If an adversary can be included in Anslinger’s inner circle, then Al Scharff, along with FBI director J. Edgar Hoover, deserves the honor. Based in Texas, Scharff’s area of expertise was Mexico, where in the First World War, while operating as a special employee of the War and Justice Departments, he assassinated two German spies. After that the customs service hired him, and over the ensuing years he made many alcohol- and drug-smuggling cases. But it was not until 1936, when he smashed a drug-smuggling ring that stretched from Shanghai through Havana to Mexico City, that Scharff’s competition with Anslinger, Dyar, and the FBN began. The drug ring, which was depicted in the 1948 movie To The Ends of the Earth, included a Eurasian femme fatale, a Prussian count-cum-Nazi spy, the Paris-based playboy brother of the mistress of Rumania’s King, and the Istanbul-based son-in-law of Mexico City’s police chief. All were associates of Elie Eliopoulos.4
The problem for Anslinger was that, although the case had been made in Mexico, Scharff had generated leads and developed informants in Europe, which he was not about to share with the FBN. As noted, Morgenthau had lost faith in Anslinger and had instructed Scharff (as we are told in his biography, The Coin of Contraband) to assist the American Embassy in Paris “in organizing a system to combat the flow of narcotic drugs from the Far East through Europe to the United States.” In addition, the chief of Naval Intelligence wanted Scharff to obtain “certain information from Europe on matters not being investigated by its other agents.” Obviously, in this latter respect, Scharff’s narcotics investigation was merely a cover for espionage activities.5
In Europe, Scharff used an “unlimited expense account” to hire forty-six men in key European cities and, based on this vast informant network, found that narcotics from the Far East were smuggled through the Suez Canal into Italy and Turkey, then to Corsica and Marseilles, and that French Corsicans, financed by Greek racketeers, controlled the traffic. Scharff also discovered that the overland narcotics route included the Trans-Siberian Railroad and the Vienna Express from Istanbul to Paris. He located poppy fields in Yugoslavia, and learned how narcotics were moved to Trieste, Rome, and Naples, where he “saw American tankers pumping gasoline into German submarines and barges, and into tank cars bound for Berlin.”6
In Paris, as part of his espionage mission, Scharff worked with Ambassador William C. Bullitt in an effort to penetrate a faction of the Sûreté that protected Louis Lyon. Through the family connections of his wife, Ida Nussbaum, whose cousin was related to French Premier Léon Blum, Scharff was eventually able to initiate action against Lyon. It is a case worth examining.
As mentioned in chapter 1, Lyon had worked with Eliopoulos smuggling narcotics to various American gangsters. Lyon, however, played a double game and information he provided to French officials resulted in Eliopoulos being expelled from France. In exchange, Lyon was allowed to operate a heroin factory in Paris, directly across the street from the French Ministry of Foreign Affairs. From his factories in Turkey and China, tons of opium was moved to his accomplice, Corsican Paul Carbone in Marseilles. The Sûreté even protected Lyon after an explosion in his Paris factory in 1935. Everyone knew Lyon was the factory’s owner, but he was not tried until 1938, and then received only a light sentence. Why? Because high government officials, including Max Dormoy, the former Socialist minister of interior, employed Lyon as a spy against fascist French with ties to Nazi Germany.7
By 1940, the French were deeply divided along ideological lines, and while his former partners Elie Eliopoulos and Paul Carbone became Nazi collaborators, Lyon played a precarious triple game, posing as a Nazi sympathizer in order to expose Gestapo agents trying to infiltrate the Resistance. As Anslinger grudgingly observed, “Following the war, the French government awarded ex-gambler, ex-bookmaker, ex-dope dealer Lyon the Legion of Honor.”8
Throughout his tour in Europe, Scharff had a huge ego battle with Charlie Dyar, whom he started supervising in 1937. In a July 1940 letter to his supervisor in El Paso, Scharff disparagingly and unfairly said of Dyar, “so far as I knew he had not done anything up to the time I left Paris.”9
One can imagine refined, taciturn Charlie Dyar suffering sidewinder Al Scharff, with his cowboy boots and grating Texas drawl that so irritated the French officials he was trying to outwit. And of course Dyar was anything but unproductive. After the First World War, he had helped French counter-intelligence identify some 13,000 German spies, and thereafter Dyar relied on his friends in the Sûreté for the successes he achieved in his European narcotics investigations. So when Scharff tried to penetrate the Sûreté, the two men clashed immediately, and Scharff had Dyar summarily transferred to Customs in June 1937. But as soon as Scharff left Paris to return to Texas, the Treasury Attaché summoned Dyar back to resume control. Dyar remained in France until his investigations were interrupted by the Second World War, at which point he was reassigned, to his eternal dismay, to Scharff in El Paso, where the feud between Customs and the FBN simmered in the sweltering Texas heat.
