Biographies & Memoirs

7.

Waking Up in the Dream Factory

Although a number of factors played into the eventual demise of the Outfit’s Hollywood spree, one largely avoidable oversight was crucial: The Outfit neglected to teach Willie Bioff how to launder money. Long experienced in the ways of rendering truckloads of bootleg cash untraceable, the gang’s failure to pass their expertise on to Willie the pimp would come back to haunt them. As previously noted, the Outfit used many methods to launder their money, especially favoring the natural subterfuge provided by cash flow at their racetracks. But in Hollywood, Willie Bioff had no clue how to avoid walking into a bank with a $100,000 cash deposit in his pocket. Ironically, of all the illegal chicanery orchestrated by Bioff, it was his benign desire to build a home that led to the collapse of his Hollywood reign. It would also temporarily derail key bosses in Chicago.

“A chain is only as strong as its weakest link” goes the aphorism, and it was the most compelling lesson learned by the Outfit in their IASTE finagling. The weak link in the Hollywood scam, to no one’s surprise, turned out to be Willie Bioff. Like so many before him, Bioff believed that by demanding payoffs in cold cash he would effectively protect himself from a paper trail of his covert criminal transactions. In the short term he was correct, but he had not learned the lesson of the bootleggers: Spending vast amounts of cash is an invitation to official scrutiny. By the time Bioff realized his mistake, he had to scramble. Thus, when he desired to place a down payment on his Rancho Laurie purchase in 1937, Bioff was by then aware that even a rookie bank officer’s eyebrows might raise at the sight of a thousand $100 bills dropped on his desk. In what would prove to be a fatal move, Willie Bioff turned to Joe Schenck to launder his funds and bail him out of his predicament.

Since Bioff had facilitated the Schenck brothers’ money laundering on numerous occasions, he expected, and received, a quid pro quo. Instead of depositing his cash in the bank, Bioff consigned it to Joe Schenck, who in return made out a company check to Willie for the same amount, $100,000. With his money now in a nonsuspicious form, Willie marched down to the bank and deposited a Twentieth Century-Fox business check, which he could claim, if asked, was a commission payment for his film-stock agenting deal. The transfer went unnoticed for the better part of 1937. However, when one of Willie Bioff’s growing number of enraged adversaries was pushed to the brink, the exchange was brought to light, triggering a series of events that ended with the collapse of the entire enterprise.

A number of disparate forces had opposed Bioff’s handling of IATSE, but had been stymied in their attempts to oppose the powerful Bioff-Browne-Rosselli-Outfit alliance. Bioff’s enemies were too numerous and motivated, however, to give up the fight, and their diligence was soon to be rewarded. One such foe, a coalition known as the IA Progressives, engaged in pitched battle with Bioff’s IATSE muscle. Courageously led by Irv Hentschel and Jeff Kibre, the IA Progressives fought to “get the mob out of the union.” Forming their own scab union-within-a-union, Kibre and Hentschel persuaded growing numbers of workers to defy Bioff’s orders.

The same year he constructed his paean to domesticity in the valley, Bioff began making noise about muscling in on the Screen Actors Guild (SAG). After SAG meetings, guild members would emerge to find their car tires slashed. Other members were mugged and threatened, but despite the assault, the SAG contingent refused to capitulate. Instead, they conducted their own investigation of Willie Bioff. Under the leadership of its president, actor Robert Montgomery, SAG financed an inquiry that uncovered the $100,000 payment Schenck and Fox had made to Bioff. With the examinations by the IA Progressives and SAG making headlines, the California state legislature began its own review. Under oath, Bioff stated that the transaction was merely a loan, obtained so that he could purchase land. The Assembly’s investigation allowed them to append Bioff’s resume to include “former panderer from Chicago.” The IA Progressives seized the opportunity to distribute leaflets boldly illustrated with Bioff’s Chicago mug shot. Despite the setback, Bioff was not about to take the insults lying down. Using Curly Humphreys’ tried-and-true MO, Willie was able to nip the Assembly problem in the bud by paying Assembly Speaker William Jones and his investigator William Neblitt $5,000 to kill the investigation. The move would grant Bioff only a temporary reprieve: 1938 was a bad year to be on the wrong side of the law in California, as the political climate was undergoing one of its periodic reform movements. In Los Angeles, the public was calling for gangster-corrupted mayor Frank Shaw’s recall, eventually succeeding in September 1938. Nitti and the Outfit sensed the obvious and sent word to Bioff that he should step down from his IATSE post, at least publicly. Bioff complied with the order, but continued to draw a salary and shadow his boss, George Browne.

