by Gus Russo
After his father's death when Jacob was just thirteen, Arvey located the power quickly: it was concentrated at the Roosevelt Road headquarters of the corrupt Twenty-fourth Ward Democratic organization, a model of miscreant efficiency, with sixty Jewish neighborhood precinct captains each responsible for a small section of the ward, where they knew everyone and almost everything. They befriended the voters, often bringing food, clothing, and coal to the needy, helped immigrants secure citizenship papers, and assisted people who had run afoul of the law or merely needed traffic tickets fixed.
This hands-on, in-person style of ward politics had been the brainchild of brothers Michael and Moe Rosenberg. The Rosenbergs, also sons of Russian immigrants, started out as junk dealers, but after forming an alliance with the notorious utilities baron Samuel "the Emperor" Insull, they prospered, becoming among the first Maxwell Street habitues to make the exodus to Lawndale.23 Insull, a former private secretary to inventor Thomas Edison, and himself a genius in business, inherited Edison's General Electric power company and, thanks to massive political corruption, built it and his other holdings into a $2 billion empire. The Rosenbergs, in exchange for uncontested junk-hauling contracts from Insull, corrupted countless pols who happily allowed Insull to use monopolistic and predatory practices in exchange for "investment opportunities" in the power company—in other words, insider stock priced far below the market quotes. Ovid Demaris, the seminal historian of Chicago crime, described the unsavory climate thus: "[Insull] built his paper colossus on the hot coals of corruption. Corrupt politicians and predatory law firms kept it precariously fireproof for forty years in a continuing conspiracy that provided low taxes, and favorable legislation, plus safe judges, reasonable mayors, pliable aldermen, patronage officeholders, and anybody else who could serve Insull's undivided interest."24
Everyone got rich together, and when the stock market crashed in 1929, Insull merely sold overvalued stock to the public, costing investors over $2 billion in losses. So hated did Insull become that he hired Capone's musclemen to protect him from his countless enemies. Eventually, Insull's paper profits evaporated and he was charged with stock fraud and, separately, with embezzlement—he escaped conviction in both.25 Years later Moe Rosenberg would serve a prison term for receiving stolen goods and was also indicted for tax evasion. In an effort to lessen his sentence, Rosenberg gave a full confession in 1933 regarding the massive political-corruption schemes he had entered into with Insull. However, Rosenberg died before the trial started, and a year later his sealed confession was made public.26
Although his father's death forced Arvey to wrork evenings after high school, and days while at night school at John Marshall Law School, he made time to grease the Rosenberg corruption machine. The Rosenbergs became Jake's "Chinamen," or sponsors. Arvey's was a year-round job, but he was especially visible among his neighbors before each election, when every home was visited more than once to convince and plead with voters to vote for the endorsed candidates. It wasn't uncommon to see Arvey escort semiliterate Jewish immigrants, ignorant of the complexities of white-collar gangsterism, into the voting booth, instructing them, "Vote this way." One of Arvey's successful proteges, Judge Abraham Marovitz, recalled in 1997, "They would give them matzos at Passover, and feed and clothe them, and, come election time, Arvey said, 'You vote for so-and-so,' and, 'You vote for so-and-so.' "27
The often-beholden voters turned out landslide majorities for the party machine, which sometimes garnered as much as 97 percent of the vote. Most Chicago Jews had voted Republican until the late 1920s, when they started voting Democratic.28 Jake Arvey once said of the Twenty-fourth Ward, "The only ones who voted Republican were the Republican precinct captains, election judges, and their families." Arvey's political prowess would soon garner him a national reputation. "In the election of 1936," Arvey later wrote, "President Roosevelt called our ward the best Democratic ward in the country."29
While too young to vote, a teenaged Jake Arvey nonetheless became a precinct captain for the Rosenbergs. The lifelong Democrat rang doorbells, developed personal relationships with voters, and learned about patronage, Ashkenazic style. Implicit in everything Arvey accomplished in his career was the attendant loyalty to all Jewish causes—a trait he would inculcate in his own proteges. He also insisted that his workers balance their lives with regular giving to the less fortunate. "I'm an intense Jew," Arvey later wrote. "I demanded that any man who was a precinct captain of mine had to belong to a church—Catholic, Protestant, or Jewish . . . I made them charity-minded, civic-minded, culture-minded, and sensitive to the needs of other people."30 This charitable sensibility—tzedaka is the Hebrew word for giving back to the community—would become a paradoxical leitmotif in the coming decades for even Arvey's most corrupt students.