At home, Anslinger’s top gun was fearless Ralph Oyler, the premier narcotic agent of the 1920s. In 1916, having transferred to the Narcotics Division as a special employee, Oyler made the seminal Jim Fuey Moy case in Pittsburgh. Moy, an addict, was arrested because his doctor had prescribed him narcotics, and the Narcotics Division wanted to challenge the legality and wisdom of the practice, because narcotics were being diverted from many of the treatment clinics that existed at the time. A milestone in drug law enforcement, the Moy case went to the Supreme Court, which ruled against Moy and found, in effect, latent police powers in the Harrison Act, which had been enacted as a revenue-gathering measure.10
In 1921 Oyler initiated another landmark case against several major American drug manufacturers and wholesalers. An estimated 300,000 ounces of heroin was being produced every month in New York, much more than was needed by area hospitals. Licenses were easy to obtain, and huge amounts of narcotics were being diverted onto the black market. At Oyler’s direction, an agent was placed in each manufacturing and importing house, and for the first-time purchasers, as well as manufacturers and wholesalers, were investigated. The result was the Jones–Miller Act of 1922, which standardized licensing and registration practices, and made the mere possession of narcotics a crime. Jones–Miller also provided for a federal narcotics commission, later chaired by Anslinger, which controlled the importation and exportation of narcotics.11
Oyler was also the brawling undercover hero of the Battle of the King Alexander – the King Alexander being a Greek ship whose crew was smuggling a million dollars’ worth of opium and cocaine to the Mafia. Oyler, leading seventeen fellow agents, raided the ship on 9 September 1921. As the New York Times reported, “Oyler and his companions used their revolvers freely and with effect.”12 Two crew members were killed, four hospitalized, twenty-eight arrested, and eleven convicted.
Not only was Oyler a skilled investigator, he had high-ranking contacts in the military. Most important was an association he formed in 1923 with Assistant US Attorney William J. Donovan. Together they cracked an international drug ring based in Buffalo, New York, and a huge seizure they made in Canada became a hot topic at the 1924 Geneva Opium Conference, and provided Representative Porter with the evidence he needed to trace the source of the narcotics to British and French Opium Bloc colonies. It is very likely that Oyler introduced Donovan to Harry Anslinger. Along with Donovan, future Central Intelligence Agency (CIA) chief Allen W. Dulles, and Andrew Mellon’s son-in-law David K. Bruce (later ambassador to France, Germany, and Great Britain), Anslinger would become one of the founding fathers of the Office of Strategic Services (OSS) in the Second World War and the CIA in 1947.
The turning point in Oyler’s career, however, was the Rothstein investigation, and his reward for smashing the world’s biggest narcotics ring and for uncovering corruption within the Narcotics Division was a summary transfer to Chicago. But Anslinger recognized Oyler’s talents and in 1934 resurrected his career by appointing him dis
trict supervisor in Detroit. Oyler served in this position until his death in 1947, making numerous newsworthy (but local) cases against mostly Chinese and Afro-American gangs dealing in opium and marijuana.
While Oyler’s tenure in Detroit was marked by mostly small and safe investigations, other case-making agents were actively pursuing heroin traffickers and establishing the basis for the FBN’s great post-war Mafia hunting expedition. Bespectacled, demure, and small in stature, Benedict “Benny” Pocoroba was one of the few undercover FBN agents ever to slip unnoticed inside the upper echelons of the Mafia. A man of immense courage, Pocoroba worked from 1918 to 1928 for a private detective agency that had launched its own investigation of the Mafia. Through this experience he had acquired insights into the secret organization that had taken over drug trafficking from the original Chinese and Jewish gangs. Pocoroba was recruited by Anslinger in 1930 and assigned the task of infiltrating Mafia chapters in California, Virginia, Pennsylvania, Ohio, and New York.13
The exact opposite of flashy Ralph Oyler, Benny Pocoroba was unglamorous and eminently un-newsworthy, but he and a few Italian, Chinese, and Jewish undercover agents are said to have “made the Bureau,” which by the late 1930s was accurately mapping out the Mafia’s hierarchy.