Whereas Nitti and the gang began to express concern, George Browne exuded confidence. At the 1938 IATSE convention, Browne came to his friend Willie’s defense. Flis oration to his delegates also included jingoistic verbiage that would conveniently be adopted by firebrand pols for the next four decades: He labeled the Progressives “Communists” and “parlor pinks.” With Browne’s Red-baiting diatribe ringing the rafters of the auditorium below him, Willie the pimp took two of his goons to Irv Hentschel’s hotel room, where they beat the daylights out of him. It was Willie’s last stand; the battle for the union had just begun.

Bartenders’ Union Redux

The year 1938 not only provided drama on the IATSE front, but also for the continuing Outfit battle for control of Chicago’s bartenders’ unions. Having successfully placed Louis Romano on the board of the five-thousand- member Local 278 three years earlier, the gangsters embarked on an expansion that appeared to backfire, but actually helped embroider the growing legend of the Outfit’s legal sage, Curly Humphreys.

The union’s business agent, George McLane, later recalled how one day in 1938, Louis Romano, accompanied by Curly Humphreys and his partner from the bootlegging days, Fred Evans, arrived at his office. Robert Satchie, president of Local 278, had died of natural causes, prompting Curly Humphreys’ decision that Romano should be elevated to the presidency of the Chicago bartenders’ union. “As they sat down, Romano told me, ’I’m taking over,’” McLane recalled. “My desk drawer was open a few inches and they noticed my pistol. Humphreys and Romano pulled pistols and ordered me away from the desk.”

“We’re taking over,” Romano repeated. “You will receive your pay.” McLane took the demand to his board, which initially refused to grant Romano and the Outfit the top spot. When McLane reported back to the Capri, Curly Humphreys gave him the Look and coldly said, “Tell us who opposes it. We will take care of it.” McLane asked his counsel what he should do. “Turn it over to them” was the reply. If McLane hadn’t made up his mind by then, he would when he reached inside his coat pocket. “They slipped me a bullet,” McLane testified. A bullet placed in a man’s jacket was the standard Outfit warning of imminent death to its recipient. McLane went on a forced three-month vacation. When he returned, Curly and Romano had formed a “joint council,” having muscled fifteen other unions to fall under their umbrella. The Outfit’s dues-paying bartender serfs had now grown from five thousand to thirty thousand.

While the Humphreys-McLane tango continued, events were quietly occurring elsewhere that marked the end of an era. In April 1939, Johnny Torrio conceded defeat to the IRS after having been charged with evading $86,000 in taxes for the years 1933 to 1935. The feds had even gotten to the near-demented Al Capone in prison and persuaded him to testify against his mentor. However, his ramblings turned out to be incoherent and useless. Although Torrio initially pleaded not guilty, he changed his plea, it is assumed, so that the prosecutors would not pry open a door that would lead them into the heart of the all-important Commission. After serving twenty-three months in Leavenworth, Torrio was paroled on April 14,1941. He had done his time like a man of honor and had earned the right to retire as a living legend among those who knew what he had accomplished in a life dedicated to forging profitable alliances. The man whose vision had created first the truce between the James Street Gang and the Five Points Gang, then organized the original Chicago Syndicate, and finally the national Commission, was fifty-nine years old when he decided to take his millions and enjoy the good life.

The same year that Torrio was sent up on tax charges, his protege, Al Capone, was liberated. On November 7, 1939, with his health in steep decline, Capone was released to his wife’s custody. He would spend the next few years in seclusion at his Palm Island estate.

Meanwhile, McLane continued to haggle with Nitti and the gang about Romano. Now the Outfit wanted the union to nominate Romano for the national bartenders’ union presidency at the upcoming convention, the ploy used so successfully with George Browne and IATSE. McLane recalled one occasion when Curly Humphreys visited him at the union office, and the master of the velvet-glove approach was in rare form. “Why don’t you have some sense? You have been in the labor game all your life, but you don’t have a quarter.” Curly promised that the Outfit would make McLane as rich as Bioff and Browne. But McLane was unyielding. “I can’t go to sleep at night,” McLane said. “I ain’t going to push people around for you or anybody else.” Humphreys was taken aback, saying, “That’s the trouble. We call it business and you call it pushing people around.”