Arvey was admitted to the bar in 1916, at just twenty-one years of age, and then became the personal attorney for the Rosenbergs' junk business and Moe's Cook County Trust Company. Here, Arvey learned the beauty of the "receivership" game, the obtaining of foreclosed properties at fire-sale prices. Again, Demaris: "The fantastic earnings of receivers in six years in Chicago totally eclipsed the illicit profits of gangsters. One Congressional Committee investigating real estate foreclosures for a six-year period reported in 1936 that 'there appears in the State courts serving Chicago and its adjacent territory approximately 100,000 foreclosure cases filed since January 1930, representing approximately $2,000,000,000 in face value.' "31
Demaris concluded that local attorneys had accrued some $100 million in fees during the period. While working at the Trust Company, Arvey utilized the Rosenberg-controlled judges to obtain 272 receiverships. He and his emissaries, known as Arvey's Army, would revisit this scheme with a vengeance when Japanese Americans saw their California land confiscated during World War II.
When Mike Rosenberg died in 1928, Arvey was chosen to fill his spot as Ward committeeman. As such, Arvey ushered in a new era in Chicago politics, that of the politician/lawyer. It was now his turn to be the Chinaman. Previously, political power rested in the hands of saloonkeepers and bookies. Lawyering formed the bedrock of this new political sophistication, and years later Arvey would mentor and advise a young Richard Daley as to the wisdom of earning a law degree. Daley had admired Arvey, who guaranteed him great success in politics if he passed the bar. Daley followed Arvey's advice and attained staggering power both in Illinois and the nation. His biographers dubbed Daley the American Pharaoh.
Korshak pals Jake Arvey (right) and Arthur Elrod (center) with unidentified associate (Chicago Historical Society)
With the help of Syndicate legend Al Capone, Arvey and Moe Rosenberg elected Anton "Ten Percent" Cermak mayor of Chicago in 1931. In his quest to "beat the Irish," Cermak focused on gaining the approval of the working classes, and using Rosenberg's and Arvey's army of precinct captains, he unabashedly used patronage to gain the mayor's office. With Capone thugs providing security, Arvey's Army stood in the polling places and reminded the families of what they did for them, often accompanying the voter right into the polling booth. "Let me put it to you in a crude way," Arvey advised his young charges. "Put people under obligation to you."32 By putting people under obligation, especially those prone to legendary ashmah, or "Jewish guilt," a self-perpetuating political machine was born. Patronage was king, and Arvey's Army elevated the practice into an art form.
