Maurice Malkin attended the Communist Party's leaders' first meeting with A. R.:
Rothstein promised to loan the Communist Party $1,775,000 at a rate of interest exceeding 25 percent. Repayment of the loan was guaranteed by Amtorg, the Russian-American Trading Corporation, which had recently opened offices on lower Broadway.
Rothstein also agreed to put us in touch with police officials and Magistrates who were on his regular payroll. As the Communist organizer of the strike we planned, I became the paymaster for these corrupt cops and judges who were to look the other way when the rough stuff started.
We were particularly eager to secure the aid, or at least the neutrality, of police in the areas where the fur industry was located (the Mercer Street, Fifth, West 30th and 47th Street stations). We received the assurance of many police that they would not take action against our gang. In cases where newspaper publicity might make booking a necessity, we had the assurance of the Magistrates that charges would be quietly disposed of.
Whether A. R. felt sympathetic to his new clients, we'll never know. If he had any consideration for working people in general, we'll never know. To Arnold Rothstein, everything was a business. "Rothstein was no Communist," said Malkin. "He was charging us a high rate of interest and he was in it for what he could make out of it."
Five thousand members of the Communist-led International Fur Workers Union struck in February 1926. The union's playbook echoed Rothstein's: bribe as many cops and judges as you could. Malkin revealed that $100,000 went to the police, and "between $45,000 and $50,000 was paid to [Detective] Johnny Broderick, head of the Industrial Squad."
Non-Communists in the union movement weren't blind to Rothstein's involvement with their Marxist-Leninist enemies. American Federation of Labor Vice President Matthew Woll wrote Mayor Walker:
It is a common rumor, if not an understanding throughout the fur district, that "police protection" has been assured the Communist leaders and sympathizers. It is said that nearly ten days before the beginning of the present reign of terror, one Arnold Rothstein, said to be a famous or infamous gambler, had been the means of fixing the police in behalf of the Communists.
Walker did nothing to investigate charges of police payoffs, nothing to investigate Tammany's friend Arnold Rothstein.
As the fur strike ended, another major work stoppage in the garment center erupted, as cloak and suit workers represented by the International Ladies' Garment Workers' Union (ILGWU), a union riven into strong Communist and socialist factions, struck. Internal union politics aside, however, the hard line that employers in labor relations took made a strike inevitable. Governor Alfred E. Smith appointed a blue-ribbon commission headed by prominent attorney George Gordon Battle (namesake of Watergate figure G. Gordon Liddy) to mediate. When management reluctantly accepted the commission's terms, a stoppage appeared avoidable. ILGWU's Communist faction, however, forced a strike, not merely to gain further wage-and-hour concessions but to solidify power within the union against their socialist rivals.
The ILGWU's walkout is numbered among the most disastrous in American labor history, not only due to the pointless hardship the strike inflicted on workers or the industry itself, but because of the massive gang violence it ignited. Management hired Legs Diamond. Labor turned to Jacob "Little Augie" Orgen. When Dopey Benny Fein abandoned racketeering Augie had vied with another up-andcoming hoodlum, Nathan "Kid Dropper" Kaplan, for leadership in the field. By August 1923 Dropper was ready to call it quits and leave New York. He never got the chance. Surrounded by three-dozen police, including Captain Cornelius Willemse, the Kid walked out of the Essex Market Courthouse and boarded a taxi to take to him to Penn Station. Willemse advised Kaplan to leave town and the rackets as soon as possible. Nobody paid attention to an inoffensive-looking member of the Orgen gang, seventeen-year-old Louis Kushner (ne Louis Cohen), elbowing his way through the police cordon. Kushner fired five shots through the cab's open window (one sailed through Willemse's straw hat), killing the Kid on the spot. "Well, I got that guy," grinned Kushner. "Now gimme a cigarette."
You needed a scorecard to follow 1920s labor racketeering. Actually, there was perfect order-controlled by Arnold Rothstein. Leftwing journalist and labor historian Benjamin Stolberg described the situation:
Questionable characters of all sorts muscled into the strike by the simple device of joining the Communist bandwagon. All a cheap little racketeer had to do was to become an enthusiastic red pro tem, and he would be welcomed and trusted as a col laborator by the Communist party functionaries who were really running the strike. What was worse, these functionaries siphoned off thousands of dollars of union funds into the party coffers.