McLane later testified that at some of these meetings he met Bioff, Browne, and Circella. Clearly, the movie scam was to be used as a template for the gang’s national control of all forms of pleasure. Eventually a compromise was reached wherein the Outfit agreed to prop up McLane himself instead of Romano for the national leadership of the bartenders’ union. When Nitti first suggested the new strategy, McLane tried to school the mobster. “I told Nitti that, as it would be known that I was an Outfit yes-man, I would wind up in the penitentiary, or in an alley.” But Nitti would hear none of it. “They told me they had run other organizations and had taken other organizations through the same channels,” McLane said, “and all they said they wanted was two years of it and they would see that I was elected.” McLane capitulated to Nitti’s demand, and just as Browne had been forced on IATSE, McLane would be installed at the top of the national bartenders’ union.

When the convention occurred, the Outfit miscalculated somehow and McLane was defeated. By this time, George McLane had had enough. He went to Chicago’s master of chancery, Isadore Brown, telling the city official of the death threats he had received from the boys from Cicero. This led to the impanelment of a Cook Country grand jury in 1940. When the state’s attorney announced publicly on June 5,1940, the subject of the grand jury’s inquiry, the gangsters had to move fast. In the days of Capone’s Syndicate, the situation would have demanded that the gang dust off their Chicago typewriters. But Curly saw things differently: If the grand jury sent up indictments, a trial might provide him a laboratory in which to field-test some legal maneuvers he had been studying. If he had done his homework properly, the trial could be the best thing that ever happened to the Outfit. Thus, instead of using force to stop McLane from repeating his story before the grand jury, Curly told his colleagues to keep their distance. Curly’s move was meant to inform his associates that they could use brains over brawn. Furthermore, there would be no intimidation of the judge or jury. His grand strategy predicated that McLane be allowed to talk to the grand jury, and that the resultant trial go forward. And talk McLane did, with his testimony culminating in the indictments of Nitti, Humphreys, Ricca, Romano, Evans, and a slugger named Tom Panton. Ricca and Campagna promptly went on the lam, probably to Hollywood. Local 278’s council was dissolved and the union placed into receivership until untainted directors could be placed in charge. Why the Outfit would so break with tradition by allowing a trial to proceed seemingly without interference would soon be made abundantly clear. The stage was now set for Humphreys’ brilliant manipulation of the legal code.

Although other attorneys were reported as defense counsels of record when the case came before the criminal court, it was actually Curly Humphreys who masterminded the legal strategy that left even his adversaries in awe. Just before the November 29, 1940, trial, George McLane reported that his union was now healthy, persuading the court to terminate the receivership. At this point, McLane’s attorney, A. C. Lewis, should have suspected something. On the first day of the trial, McLane informed Lewis that he was fired. In his place was a former judge named Alfar Eberhardt, a close friend of Curly Humphreys’. After this introductory shock, Humphreys made his grand entrance. Curly’s biographer John Morgan described the scene: “The Welshman strolled into Criminal Court, with his lawyer Roland Libonati in tow, smiling courteously at the assembly, placing his vicuna coat on the back of his chair and gracing the judge with a smile.” Knowing what was about to transpire, Humphreys must have had a difficult time stifling his glee.

Following the requisite introductory remarks, the state prosecutor swore in his crucial star witness, George McLane. After McLane gave his name and address, the bombshell exploded, ignited by a seemingly innocent interrogatory:

Prosecutor: “What is your wife’s given name?”

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

Prosecutor: “Do you know the defendant Murray Humphreys?”

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.1

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.2 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.3

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.4With 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.

Over the decades, Korshak maintained close relationships with former Capone associate Jules Stein and Stein’s partner at MCA, Lew Wasserman. These friendships were vital to assuring the Outfit’s continued weight in movieland over the decades. Like Jake the Barber (who was a Korshak client), the Schencks, the Annenbergs, and innumerable others before, Sidney Korshak mastered the art of walking through life with one foot in the upperworld and one in the underworld. Other Korshak connections to the entertainment world were of obvious attraction to hoods anxious to make a mark in that industry. As with Stein, Korshak was a lifelong friend of CBS president Bill Paley, who, like Korshak, had risen out of Chicago’s Twenty-fourth Ward.

Korshak’s wife, Bernice, a model and Ice Capades skater, obtained a glimpse of Sidney’s clout early on. After returning from the honeymoon, Mrs. Korshak read from a list of coded messages that awaited her new husband.

“George Washington called, everything is status quo. Thomas Jefferson called, urgent, please call ASAP. Abraham Lincoln must speak with you, important. Theodore Roosevelt called three times, must connect with you before Monday.”

