The Mob and the City

by C. Alexander Hortis

  Mafiosi exploited the insularity of these enclaves. South Italians placed a strong primacy on the Italian home and had a deep mistrust of government outsiders. The Mafia played on these cultural traditions. Robert Orsi, the author of an award-winning study of Italian East Harlem, explains the mythology he found: “The racketeers, in the community's mythical restatement of their identity, were the enforcers of the values of the domus [the Italian home],” Orsi explained. “Of course, no one talked about what these men might have done outside the community.”64

  The mob relied on social pressure and intimidation, too. “We never asked what they did for a living,” said Clara Ferrara, a resident of East Harlem. “We never knew what Joey Rao did. His wife was a lovely woman.”65 It was hard for outsiders to penetrate the wall of silence. “The coroner's office in New York found itself handicapped whenever we had a case involving members of the Mafia,” said the chief coroner. “Respectable and hard-working Italians, some of whom I knew personally, would become evasive or refuse to answer questions.”66

  Wiseguys were an everyday presence in many neighborhoods. The unofficial headquarters of the early Mafia was East 107th Street in Harlem. “The tenements gave the block the appearance of a walled medieval town somehow replanted in New York City,” said Salvatore Mondello, who grew up along 107th Street.67 Goodfellas gravitated there for decades. “They used to hang on the corner. There was the Artichoke King, Rao, Joe Stutz, Joe Stretch,” said Pete Pascale of East Harlem. “They think nothin’ of breakin’ your legs.”68

  Ronald Goldstock, former director of the New York State Organized Crime Task Force, has pointed out that these Little Italies were recruiting grounds for young members.69 “When you were brought up in the neighborhood, East Harlem in New York City, you always looked up to the wiseguys,” said Vincent “Fish” Cafaro.70 “In Italian neighborhoods, priests and gangsters were held in virtually the same esteem,” echoed Tony Napoli. “Both were loved and feared, and most of all, respected.”71

  Kinship ties further drew young men into a “Mafia family.” When FBI agent Joseph Pistone infiltrated the Bonanno Family, he found there was often “some type of family bond, real family, not Mafia family, a father, an uncle, a cousin,” between them.72 Anthony “Gaspipe” Casso was influenced to join the mob by his (lowercase g) godfather Sally Callinbrano, whom young Anthony saw as “a class act” and a “man of respect.”73 Vincent “Fat Vinnie” Teresa was drawn to his mobster uncle Dominick Teresa who “seemed to have everything.”74

  MAFIA FRANCHISING: WHY THE COSA NOSTRA WAS LIKE A BURGER FRANCHISE

  The Sicilian mafiosi who settled in Gotham brought with them the organizational structure of the cosche or “clans.” In New York, these became known as the Mafia families.75 Mafia families have been inaccurately compared to a traditional corporation, with managers and employees.76

  Rather, the Mafia families most closely resembled franchise companies.77 Franchise companies (that is, burger chains and hotels) allow the use of their trademark by franchisees in exchange for a fee or percent of profits. The franchise company controls minimum standards, guarantees exclusive territories, and arbitrates disputes among franchisees. Franchises are economically efficient because they let the franchisees reap the benefits of a trademark, while the franchisees put up their own capital and know-how to operate on a daily basis.78

  Similarly, the Mafia families, rather than paying salaries, simply allowed its members to operate under their names to make money in the underworld. Of course, the Cosa Nostra did not produce any (legal) goods or services, and it was a parasitic enterprise in general. Nonetheless, as the Mafia families expanded in the 1920s, they took on the characteristics of franchise companies.

