by Pete Earley
Shur’s account intrigued OCRS chief Edwyn Silberling, and in November he gave Shur a special assignment. U.S. attorney Hoey had just convicted Persico of extortion, and he’d been sentenced to prison for fifteen years. “I want you to go see Persico and offer him a deal,” Silberling said. “See if you can get him to become an informant in return for us reducing his sentence, but first clear it with Hoey.”
As ordered, Shur went to see Hoey. “Do you guys know who Persico is?” the prosecutor asked incredulously. “Persico is Profaci. He’s not some small-time hood! He’s a boss, for God’s sake! He’s not going to squeal! What’s wrong with you guys?” Hoey threatened to call Robert Kennedy personally and complain if Shur tried to talk to Persico. “I’ll have your job, Shur!” he yelled.
Silberling told Shur to back off. “Everyone automatically assumed a gangster like Persico would never talk,” Shur said. “Everyone decided it would be a waste of time to even approach him. I disagreed but was overruled.”
Robert Kennedy sent a glowing progress report to his brother at the White House near the end of 1961, noting that OCRS attorneys had spent nearly two thousand days in the field, four times more than they had under the Eisenhower administration. Working together, the IRS and FBI under OCRS guidance had cleaned up Newport, Kentucky, a town directly across the Ohio River from Cincinnati that was infamous for its bordellos and gambling dens. “For the first time, federal agencies are cooperating,” Kennedy bragged. Shur was not nearly as optimistic. Despite his best efforts, bickering between agents was still rampant, and even though Brooklyn was a hotbed of organized crime, Shur’s hard work hadn’t led to any major convictions. He decided to step up his efforts, and he chose Larry Gallo as his target.
By this point, Joe Profaci had died of cancer in Florida, but his brother-in-law, Joseph Magliocco, had taken charge of the Profaci crime family, and the mattress war had turned even more violent. Magliocco had increased the killing because he was afraid the other four crime families in New York might try to muscle in on his turf now that Profaci was gone. By mid-1962, five Gallo soldiers had been murdered and three others kidnapped and never seen again. In the midst of all this, an IRS agent casually mentioned to Shur that Larry Gallo had been seen entering a Brooklyn bank.
“Let’s find out what he was doing there,” Shur suggested.
It turned out Gallo had applied for a Veterans Administration mortgage, and when Shur got a copy of the loan application, he found a letter attached to it written by Gallo’s sixty-two-year-old father, Albert. The elder Gallo claimed his son earned $10,000 per year in salary working at the family’s Brooklyn restaurant. Shur suspected the old man was lying to help his son qualify for the loan. To be certain, he asked the IRS to pull Larry Gallo’s federal income tax returns. “We discovered Gallo had not filed a federal tax return in five years,” Shur said. “I knew at that moment we had him cold.” Gallo had either lied on the VA application when he wrote that he earned a regular salary or lied to the IRS when he claimed he had not earned enough income to pay federal income taxes. “This was exactly the sort of thing that Bobby Kennedy wanted us to do,” Shur said. “We were to look for any and all possible violations, no matter how small, to harass these gangsters.”
The IRS wanted to prosecute Gallo for tax fraud, but Shur thought the FBI would have a better chance of sending him to prison if it charged Gallo with “knowingly making a false statement to a federal agency” when he lied to the VA about his income. “The IRS was upset because its agents had done the investigation,” said Shur, “and I was tangled up in another interagency squabble, but I got the IRS to go along with me after I assured officials there that I’d make sure they were credited with helping catch Gallo.”
Gallo and his father both agreed to plead guilty when they saw the evidence against them. Reporters and photographers swarmed around Larry Gallo when he arrived at the courthouse, surrounded by five bodyguards, for sentencing. The law required that both men be sentenced to a minimum of eighteen months in prison, but the judge suspended all of the elder Gallo’s sentence. “I’m not sending you to prison because you were simply trying to help your son,” he explained. The judge then suspended all but four months of Larry Gallo’s prison sentence. The New York Daily News speculated that the four-month prison term “may have saved Gallo’s life by giving him sanctuary in a federal prison, away from crime boss Joseph Magliocco’s guns.”
