Official and Confidential (37 page)

The growth of the American Mafia coincided precisely with Edgar's career. Its seeds had been sown when Edgar was a little boy, when Italian and Sicilian immigrants poured into the United States bearing the bacillus of Cosa Nostra, ‘Our thing.' They formed ghetto gangs that battled the authorities and one another, and began to practice their specialty, extortion enforced by violence.

While Edgar was growing up, the gangs remained disparate and unstable. But by the time he became FBI Director, in the spring of 1924, Prohibition had opened 200,000 speakeasies. The bootlegger was in business by popular demand, and few cared that bootlegger was synonymous with crook. This was when the mob empire was founded, on a basis of booze, prostitution, loan-sharking and labor racketeering.

The names that made the fortunes – Luciano, Costello, Capone, Siegel, Torrio, Dutch Schultz, Longy Zwillman –
were in league with the captains of Prohibition commerce, liquor dealers like Lewis Rosenstiel, forging alliances that were to make them multimillionaires when liquor became legal again. In time, at least two of these characters would forge relationships with Edgar. Around 1930, following their first high-level conferences, the nation's top criminals divided the United States into agreed spheres of influence operating under a formal alliance.

Edgar's life and rise to power ran parallel to that of the mob, in significant phases. Professionally, his early performance was fairly good. The Bureau responded well in the early twenties, when it was used to enforce Prohibition in Ohio. It was Edgar's agents who first arrested Al Capone in 1929 – for contempt of court – although the Internal Revenue Service eventually sent him to jail.

In the thirties, Edgar concentrated on soft targets, kidnappers and bandits like Dillinger, but he did seem seriously interested in the mob. He set up the Hoodlum Watch, which required all Bureau offices to collate information on local crime bosses, and he announced a national drive against racketeers, or ‘organized business criminals.'

In 1935, not to be upstaged by Thomas Dewey, then Special Prosecutor for New York, Edgar declared Dutch Schultz ‘Public Enemy Number One.' Soon he was sounding like a crusader against organized crime. ‘Racketeering,' he said early the following year, ‘is a problem which, if not solved, will destroy eventually the security of American industrial life and the faith of our people in American institutions.'

In 1937, as Baltimore society danced the night away at the Preakness Ball, Edgar personally led dozens of agents on raids against the city's brothels. Clyde, who was at his side, earned the nickname ‘Slugger' for knocking out a man who resisted arrest. The premises targeted were operated by Italian gangsters, and – according to notes kept by the agent who organized the operation – Edgar ‘was interested in the big
racketeers and the tide of dirty money that flowed from the houses to the racketeers and through them filtered out to local protectors, police, small-time politicians and even ultimately into the coffers of state political machines.'

There could hardly be a more succinct description of the way organized crime works. And Edgar pressed on. In August, after swoops in three states, Edgar made a point of telling newsmen that one of those arrested – for running prostitution rackets – worked for Charles ‘Lucky' Luciano.

Edgar was getting to the heart of things. Luciano, specialists agree, was the father of organized crime in America, founder with Meyer Lansky of the national syndicate, a key man behind the Atlantic City mob convention of 1929 and the victor in the gang wars that followed. He had been in prison since 1936, following his prosecution by Dewey for vice offenses, but still wielded vast power. On the outside Meyer Lansky, Frank Costello and Joe Adonis continued to run the empire of crime: in targeting the Luciano network, Edgar was threatening the heartland of the Mafia.

Then, abruptly, Edgar's attitude changed. From the late thirties on, the FBI's war with organized crime became a nominal affair, a thing of occasional sound but no fury at all. The American criminal, Edgar was insisting by 1938, was ‘not of a foreign country, but of American stock with a highly patriotic American name.' Comforting words for crime bosses with names like Costello and Luciano, Genovese and Adonis, Lansky and Siegel.

World War II was boomtime for organized crime, a boom boosted by new rackets and black marketeering. The New York mob leadership won official approval by helping to protect the waterfront against Nazi saboteurs, thus easing the way for Luciano's release and deportation. After the war, Costello, Lansky and the crime empire flourished out of control, while Edgar did nothing.