By 1937 the FBN’s rising star was George Hunter White, the organization’s most flamboyant and controversial character. White’s claim to fame was the 1937 undercover case he made against the Hip Sing T’ong, the infamous drug-smuggling Chinese–American trade association. Posing as John Wilson, a nephew of his “Uncle Sam” (a hitherto unknown gangster forming a new drug syndicate), White initiated the case in Seattle, then crossed the country contracting with Hip Sing T’ong members for huge purchases of opium. According to legend, White was initiated into the T’ong, swearing to accept “death by fire” should he ever break its sacred oath of secrecy.14 The investigation climaxed in November 1937 with a series of spectacular mass arrests, one of which implicated Charles Luciano through the arrest of the wife and brother of one of his top aides. The Hip Sing T’ong case earned White his well-deserved status as one of the FBN’s top case-making agents.
At five feet seven inches tall and 200 pounds, White, with his head shaved bald, was the picture of the mythical detective who made bad guys tip their hats and speak politely to cops. A native of California, White was ebullient and exceedingly confident, and as a former crime reporter for the San Francisco Call Bulletin, he had a nose for sniffing out trouble – and trouble was what he enjoyed more than anything else. It didn’t matter that he collected confiscated opium pipes or drank to excess, because White was the roughest and the toughest, and he fought with the troops on the front lines. More importantly, his newspaper contacts were always available to his publicity-hungry boss – and after he helped to extricate Anslinger’s stepson, Joseph, from an undisclosed legal problem, White became Anslinger’s favorite and most trusted agent.
Anslinger’s top field manager was Garland H. Williams from Prentiss, Mississippi. After earning a degree in civil engineering, Williams served in the Louisiana National Guard until 1929, when he entered the customs service. An intrepid investigator, Williams worked for Anslinger in the Flying Squad on some of the Foreign Control Board’s most important and wide-ranging cases. Utterly dependable, Williams in 1936 was chosen to negotiate, with Mexican president Lazaro Cardenas, an anti-smuggling agreement that allowed Treasury agents to operate inside Mexico. That same year Williams organized the customs service’s southwest Border Patrol in El Paso, Texas, to monitor the entire US–Mexican border.15
Williams was transferred to the FBN in November 1936, after Manhattan US Attorney Lamar Hardy complained to Secretary Morgenthau about the FBN’s failure to make any significant drug cases in New York in the previous two years. Morgenthau, without notifying Anslinger, sent a team of IRS agents to New York to find out why. What the IRS agents found was an office paralyzed by corruption and a lack of leadership. Morgenthau, having lost confidence in Anslinger (who nearly lost his job, and did lose all of his hair as a result of the stress), assigned Williams the job of cleaning up the mess in New York.16
As New York district supervisor, Williams whipped the office’s maverick case-making agents (aka the Forty Thieves) into line, and then tied Yasha Katzenberg’s gang of Jewish narcotics smugglers to Japan through their source in Tientsin, China, at the same time that Anslinger, in March 1937, was accusing the Japanese of dispensing opium in Manchuria as a weapon of war.