“Everyone at the Justice Department was thrilled we’d convicted Larry Gallo,” Shur recalled, “and then J. Edgar Hoover blew it. He was on Capitol Hill testifying before an appropriations committee, and out of the blue, he brings up the Larry Gallo tax case and cites it as an example of how thorough the FBI is when it investigates mobsters. He tells Congress that it was his FBI agents who had caught Gallo lying on his VA application. I never knew for sure if Hoover was aware he was lying or if some aide had given him false information, but I always suspected he knew exactly what he was doing. Of course, the IRS agents, who had actually done all the work, were livid. They called me and said they would never, ever work again with the FBI. They were furious at me for taking the Gallo case away from them. All I could do was promise that I would set the record straight in my report to Robert Kennedy.”
By now, Shur had spent two years traveling back and forth to Brooklyn, and in a memo to his bosses he suggested it was time for the OCRS to change its approach. The problem, he explained, was that the Justice Department was aiming too high. It was trying to bring down New York’s top crime bosses. “These figures are simply too well insulated,” he wrote. The government needed to lower its sights. “If we could get just one midlevel crime family member convicted of a serious charge that would send him away to prison for life or earn him a death sentence, then we might be able to get him to testify against his master. We have to work from the bottom up, rather than trying to go from the top down.”
Shur already had a midlevel gangster in mind. Christopher Furnari had been spotted meeting with one of Magliocco’s top lieutenants. Shur knew Furnari was on parole from prison, where he’d been serving a ten-year sentence for rape. Meeting with a known criminal, in this case Magliocco’s lieutenant, was a violation of Furnari’s parole. “I called the state parole authorities, and they agreed to revoke Furnari’s parole and put him back in prison. I told them I wanted to be there when they arrested him. I thought he might be willing to cut a deal.” Instead, the gangster pelted Shur with profanities. “The fear of being sent back to prison was simply not enough to make Furnari crack,” Shur said. “It was going to take something more.”
During a routine search of Furnari’s house, agents found photographs of several Gallo gang members hidden in a family Bible. Shur guessed Furnari had been given the pictures because Magliocco wanted the men murdered, a hunch the gangster indirectly confirmed when Shur quizzed him about the photographs.
“I sell life insurance, and my boss gave them pictures to me,” he replied sarcastically. “He told me to avoid selling insurance policies to these guys. They might not be living too much longer.”
Shur recognized the photographs. They had been taken by the New York City Police Department. “It was obvious to me that a crooked cop had given the photographs to Magliocco’s men, who in turn had given them to Furnari.”
Shur felt stymied. “The mob had better sources than we did. It wasn’t just dirty cops giving the mob police photographs. It was crooked judges, too. The mob was even paying off people in the telephone company. If we learned a telephone number was being used by a bookie, we’d ask the phone company for the address at that number. A few minutes later, our contact at the phone company would call us and tell us the address. But it turned out our contact was being paid by the mob to call them first whenever we asked for an address!”
It wasn’t bribes, however, that were keeping mob members’ lips sealed. “Omertà was very, very real,” said Shur, “and we had plenty of photographs of dead bodies in our files to prove it. It didn’t take me lon
g, working in Brooklyn, to realize that the only way we would ever be able to cause the mob serious damage was by getting someone from inside its own ranks to testify for us, but omertà was simply too strong. Despite all of our best efforts, we rarely learned anything from informants that we could use in court. For instance, an informant would tell us about a mob bookie operation and we’d rush in and bust it, only to discover later that the informant had been using us. He’d send in his own bookies as soon as we locked up his competition. What we needed was a stick and a carrot. We had to find a way to make a midlevel gangster vulnerable, and then we had to offer him a way out. That’s what I explained in my memo. But there was another piece to the puzzle. We had to be able to offer a gangster protection. We had to prove we could keep a mobster alive if he testified for us. We had to create some sort of protection program. But how? If we couldn’t get federal agencies to share trivial information with each other, how were we ever going to get them to cooperate when it came to protecting a witness? The IRS was not going to trust the FBI to protect an IRS witness, and the FBI wasn’t going to trust the IRS to protect an FBI witness, and neither of them was going to trust the Bureau of Narcotics.”
