Island of the Damned (3 page)

He
went on to inform the press of about his team’s most shocking discoveries. A large amount of morphine was found to be missing from the store room of the prison’s medical department: the store was ample enough to provide the addicts with over 3,000 injections. It emerged that a Welfare Island employee had stolen the drug and distributed it through Rao’s gang, whose members supplied almost all the narcotics to the prisoners, feeding the habit of hardened junkies and turning previously “clean” prisoners into addicts. According to the commissioner, the rest of the drugs were smuggled into the jail by various means: for example visitors would hide drugs inside intimate body parts, or bring in paper impregnated with substances. An alternative way of delivering drugs to the inmates was for visiting wives and girlfriends to kiss the men, exchanging pellets of drugs from mouth to mouth. It was also possible that the carrier pigeons owned by Cleary and Rao, who owned two pigeon coops, were used to bring in packets of drugs from outside. Another staggering revelation was that although the prison library once contained a collection of over 1000 books, all the volumes had been burned as fuel by the prisoners in order to cook food in their cells.

At
the press briefing, it became evident why the prison warden Joseph McCann and his deputy Daniel Sheehan had been suspended from their duties: all the crimes had been committed with these men’s full knowledge, as was obvious when they were interrogated by MacCormick and his team throughout the day. Both men now faced not only an investigation by the Department of Correction, but probable criminal charges. As MacCormick told reporters, Rao and Cleary were only able to control all drug traffic and flout every prison rule because the wardens allowed them total freedom to do so. And, as far as the gangsters on “politician’s row” were concerned, life in prison was little different from living at home. Sometimes it was better.

“These
men were waited upon by other prisoners. They had a private mess and never took their meals in the mess hall. Their food was specially prepared, cooked and served to them by inmates acting as servants,” explained MacCormick, describing the cruel divisions that existed between the haves - known to many as the “Board of Directors” - and the wretched have-nots. Rao had arranged for a garden to be built for him at the back of the prison, where his favourite flowers were planted. Park benches were brought in and a fence erected so that he and his cronies could enjoy the surroundings, while his pet goat, kept for its milk, roamed around. In two coops, built above one of the storage sheds, he kept two hundred carrier pigeons.

From
all quarters of the prison, the raiding party was regaled with stories from prisoners and keepers alike about the power wielded by Rao and his gang. You could always tell a member of this elite group by their well-groomed appearance: they had valets to attend to their every need and fancy from the pressing of shirts to the provision of luxuries. Even prison staff had to dance attendance on the overlords. David Marcus was told of an occasion when an exceptionally busy senior warden was forced to interrupt his duties to find half a dozen lemons for Rao who was thirsty and demanded a fresh supply of lemonade. Of the 1700 prisoners, the sixty eight bosses and their minions ate in their quarters and enjoyed the very finest foods. The rank and file ate off tin plates; Rao and his henchmen were served meals on china. They feasted on steaks, chops, pies, fresh vegetables, cakes, fine wines and brandy, and other delicacies while the lower ranks only got slops, unappetising watery grease-slicked stew with no trace of meat.

“That
gives you one of the reasons for the poor food,” remarked MacCormick. “But now we’ll change all that. There’s going to be a standard menu for everyone.”

Limited
order had been restored by the end of that afternoon. But the prison was cut off from the rest of the world. Once the raiding party realised the extent to which prison discipline had broken down, access to the island was forbidden until further notice. All visitors were banned, and New York’s deputy police commissioner Lewis Valentine brought fifty officers from different precincts onto the island to help maintain order and assist in the transfer of prisoners to the correction hospital normally reserved for seriously ill inmates. They were joined by half a dozen patrolmen, an inspector and a captain to prevent anyone from taking the lift or stairs to Welfare Island and to provide backup for any emergencies. Rao and Cleary and their gangs were placed in isolation; homosexual prisoners were transferred to another secure hospital, and seventeen inmates suffering from venereal disease were sent to the prison hospital elsewhere on the island. Another thirteen prisoners, diagnosed as mentally ill, were driven to an asylum in New York.

