Supermob

by Gus Russo

  Alex Louis Greenberg testifying before the Kefauver Committee, January 19, 1951 (Corbis/Bettmann)

  Greenberg was first arrested in May 1910 for theft of barrels of whiskey; he was one of ten defendants indicted by a grand jury for larceny and receipt of stolen goods. During Prohibition he operated a speakeasy at Lawndale and sixteenth and was arrested in a raid there in 1921, caught with forged whiskey permits.43 In 1925, he was charged in what the IRS described as "the biggest booze plot since the advent of Prohibition." The scam, which included a police captain, three bankers, and Prohibition personnel, involved hijackings, counterfeit medicinal-alcohol certificates, spurious Prohibition Department stationery, and phony withdrawal permits. The partners had grossed millions in the enterprise.44

  Greenberg's career really began to accelerate when he decided to enter the world of finance. Starting off small, he first loan-sharked his own mugging victims at 20 percent vig* per week. Those who were tardy in their payments were seen frequenting emergency rooms complaining of broken arms. Greenberg may have learned the ropes from his brother-in-law, Izzy Zevlin, another financial wiz, responsible for hiding millions of embezzled entertainment union funds. As personal secretary to George Browne, the president of the International Alliance of Theatrical and Stage Employees (IATSE), Zevlin would soon figure in a massive extortion of Hollywood studios.

  By this point, Greenberg had mastered the political payoff, greasing the palms of the notoriously corrupt Kenna-Coughlin regime in order to quash the few indictments that he received. He later testified that he made a point of bribing both Democrats and Republicans. "They both want money," he said. "You pay them for what you want. Then you get it."45 His money-lending scheme thrived and gave rise to Roosevelt Finance, which became, according to Greenberg's testimony, the third-largest company in Chicago.46 The company obtained start-up funds (used to finance mortgages) by borrowing as much as $50,000 at a time from notorious bootlegger Dion O'Banion, the Arvey-Annenberg ally in the circulation and wire wars.47 Greenberg had previously loaned O'Banion and Hymie Weiss money to start their bootlegging Manhattan Brewery (later Canadian Ace Brewery), where one of O'Banion's partners was Joe Adonis, underboss for New York Mafia chief Frank Costello.48 For his distribution needs in the West, Greenberg was represented by mafioso Tony Gizzo in Kansas City, and Luigi Fratto in Des Moines.49

  After the Capone Gang killed O'Banion and Weiss, Greenberg took over the brewery with Nitti, helping Canadian Ace become the most popular beer in Chicago, grossing over $10 million a year by 1950. That success was not based merely on the brew's sudsy appeal. When the Outfit started to muscle in on the Bartenders Union, union official George McLane said that he was ordered by Nitti and Greenberg to have his men push sales of Man­hattan/ Canadian beer.50 Such an order was not to be taken lightly, since Greenberg's Chicago distributor was Ralph Buglio, the gunman for Capone's patriarch, Johnny Torrio.

  Greenberg diversified again when he opened Realty Management, which managed, among other properties, Capone's Cicero headquarters, The Towne Hotel. With Capone's backing, Greenberg opened a cigar store in the lobby of another Capone installation, the Lexington. The store was merely a front for an off-track betting parlor, started with $110,000 fronted by Nitti. Under the Realty banner, Greenberg bought stock in the Seneca, the shares actually purchased from the wife of Charlie Gioe. At the time of his death decades later, Greenberg owned, by his own testimony, $579,632 of stock in the Seneca, for which he also served as president.51

  Another of Greenberg's significant real estate partners was Fred Evans, regarded by the Chicago Crime Commission as "the financial brains of the Capone gang." Evans worked closely with Frank Nitti, Paul Ricca, and Louis Campagna, but his staunchest Capone partner was the legendary Murray Humphreys, the labor and legal strategist for the Capone Syndicate, and occasional Public Enemy Number One. The two were so close that Evans named his only son, Robert Murray Evans, in tribute to Humphreys. Evans and Greenberg were coinvestors in a number of commercial properties, such as buildings at 5100 Cornell Avenue, the Monterey Hotel, and Ruby Cleaners.These52 investments were but a warm-up to the massive land grabs that Greenberg, Evans, and the rest of the Supermob would institute in California and elsewhere. (For a biography of Evans, see chapter 4.)

