty, such as Israel’s former prime minister, Benjamin Netanyahu, who attended Adelson’s 1992 marriage to Walters. For years, Lorimar was headed by Leslie Moonves, currently the head of CBS Entertainment. Adelson recently merged Lorimar into Time-Warner and placed his money in EastWest Capital Associates, which invests in digital motion picture infrastructure. His son, Andy Adelson, runs Filmtrust, which sells film-production accounting software.

16.

Courted by Old Joe Kennedy:
The Outfit Arrives

His papa bought him the presidency.

-Lee Oswald, speaking with his wife,
Marina, about President Kennedy

It consumed our lives that year.

-Jeanne Humphreys, speaking of
Curly’s work on Jack Kennedy’s behalf

T
he decade that ushered in a sociological revolution of youth and sexual liberation began fittingly enough: On January 20, 1960, Joe Kennedy’s forty-two-year-old son, Jack, declared for the presidency, one year after then thirty-four-year-old Fidel Castro had seized America’s Cuban playground; on the sexual front, February 29 saw
Playboy
magazine mogul Hugh Hefner, then just thirty-three years old, open his first Playboy Club in the vortex of the Outfit’s power structure at 116 East Walton Street in downtown Chicago. These seemingly disparate, but seminal, occurrences held more commonalties than the youthfulness of their standard-bearers: They could not ignore the power and influence of the middle-aged men who composed Chicago’s Outfit.

The Second City bosses wasted little time in sinking their claws into Hefner’s new “key club” venture. As with most other Near North businesses, the Playboy Club had to make accommodations with the countless semilegit enterprises within the all-encompassing grasp of the Outfit. The intersections started with Hef’s liquor license, which had to be approved by the Outfit-controlled First Ward headquarters, where John D’Arco and Pat Marcy reigned supreme.

Much of the club’s cutlery was said to be supplied by businesses owned by Al Capone’s brother Ralph, while other furnishings had their origin in the gang’s distribution warehouses. In addition to the army of Outfit soldiers who were seen cavorting at the new jazz-inflected boite, Accardo’s boys (via Humphreys’ union stranglehold) controlled the numerous concessions - bartenders, waiters, coat checkers, parking valets, jukeboxes - so vital to the new enterprise. Local bands that supplied the requisite cool-jazz backdrop were booked by the Outfit’s musicians’ union. Coordinating the gang’s feeding frenzy was the club’s general manager, Tony Roma (of later restaurant fame), who was married to Josephine Costello, daughter of Capone bootlegger Joseph Costello.
¹

Outfit bosses were bestowed exclusive Number One Keys, which allowed them to date the otherwise off-limits “bunnies” and drink on a free tab. Slot king, and Humphreys crony, Eddie Vogel, dated “Bunny Mother” Peg Strak, who later became Roma’s executive secretary when Roma was promoted to operations manager of Playboy Clubs International, Inc., which oversaw the empire of sixty-three thousand international key holders. Although Hefner himself has never been tainted by his club’s unavoidable contact with the Outfit, it is interesting to note that in 1977, when he fought a copyright infringement lawsuit filed by Universal Studios, Hefner employed the services of Sidney Korshak. For a $50,000 fee, Korshak attempted in vain to settle the case with the studio, which was run by his old friend Lew Wasserman.

On the night of the gala Playboy Club opening, the top Outfit men, Joe Accardo, Mooney Giancana, Curly Humphreys, and Johnny Rosselli, were not in attendance. Now at the peak of their influence, the Chicago bosses had been invited to a power summit in New York City.
²
However, this time their host was not another Commission boss coping with internal strife, but was none other than Ambassador Joe Kennedy.

Details of the meeting first surfaced fifteen years later, when Manhattan lawyer Mario Brod gave a series of interviews to historian Richard Mahoney. Brod had been a liaison between the Central Intelligence Agency and the New York crime bosses since World War II, when the CIA’s precursor, the Office of Strategic Services (OSS), had kicked off the U.S. government’s long, mutually beneficial relationship with the underworld. The partnership had its known origins in 1942, when the OSS enlisted Meyer Lansky and the imprisoned Charles “Lucky” Luciano in its effort to deter wartime sabotage in the New York harbor. The government also utilized Luciano’s Italian contacts to gain intelligence in anticipation of the invasion of Sicily. For his efforts, detailed in Rodney Campbell’s book
The Luciano Project,
Lucky Luciano was allowed to leave prison in exchange for permanent exile in Italy. At the time, Brod was an OSS captain in Italy under future CIA counterintelligence chief James Angleton. In that theater, Angleton and Brod coordinated the information received from Luciano.
³
After the war, Brod maintained his contacts with both the underworld and the U.S. intelligence community from his Park Avenue law office. According to Angleton’s biographer, Tom Mangold, “[Brod] helped the CIA, on a regular, salaried, contract basis, with all those awkward jobs in the intelligence business that need an untraceable intermediary.” Leonard McCoy, a longtime CIA analyst who became the deputy chief for counterintelligence, described the Angleton-Brod relationship thus: “Angleton used Brod anytime he needed to go around normal channels. Brod was involved with organized labor officials, and certain unsavory characters. Whenever Angleton needed to keep the world from knowing the CIA was involved in an operation, he used Brod.”