Slowly,
some order and discipline was being introduced to the jail. The rest of the inmates, especially those without any of the gang members’ privileges, appeared to react favourably to these changes, and even appreciated the new sense of order. Many realised that the raid might lead to improvements in their own wretched conditions. The majority of rank and file prisoners hoped that clean cells, prompt medical care, fresh clothing, better food were the sorts of changes from which they might soon benefit. MacCormick and Marcus spent the whole of that Wednesday night on the island after their initial inspection, prepared to deal with any rioting or rebellion by the mass of prisoners. To their surprise, trouble never came.

*

The following morning, the scandal was splashed over all the front pages. Banner headlines, page after page of photographs and graphic accounts of the gangsters’ rule over the prison made this the principal news on January 25th. Sensational disclosures continued for days and weeks afterwards, first in the New York press, and eventually throughout the USA. This was precisely the blaze of publicity MacCormick hoped for; his intention being to galvanise every authority figure into action, including New York’s police chief, Mayor La Guardia, New York State Governor Herbert Lehman, and even President Franklin D. Roosevelt. If any reason were needed to launch a sustained, all-out crackdown on organised crime, the Welfare Island disclosures surely provided it. A day after the raid, investigators made another important discovery: a young prisoner whose mathematical and accounting skills led him to be dubbed the “Brain” was apparently the financial wizard behind the prison rackets. Thirty year-old Michael Shea, a bookkeeper, had been imprisoned in 1931 for embezzling over $21,000 from Woolworth’s department stores while working at the company’s head office. Shea’s bookkeeping skills secured him a clerical job in the general offices of the prison, where Rao and Cleary regularly consulted him on finances arising from their gambling and drug deals, food sales and other rackets. Soon “Mastermind” Shea was splitting the profits from those activities, while also helping the gangsters by ensuring the “right men” got the jobs vacated by released prisoners.

Lacking
in all reports however was any suggestion as to how Joe Rao had become the supremo of Welfare Island, let alone what enabled him to retain the role for so long. What puzzled many outsiders was how Rao could ever have wielded such power and influence. How did he pull it off? Even the presence of corrupt prison wardens open to bribery was an insufficient explanation for crimes of this extremity. On the contrary: in order for an army of staff to sanction a scandal on such a scale, they themselves must have received orders from very high above.

New
York’s seasoned crime reporters could only guess at the real story behind the events they had witnessed. Only very senior police detectives, as well as Commissioner MacCormick, and his deputy David Marcus realised there was a darker meaning to Rao’s rule over the prison: more crucially, they knew they needed to dig deeper into the scandal to identify, and bring to justice, the people with real power who had set Rao up and continued to protect him and his cronies in this poisonous set up.

Deputy
Commissioner Marcus was best placed to investigate the situation, having previously worked as an assistant U.S Attorney in the Southern District of New York, where his closest colleague was another brilliant and ambitious young lawyer, Thomas Dewey, shortly to become New York’s most famous crime fighter. Marcus, like Thomas Dewey, knew all about Joe Rao’s background, including the likely identities of his very eminent, outwardly respectable “protectors”. For Marcus there was never any mystery about Rao’s exalted position on Welfare Island. Marcus realised that the most valuable aspect of the raid on the island was not only the uncovering of gross abuses, crime and corruption: equally important, the raid provided a road map, pointing to where the real control and corruption almost certainly originated. Once David Marcus identified Joe Rao as the kingpin of Politicians’ Row, he was virtually certain who was the real power behind the throne.