Seldom in the history of American labor has a strike been so incompetently, wastefully, and irresponsibly conducted. Scabbing was rampant. The employers, as usual in those days, had their full complements of gangsters, and the joint Board [the Communists] fought back with professional gorillas. The employers hired the Legs Diamond gang and the Communists hired Little Augie, the Brooklyn mobster. Later it was discovered that both gangsters were working for Arnold Rothstein, czar of the New York underworld.
So, just as Arnold Rothstein fixed roulette wheels or a World Series, he now fixed a strike. As he toyed with the faith of 50 million baseball fans, he now toyed with the fate of 50,000 garment workers. Ten weeks passed without progress. The union nursed second thoughts. They approached Abraham Rothstein, respected in the industry by both labor and management, to mediate a solution. A. R.'s father realized that if Governor Smith's blue-ribbon commission couldn't prevent a strike, a humble cotton merchant couldn't end one. "Abe the just" suggested they approach a large and respected garment manufacturer. This individual listened to their story and confessed that he, too, could do little to help. Moreover, he advised them that they had approached the wrong Rothstein: They should talk to A. R.
The left wing came full circle, asking the man who had bankrolled this catastrophe to find a way out of it. A. R. agreed to help. First, he ordered Legs Diamond to quit working for the bosses. The union then dismissed Augie Orgen. Diamond went quietly; Orgen wouldn't-until he received a call from Arnold.
Rothstein now brought labor and management together and hammered out a settlement. It might have held, but the union's Communist and socialist factions again vied to demonstrate their toughness and "class consciousness." They'd fight to the last worker. The strike dragged on for a total of twenty-eight weeks. Fifty thousand workers achieved virtually nothing for their lost wages. The union itself spent $3.5 million, with only $1.5 million expended on strike benefits. Huge amounts were unaccounted for, including half of its $250,000 picket fund. Presumably, some went to crooked police and to thugs like Diamond and Orgen.
When the strike ended, Legs and Eddie Diamond become Orgen's bodyguards. But peace remained elusive. Rothstein knew the old yenta-goon days were passe. It made far more sense to infiltrate the garment-trade unions and enjoy a continuing (and marginally less violent and less conspicuous) operation. Orgen didn't get it. He was content to simply beat people up for pay. But two Orgen henchmen, Lepke Buchalter and Gurrah Shapiro, did understand and began challenging his leadership.
Lepke and Gurrah possessed an incredibly vicious ruthlessness. Gurrah was a Neanderthal. Yet both had a certain animal cunning that put unions and bosses under their command. Lepke, for example, recommended to Meyer Lansky and Lucky Luciano that they cooperate to provide package deals to garment manufacturersprotection plus discounted, high-quality Scotch for them to offer to thirsty out-of-town buyers for the wholesale and retail trade. From there, it was but a small step to high-interest loans to the same manufacturers-loans that eventually gave the goons substantial control of the industry.
Rothstein still remained reluctant to break with Orgen and the Diamonds, and even appeared to intervene in their favor-though he risked antagonizing the rising stars of labor rackets in the process. In 1927 vicious Lepke protege Hyman "Curly" Holtz seized control
of Local 102 of the International Brotherhood of Painters, a union centered in the Flatbush area of Brooklyn. When the IBP struck, the employers' association used Rothstein to hire-for $50,000-the "John T. Nolan Agency" to combat the strikers. The agency consisted of three principals-A. R.'s bodyguard Fats Walsh, Legs Diamond (his real name was "John T. Nolan"), and Little Augie Orgen.
For months both sides fought it out. Events climaxed on 8:30 P.M. on Saturday, October 15, 1927 as Orgen and Diamond strolled down crowded Delancey Street on the Lower East Side. Suddenly a car pulled up. From inside, Buchalter, Shapiro, and Holtz opened fire with machine guns. Twelve slugs, including one through the right temple, hit Orgen. He died instantly. He was twenty-five.
Diamond took bullets in the leg and arm. He survived, but didn't dare identify his assailants. ("Don't ask me nothing.") When Legs emerged from Bellevue Hospital, he contacted Lepke Buchalter, telling him he wanted no trouble and no part of the garment racket.
Lepke and Gurrah could have it all.
AMAN LIKE ARNOLD ROTHSTEIN, who provides immense amounts of cash for card and crap games, usurious loans, and bail bonds readily and profitably, is soon approached for even less reputable propositions. Eventually Broadway asked Rothstein to finance bootlegging and speakeasies and drug running. But before that it wanted cash-or perhaps he volunteered it-for a lucrative traffic in stolen goods. A. R. fenced jewelry and furs, but the big money was in stolen war bonds.