Sometimes it was as if he was deliberately thwarting progress against the mob – as in the case of James Ragen,
owner of a racingwire service covering half the country. Whoever controlled that wire had enormous power over gambling operations, and in 1946 the Mafia tried to muscle in. Ragen resisted and began telling the FBI all he knew about the rackets. Yet Edgar refused to provide protection – and the mob killed Ragen.

‘The Ragen affair,' said William Roemer, later the FBI's star expert on the Chicago mob, ‘is a very, very significant moment for any study of J. Edgar Hoover and organized crime. When Ragen started talking, the FBI opened a real operation against organized crime in the city for the first time ever. But as soon as Ragen was killed, Hoover dropped the investigation. For eleven years afterwards, that was the end of it.'

According to the then Attorney General, Ragen's revelations led to ‘very high places,' including Henry Crown, the Chicago financier, and the Annenberg family, which had originally owned the racingwire service. Edgar, however, claimed ‘the people Ragen pointed to had now reformed.'

Pete Pitchess, the longtime Sheriff of Los Angeles County, was an FBI agent in the forties. ‘Organized crime,' he recalled, ‘was just not a concern of the Bureau. We knew it existed, but there were hardly any prosecutions, and we knew this was FBI policy. I myself had to deal with Bugsy Siegel [a key associate of Meyer Lansky who opened up the West Coast to syndicate operations]. When Siegel took it upon himself that he would like to talk to me, I was afraid even to tell the Bureau.

‘I didn't tell the Agent in Charge I was going to see him. We'd stand at a street corner on Sunset Boulevard, in front of the old La Rue restaurant. Siegel gave me information on his enemies, but we just put it in some intelligence file – we didn't dare call it “Mafia.” That, we'd been told, didn't exist. So we simply dumped it in a file, or quietly passed it on to the police.'
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Neil Welch, a distinguished former SAC who eventually made organized crime his specialty, became an agent in the
early fifties. ‘When I was in Boston,' he recalled, ‘I used to investigate theft of interstate shipments – whole truckloads of freight – that was totally dominated by Mafia union racketeering and the Teamsters Union. It was frustrating; we were trying to solve the theft of a single shipment of shoes, or chickens, when it was obvious to us all that the answer wasn't in that approach. The whole thing was controlled by organized crime, yet it was never made the subject of investigation. It was just inexcusable blindness. I don't know how you can have the responsibility that Hoover did, and the FBI did, and just ignore it, for all practical purposes.'

In 1951, millions of Americans watched on television as a procession of gangsters appeared before the Senate Special Committee to Investigate Crime in Interstate Commerce, remembered today as the Kefauver Committee. After hearing 800 witnesses, it concluded that there was indeed ‘a nationwide crime syndicate known as the Mafia,' and that there were ‘indications of a centralized direction and control' by Frank Costello and Meyer Lansky and others.

Edgar had appeared before the committee to congratulate its members on having revealed ‘the unholy alliance between the criminal element and officialdom,' and to mouth courtesies to the senators. Behind the scenes, it was a different story.

Senator Kefauver revealed to Jack Anderson, then a young reporter, that Edgar had tried to prevent the committee from being established in the first place. ‘He told me the FBI tried to block it,' Anderson recalled. ‘They worked with the Senate Majority Leader, Scott Lucas. Hoover knew that if the public got alarmed about organized crime, the job would go to the FBI. And he didn't want the job.'

Kefauver's Assistant Counsel, Joseph Nellis, was still angry in 1990, when he recalled the way Edgar treated the committee. ‘We had a long series of meetings with him off the record, at which he told us, “We don't know anything about the Mafia or the families in New York. We haven't followed this.” He told us what we were learning about the Mafia
wasn't true, but we didn't believe him. It was dreadful. We tried to enlist the FBI's help in every major city, but got none. Hoover was polite to the senators – he had to be, because they controlled his purse strings. But he gave us nothing.'

Heavily censored documents in Kefauver's FBI file strongly suggest Edgar gathered smear material on the Senator. He forbade agents to join other law enforcement officials at a meeting with Kefauver and refused requests for FBI protection of committee witnesses – even after two had been murdered.