  Still another diversification was the founding of Lawndale Enterprises, which saw Greenberg fronting for Nitti in a partnership with Jake Arvey and Moe Rosenberg.53 Another partner in the business, which operated theaters and exhibitions, was Joseph G. Engert, a co-owner with future Outfit boss Joey "Doves" Aiuppa, owner of Capone's Towne Hotel.54 Not surprisingly, Lawndale Enterprises had its downtown Chicago office at 188 W. Randolph.55

  As though he needed any more underworld connections, the driven Greenberg helped finance the San Carlo Italian Village at the 1933 World's Fair, held on Chicago's lakefront. The village was run entirely by members of the Chicago Outfit, including Fred Evans, Paul Ricca, Joe Fusco, Ralph Capone, Murray Humphreys, James Mondi, and Charlie Fischetti.56

  When interviewed by congressional staffers, Greenberg admitted that he and Nitti had loaned each other tens of thousands of dollars over the years.57On the occasion of Nitti's suicide on March 19, 1943, Greenberg had to pay back the money to Nitti's estate. During the probate hearings after Greenberg's subsequent death, it was disclosed that Nitti had loaned Greenberg over $2 million in mob money for investment purposes. Nitti's widow, Annette, told the court that Greenberg had been investing Nitti's money for over twenty-five years. Some of the stocks purchased included American Air Lines, the Chicago Daily News, Marshall Field & Co., United Air Lines, Standard Oil, and US Steel.58Greenberg appeared to share the investment-adviser role with Sid Korshak. As the FBI later noted, "Korshak advised top racketeers in Chicago concerning their investments in legitimate enterprises and was in close contact with [Murray] Humphreys and handled many matters for Humphreys and his Chicago hoodlum associates."59 According to James Ragen, president of the Continental Wire Service prior to the Outfit's takeover, Greenberg also peddled Continental's "blue sheet" racing form. Ragen added, "Louis [Greenberg] is Capone to some extent. He is probably Capone to a larger extent than he wants to be. He would like to break away and he is having a hell of a time doing it."60 (Six weeks after making these and other disclosures to the U.S. attorney in Chicago, Ragen was shot to death in his car on June 24, 1946.)

  As a final side endeavor, Greenberg managed many of the Capone-run unions. One such guild, the waiters' union, had Greenberg reach accommodation with the owner of the Folies-Bergere, a topless dance revue that was the hit of the 1933 World's Fair. That proprietor, Jules Stein, like so many other Greenberg contacts, would play a large role in the future success of Sid Korshak and the Supermob. Through his founding of the entertainment power agency Music Corporation of America (MCA) on May 24, 1924, Stein would give his Chicago brethren entree—once they moved to the next settlement in Los Angeles—into the highest echelons of twentieth-century entertainment. With his enabling pal, James Petrillo, supplying the talent, Stein turned MCA into the most powerful entertainment conglomerate in American history.

  The C z a r s of M u s ic

  Julius Caesar Stein was born in 1896, another son of Jewish immigrants from the Pale (Lithuania). Growing up in Indiana, he studied violin for a time, but soon gravitated to saxophone. In 1913, at age seventeen, Stein moved to Chicago, where he played in, and organized, dance bands to pay for his schooling. Stein's diminutive, 140-pound frame was no barrier to attracting the ladies—his wit more than made up the difference. He entered Chicago's Rush Medical School on a scholarship, but when Prohibition became law in 1920, Stein was seduced by the money that flowed not only to the speakeasies, but also to the bands that were enlisted therein. Like Arvey, Greenberg, Korshak, and so many of his friends, Stein soon struck up a friendship with Big Al Capone, with whom he was also a bit player as an illegal-whiskey supplier.

  Jules Stein (Marc Wanamaker/Bison Archives)

  "Mr. Stein was friend
s with Al Capone," recalled Charles Harris, Stein's butler and confidant for over four decades.61 Actor Robert Mitchum said, "Everyone knew that Stein worked for Al Capone in Chicago. That's how MCA got into the band business."62