The Katzenberg case marked a pivotal point in the history of international drug smuggling. To sum it up, Yasha Katzenberg managed an elaborate drug ring that, with the help of corrupt Customs officials, smuggled huge amounts of narcotics on luxury liners from China to Mafia and Jewish distributors in New York. After Katzenberg was indicted in 1937, Garland Williams tracked him across Europe and caught him in Greece. Brought back to New York to stand trial, Katzenberg “flipped” and became the main witness against his fellow conspirators. But of his many revelations, the most important was that Giuseppe “Joe Adonis” Doto had stolen his last drug shipment, and had effectively taken control of narcotics importation. The significance of Katzenberg’s revelations about Adonis cannot be overstated: it confirmed that the Mafia had always obtained narcotics from the Far East, and that it had taken over international drug trafficking from the Jewish gangs; but it also meant that the FBN had identified a top member of the conspiracy – as well as his political protector, Brooklyn District Attorney William O’Dwyer.17
THE POLITICS OF ASSASSINATION IN NEW YORK
A member of Mafia boss Vincent Mangano’s crime family in Brooklyn, Joe Adonis rose to power in the underworld by providing the Ford Motor Company with the muscle it needed to smash an autoworkers strike outside Detroit in 1932. He was rewarded with a lucrative franchise, and until 1951 his Automotive Conveying Company freely moved sedans and drugs between Detroit and New Jersey, and thence throughout New England and the East Coast. “In the eight years from 1932 to 1940,” investigative journalist Fred Cook wrote, “Ford paid this Adonis-controlled company a cool $8 million.”18
The FBN’s headquarters staff knew this about Adonis, but Katzenberg provided an astounding new insight into the relationship between Adonis, his Mafia and Jewish associates, and politicians in New York. According to Katzenberg, Adonis had used his political influence to ensure that Brooklyn policeman William O’Dwyer first became a magistrate, and then Brooklyn’s District Attorney. By 1941, O’Dwyer was a powerhouse in his own right and would successfully run as the Democratic candidate for mayor of New York, presumably with Mafia backing.
Anslinger and Harney knew that O’Dwyer, while serving as DA, had investigated the murder of labor leader Joe Rosen. They knew that O’Dwyer’s informant in the case, Abe Reles, a professional hit man for Murder Incorporated (the joint Jewish–Mafia operation that sanctioned underworld murders nationwide) had named Katzenberg’s financier, Louis “Lepke” Buchalter, as having ordered Rosen’s murder. O’Dwyer indicted Buchalter for murder, of course, but what troubled Anslinger and Harney was that Reles had also named Joe Adonis, Willie Moretti, Meyer Lansky, Benjamin Siegel, Frank Costello, and Albert Anastasia as Buchalter’s co-conspirators – and yet they were not indicted. In fact, when prosecutors in California sought Reles’s testimony in order to indict Siegel on murder charges, O’Dwyer declined to send him.19
Then on 12 November 1941, Reles (“the canary who couldn’t fly”) took a fatal fall from the sixth floor window of the Half Moon Hotel in Coney Island while under the protection of six policemen – all of whom had fallen asleep simultaneously. With no material witness to testify against Adonis and the other members of Murder Inc., the case against them evaporated.20
Bigger problems, however, were looming for the FBN, and two weeks after Reles was silenced, the Japanese attack on Pearl Harbor forced the wholesale reorganization of American society and ushered in a more complicated phase in the FBN’s history. The exigencies of world war would turn An
slinger’s enemies into unwanted allies and would pervert the nature of drug law enforcement for a long time to come.
ANSLINGER’S ANTAGONISTS
In 1930 the Mafia’s boss of bosses, Charles Luciano, and his Polish-born Jewish partner, Meyer Lansky, incorporated crime in America. As the organization’s financial manager and executive producer of vice, Lansky located and shielded investors in its various rackets and channeled mob profits into an assortment of legitimate business ventures, including Florida land deals, Mexican racetracks, and casinos in Cuba. A financial wizard and a government informant when it suited his purposes, Lansky was a seeker of the respectable façade. But he could never expunge from his lengthy rap sheet a Public Health Act charge for violating drug laws that he incurred in January 1929 with his partner since childhood, Benjamin “Bugsy” Siegel.21
Lansky’s other boyhood friend, Charles Luciano, was born in Sicily in 1897 and arrived in New York in 1904. A fifth-grade dropout and compulsive gambler, his first arrest for heroin possession was in 1916. His second occurred in 1923, and this time he cooperated with New York Narcotics Division agent Joe Bransky and set up a rival gang member rather than face charges. Six years later, on a chilly October night, Luciano earned his famous nickname. As related in The Luciano Story, a drug shipment from the Eliopoulos gang was headed for New York on a Greek ocean liner. Unaware that rivals had betrayed him, Luciano went to the pier to receive the load, but was tailed by Narcotics Division agents. He recognized the agents before the exchange was made and backed away, but the agents wanted to know where the drugs were hidden, so they took Luciano to a secluded spot on Staten Island where a brutal interrogation ensued.22
The Strength of the Wolf Page 5