“Your friends sure have a strange sense of humor. Who are they?” asked Bernice.

“Exactly who they said they were,” was Sidney’s terse response. “Any other questions?” According to producer Bob Evans, who was told the anecdote by Bernice, “Fifty years later, Bernice has never asked another question.”

In Los Angeles, Joe Accardo’s longtime associate and gambling expert Charles “Cherry Nose” Gioe who, like Korshak, lived at the Seneca, had first introduced Sidney Korshak to Willie Bioff. “Sidney is our man,” Gioe had instructed, “and I want you to do what he tells you. He is not just another lawyer. He knows our gang and figures our best interest. Pay attention to him, and remember, any message you get from him is a message from us.” Three days after Bioff’s indictment, Korshak renewed his acquaintance with the man who formerly pummeled prostitutes in Chicago’s Levee.

“You will admit to being Schenck’s bagman and do your time like a man,” Korshak explained to Bioff when they convened at L.A.’s Ambassador Hotel two days after the indictment. Bioff knew that defying Korshak meant defying the Outfit. He accepted his fate and prepared for the trip back to New York to plead guilty. Korshak obtained $15,000 from his Chicago bosses, a gift to Bioff to defray his attorney fees. It is assumed that similar arrangements were made with George Browne, who also turned himself in.

The third defendant, Nick Circella, the most obvious link to the Chicago bosses, disappeared after his indictment the following September. His flight invites the reasonable inference that he was ordered to go on the lam by the Outfit, since his interrogation would leave a key gangster open to being “turned” by the government. It was a chance, however remote, that the gang was unwilling to take. Circella went into hiding with his girlfriend Estelle Carey, a thirty-four-year-old, beautiful, blond hostess at Circella’s Colony Club. Carey, a former 26 game dice girl,5 had moved up to the lucrative position of hostess when she hooked up with Circella. As a hostess, Estelle’s primary responsibility was to steer potential high rollers from the legal 26 game to the illegal, big-money craps tables on the second floor. The role also called for the occasional bedding of a client in a third-floor suite, if that’s what it took to keep him happy. Circella, who was known to share Estelle with his Outfit associates, often crowed about her talents. “I once saw her steer an oilman from Tulsa to the tables,” Circella boasted. “He lost ten grand in an hour. She kept him happy all the time, and after that, whenever he came to Chicago, he wanted Estelle.” Now on the run with Nick Circella, Estelle Carey dyed her hair black, abandoning the high life of Chicago’s nightclub district for the suburbs.

The summer of 1941 saw a battery of legal maneuvers that stalled Bioff and Browne’s trial opening as long as possible. On October 6, 1941, the trial finally commenced, opening with pleas that were unheard of in gang circles: Both defendants defied Korshak’s directive and pled not guilty, assuring that witnesses would be heard who could tip the prosecutors to the real scope of the operation. In Chicago, the bosses seethed, worrying that the capricious Bioff might trump his mistake and take the stand. To the gang’s increased consternation, he did. Now all they could do was hold their collective breath and hope for the best. Bioff’s testimony showed that he had decided he could fight the charges without giving up the Outfit. His one-note defense was inventive, if nothing else: “They bribed me. I didn’t extort them.” Bioff claimed weakly that the producers sought him out to guarantee labor peace.

Although Bioff himself spared the Outfit, the gang’s fears were eventually realized when the trial heard from another witness. As a result of Schenck’s limited cooperation, prosecutors Boris Kostelanetz and Matthias Correa had deposed a number of other movie moguls. Lightbulbs went off in the prosecutors’ heads when they inadvertently picked up a bombshell from the lips of Warner Bros.’ head, Harry Warner. The beleaguered executive recalled that on one occasion when Willie Bioff had upped his cash demands, he had let slip the true scope of the racket. “The boys in Chicago insist on more money,” Bioff had blurted. That was all the prosecutorial team needed to hear. They were now certain that Bioff’s Chicago background was more than happenstance, since it went straight to the heart of the regime of Al Capone’s heirs, the Outfit. Although it was too late in these proceedings to vet the new revelation, the prosecutors were salivating over the potential for future investigations. After three weeks of testimony, and after only two hours of deliberation, the jury returned a guilty verdict. Soon Bioff received his ten-year sentence, while Browne got an eight-year term. On December 1, one week prior to America’s declaration of war against Germany and Japan, and within weeks of the Bioff and Browne verdicts, Circella was apprehended while having breakfast at Shorty’s Place on Cicero Avenue, miles from his normal haunts on the Near North Side. To the great dismay of the prosecutors (and the relief of the Outfit), Circella played his role true to form: He clammed up. On March 8, 1942, Circella pled guilty and quietly went away to prison.