When Cermak was assassinated in 1933 in Florida by a lone shooter (who some believe was actually aiming at the nearby President Roosevelt), Arvey set about building his own legacy, solidifying his anointing as "The Kingmaker." With some seventy-five Arvey's Army precinct captains at his command—many of whom went on to local and national success—Arvey relished behind-the-scenes power. One of his precinct captains, Marshall Korshak, remembered putting Arvey's style to work. "When I was a precinct captain, I knew every one of the voters by their first name," Korshak said. "I knew their wives. I knew their children. I knew their family."33 When Marshall set his sights on th
e Fifth Ward committeeman post years later, his brother Sidney spoke to Arvey about it. Arvey appointed Marshall committeeman, even though Arvey had to ask his own law partner, Barnet Hodes, to vacate the position for Marshall. Putting Arvey's patronage rule foremost, Committeeman Marshall Korshak obtained jobs for over five thousand constituents in one ten-year period, according to one estimate.34
Arvey would spend twenty-eight years as ruler of the Twenty-fourth Ward before becoming Cook County Democratic chairman. His ward organization created absurd Democratic pluralities for Franklin Roosevelt—such as 29,000-700 (1936) and 29,533-2,204 (1944)—and his successor, Harry Truman. However, rumors of impropriety were never far beneath the surface. According to his obit, "Arvey's organization was at the top of the list in vote fraud charges, including ballot box stuffing, illegal voting and polling place violations."35 By his own admission, Arvey took thousands of parking tickets to the mayor's office for scuttling.36 He also freely admitted the election frauds perpetrated by his precinct captains. "Some of them went to illegal means to do it," he wrote. "I know it. I regret it very much, but they were inconsequential in relation to the ultimate result."37
With his expanding powers, Arvey extended the patronage system. It wasn't just the thousands of civil jobs that came under Arvey's thumb; applicants wishing to work at Lawndale's Sears, Roebuck headquarters knew better than to show up without a letter from Jake Arvey.38 Other jobs were secured through Arvey's cousin George Eisenberg, a Maxwell Street Russian immigrant who made millions with his Northwest Side company, American Decal and Manufacturing.*
Not all of Arvey's triumphs were in the public arena, however. Congressional investigators learned that his law firm commanded a $24,000-per-year retainer from the infamous illegal national bookie service known as Continental Press,39 itself the brainchild of fellow Russian Jewish emigre Moe Annenberg. Born in Prussia in 1878, Annenberg came to Chicago in 1885 and made his mark in the newspaper circulation wars of the 1920s that pitted William Randolph Hearst against Colonel Robert McCormick, not to mention the six other competing daily rags. Moe and his brother Max utilized the talents not only of well-connected Capone sluggers to gain the upper hand, but North Siders like Dion O'Banion. When Moe founded Continental, he again employed Capone's muscle to snuff out the competition. After Capone was sent to prison, Annenberg's alliance with the new Outfit was strengthened. In return, the Capone gang's bookies received the wire service free of charge. After his indictment for tax evasion on August I I , 1939, Moe Annenberg walked away from the wire business and the Capones took over. After the Capone takeover, Arvey began working for Continental.'1' After an in-depth investigation, the 1951 Kefauver Committee concluded, "The Continental Press national horsetrack service is controlled by the Capone mob in Chicago."
But there was an even more furtive association than that with the wire mogul. Early on, Arvey made a fortuitous alliance with a future powerful industrialist who would play a role in not only Arvey's financial success, but that of proteges such as the Korshaks. He was born Henry Krinsky, but was raised as Henry Crown.
Henry Crown, who spoke at a 1964 testimonial honoring Marshall Korshak, 40 had a long history with Jake Arvey. Henry was the third of seven children of Arie Crown (formerly Krinsky) and Ida Gordon. Crown's father, another Russian Jewish immigrant from the Pale, worked in the Maxwell Street market as a suspender maker, a foreman in a sweatshop, and a pushcart peddler. Like so many others, young Henry attended night school, where he took classes in bookkeeping. After persuading Chicago banks to extend him credit, he and his brother Sol formed the Material Service Corporation (MSC), a sand-and-gravel building-supply company—one of many conglomerates that would hire Sidney Korshak as its labor lawyer. Years later, Korshak told New Jersey gaming officials that, among his other successes, he'd intervened when Teamsters would not allow Crown's nonunion trucks to have access to his gravel pits in Indiana.41
As MSC prospered, Crown diversified into numerous raw-product and manufacturing entities, and real estate investing, which included the purchase of the Empire State Building in the 1950s."^" With the political influence of his pal Arvey, Crown obtained lucrative city contracts in Chicago such as the award to furnish all the pencils and paper for the city's school system. He also supplied the coal for over four hundred schools, earning an additional $1 million per year.
The Two Colonels
After Japan attacked Pearl Harbor, Jake and Henry enlisted in the U.S. army. Arvey, aged forty-six, served four years as a judge advocate, including two years in the South Pacific, and when he came home in late 1945, he carried the rank of lieutenant colonel. However, during his military hitch, Arvey managed to become, with no small thanks to friends in the Roosevelt administration, the overseer of the countless international post exchange (PX) facilities on military bases. Soon, the military was supplying these PXes with commercial goods purchased from buddy Col. Crown's Material Service Corporation.
