Supermob

by Gus Russo

  Hoffa formed his first known coalition with organized crime when he requested help from some of Detroit's east-side gangsters to roust an opposition union, the Congress of Industrial Organizations (CIO). By the late forties, with his ambition to ascend the Teamster national power structure in overdrive, Hoffa knew that to achieve his goals he would require the allegiance of the all-powerful Chicago Outfit, which by now had a vise grip not only on Chicago's influential local Teamsters, but on the locals of numerous cities west of Chicago.1

  Tom Zander (pseudonym), a retired organized crime investigator for the Chicago office of the U.S. Department of Labor, remembered well the takeover days. "The Chicago Teamsters were very corrupt, except for one or two locals," Zander recently said. "The mob took the Teamsters over in small ways: first they'd pinpoint certain locals and go after the treasurers and members of the joint council. They did it principally by payoffs or threats. Once they got one or two key guys, they were in. They got to the pension fund real quick. It was their bank. They used the money to build Las Vegas, and Sidney was in it very deep."2

  An FBI intelligence report noted, "The labor racket's web had at its center Sidney Korshak, and around him were Murray Humphreys, Gus Alex, Joey Glimco, and Jake Arvey."3

  Joey Glimco, 1959 (Chicago Crime Commission)

  In 1949, through a union-busting Michigan steel hauler named Santo Perrone, Hoffa met Dorfman, who then introduced Hoffa to boss Accardo, Humphreys, Ricca, and the rest. Hoffa also became close friends with Korshak underling Joseph Glimco (ne Guiseppe Glielmi), appointed by Humphreys in 1944 to run the fifteen powerful Teamster taxicab locals of Chicago. Predictably, Hoffa and Korshak developed a powerful association. "Sid was the closest person to Hoffa," recalled Leo Geffner, an L.A. attorney who associated with Korshak.4 Andy Anderson, who became the head of the Western Conference of Teamsters, remembered Korshak in constant contact with Hoffa until Hoffa's imprisonment in 1967: "[Hoffa] checked with Sidney on everything he did, and he still got in trouble."5 In an interview in 2003, Anderson hinted at the kind of power Korshak held over Hoffa: "He knew Hoffa well. In fact, he used to say to me, 'Do you want a job with Hoffa? I'll get you promoted and you can get a job with Hoffa.' And I'd say, 'No, I don't like him.' He said, 'Okay, thanks for telling me.' "6 MCA agent Harris Katleman went so far as to say, "Sidney Korshak controlled the Teamsters."7

  According to the FBI, Red Dorfman suggested to Humphreys that if the Outfit's Teamster locals, which Humphreys controlled, would back Hoffa's advancement, Hoffa would return the favor by making Sid Korshak the Teamsters' national labor negotiator. Simultaneously, all businesses dealing with Korshak would be required to take out insurance with Dorfman's agency, the newly constituted Chicago branch of the Union Casualty insurance company, run by Red's son, Allen. During the ensuing years, father and son Dorfman were estimated to have received over $3 million in annual commissions, $5 million by 1963. A government asset manager, brought in to clean up the operation in the 1970s, reflected, "It looks like it was an unwritten rule that when you got a loan from the fund you bought insurance for your property from Allen Dorfman."

  After the 1952 Teamster convention, where Hoffa was seen schmoozing Glimco and other hoods, it was understood that Hoffa would be the real power behind the "front" president, Dave Beck. According to Johnny Rosselli's friend L.A. mobster Jimmy Fratianno, Beck agreed to retire after one five-year term, while Hoffa worked behind the scenes to broaden his own power base, simultaneously proving to his underworld sponsors that he was capable of ruling. Among his first decrees was the anointing of Dorf­man's insurance agency as the carrier for the Teamsters' Central States Health and Welfare Fund.

  In 1954, aware of the windfall about to descend on Dorfman's insurance company, Sidney Korshak purchased $25,000 worth of stock in the agency. The stock soared one year later when, in March 1955, Hoffa created the Central States Pension Fund. Employers paid $2 per employee per week into the new fund (or $800,000 per month), which accrued to $10 million the first year; by the early sixties it held $400 million in its coffers, eventually topping off at $10 billion. In creating the fund, Hoffa also fought for more union leaders on the Teamsters' board of directors, and the fine points of the deal dictated that Hoffa would appoint Red's son, Allen, a college phys ed teacher, to administer the pension fund loans. Technically, a Teamster fund board of trustees, with Allen as a "consultant," had to authorize the loans, but in actual practice, Allen with his intimidating underworld sponsors called the shots on loan approvals. Of course, applicants were "strongly urged" to buy business insurance from the Dorfmans.