Chapter Two - Barons of the Underworld

Although in 1934 Joe “Joie” Rao was not a household name compared to legendary mobsters like Al Capone and Legs Diamond, by the time of the Welfare Island raid he was nonetheless a familiar and feared figure in New York’s underworld. He had been a member of the Italian-American mafia for long enough to also become well known to New York police, magistrates’ courts, the Manhattan District Attorney, and many judges. The son of an Italian immigrant who owned a feather shop on East Harlem’s 107th Street, Rao seemed destined to join the mob. He was a cousin of the Lucchese crime family’s
consigliere
Vincenzo Rao and went on to marry Lena Stracci, the sister of gangster Joseph “Joe Stretch” Stracci. By the time he was sent to the prison on Welfare Island in late 1932 on charges of extortion, he was already a notorious gangster with a long criminal record, which included five arrests for murder, violent assault, burglary, extortion and racketeering none of which had interfered with his criminal career. Rao’s lawyers had managed to get all these charges dismissed, except for his 1932 conviction, for which he was serving a three year term. Rao’s imprisonment was a setback which surprised his cronies, who until then had regarded him as invincible. At the outset of his criminal career in the 1920s, Rao had started out as a humble foot soldier for Giovanni “Joe the Boss” Masseria, head of the Genovese family and the most powerful single figure at the time on New York’s Italian-American crime scene. Masseria, known for his close links to Al Capone in Chicago, had on his payroll a group of young upstart mobsters including Lucky Luciano, Vito Genovese, Albert “Mad Hatter” Anastasia, William Moretto, Joe Adonis and Frank Costello. Several years later, those
cosa
nostra
young bloods were to revolutionise organised crime in America by creating a national “syndicate”, whereby all rackets were run as cartels along the lines of a corporate business, with executive directorship, control and financing undertaken by a ruling “commission” composed of the most senior and powerful
capos
- or heads - of five individual crime families.

Long
before the mafia adopted that business model however, Joe Masseria, the self-proclaimed
capo
di
tutti
capi
(boss of all bosses) demanded absolute supremacy in the Italian-American underworld and would brook no rivals. It was his ruthless ambition which led to many of the bloody turf wars and massacres of the early 1930s, especially the brutal Castellammarese gang warfare between Giovanni Masseria and Salvatore Maranzano, so-called because Maranzano came from Castellammare del Golfo in Sicily. Maranzano took Masseria’s mantle of
capo
di
tutti
capi
after arranging his rival’s execution at a restaurant in Coney Island in April 1931. But his reign was short lived. Salvatore Maranzano was himself shot and stabbed to death in his Manhattan office five months later by a team of Jewish assassins including Bugsy Siegel and Samuel “Red” Levine, recruited from the ranks of the Jewish Mafia by Meyer Lansky, the
eminence
grise
behind such younger generation Italian mobsters as Lucky Luciano.

While
Rao learned to duck and dive between these warring factions, he eventually took over the administration of affairs of the infamous 107th Street mob where he controlled and financed the distribution of narcotics in Harlem and the Bronx, as well as arranging protection payments from gambling, bookkeeping, and prostitution rackets in the neighbourhoods. An acknowledged associate of Ciro “the Artichoke King” Terranova, he also became a silent partner in a numbers bank run by Joseph Valachi and his brother in law Joe “Stretch”, and found time to do business on the side with such hardened criminals as “Trigger” Mike Coppola, millionaire Frank Livorsi, who made a killing in black market sugar, and Charlie “Bullets” Albero, holder of the mob’s arrest record, with 27 arrests dating back to 1911. A close associate of the gang was Joe’s cousin Vincent Rao, a multi-millionaire owner of many New York apartment buildings. He too had many different arrests under his belt for grand larceny, murder and illegal possession of a revolver: like his cousin Joe, Vincent had been either acquitted or discharged on each count. Also on friendly terms with the 107th Street gangsters was Joe Rao’s brother in law Joe “Stretch” who had become chief enforcer for the “Italian Mob”, so named to distinguish its members from the Irish and Jewish gangsters who were especially prominent and successful in New York’s organised crime scene during the Prohibition era of the 1920s and early 1930s.

