by Gus Russo
These were the years when Chicago's Outfit, under the direction of its "Einstein," Murray "Curly" Humphreys, was perfecting the science of labor racketeering—the takeover of unions so as to cut sweetheart deals with industry. Among others, Humphreys worked closely with Korshak mentor Abe Teitelbaum, Jake Guzik, and Al Capone in the takeovers of Chicago's dry-cleaning establishments.20 Teitelbaum, who first met Capone due to the friendship of his and Capone's mothers, was a labor-relations attorney, hired by the Chicago Bar and Restaurant Association in 1932. His labor counsel was therefore invaluable to the Capones. Years later, a congressional investigation concluded that the Chicago Restaurant Association engaged in "terrorism" and functioned "principally to defeat and destroy legitimate unionization and has callously and calculatedly used men with underworld connections to make collusive arrangements with dishonest union officials. There is additional undisputed testimony that gangsters and hoodlums were employed to handle the association's labor relations." It added that Teitelbaum was nothing more than a mob front, funneling corporate money to the Outfit in exchange for labor peace and protection from arson.21
In the case of unions not directly under the mob's control, it was often just a simple matter of paying off the union bosses to persuade them to accept a substandard deal, a modus operandi adopted by Sid Korshak. "He made cash payoffs to business agents—five thousand dollars here, three thousand dollars there," said Leo Geffner, a Los Angeles attorney who negotiated with Korshak years later. "I know that. That's the way it was—to keep labor peace, you'd find a corrupt business agent and pay him off."22 Of course, in doing so, the racketeer stabbed both the workers and their employers in the back. Ironically, this was the very abuse suffered by Korshak's grandparents in Kiev. The ever-vigilant Korshak gadfly, journalist Lester Velie, succinctly described how the treachery worked: "The deal may be to bring a 'friendly' union in, or to keep a union out, or to accept substandard wages . . . In the deals that the go-between arranges, the union's function is perverted. Instead of serving as an instrument to win better wages and working conditions, it becomes a tool for keeping the worker in line. Thus, it performs the same function as the unions do in Communist Russia."23
Thus, by the early 1930s, it was decided that Korshak would be groomed to oversee labor matters when the Outfit expanded outside Humphreys's Chicago home base. Korshak later admitted to the FBI that he met Humphreys in 1929. As overheard by FBI "bugs" planted years later, it was Curly Humphreys who indeed approved Korshak's recruitment.
Curly Humphreys (Don Llewellyn)
A retired detective from Chicago's Police Intelligence Division, who wished to remain anonymous, witnessed something of the Korshak-Humphreys relationship: "There used to be this joint on Rush Street many decades ago. It was a lavish seminightclub. A guy I knew was sitting at the bar with Sidney. I don't think Sidney drank, but he was sitting at the bar. Out of the back room of this joint came a man shouting all sorts of four-letter words at Sidney, demanding that Sidney come into his office in the back. And Sidney got up and went back. The significance of the story is that the man sitting at the bar said that the man doing the yelling and demanding was Murray 'the Camel' Humphreys."24
Humphreys scholar Royston Webb concluded, "Obviously Humphreys considered Korshak several rungs below, and I think he used Gus Alex as an intermediary for a while. He'd bloody well tell Korshak to remember on which side his bread was buttered or words to that effect."25
Gus "Slim" Alex, Korshak's pal and Outfit liaison (Kefauver Committee Evidence File, Library of Congress Legislative Archives)
His niche now established, Korshak occasionally turned back to his original benefactor, Abe Teitelbaum, whenever a labor problem proved especially vexing. "Whenever the going got tough, Sidney called Abe in," said a close family friend of the Teitelbaums.26 (This counsel would continue for decades.) Soon, Korshak and King were working out of the office of attorney Philip R. Davis at 188 W. Randolph Street, a notorious point of convergence for Syndicate members, their lawyers, and paid-for officials. The building had an interior connection to the equally notorious Bismarck Hotel, where mob boss Frank Nitti and his next-in-command, Paul "the Waiter" Ricca, maintained their headquarters. Thirty years later, 188 W. Randolph was still an unmolested underworld crossroads. Jim Agnew, an elevator operator in the building in the 1960s, saw teamster head Jimmy Hoffa, Outfit boss Tony Accardo, and underbosses Gussie Alex, Eddie Vogel, Phil Alderisio, and Marshall Caifano, all making the trek up to the mobsters' top-floor dominion. Mob-friendly judge, and Arvey protege, Abe Marovitz also attended powwows on the upper floors. "They used the back entrance and took the freight elevator up to Postl's Health Club on the twenty-seventh floor," Agnew recently recalled. "They had meetings in the steam room, which they didn't know was bugged illegally by FBI."27