  Under the new protocols, the hard-earned dues of truckers, warehousemen, and taxi drivers from the twenty-two states comprised by the Central Fund would subsidize business ventures of questionable pedigree in Nevada, California, and elsewhere. And for the next twenty-five years, Allen Dorf­man disbursed the assets of a fund that by 1961 had lent over $91 million in low-interest (6 percent) loans. In all, some 63 percent of the fund's holdings were made available to borrowers.

  Two retired trustees of the pension fund stated that Korshak was in the critical position of anointing prospective trustees, and James C. Downs attested that Korshak got him an appointment with Hoffa to apply as a loan analyst for the fund, a position he later resigned. "I don't know if I could have seen Hoffa if it wasn't for Sid," Downs said. One Teamster associate recalled that Korshak was responsible for appointing Abe Pritzker's law partner Stanford Clinton as the general counsel for the Fund.8 Clinton, who represented Outfit boss Joe Batters Accardo, introduced Pritzker to Jimmy Hoffa and Dorfman and received a piece of Pritzker's Burlingame (Califor­nia) Hyatt Hotel for his efforts.9 Journalist Knut Royce located two letters from Abe Pritzker to Red Dorfman's son, Allen, asking for help in obtaining Teamster loans.10 Consequently, between 1959 and 1975, the Pritzkers would obtain $54.4 million in Teamster loans, some for use in Las Vegas casino construction. A circumspect Sid Korshak told the SEC in 1970, "It is possible that Hyatt Hotels talked to me about the possibility of making an acquisition in Nevada."

  Federal documents obtained by Sy Hersh in 1976 showed that Korshak played a huge role in arranging many of the fund's other loans. Reportedly, Korshak used Donald Peters, head of Chicago Teamster Local 743, as a key liaison to the Teamster board. Korshak and Peters, according to one source, had been close since the 1940s, and Peters had, like Korshak, been one of the early investors in Red Dorfman's insurance agency. "He was always Sidney's boy," said one prominent Chicago businessman. "Sid dealt with nobody as much as Don Peters."

  Actor-singer Gianni Russo (no relation to the author), who came up in the world as a courier for New York mob boss Frank Costello, remembered Korshak's power when he shared Table One with him at the Pump Room. "He'd negotiate all the deals with the pension fund money," said Russo. "Whatever it was, whoever it was for, Sidney would be the guy who'd come and polish it up."11

  The timing for Korshak's putsch with the pension fund couldn't have been better, since his sweetheart deal-making was soon to be diminished by the 1959 passage of the Landrum-Griffin Act. This legislation gave union members more power and compelled unions to file hundreds of written reports about all aspects of their activities with the Department of Labor, making sweetheart contracts negotiated quickly by the likes of Korshak impossible. Korshak's success now depended more on his ability to ensure freedom from strikes than his furtive negotiations of low-wage settlements.

  Due to the Teamster connection, Sidney Korshak's workload grew exponentially. He was now in a position to broker countless Teamster loans, control strikes, and begin the creation of his own mythic legacy, of which by all accounts he was quite proud. With the Chicago mob's labor genius "Curly" Humphreys slowing down as he approached age sixty, Korshak likely assumed the time was right to stretch his wings and emerge from Humphreys's long shadow—or so he hoped.

  The entire Humphreys-Korshak labor scheme had recently been facilitated by the passage of the Taft-Hartley Labor Act of 19
47, which prevented employers from cutting deals with union leaders. This dictum, however, left the playing field open to the middleman, who was happy to take the bribes himself after seizing control of a particular union.