The
107th Street mob has been described as the most vicious group in 1930s New York. In 1932, a year before the repeal of Prohibition, they began to diversify and extend their tentacles to other rackets, realising that the lucrative days of bootlegging would soon be over. In anticipation of that day, they moved their activities to the garment district in midtown Manhattan, where they branched out into extortion rackets, demanding protection payments from trucking firms, also muscling in on the booming narcotics trade. As is traditionally the case with the Mafia the world over, what gave this gang much of its power was kinship, whether through blood or marriage. With three powerful relatives, his cousins Vincenzo and Vincent and his brother in law Joe Stretch, Joe Rao carried clout among several gangs. In fact, one of the dangerous aspects of his criminal activities was that he had few lasting loyalties, tending instead to form alliances with several different groups and mob bosses depending on how much enrichment was in it for him.

What
ultimately led Rao to be feared and respected by the mob in equal measure was his eventual long term association with Jewish-born Mafioso “Dutch” Schultz, aka Arthur Flegenheimer. Born in the Bronx in 1902, Schultz had risen to fame in the 1920s as the Bronx Beer Baron, who controlled the manufacture, importation and distribution of illegal brew throughout New York City. Pre-empting the repeal of prohibition, he went into the restaurant racket and then became king of the so-called “numbers game” or policy racket, an illegal version of the lottery in which the odds were a thousand to one and winning numbers were always “fixed” by Schultz’s men to ensure players never won much from their bets. From earlier criminal investigations, David Marcus knew it was the Schultz connection which ultimately conferred on Rao the power to run Welfare Island as his personal fiefdom. Marcus had heard that when Rao was convicted in 1932 and given a prison sentence, he asked to be sent to Welfare Island knowing he could organise a drugs racket - a rumour Marcus had no reason to disbelieve. Given his close relations with New York’s most powerful millionaire mobster, Rao would have had ample support and few obstacles in his drug trafficking operation and any other racket he decided to run on the island.

Today,
Dutch Schultz may not be remembered as a gangland celebrity such as Bugsy Siegel or Charles “Lucky” Luciano, immortalised on film and TV, but there was a time when Schultz’s power in New York’s underworld was virtually second to none. In contrast to the alliances between members of the various Italian clans, Dutch Schultz was the last independent mobster who refused to become a part of the new style syndicate. Never a team player, Schultz knew he had too much to lose by forging partnerships. By 1930, Schultz held New York in the same way Al Capone ruled Chicago and could afford to operate solo. In 1934 he had been running the hugely profitable numbers game for several years, aided by a loyal handpicked team of lieutenants and foot soldiers, enforcers, lawyers, accountants and bankers. The average daily take in bets was reported to be around $35,000; estimates of Schultz’s annual income from the policy rackets was put at $12-$14 million. He kept a low profile, bore a perpetually sullen expression and lacked the sinister glamour of many Jazz Age gangsters. With a miserly nature verging on the pathological, he lived frugally, wore cheap suits and shirts, abhorred ostentatious behaviour and flashy clothes and cars. Journalist Meyer Berger, who interviewed Schultz for the
New
York
Times
, described him as having the appearance of “an ill-dressed vagrant …. or at best a guy with a special talent for looking like a perfect example of the unsuccessful man.” Schultz told Meyer that he never spent more than $35 for a suit or $2 for a shirt, claiming: “Only queers wear silk shirts. I never bought one in my life. Only a sucker will pay $15 or $20 for a silk shirt. Such display is vulgar. Hell, you can get a good one for two bucks.”

Schultz’s
associates – like his enemies – knew enough about him to see through this fusty image, which belied a steel core of remorseless cruelty – and an insatiable lust for money. A born businessman, he ruled his tightly run enterprises according to a strict profit motive: not for luxuries or status symbols, in which he wasn’t interested, but purely for the money. As his lawyer, Richard “Dixie” Davis, used to say about Schultz: “You can insult Arthur’s girl, even steal her from him, spit in his face, push him around and he’d laugh it off. But don’t steal even a dollar that belongs to him. You’re dead if you do.”