  MAFIA FRANCHISES: THE MAFIA TRADEMARK AND FRANCHISE FEE

  Like a franchise company, the New York Mafia developed a valuable “trademark” in the underworld. The Cosa Nostra developed a reputation for reliability, for protection from police and other criminals, and for its capacity for violence.79

  The Mafia was known for its ability to offer reliable immunity from local cops. “You had to be allied with somebody like Paulie [Vario] to keep the cops off your back,” believed Henry Hill, an associate of the Lucchese Family. “Wiseguys like Paulie have been paying off the cops for so many years,” explained Hill. “They developed a trust, the crooked cops and the wiseguys.”80 The Mafia became an elite slice of the underworld. When NYPD detective Frank Serpico joined the plainclothes division, he was bluntly told by a fellow officer that while he could arrest black and Puerto Rican criminals, “the Italians, of course, are different. They're on top, they run the show, and they're very reliable, and they can do whatever they want.”81

  The Cosa Nostra's underworld reputation was so ferocious that it shielded its members from other crooks. “That's what the FBI can never understand—what Paulie and the organization offer is protection for the kinds of guys who can't go to the cops. They're like the police department for wiseguys,” described Hill. “The only way to guarantee that I'm not going to get ripped off by anybody is to be established with a member, like Paulie.”82 Mob connections could shield non-mobsters, too. “When a businessman is ‘with’ someone, it means he has a godfather, a gladiator who will protect him,” explained Michael Franzese, a prominent ex-mafioso. “That status made him ‘hands off’ to anyone on the street.” The Mafia's preeminent reputation in the underworld was such that it often served as a kind of master arbiter of disputes among other criminals well into the 1970s.83

  Ultimately, the Mafia's “brand” was based on its reputation for extreme violence. The scholar Diego Gambetta noted how many mafiosi demonstrated “the ability to use violence” early in their careers to enhance their reputations.84 New York's mob bosses commanded authority based on “a reputation for savagery and a history of settling disputes by shedding blood,” confirms undercover FBI agent Joseph Pistone.85

  The Mafia's reputation for violence was so intimidating, that it only had to resort to actual violence sparingly.86 As an FBI informant stated, “a ‘button guy’ received a lot of respect in the neighborhood and was able to use this position to obtain money without getting himself involved in a lot of problems.”87 When Jimmy Fratianno became a “made man,” the mafioso John Roselli explained its reputational benefits: “The fact that you're a member gives you an edge. You can go into various businesses and people will deal with you because of what you represent,” said Roselli. “Nobody fucks with you. We're nationwide…. And that means you can make a pretty good living if you hustle,” counseled the veteran wiseguy.88

  The Mafia trademark was valuable enough that there was even some “licensing” and “passing off” of the mark in the underworld. Trademark owners sometimes license their mark to nonaffiliated companies (for example, “[trademark] Diet™-Approved” for food companies). In Manhattan, an Irish gang named “the Westies” entered into a virtual licensing agreement with the Gambino Family. As a federal court explained, the Gambino Family “permitted the Westies to use the Gambino name and reputation in connection with their own illicit business,” and in exchange “the Westies paid the Gambino Family ten percent of the proceeds from various illegal activities.”89 Others occasionally tried to “pass off” the mob's trademark by pretending to be affiliated. “Because of my ethnic background, they thought I was mob-connected and it worked to my advantage. It gave me some leverage to keep bettors in line,” said Anthony Serritella, a Chicago bookie. “I really wasn't connected, but never admitted or denied it.”90

  In exchange for operating under a Mafia family, the members paid something resembling a franchise fee and percentage of the profits. Joseph Valachi testified before Congress that each of the five-hundred-odd soldiers in the Genovese Family of which he was a member paid $25 monthly “dues” (about $2,300 annually for each soldier). In the mid-1950s, an Anastasia Family underboss named Frank Scalise was selling mob memberships for $40,000—an express franchise fee. Soldiers were also expected to split some
of their profits with their caporegimes (captains) who in turn sent some up to the bosses of the family. “Usually the split is half with your captain,” explained FBI agent Joseph Pistone, who infiltrated the Bonanno Family. “The captain in turn has to kick in, say, ten percent upstairs, to the boss.”91

  MAFIA FRANCHISES: TERRITORIAL RIGHTS

  Franchise companies often guarantee each franchisee an exclusive territory and prohibit encroachments by their other franchisees (for example, no two coffee shops of the same trademark may open on the same block).92 Similarly, the Cosa Nostra upheld territorial rights for wiseguys.

