The Mob and the City (7 page)

2–1: Charles Luciano, 1928. (Courtesy of the National Archives and Records Administration)

Luciano's drooping right eye, caused by a vicious cutting of his face by assailants, reinforced this appearance of indifference. His nickname “Charles Lucky” was a play on his surname and his fortunes. Luciano later admitted to a psychiatrist that he had been arrested dozens of times (including several never made public) but was able “to free himself from most of these charges and because of this was nicknamed Lucky.”
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“Charles Lucky” saw himself as a gambler. Though he would later become a bootlegger and labor racketeer, controlling trucking in the Garment Center, when Luciano was asked about his profession, he usually said “bookmaker” or “gambling.” He would purchase a place in upstate New York, and he spent summer months at the Saratoga Springs racetrack betting on the ponies. To avoid the fate of Al Capone, Luciano's lawyers filed federal income tax returns in which he listed “miscellaneous” income. “I'm a gambler. That's my profession,” he brashly told IRS examiners. Like any good gambler, Luciano was at ease taking huge, calculated risks in the underworld.
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These traits would come in handy in the years to come. But that was all in the distant future. Through the late 1910s, Salvatore Lucania was just another petty crook with a record. At age twenty-two, he was still living at home with his parents on East 10th Street.
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THE MORELLO FAMILY IN SHAMBLES, 1910–1919

Meanwhile, the small Mafia of New York City was in shambles as well. The first substantial Sicilian
cosca
(or clan) in New York was led by Giuseppe “The Clutch Hand” Morello, his brother-in-law Ignazio “The Wolf” Lupo, and Morello's three half-brothers Ciro, Nick, and Vincenzo Terranova. The Morello Family barely survived on petty extortion, horse thievery, and insurance fraud. A few of its leaders graduated to early racketeering by using threats and extortion to control shipping and access to the wholesale vegetable markets in early 1900s.
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Then, the Morellos made a disastrous mistake: in 1909, they got caught counterfeiting US currency. Disastrous because, while the Morellos might be able to bribe local officials, counterfeiting fell under the federal jurisdiction of the US Secret Service. In 1910, the Morello Family, which never totaled more than 110 men, including its associates, saw 45 of its men convicted and sentenced to lengthy prison terms in the Atlanta Federal Penitentiary. All their legal appeals failed, and their convictions were affirmed.
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The hardest fall was Giuseppe Morello. Besides being the head of his own family, Morello held the title of
capo di capi
or “boss of bosses” of the American Mafia. After being sent to prison, Morello lost that title to Salvatore D'Aquila,
a former confidence man and gang leader in East Harlem. Morello's underboss Ignazio Lupo went away with him, too. With their leadership decimated, the remnants of the Morello Family came under attack from a Brooklyn-based Camorra gang (whose members were from the Naples area of Italy), which began trying to kill off the Morello's remaining men and poach their territories.
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The Morello Family prisoners grew increasingly desperate as their sentences wore on at the Atlanta Federal Penitentiary. Mislead by their ability to pay off local police, they convinced themselves that influence might spring them from federal prison. They banked their hopes on an Italian politician from the Lower East Side who apparently promised them that “an attempt will be made to pass a law in Congress” to help them. When that fizzled out, they next retained a lawyer who claimed he was “cousin of the President's Secretary,” and put $5,000 in deposit “for the lawyer after Morello is released.” It did not work. Giuseppe Morello wasted away in the Atlanta federal prison for a full decade, until he was finally released in 1920, a gaunt and penniless man.
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PROHIBITION NEW YORK, 1920–1933

Then came Prohibition. At 12:01 a.m., Saturday, January 17, 1920, the Eighteenth Amendment to the Constitution went into effect, prohibiting “the manufacture, sale, or transportation of intoxicating liquors within…the United States.” The new Prohibition Unit was given the task of enforcing the federal law, with only fifteen hundred enforcement agents initially for the entire United States. “Detailed plans have been made to carry out the law in cities, such as New York,” the
New York Times
reported. “Fifty men are said to have been assigned to New York.”
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New Yorkers rejected Prohibition in massive numbers by continuing to buy beer and booze. Law enforcement was quickly overwhelmed. The federal court in Manhattan held “cafeteria court” hearings where two hundred defendants at a time were brought before a judge to plead guilty and pay fines averaging $25. Responding to the public backlash, the New York State Legislature repealed its state “dry” law in June 1923. Gotham thus became the symbolic capital of drinking in America. As a Prohibition report said, “New York is considered the most conspicuous example of a wet city.”
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Prohibition agents, and some local police, arbitrarily enforced the federal law just enough to keep the liquor trade underground.
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By the late 1920s, the NYPD was still making over eight thousand arrests a year for violation of the National Prohibition Act. Manhattan speakeasies were especially vulnerable to shakedowns from corrupt cops. A report on Prohibition noted the NYPD's peculiar practice of wholesale arrests of “bartenders in speak-easies and waiters in night clubs, cabarets, and so-called restaurants.”
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It was in this environment that gangsters thrived.