  By now, all who sought to make good with the Teamster juggernaut courted Korshak. In 1955, Anthony Inciso, a Capone- and Accardo-affiliated racketeer and United Auto Workers union boss, gave pricey gifts (including $1,000 diamond rings) to five Teamster officials, and a symbolic $360 money clip to Sidney Korshak. Inciso admitted to a Senate Labor Committee that he gave the gifts to "anyone that had done us a favor. It wouldn't be honest to bring them money, so we bring them a token of appreciation." Inciso's honesty notwithstanding, he was convicted on twenty-two counts of a federal indictment charging him with violation of the Taft-Hartley Act. On June 23, 1960, he was sentenced to ten years and fined $22,000. He began serving his sentence on December 4, 1961. Senator Paul Douglas, Democrat of Illinois, had allegedly told Inciso that he had disgraced the labor movement.12

  Korshak's Teamster dealings were next in the public spotlight in 1956, when he was listed on both the Sponsors' Committee and the Entertainment Committee for an April 20 testimonial dinner held to honor Jimmy Hoffa in Detroit.13 Sidney's party pal Joel Goldblatt headed the sponsoring committee for the $100-a-plate dinner, with the $250,000 take used to build a children's home in Israel.14

  Back in California that same year, Jake "the Barber" Factor's brother, Max, who was trying to weather a move to unionize his cosmetics company, engaged Korshak. Royston Webb, the company's British attorney, remembered Korshak at the firm:

  I was the general counsel for Max Factor in the UK and also the director of personnel. I remember going across to the old Max Factor headquarters, which was on Hollywood Boulevard, opposite the Chinese Theater, to see my counterparts in Los Angeles—a chap named John McKenna. We were just talking of general personnel and union issues, which I handled in the UK, and I said to John, "Well, who deals with them over here, John?" He said, "Sidney Korshak." I think they were paying him about fifty thousand dollars a year. I said, "Is he coming in today?" I was told, "Oh, no. He doesn't come in. He's not coming in today."

  "Well, when will he come in?"

  "He doesn't come to the office at all," McKenna said.

  So I said, "How does he deal with any union problems you have?"

  He said, "You don't understand. Sidney is connected."

  I just thought, "This is not how we would do business in England, but then, this isn't England."15

  As his workload became burdensome, Korshak created a new paradigm for himself, wherein he would act as a referral service, shuffling the hard work off to a chosen colleague and keeping a healthy share of the fee just for making the call. Such was the case when he engaged Nathan Shefferman's Industrial Relations Associates of Chicago to handle the labor troubles of the Indiana plant of the Brooklyn-based Englander Mattress Company, which had Korshak on retainer. When the workers wanted to form a Teamster local, in the face of a company that was strongly antiunion, they turned to Shefferman, whose close friend Korshak was consulted only to put the fine points on the contract. After it met with Korshak's approval, it was sent up to Hoffa for his imprimatur.

  Suddenly, Englander seemed eager to recognize the new Teamster local, and few who were privy to the deal questioned why. It seemed that Korshak had arranged for the workers to receive $37 take-home pay weekly, far below the national average of $53 for factory workers. Englander was now more than happy to allow workers at its Alabama, Illinois, New York, Washington, and Texas plants to become Teamsters.16 For his role in backstabbing the workers, Shefferman was paid $76,000. (When Korshak, who claimed to have received only a $2,000 fee, was informed of this by Bobby Kennedy during later congressional testimony, Korshak feigned poverty, saying that, by comparison, "I am being grossly underpaid." Few would agree.)

  But the truth was more complex. From the perspective of most Teamsters, their lot was far better than at any other time in history. Although some workers were receiving less pay, many others experienced just the opposite, with safer working conditions, guaranteed overtime pay, health benefits, etc. Also, from this point on, many Teamsters were paid handsomely to featherbed, wherein the union dictated that more workers were hired than were actually needed for a job. Some investigators, such as Pulitzer Prize-winning journalist Wendell Rawls, asserted that middlemen such as Sid Korshak had little difficulty in rationalizing their actions. "Korshak didn't think he was stealing from workers because he believed he was getting more money for the Teamsters than they ever dreamed they'd get," Rawls recently said. "And he deserved his commission. These negotiators got more sit-around Teamsters hired. If one worker complained about that, another would hit him with a crowbar."17