When Bobby Kennedy announced he was going to subpoena Brod in 1963 to ask about his Teamster friends, Angleton personally called Kennedy and advised him to drop the initiative. Angleton came to Brod’s rescue again in 1975, when he convinced a Senate committee to drop Brod from its interview list, lest he suffer retaliation at the hands of mobsters who had no inkling of his cozy history with the U.S. government.

Although Brod had no recollection as to which of his mob friends invited him to Felix Young’s Restaurant in Manhattan on February 29,1960, he had a clear memory of who showed up and what was discussed. Rosselli told Brod that Joe Kennedy, whom Johnny had known since both their early Hollywood days in the 1920s, had asked Rosselli to set up the confab. Brod told Mahoney that the New York and Boston crime bosses, whom Kennedy had also asked Rosselli to invite, failed to show up. Once the attendees were in place, Joe Kennedy quickly got to the point: He wanted a large contribution to Jack’s campaign, and more important, the Outfit’s labor support for the election push. According to Brod, Curly Humphreys objected, noting that Joe’s other son Bobby was on an adrenaline-fueled mob-chasing crusade. Mahoney, who finally wrote of Brod’s account in 2000, noted, “The elder Kennedy replied that it was Jack who was running for president, not Bobby, and that this was ’business, not politics.’” After that weak argument, Kennedy left the restaurant and his unimpressed guests. However, Rosselli told the group that it was significant that Joe Kennedy had come to
them.
He asked his associates to at least consider the Kennedy alliance. Little did the bosses know, but Joe Kennedy was used to getting his way, and he would continue to arrange sit-downs with the Outfit in hopes of winning them over.

In 1988, ignorant of Mahoney’s unpublished interview with Brod, Irish journalist Anthony Summers spoke with Edna Daulyton, the hostess at Felix Young’s Restaurant in 1960. She also remembered the February powwow, telling Summers, “I took the reservations.” Daulyton recalled an even larger roster than did Brod, informing Summers, “It was as though every gangster chief in the United States was there. I don’t

remember all the names now, but Johnny Rosselli was there . . . They were all top people. I was amazed Joe Kennedy would take the risk.”
⁴

But Joe Kennedy believed that he had to take the risk if his son was to stand any chance of prevailing in the upcoming national contest. On the Republican side, Vice President Richard Nixon had allied with Outfit connected Teamster boss Jimmy Hoffa.
⁵
(When Nixon was defeated, his part of the deal could not be delivered, but his debt to the Teamster leader would be more than nullified when Nixon eventually became president.)

Papa Joe knew, however, that an arrangement with the Chicago Outfit would trump any alliances formed by the opposition. Joe had had firsthand knowledge of the power of the Chicago gang since his purchase of the world’s largest office building, the Chicago Merchandise Mart, in 1945, a virtual impossibility without making concessions to the gang.
⁶
As to why Joe Kennedy would “take such a risk” in meeting personally with hoods, a clue is offered by an associate of Joe’s son-in-law Steve Smith, who overheard Joe telling Smith that the other candidates “didn’t have the balls to go straight to the mob themselves.” Joe did. But then again, Joe Kennedy had been dealing with the underworld for years, and among Kennedy’s earliest shady acquaintances was the gang from Chicago.

Joe Kennedy and the Outfit

Joe Kennedy was Meyer Lansky with a Harvard degree.

-A member of the Chicago Outfit

Few doubt that Old Joe Kennedy had the “balls” to deal directly with gangsters. And historians agree that since the days preceding the 1929 stock market crash, when Kennedy had sold short on his stocks, driving the Depression even deeper while he profited from the nation’s misery, Joe Kennedy’s empire had come first, with patriotism and ethics distant runners-up. As for Kennedy’s ability to make deals with the underworld, the story likely begins during Volstead, when many immigrants seized the brass ring known as bootlegging.