What
his aides feared most was his sudden explosive anger. Many saw him as a psychopath, without empathy, impervious to the suffering of others. When he suspected that Jules Martin, one of his associates in the restaurant racket, had attempted to defraud him of $25,000, he called Martin to a meeting at a hotel suite in New Jersey, where Schultz at the time was lying low, on the run from the New York authorities on charges of tax evasion. An argument flared up between Schultz and Martin, and, as Martin was loudly trying to talk his way out of any blame for the missing money, Schultz whipped his pistol from inside his trousers, where he always kept it, rammed it into Martin’s mouth as he was talking and pulled the trigger. Lawyer Dixie Davis, a terrified witness, recalled his employer’s action as mechanical, almost nonchalant. “It was simple and undramatic – just one quick motion of the hand. The Dutchman did that murder just as casually as if he were picking his teeth. No one had time to move. Julie Martin didn’t even have time to look surprised. Martin was right in the middle of a sentence as the gun blasted like a howitzer in the flimsy little hotel room.” Once Martin’s body was removed, Schultz worried that the blood from his shattered brains which now stained the carpet might be traced back to him if hotel staff called the police. Instantly, he came up with the perfect cover-up. He pointed to a recent recruit to his gang, a young teenage thug, and told one of his aides to hold the boy’s arms. He turned to Bo Weinberg, a burly thug of a man who carried out Schultz’s beatings and assassinations, snarling: “Break his nose.” When Weinberg hesitated, saying “What do I want to hurt the kid for?” Schultz shouted at him. “Do it.” Shrugging, Weinberg smashed his huge fists into the boy’s face, mashing it to a bloody pulp. As blood gushed from his shattered nose, Schultz pushed him onto a chair and held his head over the existing bloodstain on the carpet, letting the boy’s blood trickle onto the existing stain. Schultz then phoned down to the front desk asking for the hotel doctor to patch up a friend who had been in a fight over a card game.

Another
small time crook foolish enough to try and muscle in on one of Schultz’s rackets was Joseph Rock. He was kidnapped by Schultz’s thugs, who beat him senseless. For extra measure, Schultz ordered his enforcers to tape a piece of dirty gauze, covered in pus, tightly over Rock’s eyes. The gauze was contaminated with syphilis, and Rock eventually went blind. Joel Shapiro, who also believed he could outwit Schultz, fared equally badly, being rammed into a large barrel containing cement which was taken on a boat out of New York harbour and dumped into the Atlantic Ocean.

Not
only his rivals and enemies had reason to fear for their lives. So intense was Schultz’s paranoia that even those closest to him were not safe. Not even Bo Weinberg, one of his most faithful, trusted aides and brother of Schultz’s business manager, George Weinberg. Bo Weinberg eventually aroused his boss’s suspicion by spending time downtown in the company of rival mobsters. Even though there was no reason to doubt Weinberg’s loyalty – on the contrary, he was acquiring secret inside information from the rival gangs which benefited Schultz – Schultz was eventually consumed with seething resentment. Soon, Bo Weinberg went missing and was never seen again. Reportedly, like Shapiro, he had been tied up, his feet encased in a block of cement and dumped into the East River.

Well
known for his close links to New York’s Tammany Hall politicians, Schultz declined to cut deals with other mob leaders, preferring to set his own rules and keep the millions he made from the takings of the numbers games he singlehandedly controlled throughout Harlem and the Bronx. During the early 1930s, the numbers racket is estimated to have yielded an annual return of $100 million. In 1933, his street runners, responsible for collecting money from all the players, when threatened with a 50% pay cut, stopped work and organised themselves into a union. Within the first week of the strike, one of the bank’s takings from the players dropped from $9,000 a day to $186. Schultz soon backtracked on the men’s pay cut. In view of the spectacularly lucrative rewards from both the beer business and the numbers racket it was hardly surprising that rival gangsters hoped for a piece of the action. When Schultz went into the slot machine business he teamed up briefly with Frank Costello and, “Legs” Diamond and Vincent “Mad Dog” Coll from Hell’s Kitchen to act as his enforcers. Unwisely, Coll and Diamond both attempted to hijack the business. Neither survived long. In October 1931, Legs Diamond was killed, reportedly by Schultz’s men: when asked by journalists about the murder, Schultz retorted: “Diamond was just another punk with his hands in my pockets.”