Edgar told the committee organized crime should be dealt with not by the FBI but by local police forces. Given the chance to call for new laws giving the FBI wider jurisdiction, he said the existing laws were just fine. When the committee recommended the creation of a national crime commission, Edgar made sure it did not happen.

In 1953, more than a year after Kefauver's report had been issued, FBI Assistant Director Alan Belmont wrote a memo to Assistant to the Director D. M. Ladd. ‘Maffia [
sic
],' he wrote, ‘is an alleged organization … The organization's existence in the U.S. is doubtful.' This was the truth according to Edgar, a truth maintained at the top of the FBI, in defiance of all the facts. The street agents who actually encountered organized crime had to behave as if black was white.

‘During the early 1950s,' recalled veteran agent Anthony Villano, ‘two agents caught a made guy [formally enrolled mafioso] in midcrime … He relaxed and started to tell them war stories – Mafia war stories. They were astonished at his recitation of the table of organization in criminal circles. They wrote it all down and filed reports in New York. None of the brass believed a word of it; after all, the Director had announced that organized crime didn't exist. It was filed and forgotten.'

‘At headquarters,' recalled former agent William Turner, ‘there wasn't even a section working on organized crime. In the field, what we did get on top mobsters was just dropped
into the General Investigative Intelligence file – to be forgotten.'

During the writing of this book, three former Attorneys General, a District Attorney, the former police chief of a major city, a congressional consultant on organized crime, several former Justice Department officials, a professor of law and nineteen former FBI employees, including several Assistant Directors, were asked why Edgar failed to tackle organized crime. None had a satisfactory explanation. Some thought that, because cases would be difficult to make, Edgar was afraid his annual statistics would suffer – that the FBI would appear to be slipping. Some thought he feared contact with gamblers and hoodlums would corrupt his agents. Others mentioned Edgar's supposed animosity toward Harry Anslinger, the head of the Narcotics Bureau. Because Anslinger saw the hand of the mob everywhere in the narcotics rackets – so went this theory – Edgar automatically rejected the notion.
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Some pointed to the excuse Edgar himself offered in the sixties, after change had been forced on him. ‘The truth of the matter,' he claimed, ‘is that the FBI had very little jurisdiction in the field of organized crime prior to September 1961.' This was not true. The FBI had had some local jurisdiction in crimes of violence since 1934, and many federal statutes covered mob activity. In any case, when Edgar did want a change in the law, Congress generally obliged. On the question of organized crime, he never asked.

Edgar's claim about having no jurisdiction, said the historian Arthur Schlesinger, Jr., ‘was a transparent fraud.' ‘If they want to do it,' said Director of Prisons James Bennett, ‘it's within the jurisdiction of the FBI. If they don't want to do it, they tell you it's outside the jurisdiction of the FBI.'

Former FBI official Neil Welch could conclude only that Edgar's attitude was a mystery. ‘None of the usual excuses,' he said, ‘are convincing. Hoover and his top people knew of the existence of the Mafia. They knew from the agents'
reports that routinely referred to it, certainly all through the fifties … Hoover's attitude was so contrary to reality as to be a reason for great speculation. It's a mystery …'

The clues that explain Edgar's behavior lead back to the midthirties. It was then, as the American Mafia was establishing itself, that he had begun enjoying national celebrity. Egged on by the columnist Walter Winchell, he started making regular weekend trips to New York, there to enter a social world that put him perilously close to organized crime.

The danger started with Winchell himself. Any decent crime reporter makes it his business to know criminals on a personal basis, but Winchell did not know where to draw the line. The journalist was on close terms with Owney ‘The Killer' Madden, a mob associate of Meyer Lansky's. He intervened with the
Herald Tribune
when it made repeated references to Madden's murderous past, then accepted a new car from the mobster as a reward.

Winchell was on first-name terms with Lansky himself, and often dined with him in New York and Florida. As the mobster's widow has revealed, the columnist even asked Lansky's permission before writing sensitive stories about the mob. He knew Frank Costello – Winchell called him ‘Francisco' – even better. They both had apartments at 115 Central Park West and met there frequently. In the fifties, when Costello was targeted by the Kefauver Committee, Winchell rushed out an article saying what a good, misunderstood fellow he was.