For the prosecutors, the work had just begun. Putting away the heirs to Al Capone was potentially a career-making case, and the team gave it the requisite attention. The were emboldened by the June 1934 passage of the Federal Anti-Racketeering Act (the Copeland Act), which gave law enforcement new weapons to train on gangsters. With Schenck serving a lenient three-year sentence (which was reduced to one year and a day), and Browne and Bioff facing hard time, the prosecutors strategized over how to build their case against the Outfit. Initially, they focused on the double-book-keeping Izzy Zevlin, hoping he might provide the link to the Outfit. He would be indicted later that year, but without providing the fatal blow to the Outfit. Meanwhile, the other Outfit bosses lay low, hoping the heat would die down. Some even sought to embellish their biographies with patriotic gestures. Curly Humphreys utilized his Hollywood connections to organize a wartime bond rally at Chicago’s Soldier Field. Pressed into service were such luminaries as Bob Hope, George Raft, Jimmy Durante, and a young up-and-comer named Frank Sinatra. Johnny Rosselli, in his effort to wave the flag, went so far as to enlist in the army. The thirty-seven-year-old sufferer of chronic tuberculosis was a recruitment long shot at best. However, after an initial rejection, the persistent Rosselli was inducted on December 4, 1942. Although his patriotism was never in question, his biographers labeled his move for what it was, an “all-American alibi.”

Throughout 1942, the intrepid federal prosecutors in New York prodded Bioff, Browne, and Circella with little success. Circella toyed with the idea of cooperating with investigators. “He never agreed to spell everything out for us, but there was a measure of cooperation,” Kostelanetz told writer Ed Becker decades later. But with the dawning of 1943, a horrific piece of savagery turned the tide in the government’s favor.

At 3:09 in the afternoon on February 2, 1943, Chicago firemen were called to an apartment at 512 Addison Street on the North Side near Lake Michigan, where neighbors had smelled smoke. Racing up the stairs to the third-floor apartment, the firemen found the still-smoldering corpse of a redheaded young woman on the dining-room floor. Her remains were in a horrid state: She had been stabbed with an ice pick, beaten, and set afire after being doused with a flammable liquid. The flash fire had burned the flesh off her legs up to her knees. The apartment’s condition bespoke of a fierce struggle. The woman’s blood and hair covered the walls and floors in the kitchen and dining room. In the kitchen, investigators found the bloody objects used to assault the woman before she was set ablaze: a blackjack, an ice pick, a knife, an electric iron, and a broken whiskey bottle. The police concluded that the crime had occurred just hours before their arrival. The victim, it was learned, had been on the phone with her cousin when she had had to answer the door. “I’m expecting someone” were her last words as she hung up. Although two fur coats were missing, the victim’s much more valuable jewelry was untouched. Police wondered if the coats were taken to give the appearance of a robbery. Also, the bottle of flammable liquid found in the ashes had not belonged to the deceased or her roommate, and burglars are not typically known to carry combustibles with them to a heist.

Virtually no one suspected organized crime involvement in the tragedy, since killing a wife, girlfriend, or any woman for that matter violated the gangsters’ unique moral dogma. In addition, since the Outfit had taken over, innocent bystanders were insulated from the fray even more so than in Capone’s day. What gave the investigators pause was that both the victim’s given surname, Smith, and her blond hair had been changed several times, and that most recently she had been known as Estelle Carey, the talented nightclub hostess and lover of Nick Circella.

Investigators learned that Carey had dyed her hair still again (this time red) and gone into hiding after Circella’s indictment, taking up with a roommate named Maxine Buturff. Although police initially suspected a mob hit, they never determined why Carey would feel threatened by gangsters whose code prohibited the terrorizing of women. Like most other Chicago murders of the era, Carey’s would go unsolved, allowing speculation to fill the void. One theory holds that Carey had been two-timing Circella and had divulged his hideout to authorities; another view maintains that both Circella and Carey had skimmed from the Outfit’s Hollywood extortion operation and thus courted punishment; another hypothesis postulates that the Outfit killed Carey to dissuade the defendants from entertaining the notion of testifying against the bosses; lastly, there remains the possibility that the crime was just a ghastly coincidence, having nothing to do with the Outfit or the Hollywood trial. This last possibility certainly jibes with the Outfit’s aversion to involving women in its affairs. It is widely believed in Chicago that Carey was seeing Outfit enforcer Marshall Caifano on the side, and that she was using her cachet with him to manipulate, and infuriate, countless creditors. But tending to verify the gang’s culpability was that coincident with Carey’s murder, George Browne’s wife received an anonymous phone call warning her and her husband not to cooperate with the investigation, lest her lifeless body turn up in somebody’s trunk.