It is all but universally accepted as historical fact that in the 1920s Joe Kennedy was up to his eyes in illegal alcohol. Leading underworld bootleggers from Frank Costello to Doc Stacher to Owney Madden to Joe Bonanno to Meyer Lansky to Lucky Luciano have all recalled for their biographers or for news journalists how they had bought booze that had been shipped into the country by Joseph Kennedy.
⁷
On the receiving side of the booze business, everyone from Joe’s Hyannis Port chums to the eastern Long Island townsfolk who survived the Depression by uncrating booze off the bootleggers’ boats tells tales of Joe Kennedy’s involvement in the illegal trade.

Overlooked by most was the 1996 discovery of a written record that described Kennedy’s illegal alcohol trafficking. While researching a television documentary based on Edward Behr’s book
Prohibition,
the A&E Network producers uncovered the records of a 1926 Canadian government investigation into Canadian alcohol exported to America during prohibition. At the time the report by the Royal Commission on Customs and Excise was compiled, Canadian authorities were attempting to discern how much export tax they were owed by the American bootleggers. The commission’s paperwork, displayed on the show that aired, showed that the one American purchaser’s name that appeared time and time again was Joseph Kennedy. The files showed that Kennedy had been buying up liquor from Canada’s Hiram Walker facility, which had upped its production by 400 percent to meet the demand of Kennedy and the other U.S. “importers.” In the same Hiram Walker address book that contained the name Joseph Kennedy were the names of other American bootleggers, among them Al Capone and his “financial director” Jake Guzik. It was the earliest hint of an intersection between Kennedy and the Chicago underworld.

The inclusion of Kennedy’s and Capone’s names in the same Canadian government bootlegging file may not be coincidence. Rumors have long been rife in Chicago that one of the many hoods Kennedy had cut sales deals with was none other than Al Capone. The core of the allegations is that Kennedy made arrangements with Capone regarding transshipment of booze across Lake Michigan from Canada - a route controlled by Capone’s Syndicate. Recently, a fascinating corroboration for those stories has surfaced.

In 1994, John Kohlert, a master piano tuner and retired plant supervisor for Wurlitzer Pianos, gave a videotaped oral history just prior to his death at age ninety-three.
⁸
In his recitation, Kohlert pointed out that he had obtained two master’s degrees, one in acoustical engineering from Johns Hopkins University. But he had got his start as a young piano tuner in the speakeasies owned by the man who paid for his college education, Al Capone. On the tape, Kohlert tells his story of Al Capone merely as an unremarkable aside to the history of his life.

One night in 1926, while tuning the home piano of Capone (who had become like a father figure), young Kohlert was invited to stay for a spaghetti dinner. “We’re having a special guest,” Big Al informed the young man. At the dinner, Joe Kennedy showed up, and Kohlert watched as Capone and Kennedy struck a deal wherein Capone traded his whiskey (from his Canadian distillery) for a shipment of Kennedy’s Seagram’s brand. The exchanges were to be made in Lake Michigan, off Mackinac Island.

Years later, when Kohlert was arrested in Britain (on stowaway charges - he had escaped Nazi Germany, but had no passport), he got a message out to the now ambassador to Great Britain, Joseph Kennedy. The note said: “I hope you remember me from that spaghetti dinner in Cicero . . . “ The next day, Kennedy came to the prison and saw to Kohlert’s release. In 1944, when Joe introduced Haig & Haig whiskey to Chicago, his agent was, according to FBI files, Tom Cassara, a Miami gangster who was shot dead soon after arranging the deal with an operative from the Outfit.

Curly Humphreys also remembered Joe Kennedy from the Volstead era. Years later, Curly Humphreys’ daughter, Llewella, recalled her father speaking of his distrust of Kennedy, explaining that one of Curly’s hijacked booze trucks was hit by bombs tossed by Kennedy’s bootleggers, an apparent double cross by Kennedy, the details of which were not clarified for the family. Jeanne Humphreys also has vague memories of Curly speaking about a booze theft by Joe Kennedy’s forces. Kennedy’s interest in Al Capone’s liquor business was buttressed by
Washington Post
reporter and Joe Kennedy biographer Ronald Kessler, whose sources indicated that Joe promised a Chicago friend that “if he got Al Capone’s business, he would give him 25 percent. The man got the business, but Joe then fired him and hounded him so he could not find another job.”