  In return for the supply of whiskey, Stein obtained Capone's muscle to force holdout clubs to book his bands. It is also known to insiders, such as columnist Irv Kupcinet, that Stein gave Capone a piece of MCA, which regularly took as much as 50 percent of the client's earnings.63 Stein fine-tuned Capone's bookkeeping model, maintaining murky ledgers in order to render accurate royalty statements impossible. MCA entertainers such as Bing Crosby, needing relief from freelance Black Hand extortionists, turned to Stein, who would use his connection with Capone to call off the dogs.* When the Outfit started placing its newly invented coin-operated jukeboxes in clubs, Stein came up with the top-forty list of most-often-played songs. Of course, the accounting was far from accurate and jukes were rigged, so soon entertainers became beholden to the Outfit and Stein's MCA for the career push afforded by the machines.t^'64

  SUPERMOB

  Stein's hardball modus operandi included the use of an Indiana labor union racketeer named Fred "Bugs" Blacker to "take care of" nightclubs that refused to hire MCA bands. Under Stein's orders, Blacker hurled stink bombs into the holdout clubs, along with his trademark bag of roaches—hence the nickname Bugs. Stein's dirty tricks came to an abrupt end on November 26, 1937, when Blacker and his wife stepped out of Chicago's Argo Theater and were killed by three masked gunmen.65 MCA had grown so notorious that a series of federal investigations into MCA (over a dozen) were begun in 1938 and would continue periodically for the next five decades, albeit with minimal success. Stein was also close to entertainment union honchos Willie Bioff and George Browne, who would soon figure in a headline-grabbing extortion of Hollywood studios.

  Stein was also known to be an owner of the 650-seat mob hangout the Chez Paree Club, which opened in 1932. "I know Jules had an interest [in Chez Paree] because I represented [co-owner] Mike Fritzel," said Chicago's legendary Judge Abe Marovitz. "Jules made deals with Fritzel and [Joey] Jacobson to provide the entertainment, and then he demanded a piece. Jules was very powerful."66 However, it was common knowledge that the Chicago Outfit was the silent partner behind not only Stein, but also the owners of record, Fritzel and Jacobson. It was also understood that the Outfit handed the club over to the Fischetti brothers to run it.

  The new club instantly became a "meeting place for the Outfit," according to columnist Irv Kupcinet. It was at the Chez that Arvey protege and Harry Truman pal Arthur X. Elrod apparently sanctioned a murder. Elrod, who overlooked the gang's bookie operations in exchange for a $700-per-month payoff from boss Louis "Little New York" Campagna, was witnessed meeting with Outfit members who were at war with a bookie competitor named Willie Tarsch. At the sit-down, Elrod told the boys to "take care of it your own way." A few days later Tarsch's bullet-ridden corpse was found on W. Roosevelt Road.67

  Of course, up-and-comers like Sid Korshak were regulars at Outfit-frequented clubs like Stein's Chez Paree. "Korshak and Stein met each other in the band-booking business," a former FBI agent remembered. "They were introduced by Joe Glaser, a mutual friend who ran his own talent agency [Associated Booking]. Stein knew that Korshak was connected [to the Outfit], and he went to him when he wanted to get a message to someone or wanted something done."68 Club singer Tony Martin began his career at the Chez, where he met his lifelong friend Sid in the midthirties.69

  The cross-pollination that occurred at connected clubs like the Chez was well-known, and much of it would figure in the Supermob's future hold over Southern California real estate, politics, and the entertainment industry that made its home there. Illinois-born actor and future California governor and U.S. president Ronald Reagan was one of Stein's early and lifelong MCA clients, booked into the Outfit-controlled Club Belvedere in Iowa. Joe Glaser got his start managing Capone's interests in the Sunset Cafe and a small prostitution ring, before obtaining a $100,000 loan from Stein to create Associated Booking, which specialized in black musicians like Louis Armstrong and Duke Ellington, both Capone favorites. Jazz authority Burton Peretti points out that unscrupulous club owners maximized their profit by muscling their names as coauthors onto Ellington compositions, and patenting a trumpet mute that was actually created by their black acts. When Associated moved to L.A., it developed a strong roster of both white and black talent, funneling many to Las Vegas showrooms. Of course, by that time, Sid Korshak had taken over the company.70