CHAPTER
THREE
Gerald Shur was called into a deputy chief’s office in the Organized Crime and Racketeering Section at the Justice Department in March 1963 and given a stunning assignment. A member of the Vito Genovese crime family had been secretly talking to the FBI for nearly a year about his life inside the Mafia, Shur was told. Robert Kennedy wanted to give the president a summary of those private interviews, and Shur had been chosen to write it. “Stop whatever you’re doing,” he was ordered. “Read the FBI interviews and have a report ready by nine A.M. tomorrow for the attorney general and President Kennedy.”
“What’s the informant’s name?” Shur asked.
“Valachi—Joe Valachi.”
Shur had never heard of him. “Because of all the books written about organized crime and the popularity of movies like The Godfather and television shows like The Sopranos, most people today know how the Mafia operates,” Shur recalled. “But Valachi was the first real mafioso to break omertà, and before him organized crime in America was very secretive and mysterious. There were still people who didn’t believe there really was an American Mafia, and none of us in law enforcement knew how it was structured or understood its rules and rituals. I was handed this huge stack of FBI interviews—more than two feet high—and for the next five hours, I sat at a desk reading what Valachi had said. It was incredible stuff! He was giving up everything he knew.”
The fifty-four-year-old Valachi had been a criminal for thirty years, having joined the New York mob in 1930. He’d served as a hit man, robber, numbers operator, enforcer, and drug pusher. Although he was a low-ranking “soldier” or, in mob parlance, a “button man,” Valachi was well versed in Mafia gossip. Best of all, he loved to talk. But his interviews with the FBI were difficult to follow because he jumped back and forth between people and events. Valachi would be talking about mobsters in Las Vegas at one moment and the mob’s Chicago operations the next. There was no index, no directory that would have helped Shur understand the relationship between the 317 mob members identified by Valachi or why they were important. As he waded through the reams of FBI reports, he realized he’d been given an arduous task. When he read the final interview, he grabbed a blank legal pad and hustled across the street to a pub popular with Justice Department lawyers. He ordered a Jack Daniel’s on the rocks and a roast beef sandwich. “My mind was spinning. How was I going to digest all of this information and turn it into a cohesive summary—for the president of the United States, no less?” Shur would later joke that it was the shot of Jack Daniel’s that cleared his mind. As soon as he drank it, he began scribbling furiously on the legal pad. Back in his office, he typed nonstop, finishing his summary shortly before dawn. Nearly four decades later, Shur would take a fresh look at the yellowed, thirteen-page, single-spaced memorandum that he prepared that night for President Kennedy and be struck by how rudimentary much of the information in it now seemed. Yet at the time, Valachi’s disclosures were considered to be staggering revelations.
“We have achieved what we believe to be a major breakthrough,” Shur declared in his opening sentence. “We can now state that a national criminal organization does, in fact, exist. Of this, there can no longer be any doubt.” This sentence was aimed directly at J. Edgar Hoover’s long-standing claim that there was no organized crime in America. (In one of the slickest public relations moves ever, Hoover would later insist that reporters had misunderstood what he had been saying for thirty years, and he would use Valachi’s disclosures as a way to save face. One of Valachi’s revelations was that the actual name of organized crime was not the Mafia but La Cosa Nostra [LCN]—meaning “our thing”—and Hoover used this difference in terminology in his defense. He had always known there was a national syndicate, he declared, but it wasn’t named the Mafia. To this day, FBI agents are taught to call organized crime the LCN, not the Mafia. It is part of Hoover’s save-face legacy.)
Continuing with his summary, Shur explained that only Italians could be inducted into the mob.