Whatever its motive, the murder of Carey, combined with the death threats, produced powerful but opposite effects on Circella and Bioff. If Nick Circella had seriously entertained the thought of singing to the G, he quickly thought better of it after the slaughter on Addison Street. “As soon as [Carey] was killed, that was the end of it,” prosecutor Kostelanetz recalled. “[Circella] turned off, boom, just like an electric light.” Unlike Circella, Willie Bioff, fearing for his beloved Laurie and their children, reacted with rage, saying, “While we do time for them, they are murdering our families.” Bioff proceeded directly to the prosecutor’s office asking, “What do you want to know?” For his part, George Browne took the middle ground, cooperating only minimally with the investigators.

Now a friendly prosecution witness, the reckless Bioff attempted to enhance his appeal to the government by adding patriotism to his rationale for giving testimony, telling prosecutors, “I am a loyal American. I just want to get out so I can do my part against the Axis.” Bioff was not the only culprit attempting to play the patriotism card. Called before a grand jury that summer, Johnny Rosselli left his army barracks at Fort McPherson, Georgia, and journeyed to New York, where he took up residence at the Waldorf-Astoria. When he appeared before the jurors, the “all-American mafioso” showed up in full army dress. But his posturing was futile. Not even an appeal to America’s opposition to the evil Third Reich could derail the government’s high-speed investigative train. Within days, on March 18, 1943, conspiracy and extortion indictments were returned against Rosselli, Nitti, Campagna, Ricca (De Lucia), and Gioe, as well as Phil D’Andrea, Frankie Diamond (Maritote), and a New Jersey union boss named Louis Kaufman, who had helped engineer Browne’s takeover of the Kentucky IATSE convention.

Rosselli was still in New York when the ax fell and thus became the first defendant picked up by the police. Instead of accompanying his Eighty-first Battalion to Normandy, a uniformed Private Rosselli was arraigned and hauled off to jail. The same night the indictments were returned, the news was widely reported on Chicago radio. A hastily arranged Outfit meeting convened that night at Nitti’s Riverside home. At this caucus, out of necessity, the torch was passed from Frank Nitti to Joe Accardo and Curly Humphreys. Paul Ricca would also have been included, except that he was virtually assured a stiff prison term. In short time, Paul Ricca lit into the fifty-eight-year-old Nitti. “Frank, you brought Browne and Bioff to us,” Ricca yelled. “You masterminded this whole thing and it went sour.” Ricca then pronounced sentence: Nitti should take the fall honorably, just as Big Al had done.

“But it’s a conspiracy charge,” countered Nitti. “We all have to hang together.” Nitti had had such a rough time in his previous incarceration that he was determined not to go away again without a fight. Tempers flared as the combatants rose to scream at one another. “Frank, you’re asking for it,” threatened a panting Ricca. One boss’ threatening another brought the room to an uneasy silence. In a daring breach of traditional etiquette, Nitti walked to the door, opened it, and indicated that his former friends had to leave. Walking out into the fittingly chilly March night, the Outfit executive board members knew that, in one way or another, they had seen the last of their old compadre Frank Nitti.

The following day brought a freezing rain to Chicagoland. As the 2 P.M. train crawled down the tracks of the Illinois Central Railroad, its crew was startled to see a clearly drunk man stumbling toward them on the tracks. He was holding a whiskey bottle in one hand and a .32-caliber pistol in the other. The train ground to a halt after the well-dressed, smallish man made threatening gestures in its direction. In fact, he just wanted the workers to keep their distance. With the railroad men watching in horror, the despondent man aimed his gun at his head and fired two shots, but he was so drunk that he missed, putting the bullets instead through the crown of his fedora. On his third attempt, Frank Nitti’s gun found its mark, blowing his brains out in full view of the onlookers. His death remains to this day the only suicide of a high-ranking gang leader. Gang historians surmise that the Outfit gave Nitti the choice of going to prison or facing the business end of a Chicago typewriter. Nitti chose neither.