Jake Arvey with Judge Abraham Lincoln Marovitz (Chicago Jewish Archives, Spertus Institute)
The Chicago Crime Commission's legendary director, Virgil Peterson, wrote:
Korshak's connections were known ever since he could run from the barbershop two doors west of Henrici's where Fischetti and Gioe were kept waiting while Sid would hold a conference with "Tubbo" Gilbert [of the State's Attorney's Office]. This brazen messenger would commute from the barbershop to Gilbert's Sherman Hotel room four or five times a week. This was twelve years ago [1938]. But what about the supposed owner of St. Hubert's Grill on Federal Street? Where almost every goon of consequence would meet every Thursday evening, where, during the lunch hour, a number of federal judges including Igoe would relax, not with the real owner, Jake Guzik, but with the "front" who has a "place," Tommy Kelly . . . Fischetti and wives would meet Campagna's wife and Gioe's wife, who were escorted by Sid Korshak.28
Peterson was referring to the investigator from the State's Attorney's Office's police labor detail, Dan "Tubbo" Gilbert, directed by the corrupt head of the office, Tom Courtney. Gilbert had amassed an astounding $300,000 nest egg, much of it by betting with Outfit-controlled bookies, and running his own handbook on the side. In later years, when his congressional executive-session testimony was leaked to the press, the local papers dubbed Gilbert "the world's richest cop." Under intense questioning before a congressional tribunal, Gilbert admitted that he had in fact earned big winnings by gambling on baseball, football, prizefights, and even elections. He also conceded that he placed his bets with the Outfit-connected bookie John McDonald.
During the Courtney-Gilbert reign, thousands of felony charges lodged against Outfit bosses and crew members were reduced to misdemeanors. But more importantly, Gilbert was in charge of the police labor detail, a position of critical importance to the efficient running of the city. The bottom line was that the city's business community depended on Courtney and Gilbert working closely with the Outfit as Murray "Curly" Humphreys took over one union after another. Frank Loesch, then president of the Chicago Crime Commission, said, "Few labor crimes have been solved in Chicago because of the close association between labor gangsters and law enforcing agencies." Many years later, mob-fighting federal judge John P. Barnes described the arrangement between the Outfit and a compliant State's Attorney's Office: "The [Capone] Syndicate could not operate without the approval of the [State's Attorney's] office . . . The relationship between the State's Attorney's Office, under [Tom] Courtney and [Dan] Gilbert, and the Capone Syndicate, was such that during the entire period that Courtney was in office [1932-44], no Syndicate man was ever convicted of a major crime in Cook County."
The entire scheme was facilitated by Courtney-Gilbert's alliance with none other than the gang's young labor lawyer, Sidney Korshak. An associate of Gilbert's recently said, "Gilbert worked both sides—labor and business—and he took to Sidney. Sidney learned at his knee." With Korshak representing the Humphreys-controlled unions, Gilbert became a powerful voice in Chicago's power structure. The troika represented a sort of parallel-universe version of City Hall. One Gilbert acquaintance recently recalled, "Dan Gilbert was the only guy in town
who could stop a strike with a phone call." A call to Sidney Korshak, to be exact.
With such important consorts, Korshak not only controlled the city's Outfit-unionized workforce, but also was able to negotiate practically all gang criminal citations down to misdemeanors. Before long, Korshak had no need of the courts at all, since his clients had their cases resolved with a phone call. The all-solving telephone would become a leitmotif of Korshak's "practice." As one of his fellow lawyers said, "Sid Korshak is a lawyer who tries few cases—but he has one of the most important law practices in town."
The " K o s h e r N o s l r a " F i n d s a Home
Now suitably connected, the dashing Korshak joined the Lawndale exodus and made the move to the big city. Still in his midtwenties, Korshak was nonetheless wise to the power of networking. He therefore chose as his first out-of-the-nest home the most highly charged, vibrant abode in Chicago's upscale Near North district, the Seneca Hotel, a sixteen-story, four-hundred-room edifice on 200 E. Chestnut Street, just two blocks from Michigan Avenue to the west and one bock from Lake Michigan to the east.