During a secret ceremony, a boss pricks the new member’s trigger finger with a needle, drawing drops of blood, and then has him repeat an oath. A piece of paper, oftentimes a picture of a saint, is placed in the hand of the new member and set on fire … as the new member recites, in Italian, the following words: “With this oath I swear that if I ever violate this oath may I burn as this paper is burning.” The inductee is then introduced by the boss as a “new friend of ours” and thereafter, if he is ever introduced to someone and told he is a “friend of ours” that means the stranger also is an LCN member.
Shur listed thirteen rules that Valachi said members were required to follow, including six punishable by death if violated.
Executable offenses include:
1. Furnishing information about this organization to any outside person, especially the police.
2. Handling narcotics or deriving a profit from their sale. (Valachi says this rule is most often violated. As long as the boss receives a portion of the money made, there may not be any enforcement.)
3. Engaging in an affair with the wife of another member.
4. Engaging in an affair with the sister or daughter of another member.
5. Stealing from another member.
6. Committing any acts of violence against another member unless approved by the boss.
Shur went on to outline the organizational structure of the LCN and to identify the crime bosses on the mob’s “national commission.” He was exhausted when he finished, but he was pleased with himself. Only later would he realize that he had misspelled the name of the mob throughout his entire report, writing it as La Causa Nostra. His bosses never mentioned it.
Rumors swirled through Washington and New York during the summer of 1963 that a mobster had betrayed omertà. When Miriam Ottenberg, a reporter for the Washington Star, identified Valachi in a front-page story, the Justice Department moved the mobster from a county jail outside Manhattan to Washington for safekeeping. He was the only inmate on the top floor of the downtown District of Columbia jail. The city’s electric chair was located right next to his cell, and Valachi would sit in it as a joke whenever he had a visitor. There weren’t many. No one was permitted to talk to the mobster without the permission of William Hundley, who had returned to oversee the OCRS when Edwyn Silberling resigned after spending a year in the job. “Valachi called me his goombata,” Hundley recalled in an interview. “I’ve never told anyone about this before, but Jim McShane, the chief marshal in charge of the jail, and I used to sneak Valachi out of his cell at night and take him to Italian restaurants in town to eat. Can you imagine that? The mob has a price on this guy’s head and we were taking him out for linguine.”
Like most Mafia witnesses who would follow him, Valachi claimed he had not betrayed
the mob until it first betrayed him. Valachi’s break with the LCN had come on June 22, 1962, when he grabbed a piece of iron pipe in the prison yard at the federal penitentiary in Atlanta, Georgia, and beat another convict to death with it. Fifteen minutes later he discovered he had murdered the wrong man. He had been trying to kill Joseph DiPalermo, a mob hit man. Instead, he murdered Joseph Saupp, a forger with no mob ties who happened to resemble DiPalermo. Valachi was convinced DiPalermo was out to kill him on orders from New York crime boss Vito Genovese, who suspected Valachi of being a police informant. When prosecutors said they were going to seek the death penalty for Saupp’s murder, Valachi offered to talk. In return, he was given a life sentence.
“Bobby Kennedy had a special relationship with the McClellan Committee, and Senator McClellan began pressuring him to have Valachi testify before his committee,” Hundley recalled. “This was going to be the first time Valachi had ever appeared in public. I opposed having him testify because I was still hopeful we might be able to make some criminal cases based on what Valachi had told the FBI, but frankly we weren’t having much luck. A lot of what Valachi said was hearsay, or we were barred by the statute of limitations from going after people he named.”
Kennedy and Hundley met privately with Valachi, and he agreed to testify before the committee. “Kennedy and I cut a deal with Valachi that the press was never told. It was a handshake agreement. Kennedy told Valachi that if he testified before Congress, the government would put him and his girlfriend on a Pacific Island after we were done with him.” Kennedy had already picked out an island in the western Pacific that had once been held by the Japanese but was now under U.S. control. “Valachi would be safe there and be able to serve his life sentence.”