As for Crown, he was assigned to duty as a procurement officer for the Western Division, Corps of Engineers. Crown's service took him first to Los Angeles, where he directed the purchasing of military supplies. Eventually reassigned to the Great Lakes Division as chief of procurement, he was stationed near Chicago and promoted to full colonel. In that position, he supervised over $1 billion in military purchases. One month before his 1945 discharge, MSC was sued for more than $1 million by the Office of Price Administration for price-gouging a number of Chicago City and State of Illinois agencies.42 Four years later, a Mrs. Dora Griever Stern began a fourteen-year legal struggle to obtain her share of MSC. Incorporation papers filed in 1919 proved that she had invested her life savings ($4,250) for 170 shares (of 800) of the fledgling company. Her investment should have earned back approximately $100 million. She had received nothing. Ultimately the courts decided that she had waited too long to file.
Captain Jake Arvey (Chicago Historical Society)
MSC would go on to become one of the largest government contractors in history. By any measure, it was the forerunner of the present-day Halo liburton and Bechtel conglomerates. In 1962, three years after Crown negotiated the merger of Material Service Corporation as an autonomous division with General Dynamics Corporation, it was awarded the largest governmental contract ($6.5 billion) in world history—that for the TFX fighter plane development. General Dynamics had been everyone's second choice (after Boeing) for the contract, and a four-month Senate investigation obtained testimony that political payoffs were made to ensure Crown's successful bid. This scandal-ridden project ended with the plane being one of the great design failures in history.
In 1949, Arvey used insider information about soon-to-be-condemned property to purchase land that the city would soon need to build the Congress Street thoroughfare. With a $1 million gift from Crown (a "loan" that was never repaid), Arvey purchased a square block of property including twenty-seven buildings for $900,000. A small portion of this property was sold back to the city in 1949 for $1,206,452.62 for the highway construction. Arvey's syndicate kept the remaining office buildings.43
Propinquity
"Within the Jewish West Side political community, everybody knew everybody else," said Korshak family historian Rich Samuels.44 Without doubt, two of the closest Lawndale families were the Korshaks and the Arveys. It was Marshall Korshak whom the Chicago Sun-Times referred to as "the worthy successor to Jack Arvey.45 Marshall later said about Jake/Jack Arvey, "He was the guy that impressed me the most. I learned from him. He understood the problems of our people."46 When Arvey was honored by the Israel Bond Organization years later, Marshall served as chairman of the event. Arvey was especially fond of Sidney. According to a retired Chicago attorney who was close to the Korshak brothers, "Jake just loved hanging with Sidney."47
Both Korshak brothers freely admitted their closeness with Arvey, Sidney to the FBI,48 and Marshall to the local newsmen. And Jake Arvey returned the compliment, telling journalist Lester Velie in 1950, "Sidney Korshak is one of my best
friends in the world." The ward boss proceeded to prove that to Velie. When Velie interviewed Arvey, the writer tipped him that he had just left Korshak's law office, where he had noted the names of many of his "clients" who had phoned the barrister's switchboard. Returning to Korshak's the next day, Velie found that all the callers were now mysteriously using code names such as Mr. Black or Mr. White or Mr. Green.49
The past is never dead. It's not even past. 50
WILLIAM FAULKNER
Like every other college grad set loose in the world, twenty-four-year-old Sid Korshak had life choices to make. He had lived through family tragedies and was just one generation removed from officially sanctioned Russian violence perpetrated against his family and everyone they knew back in the Pale. It is safe to assume that Sid and his brother Marshall were determined that such privations would never visit them or their offspring again. They opted for the kind of power that would grant just such assurances, and if that choice meant walking an ethical or legal tightrope, so be it. As Jake Arvey put it, "You have to be unmindful of everything except the ultimate goal. This is what we must attain. If anybody stands in the way, out with them! . . . It's a rough, tough game."51