  The Mafia's recognition of territorial rights can be traced all the way back to Sicily. An investigative report from Sicily in the 1890s stated:

  Among the canons of the mafia there is one regarding the respect for the territorial jurisdictions of other [cosche]. The infraction of this canon constitutes a personal insult. Hence the encroachments…were perceived by the Siino family as an atrocious personal insult.93

  This carried over to New York, albeit in a narrower form. Gotham was too dense to grant exclusive rights to all criminal activities in a neighborhood. In the 1920s, East Harlem was divided up between the Masseria Family and the Reina Family. Later, the New York Mafia protected rights to specific rackets. For example, the Lucchese Family controlled shipping at Kennedy Airport, and different families controlled specific factories in the garment district.94

  Soldiers were conversely limited by the territorial rights of other members. The Profaci Family had to suppress a dissident crew lead by the brothers Larry Gallo, Joseph “Crazy Joe” Gallo, and Albert “Kid Blast” Gallo. An FBI informant reported that the Gallo brothers believed that once they were “made” they “would come into sudden wealth.” They grew angry when they discovered the rackets “were already under the control of someone else, and the GALLOS were not allowed to move in on anyone else's operation.”95

  MAFIA FRANCHISES: MAINTAINING STANDARDS AND ARBITRATING DISPUTES

  To preserve the trademark, franchise companies retain the right to enforce standards or step in when a franchisee is harming the brand (for example, running a shoddy motel under their trademark). Similarly, the Mafia families had the authority to maintain rules to protect the organization and its trademark. Among the most serious rules were that a member could not betray secrets of the Cosa Nostra, he could not physically attack another member, and he could not “fool around…with another amico nostra's [made man's] wife.”96 Although the Mafia talked about these rules in terms of “honor,” they also served the business rationale of protecting the organization. “In New York we step all over each other. What I mean is there is a lot of animosity among the soldiers,” Joe Valachi explained. “So you can see why it is that they are strict about the no-hands rule.”97 The Mafia also sought to protect the reputation of its “brand.” Publicly, at least, the Mafia disavowed any involvement with prostitution, pornography, and drugs (much more on that later), which were viewed negatively by the public.98

  Like mainstream franchises, the Mafia even had something resembling arbitration panels to resolve disputes among its members. In his memoirs on the 1920s, mafioso Nicola Gentile describes a “council” in which bosses from different Mafia families met to hear charges of wrongdoing and resolve disputes.99 Later, the Cosa Nostra created “the Commission” as a forum to resolve major disputes. As Joe Bonanno explained, “The Commission, as an agent of harmony, could arbitrate disputes brought before it.”100 In chapter 3 we will look at how the Commission came into being in 1931.

  THE NEW TECHNOLOGIES OF TELEPHONES, AUTOMOBILES, AND PLANES

  New technologies have been described as waves that roll through society. At the same time that new technologies were changing New York, they were transforming organized crime as well.101

  In the nineteenth and early twentieth centuries, New York gangsters had relatively limited reach. Groups like the “Eighteen Street Gang” or the “Bottle Alley Gang” rarely controlled more than a couple blocks.102 They were hampered by unreliable communication and transportation. The early Mafia families actually communicated by mail. Men of Honor would even carry with them “letters of recommendation” from their mob bosses when they traveled to new cities.103 Communicating through hard documents proved risky: in the early 1900s, the United States Secret Service seized letters of members of the Morello Family and used the letters to build cases against them.104

  The advent of the modern telephone system gave organized crime a valuable new tool to communicate efficiently across regions and the United States. As service grew, New Yorkers developed the habit of using the telephone regularly on massive levels from the 1910s onward.105 Professional criminals were relatively free to use phones in this time, too. The Federal Communications Act of 1934 prohibited the interception and disclosure of wire communications, rendering any wiretapped phone conversations inadmissible in federal court. This remained the law until 1968.106 Although local law enforcement was not so restricted, it was often compromised by corruption from investigating organized crime. From the 1920s through the mid-1950s, there was something of a golden era for gangsters to use phones. Los Angeles goodfella Jimmy Fratianno used pay phones to have conversations about loansharking and casino operations through the 1960s. Asked why he did not take more precautions, Fratianno, referring to his 1970s conviction, explained: “Well, later years we did, but like see, I was the first person that ever went to jail on a wiretap in Los Angeles.”107