At the time, Jews leaving Lawndale preferred to live in residential hotels, with the North Shore becoming known as Jewish Hotel Row. Author Louis Wirth wrote, "The middle-class businessmen among the Jews moved into these hotels originally, not merely because their wives wanted to be free of household duties, nor merely because they had reached a station in life where they could afford the luxuries of hotel life, but rather because they wished to be taken for successful businessmen or professional men—not merely successful Jews. The hotels offered anonymity."29
When one hotel manager was found to have joined the Ku Klux Klan, the Jews banded together, bought the hotel, and hired a new manager. They continued to buy hotels, one being the Seneca, new home to Sidney Korshak, and arguably the nation's most dynamic underworld networking site.
To tourists, the Seneca was known for its amenities and legendary marathon poker games played by the city's upper class. But to knowledgeable Chicagoans, the hotel represented a critical intersection for Syndicate members anxious to invest the mob's lucre in legitimate or semilegitimate operations. And it wasn't just the tenants who raised local eyebrows; the very ownership represented a who's who of the local underworld. In hindsight, the financial cross-pollination that occurred at the hotel resulted in a cascade of immense business transactions that spawned numerous Fortune 500 companies, many of which were tainted by mob money, and not coincidentally represented by former criminal lawyer, now "labor consultant," Sid Korshak.
As one might expect, Jake Arvey's presence was felt at the Seneca: his son Buddy kept his ex-wife and son there, as well as his current flame, actress Lila Leeds. The hotel was also known to be home to a dozen racketeers and hit men, including Hymie "Loud Mouth" Levin.30 And although it was rumored that Korshak was seduced into the mob's circle with stock in the Seneca, this was never followed up or proven.31 But the partners of record were interesting enough to local law enforcement officials. One co-owner and tenant of the Seneca was Charlie "Cherry Nose" Gioe (also spelled Joye), a Capone underboss and client of Korshak's. Gioe admitted under oath that he owned $12,000 of stock in the Seneca, which, in a pattern that would prove typical for underworld investments, was placed in his wife's name.32
The Seneca (author photo)
Charlie Gioe after his 1944 arrest in the Hollywood Extortion Case (author collection)
Gioe testified that he had grown up and gone to school with top Chicago mob boss Tony Accardo. In that same testimony he added that he met Korshak soon after he came out of law school, "through some fellows on the West Side when he just opened his office." Gioe further testified that he had frequent meetings with Korshak at the Seneca, as well as with bookie Hymie Levin, who lived across the street. According to a source of the Chicago Crime Commission's, Gioe enlisted Korshak's advice when immigrant Outfit boss Paul Ricca applied for (and received) his naturalization using a false identity.33 Korshak later told the FBI that he was the attorney for Gioe's Don the Beachcomber restaurant in 1939 and represented him in his divorce from his first wife.34 Simultaneously, one of Gioe's bookie joints, at 217 North Clark, was run by Korshak's brother Bernie for Gioe and "Joe Batters" Accardo, boss of the Chicago Outfit.
Like so many others involved with the Seneca, Gioe's tentacles reached far and wide. With the Calimia brothers, notorious hoodlums from Nebraska, Gioe was heavily invested in the Reddi-Whip Corp., based in Los Angeles—the Calimias became president and VP of the company. The company was the parent of over ten subsidiaries that within a decade counted over $1.5 million in assets.*
Gioe also partnered with Supermob member Alfred S. Hart, a Hungarian Jewish immigrant (born Alfred Harskovitz in 1904) who started out as a beer runner for Capone, then managed Gold Seal Liquors for Gioe and his partner Joe Fusco. Hart was among the earliest of the group to make the move to California, where in the 1920s he prospered by first forming Glen-coe Distilleries and the Pacific Brewing Company. He was arrested two times in 1928, four times in 1929, and twice in 1931, all in connection with his running of an illegal punchboard operation out of an L.A. cigar stored In the thirties, Hart owned Central Liquor Distributors, the San Angelo Wine and Spirit Corporation, and the Alfred Hart Distilleries, using their profits to purchase the Del Mar Race Track, where he struck up a lifelong friendship with racing fan—and FBI director—J. Edgar Hoover, this despite the fact that Hart's FBI file notes, "Hart has a reputation of associating with known hoodlums."