2–2: Deputy police commissioner and agents dump illegal beer during Prohibition, 1921. (Courtesy of the Library of Congress Prints and Photographs Division, New York World-Telegram and Sun Newspaper Photograph Collection)

MOONSHINERS AND BASEMENT BREWERS

Moonshining and basement brewing was a phenomenon common in immigrant neighborhoods. “I think that about twenty minutes after Prohibition started, my father made a deal with the tinsmith to make him a still,” recalled Tom Geraghty, who grew up in Hell's Kitchen.
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In the South Village, Italian immigrants had long produced homemade wines. Now that it became a premium product, Italian grocers and barbershops sold it out the back door. When
mafiosi
started converting their basements into distilleries, they looked no different than the innumerable other makeshift stills throughout Italian neighborhoods.
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Over time, bootleggers built large and sophisticated brewing operations. Gangsters learned that they could increase profits by producing quality beer and achieving economics of scale. “I set out to make a superior product,” said Roger Touhy, a Chicago bootlegger who sparred with Al Capone. “At peak production, we had ten fermenting plants, each one a small brewery in itself.”
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The Irish gangsters William “Big Bill” Dwyer and Owney “The Killer” Madden operated secret breweries in buildings on the West Side of Manhattan.
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The Italian gangs were an emerging force in bootlegging during Prohibition. A study of New York's top bootleggers in the late 1920s found that about 50 percent were Jewish, 25 percent were Irish, and 25 percent were Italians. Most were young and ambitious. They scrambled to make it in the cut-throat world of bootlegging.
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In Williamsburg, Brooklyn, future mob boss Joe Bonanno and his relative Gaspar DiGregorio started out with a basement distillery. They had a tunnel to a garage where they loaded their booze onto delivery trucks. Bonanno later went to work for a major bootlegger named Salvatore Maranzano, a Sicilian
mafioso
who like Bonanno came from Castellammare del Gulfo (“Castle by the Sea”) in northwestern Sicily. Barely in his twenties, Bonanno was an overseer of Maranzano's huge brewery operations in upstate New York.
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Gangsters made money in related businesses, too.
Mafioso
Nicola Gentile sold raw materials to bootleggers. Gentile conspired with Italian barbershops to divert their licensed supplies of alcohol meant for perfumes. He later ran a general store to supply “bootleggers with corn sugar for alcohol distillation and the jars and tin for the contraband of alcohol.”
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RUM RUNNERS

“Rum runners” smuggled name-brand liquors from foreign countries into America. While bathtub gin was (usually) drinkable, Manhattan's connoisseurs started clamoring for the finest brand liquors from Europe and the Caribbean. Gangsters circulated “flyers and price lists with recognizable brands—Johnny Walker scotch, Martell cognac, Booth's gin, Bacardi rum, and Veuve Cliquot champagne—catering to customers who refused to settle for anything else,” explains historian Michael Lerner.
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Rum running involved sophisticated smuggling operations. Rum runners would purchase crates of liquor from foreign ports like London then travel across the ocean, stopping just outside a three-mile perimeter of the East Coast (the United States Coast Guard agreed not to search British ships outside three miles). Speed boats then smuggled the crates to clandestine landing points on Long Island or the New Jersey shore. There, the crates would be loaded onto waiting trucks. So many boats were anchored off the coast that it came to be known as “Rum Row.” Although Jewish and Irish gangsters had the biggest rum-running operations, there were major Italian smugglers, too.
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FRANK COSTELLO, BUSINESSMAN SMUGGLER

The leading Italian rum runner was Frank Costello. Born Francesco Castiglia in a mountain village in Calabria, Italy, he grew up in a ghetto in Italian East Harlem. “It is important, very important, to put in evidence the education received by Frank in the streets of 108th and 109th,” said a lifelong friend. “There is Frank, a very intelligent boy, whose aim was to arrive higher, to get revenge.” He took on the Irish surname of Costello to try to gain more respect. But like Joe Masseria and Salvatore Lucania, he struggled to make it on petty crimes. In 1915, the newly-wedded Costello was sentenced to a year in prison for illegal possession of a revolver.
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2–3: Frank Costello, 1915. (Courtesy of the New York Police Department)

Then came Prohibition. Costello learned that he was very good at bootlegging and rum running. He soon opened a “real estate” front office at 405 Lexington Avenue, from which he managed sophisticated smuggling operations with employees responsible for police payoffs, logistics, and distribution. He did business with such luminaries as Arnold Rothstein, the Jewish gangster, and Samuel Bronfman, the Canadian owner of the Seagram's liquor conglomerate. As we will see, Costello gained additional street protection under a new Mafia family.
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In 1926, Frank Costello was indicted along with sixty other defendants of a conspiracy to smuggle liquor from Newfoundland, Canada, in boats to Rum Row off the coast of New York. Among those indicted were Irish gangster William “Big Bill” Dwyer and thirteen sailors of the United States Coast Guard. While William Dwyer was convicted of the conspiracy at trial, a hung jury could not reach a verdict on Frank Costello. Observers believed that the involvement of Coast Guard sailors turned the case into something of a referendum on Prohibition.
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