Seemingly unfazed, the Outfit bosses moved on to new business, the most pressing of which was the need to post bail of $500,000. The money was raised in much the same way that the gang had produced much of its alcohol during prohibition: the Unione Siciliana was recruited into the effort. Soon, thousands of small checks began arriving at the Outfit’s headquarters, sent by the tightly knit community of Italian immigrant families, formerly the gang’s alky cookers. Contributing to the effort was a mixed assortment of crooked bookies and legitimate small-business men, all of whom felt they owed something to “the boys.” The FBI later identified some eighteen individuals who appeared at the Chicago offices of the American Casualty Company, the enlisted bail-bond company, toting tens of thousands of dollars each. They arrived bearing personal checks, money orders, cashier’s checks, and boxfuls of cash. One married couple, Jack and Betty Sussman, arrived with $50,000 in cash. The organizer of the fund drive was the mysterious “supreme president” of the Italian-American Union (formerly the Unione Siciliana), and the former twenty-one-year-old mayor of suburban Melrose Park, attorney Joseph I. Bulger (Imburgio).6 Bulger, now in his early fifties, was born in New Orleans, from where he was rescued by a Cajun woman after his father was lynched by the local xenophobes. The woman brought the youngster to Chicago, where he prospered, eventually graduating at age twenty from the John Marshall School of Law7. After becoming one of the youngest presidents of the Unione Siciliana, Bulger assumed the role of consigliere for the Outfit, and lawyer of record for the gang’s bosses, having personally handled a lawsuit for Ricca involving a fire at his Berrien Springs farm years earlier. Some believe Bulger was the hidden “ultimate leader” of the Outfit, working from his 139 North Clark Street office to link the organization back to the old country, which in turn siphoned off a percentage of the ill-gotten profits from the Windy City. This belief, though widespread in Chicago’s Italian ghettos, is virtually impossible to prove.

After a summer of predictable stalling maneuvers, the trial of the original “Chicago Seven” commenced on October 5, 1943. One by one, studio heads testified about the extent of the shakedown. In contrast to the reluctant witness George Browne, Willie Bioff gave unrestrained, detailed testimony that left the courtroom stunned. Of course, by the time of his testimony, Bioff had secured a deal with the prosecutors for a shortened jail term, protection, and a new identity upon his release. All he had to do was finger the Outfit leaders, and Bioff more than held up his end of the bargain. The former pimp readily admitted that his prior testimony in the 1941 trial, denying the extortion, was a total fabrication: “I lied, and lied, and lied.” In fact, Bioff said, “We had about twenty percent of Hollywood when we got in trouble.” The Outfit would have taken over 50 percent, Bioff added, if they hadn’t “loused up.” Summing up his tawdry life, Bioff said, “I am just a low, uncouth person. I’m a low-type sort of man. People of my caliber don’t do nice things.” This particular colloquy concluded with Bioff’s introspective no-brainer: “Oh, yes, I am a very despicable man.”

But the extortion admission was just one of Bioff’s bombshells. He also recounted how studio heads such as the Schencks were stealing from their stockholders; how Nick Schenck had paid a federal investigator $200,000 not to investigate him; and in a statement that sent ripples of fear through the members of the Outfit’s New York-based Commission partners, Bioff named Sidney Korshak as “our man in Hollywood.” However, Willie “the Canary” stopped just short of naming Curly Humphreys or Joe Accardo, whom he had never met face-to-face. Keeping these key figures insulated from Bioff and Browne was a key strategy that allowed the Outfit to continue to function despite the monumental setback.

The defendants’ legal team decided against putting their clients on the stand. Instead they chose to cross-examine the studio heads and Bioff in a futile attempt to to prove that the extortion was in fact bribery by venal businessmen who desired to control labor. Of course there was some truth to that defense. When a federal court investigated the estate of Frank Nitti six years later, the presiding judge noted, “The monies were extracted [from the studio heads] with full knowledge on their part as to Browne’s and Bioff’s activities and assurances; and no effort was made to secure the assistance of law enforcement authorities.” But Kostelanetz’s prosecution team was also correct about the Outfit’s master plan, and the Outfit was charged in this trial, not the studio heads. In the end, the jury heard vastly more testimony about the gang’s connivances than it did about the movie industry’s own expedience.