America financed its participation in World War I by raising taxes dramatically (including the hitherto modest income tax) and by heavy borrowing. The Treasury Department employed Hollywood stars Al Jolson, Mary Pickford, Douglas Fairbanks, and Charlie Chaplin to entice citizens into purchasing billions in Liberty Bonds. In the fourth Liberty Bond drive alone, half of America's adult population subscribed. However, the government ignored bondholder safety. Liberty Bonds were bearer bonds, redeemable by whoever got their hands on them.
Arnold Rothstein and Nicky Arnstein got their hands on $5 million worth.
Charming, dapper, 6'6" Jules W. "Nicky" Arnstein (alias Nick Arnold; alias Nicholas Arnold; alias Wallace Ames; alias John Adams; alias J. Willard Adair) was the husband of musical comedy star, the 5'7" Fanny Brice. When Fanny sang her heart-wrenching "My Man" in the 1921 edition of Flo Ziegfeld's Follies, she emoted about her troubles with Nicky-and all America knew it.
Nicky didn't rob with a gun. He used his wits, and made victims befriend him while fleecing them at cards or confidence games. Like Arnold Rothstein, Arnstein came from good stock. Like Carolyn Rothstein, he came from mixed stock. Nicky's father, Berlin-born Jew Moses Arndstein, fought with distinction in the Franco-Prussian War. His mother, Thekla Van Shaw, was Dutch, and they raised Nicky as an Episcopalian. "No boy could have been brought up with more love and care than was I," he recalled, "and I always have loved the beautiful things of life-beautiful pictures, good books, and birds and flowers. My fondness for gambling, however, led me to live a life rather apart from my family. It is one of the penalties I have paid for my fondness for the cards, the dice, and the horses."
"Nicky" was short for nickel plate, a sobriquet bestowed in the 1890s, when Arnstein raced a gleaming nickel-plated bicycle, in the then-popular bike racing craze. However, he spent more time throwing races than winning them. Before long he fell in with the legendary Gondorf brothers, Fred and Charley, master con-men who specialized in fleecing rich suckers in elegant settings. Arnstein graduated to gambling on transatlantic liners and in European casinos, eventually being arrested in all the best places: London, Brussels, Monte Carlo.
By 1912, he met Arnold Rothstein. "I knew him," Arnstein gushed in admiration, "not only as the king of the gamblers, but as the whitest [most honorable] of them all! ...
"He was interested in everything involving chance, to the point of a passion. Racing thrilled him ... He never gave one a wrong tip in his life."
After A. R.'s death, when others uniformly derided him as a cheat and welsher, Arnstein held firm:
What an exceptional man! Can you picture or imagine a gambler with higher instincts? [He was] a real man and a human gentleman to the fingertips. I termed him a gambler. I guess he would not have denied it, but he was a shrewd businessman as well.
I know that much will be said about him now that will not be pleasant with his memory. But to me he was an honest man, with an outstanding integrity. He had daredevil courage.
I have seen him lose a cool half million dollars in one night, a fortune that would dwarf any of them at Monte Carlo. Rothstein lost this money one night without batting an eyelash, without flinching or showing any signs of being disturbed....
I know that he earned millions as a builder, in the insurance business and with a stable ... of the finest race horses in the country. He was one of the most tireless workers I have ever known, for sixteen hours at work when I knew him was his average day. And in those sixteen hours he helped many people. I do not believe he ever said "No" to a friend.
Either in Baltimore in 1912-or London in 1913-Arnstein met Brooklyn-born Fanny Brice, star comedienne of the Ziegfeld Follies. Both were married, but fell in love instantly. Fanny willingly supported her new man, but he refused to abandon confidence scams. In 1915 he was convicted of wire fraud. Fanny financed months of unsuccessful appeals, but in March 1916 Arnstein found himself in Sing Sing. Again, she did whatever she could, pawning much of her jewelry to guarantee Arnstein proper treatment: the easiest prison job, the best cuisine. In June 1917 she secured Nicky's pardon from Governor Charles Whitman. Customarily, pardoned prisoners waited until morning for freedom. Sing Sing's warden escorted Arnstein to the prison gates that very evening.