In 1949, a San Bernardino grand jury was convened to investigate two of Hart's partners in Alfred Hart Distilleries, Edward Seeman, the slot-machine king of San Bernardino, and State Senator Ralph E. Swing, for soliciting a bribe from a citizen who wanted to obtain an auto racing concession. 35 However, the grand jury returned no indictment.
There was more. According to the LAPD, Hart became first an investor, then a majority owner, in the Maier Brewing Company. In that endeavor, he partnered with one Paul Kalmanovitz, who was in turn part of mobster Mickey Cohen's local syndicate. Kalmanovitz operated bars, such as Keith's Cafe in downtown L.A., that were key meeting places for the Cohen organization. In 1945, Hart sold Maier to his old Capone partner Joe Fusco.36
In 1948, Hart invested $75,000 in the infamous Flamingo Hotel in Las Vegas, run by legendary hoodlum Benjamin "Bugsy" Siegel for a consortium of Chicago and New York gangsters. At the time of the partnership with Hart, Siegel maintained a booth at Hart's Del Mar Turf Club, which he shared with Virginia Hill. Hart was also known to have loaned money—$7,000 on one occasion—to L.A. mob kingpin Meyer "Mickey" Cohen. Hart would go on to dabble in real estate speculation in San Bernardino (which landed him in stir for fraud), become a director at Columbia Pictures, and finally create the City National Bank of Beverly Hills, currently the largest independent bank in Los Angeles and the bank of choice for movie moguls, celebrities, and the Supermob (pals like Sid Korshak were among the original stockholders).37
Del Mar president (and former Capone bootlegger) Al Hart presenting jockey Willie Shoemaker with a trophy for his 300th win, September 1, 1953 (Corbis/Bettmann)
Another co-owner (25 percent) of the Seneca was Jake Arvey's brother-in-law, Benjamin Cohen, who also owned the DuSable Hotel, which featured a grill that was called "a common whorehouse" by the Chicago PD. He also owned ten buildings, including the Pershing Hotel, in the heart of Chicago's "Bronze Belt," a province handed down by Al Capone to the "white syndicate" for the express purpose of preying on the city's black population. According to an FBI source, Cohen, who died in Los Angeles in 1943, "had been an integral part of the Capone investment machinery."38
But the importance of Gioe's and Cohen's Seneca ownership pales in comparison to that of the majority owner, and one of the most important architects of the Supermob, Alex Louis Greenberg. It was Greenberg's financial partnerships that would taint the reputations of numerous political, corporate, and judicial icons, not only in Chicago, but also in Chicago's soo
n-to-be outpost, Southern California.
The C o m p t o m e t er
Chicago gossip writer, and Korshak pal, Irv Kupcinet called him The Comptometer, and "one of the most interesting characters I ever met."39 According to "Kup," for Alex Louis Greenberg, "like almost everyone who became rich through racketeering, respectability was what he sought most."40 His son-in-law, a scientist named Nathan Sugarman, was accustomed to seeing Greenberg studying books in Sugarman's vast library. "Imagine knowing all them words!" he once told a friend. In his quest for success, Greenberg would become key to the Supermob's massive, hidden investments in, and control over, the Golden State.
Born in Russia on December 10,1891, Greenberg was an emigre from the 1905 pogroms, journeying first to New York, then to Chicago in 1908. Greenberg liked to boast of how he journeyed from Russia alone at age fourteen with just "sixteen cents in my pocket."41 Sensitive about his lack of formal education, Greenberg was driven to succeed, and in wide-open Chicago he worked his way up from a mugger of drunks to expert jewelry thief, with Big Al Capone's right hand, Frank Nitti, acting as his fence. He admitted under oath to being friends with Capone since about 1920. "He used to be my barber," Greenberg sarcastically testified. He said he had met Nitti the same way. "We all get acquainted with good barbers," Greenberg told the Kefauver Committee in 1951.42 At only twenty years old, he opened his first saloon, which provided him with a steady stream of suitable drunks/ victims. Greenberg relocated to Lawndale (4013 W. Roosevelt, at Pulaski) within walking distance of pals Jake Arvey, Moe Rosenberg (2051 S. Hoyne), and the Korshaks.