On New Year’s Eve, 1943, after a seventy-three-day trial, the jury delivered their guilty verdict, which carried a maximum ten-year sentence, at the discretion of the judge. In two weeks’ time, the litigants returned to debate the imposition of punishment. Prosecutor Kostelanetz gave a blistering synopsis of the gang’s criminal past and alleged violent associations, even arguing that the judge might see fit to extend the requisite ten-year sentence “by one or two years, as Your Honor may feel appropriate.” One of the Outfit’s attorneys, A. Bradley Eben, in asking for a light sentence, called attention to the obvious when he reasoned, “There is not one chance in a thousand that they will be pardoned when they first become eligible for it.” Another member of the legal team added, “Your Honor may know that they will probably serve nearly every day of the sentence that Your Honor imposes.” After hearing the opposing pleas, the judge pronounced punishment: Ricca, Campagna, Rosselli, D’Andrea, Maritote, and Gioe were sentenced to ten years in prison plus $10,000 fines. Louis Kaufman, the New Jersey union strong-arm, was given seven years. After three months of futile appeal motions, during which the convicts languished in New York City’s dreaded Tombs prison, the gang packed its toothbrushes for what their pursuers assumed would be a decade “in college.” Although Nick Circella had been sent to Leavenworth federal prison in Kansas, a day’s drive from the gang’s Chicago headquarters, the new convictees were remanded to the notoriously strict, 60 percent overpopulated, and hideously unsanitary Atlanta federal facility, 720 miles from the Windy City.

In Atlanta, Warden Joseph Sanford made a preemptive gesture, aimed at informing the gang bosses that they should not expect special treatment while under his watch. When Phil D’Andrea feigned illness, Sanford personally entered his cell and beat the fifty-two-year-old father of three unmercifully. When word got back to the rest, they lay low, with Rosselli even earning a job as prison library clerk, where he pursued an interest in the Bible. Rosselli also maintained his liaisons with Hollywood. During his prison stay, he received hundreds of letters from friends such as talent agent Danny Winkler and actress Beatrice Ann Frank. But for the forty-five- year-old Paul Ricca, the man who by rights should have assumed Nitti’s leadership post, the ignominy was unbearable. He had paid off too many pols in his life to suffer such an outrage. But Ricca and the Outfit soon learned a valuable lesson: It was one thing to own high-placed politicians and judges, but pressure exerted by energetic scribes such as Westbrook Pegler could render all the bribes in the world moot. This epiphany caused a knee-jerk reaction in the humiliated Ricca, who instructed his lawyer that he wanted the crusading Pegler killed. Ricca was quickly disabused of this notion, however, and was counseled to go back to being “the Waiter.” The Chicago contingent settled in as best they could, but Paul Ricca never believed for a moment that he could not pull off the impossible and get sprung on the first day he was eligible for parole in three years. Were he a betting man, he could have gotten great odds, since virtually no one else believed it possible.

In Chicago, enough of the brain trust survived to keep the enterprise not only afloat, but prosperous. With the Welshman Curly Humphreys as consigliere, the baton of leadership passed from the deceased Frank Nitti, leapfrogging over the imprisoned Paul Ricca, directly into the hands of Joe Accardo. Reenergized by the input from a recently sprung, tough-as-nails wheelman named Mooney Giancana, the Accardo regime would go on to achieve prosperity unmatched in America’s criminal history.

1. It is believed that the first gangland use of the Fifth Amendment shield was devised by attorneys for legendary New York bootleg kingpin Arnold Rothstein.

2. Among those pinched in related inquiries were Tom Mix ($100,000), Marion Davies ($1 million, which publisher W. Randolph Hearst paid off), and Charlie Chaplin ($1 million). Chaplin eventually left the country to avoid paying the balance of his penalty.

3. When he was a congressman from the Bluegrass State in the 1920s, Barkley had fought hard against the political influence of the upperworld’s Kentucky Jockey Club, which by virtue of its agenda to monopolize horse betting was also a natural enemy of Korshak and the Outfit’s.

4. When Torrio had devised the national Commission in New York, he had had Lansky bring Korshak aboard to oversee the New Yorkers’ Western business interests.

5. In 26, an attractive girl holds a cup of ten dice at a three-foot-square board. For a quarter, a customer gets a roll; if he gets 26, he wins a drink (legal). Many clubs had a backroom version where bettors played for money (illegal). According to Chicago Code 191, Section 1, “All gambling is illegal.”

6. Bulger also held the position of chief of the West Side Park District until his death decades later.

If you find an error or have any questions, please email us at admin@erenow.net. Thank you!