In 1918 Nicky finally divorced the first Mrs. Arnstein. That October he became Mr. Fanny Brice. Arnstein hobnobbed with her show-business friends, including Eddie Cantor and W. C. Fields, and inspired Fields's catch phrase "Never give a sucker an even break." By 1918 Fanny was earning $2,500 a week. The couple enjoyed a Central Park West town house and a Long Island country home, but Nicky still had larceny in his heart. Starting in 1918, a series of bond robberies rocked Manhattan. Bandits stole $5 million in bonds from Wall Street couriers who more often than not had prearranged to be robbed. Police remained baffled until February 2, 1920, when they nabbed a group of gunmen and messengers in the act. Normally bail would be posted, and a lawyer assigned. The thieves would serve a minimal sentence and maintain a discreet silence regarding higher-ups.
But nobody arrived at the Tombs this time. No bail bondsmen, no lawyers. Joseph Gluck, the leader of the crooked messengers, confessed and identified the mastermind behind the operation as a "Mr. Arnold."
Assistant District Attorney John T. Dooling gleefully assumed he finally had Arnold Rothstein, but Gluck examined Rothstein's photo and said this was not the "Mr. Arnold" he knew. Finally Dooling showed Gluck a picture of a dapper, long-faced man with a waxed mustache. That's "Mr. Arnold," said Gluck.
It was Nicky Arnstein.
"Nicky? My Nicky?" Fanny Brice exclaimed to detectives. "Nicky Arnstein couldn't mastermind an electric light bulb into a socket!" But her Nicky had controlled the entire operation-or, at least, controlled it to the point of fencing the stolen bonds. For fencing such huge amounts, he needed the Great Bankroll. A. R. obliged: for twenty cents on the dollar.
On February 12, 1920, Nicky Arnstein dressed glumly in a shabby outfit and headed for Harlem's 125th New York Central Railroad station to catch the first train out of town. He left no forwarding address, not even to Mrs. Arnstein.
Arnstein soon decided he needed more than a hideout; he needed legal representation, of the sort Arnold Rothstein often employed. Within days, a call was made to the firm of Fallon and McGee.
William Joseph Fallon, "The Great Mouthpiece," bears further introduction, for his spectacularly scandalous career and Arnold Rothstein's intersect regularly. In the 1920s New York possessed its share of spectacular defense attorneys-Arthur Garfield Hays, Bourke Cochran, Max Steuer, Dudley Fi
eld Malone-but if you were incontrovertibly guilty of a particularly heinous crime, you thought first of Bill Fallon.
Genius and nerve marked Fallon. No one was better in a court room, thinking on his feet, citing relevant-or, upon close examination, irrelevant-precedents. No one was better at improperly injecting ideas into a jury's minds. Were his comments overruled by the judge and stricken from the record? Of course, but the damage had been done. Juries still heard Slippery Bill's inadmissible, improper, and often unsubstantiated comments-and couldn't help but give them credence. No attorney exhibited more daring in goading judges mercilessly-if it served his clients. And if all that failed, no member of the bar could more skillfully cause incriminating documents or witnesses to simply vanish. And no one tendered bribes more smoothly to amenable jurors.
Fallon was born just off Times Square, on West 47th Street, half a block from Broadway. He first earned his living quietly and respectably as an assistant district attorney in suburban Westchester County. But around 1918, something within him snapped. Fallon claimed he had wrongly convicted a man and couldn't live with his shame. But that wasn't it. Maybe it was drink, though it took him a few more years to become a roaring drunk. Or maybe Bill Fallon simply realized that there was more money and glamour defending crooks on Broadway than prosecuting them in White Plains.
Two early cases, both containing healthy doses of sex, guaranteed Fallon's reputation. In early 1919, he defended former actress Mrs. Betty Inch, a blackmailer caught red-handed accepting hush money. Fallon positioned Mrs. Inch on the witness stand to expose her wellturned ankles. She won a mistrial. For her second trial, Fallon secretly built a high wooden fence around the witness box-then blamed prosecutors for its construction, charging that it spitefully meant to block sight of his client's shapely legs. "This hurts," he fulminated. "The insult of it! The shame! That civilization permits men to treat a beautiful, frail woman in this manner shows to what depths we have sunk since the age of chivalry. I have half a mind not to go on with this case!"
Rothstein: The Life, Times, and Murder of the Criminal Genius Who Fixed the 1919 World Series Page 24