  Occasionally, Korshak's double-dealing went sour and led to frayed relationships, such as with Charles W. Lubin, the innovator who conceived of freezing baked goods for later sale in supermarkets. Lubin's brainstorm led to the founding of his now famous Kitchens of Sara Lee brand, and predictably, the improvement sent jitters throughout bakers' unions, who feared their orders would decline. Lubin enlisted Korshak to work out the difficulties, and he did so with his trademark one or two phone calls. However, one year later, after Lubin learned that Korshak was playing both sides, he fired him. According to a Korshak associate, Korshak was furious. "He called Charlie [Lubin] up and threatened him by saying that he'd better not 'walk alone at night.'" The source added that Lubin was badly shaken by the warning.18

  Bobby Kennedy's Version of Kefauver

  A great deal of my business is transacted on the telephone

  SIDNEY KORSHAK TO ROBERT KENNEDY

  By the end of 1956, the nation's lawmakers were swamped with reports that Teamster officials were looting the members' pension fund and forging alliances with the underworld. In December, the Senate Select Committee on Improper Activities in the Labor or Management Field was established to investigate the contentions, holding its first hearings on January 30, 1957. Chaired by a devout Baptist Democrat from Arkansas, Senator John J. McClellan, the "rackets" investigation would eclipse even the Kefauver probe in its scope, lasting over two and a half years and hearing fifteen hundred witnesses whose recollections (or lack thereof) were laid out over twenty thousand pages of testimony.

  Chairman McClellan made it clear early on that his investigation would be a continuation of the xenophobic battles of the pre-Prohibition era, with Italian and Irish hoods cast as the country's chief law enforcement adversaries. He viewed the prospect of twentieth-century immigrant witnesses in self-righteous disgust, saying, "We should rid the country of characters who come here from other lands and take advantage of the great freedom and opportunity our country affords, w7ho come here to exploit these advantages with criminal activities. They do not belong in our land, and they ought to be sent somewhere else. In my book, they are human parasites on society, and they violate every law of decency and humanity." In fact, most were charged with transgressions that paled in comparison to those being committed right under his nose by his party's national committeeman Paul Ziffren.

  In his Supermob advisory role, Sidney Korshak called and met with his cronies and, by their own admission, ordered them to stonewall Kennedy, which they did. "I called Sid," one such associate told Sy Hersh in 1976, "and said, 'Robert Kennedy is asking to see me.' He said, 'Don't say anything, and call me when he leaves.' " The witness said he was "tough and uncooperative" with Kennedy and, as was demanded of him, called Sidney with the news. According to the unnamed witness, Korshak was "overjoyed."19

  The many inherent ironies of McClellan's probe surfaced almost immediately, when the "McClellan Committee" chose as its chief counsel Robert F. Kennedy, the seventh child of Boston millionaire and former Roosevelt administration diplomat Joseph P. Kennedy. Over the years, countless firsthand witnesses have attested to Joseph Kennedy's pattern of working in consort with the underworld to establish his fortune. Bobby Kennedy, who had cajoled M
cClellan into forming the panel, quickly commandeered the probe, on which his brother Jack served as a Senate member, with a style alternately described as either forceful or bellicose. When the thirty-one-year-old Kennedy traveled back to Massachusetts for Christmas in 1956, he excitedly announced the full-blown inquiry to his father. Papa Joe, fully cognizant of the extent of the upperworld-underworld alliance that had helped build his dynasty, was not impressed.

  According to Bobby's sister Jean Kennedy Smith, the argument that ensued at Hyannis Port that Christmas was bitter, "the worst one we ever witnessed."20 Kennedy adviser Arthur Schlesinger Jr. described the row as "unprecedentally furious."21 The politically savvy father warned that such an upheaval would turn labor, especially Hoffa's powerful Teamsters, against Jack in his presidential quest. Longtime Kennedy confidant Lem Billings recalled, "The old man saw this as dangerous . . . He thought Bobby was naive."22 Bobby, however, saw things differently, believing such a crusade would actually enhance the family's image.

  One of Kennedy's key targets, Teamsters VP Jimmy Hoffa, said years later, "You take any industry and look at the problems they ran into while they were building it up—how they did it, who they associated with, how they cut corners. The best example is Kennedy's old man . . . To hear Kennedy when he was grandstanding in front of the McClellan Committee, you might have thought I was making as much out of the pension fund as the Kennedys made out of selling whiskey."