  The telephone expanded the reach and efficiency of organized crime starting in the 1920s. New York mafioso Frank Costello regularly phoned his partner Phillip “Dandy Phil” Kastel in New Orleans to coordinate their joint gambling operations. During the 1940s, state police discovered that mafioso Joseph Barbara was calling gangsters throughout the East Coast (he kept his conversations short and veiled to avoid incrimination). Despite the growing risks, the efficiencies from telephones were so great that mafiosi were still communicating over pay phones (using coded words) well into the 1970s. As Judge Richard Posner points out, phones are so efficient and attractive that they are still used by many gangsters despite the risks.108

  Mass-produced automobiles opened up new territories and criminal enterprises as well. By 1927, a majority of America households owned a car.109 Gangsters likewise started using automobiles for criminal activities. Joe Valachi got his start as a “wheelman” for burglaries, driving his careening Packard car through the streets after heists.110 Bootlegging operations depended on fleets of trucks. The Mafia began relying on cars to smuggle narcotics, too.111

  These new technologies enabled gangsters to forge cross-country links during Prohibition. As historian Mark Haller describes, “Bootleggers east of the Mississippi were wintering in Miami and occasionally vacationing in Hot Springs, Arkansas,” they met “in Nova Scotia or Havana, to which they traveled to look after their import interests,” and those with joint ventures were in “continual contact by telephone” to coordinate activities.112 Las Vegas's casino industry, in which mobsters conducted skimming operations, would not have developed without modern cars and airplanes.113

  TECHNOLOGY AND GAMBLING: THE NUMBERS LOTTERY AND SPORTS BOOKMAKING

  Technology had its most direct impact on illegal gambling operations. Although gambling had been around forever, it was boosted by new communications in the 1920s. The Mafia families specialized in two different forms of gambling: the numbers lottery and sports bookmaking.

  During the 1920s, the numbers lottery took off in New York City. Historians have shown that New York's illegal lotteries nearly disappeared in the early 1900s, following revelations that paper drawings were being fixed by their operators. In the early 1920s, African-American gangsters in black Harlem built a new numbers lottery based on an unimpeachable public source of randomly generated numbers: the New York Clearing House. Each morning at 10:00 a.m., as the clearings numbers were announced in Lower Manhattan, numbers runners would telephone the winning digits throughout Goth
am. “Once the Clearing House numbers became known in Harlem, the game spread like wildfire,” describes a history of the numbers lottery.114

  Numbers lotteries were highly territorial in areas of New York City. Numbers lotteries required “banks” and numbers “shops” (such as liquor stores that sold numbers under the counter) in neighborhoods to enable a large customer base of numbers purchasers. For banks and numbers shops to operate, pay-offs to the police and protection from others were required.115 As a result, the Mafia held interests in numbers lotteries around New York. In the 1930s, the lucrative Harlem numbers lottery was taken over by members of the Luciano family, and it was passed down for decades from Michael “Trigger Mike” Coppola to Anthony “Fat Tony” Salerno.116 Likewise, Joe Bonanno recalled how when he became a boss in central Brooklyn, he “also inherited the ‘rights’ to the neighborhood lottery.”117 Later, his son Bill Bonanno described how “a member could run numbers within a designated four-block area of the neighborhood,” and “if someone else interfered by encroaching on his territory,” the family would intervene.118

  Bookmaking was revolutionized by wire services, telephones, radio, and later television. Bookmaking involved handling wagers on sporting events like horse races and boxing matches. During the 1930s and ’40s, “wire rooms” became tools to obtain instant sports results. The Chicago Outfit muscled in on a major wire service to gain an informational advantage on sporting results. This advantage, however, faded with television. “Wherever there was a television set, there was a new type of sports wire service,” described a history of bookmaking. Unlike numbers lotteries, bookmaking could be handled largely over the phone and with “runners,” and did not require as many brick-and-mortar locations.119