  The through-line of the Supermob continued from Jules Caesar Stein and his Chez Paree to the man who contracted the local musicians that played there. While Stein concentrated on band bookings, his childhood pal James Caesar Petrillo, who was also a friend of Sid Korshak's, lorded over Chicago's individual musicians. His rise to the top was littered with stories of clubs that were firebombed and stink-bombed for using musicians not represented by Petrillo. Born in Chicago's Little Italy section in 1892, Petrillo's first job was that of union muscleman. An amateur musician, Petrillo soon gravitated to the musicians' union, where he found a career. With the mob's backing, the man who was known as Little Caesar and the Mussolini of Music became and remained president of the Chicago Federation of Musicians for over forty years, and the president of the American Federation of Musicians (AFM.), with its 250,000 members, for another eighteen. Petrillo regularly gave Stein exclusive sweetheart deals, including waivers that allowed A4CA alone to book its acts on radio shows it produced. These favors, in contravention of AFM bylaws, were a boon when MCA ran into problems with Petrillo's union rule forbidding out-of-town bands from performing for money on local radio stations. This unique treatment given to MCA by the AFM greatly accelerated MCA's rise to predominance.

  "Both Stein and Petrillo made their deals with the major mob guys in this town," a veteran Chicago investigator advised.71 Not only was it impossible to run a business without some mob accommodations, such alliances tended to minimize the ongoing kidnapping epidemic. At the time, local bootlegging powers supplemented their income with the occasional grabbing of a thriving businessman. There were also fake kidnappings. Petrillo was said to have been kidnapped in 1933, although some musicians believed it a con devised in order to allow Petrillo to keep the $100,000 ransom paid by his union. Stein also received threats, but both he and Petrillo always pointed the finger at Capone's North Side rival, Roger Touhy.

  But the truth may have been even more convoluted: not only were there fake kidnappings, but also false accusations—railroading someone for a kidnapping that never occurred was a convenient method for having a rival put away. "I was pretty sure the Touhy gang was behind it," Stein had said of one threat against him.72 But informed Chicagoans were, like Petrillo's union rank and file, skeptical. "Touhy was nothing next to Capone and his boys, and that's where Stein and Petrillo's connections were," the Chicago investigator adds. "All the rest of that stuff about kidnappings was nothing more than high drama, well contrived and acted out." Touhy was soon to learn the worst consequence of a false kidnap accusation.

  Sid Korshak's friendship with Petrillo came to a crashing halt in 1933, when Petrillo, for reasons unknown, made a weak attempt to distance himself from the Outfit. In December 1933, Korshak represented two union musicians in a suit against Petrillo, alleging that he stole the ransom money from his "kidnapping" earlier that year.

  Petrillo's AFM weathered three congressional investigations and two federal prosecutions, both of which came up empty. Petrillo died in Chicago in 1984, at age ninety-two.73

  Like the rest, Stein would move his operation to California, but not before he brought a worthy heir into the MCA fold. On December 16, 1936, Stein hired the publicist for Cleveland's Mayfair Theatre and Casino, Lew Wasserman. Louis, as he was originally named, was the son of Isaac and Minnie Weiserman, Yiddish-speaking Ashkenazim who had arrived in Cleveland from Russia in 190774 His family name changed to Wasserman, young Lew, as he was now called, ent
ered the workforce as a theater usher, eventually rising to the level of publicist for Cleveland's Mayfair Casino. The Mayfair was nominally run by Lew's mentor, Harry Propper, but the man who sold it to him in 1933, Herman Pirchner, knew the truth. "He was the front man," Pirchner admitted. "The casino was owned by the Syndicate—four Jewish gentlemen." Those men were Moe Dalitz, Lou Rothkopf, Morris Kleinman, and Sam Tucker, all members of Cleveland's notorious Mayfield Road Gang, which had the local monopoly on vice, gambling, and bootlegging. These men would all work in league with Korshak in the coming years in Las Vegas. According to a congressional committee, the Mayfair had still more silent partners, including the city's Mafia representatives, the Polizzi brothers.75

  When the Mayfair went bankrupt in 1936, Wasserman moved to Chicago to work for Jules Stein's MCA. The move to Chicago would prove momentous, given that Wasserman began to socialize with Stein's friends, such as Sid Korshak and Ronald Reagan, the two men most key to his future success. The disparity in income between a green Wasserman and the flush Kor­shak didn't prevent them from becoming soul mates. "It didn't matter that Reagan was making two hundred dollars a week, and I was making three hundred dollars, and Sidney much more," Wasserman recalled. "We didn't know just what Sidney was making, or what he was doing. He was a good lawyer, very accepted in the community. And he was a good friend of mine for fifty years."76