Supermob

by Gus Russo

  Rittenband, however, reverted back to his normal hard-edged style when he received reports that Polanski was cavorting in Europe with fifteen-year-old wannabe actress Nastassja Kinski. "How can I believe this remorse stuff," Rittenband told a reporter, "when the son of a bitch was playing around in Europe with a fifteen-year-old at the same time he was about to go on trial here for raping a thirteen-year-old?" Word leaked to the press that Ritten­band was going to throw the book at the director. Thus, on the day before his January 30, 1978, sentencing, Polanski fled to Paris, where he spent his first night making love to another fifteen-year-old.12 He has been a fugitive from the United States ever since, although the Academy of Motion Picture Arts and Sciences had no qualms about honoring him with a Best Director honor in 2002 for The Pianist*

  In July 1977, Sy Hersh and Jeff Gerth took aim at another Supermob figure, Charlie Bluhdorn. In a New York Times three-part series, the duo cited over seventy-five sources that pointed out a litany of Gulf ck: Western transgressions, many of which were the focus of still another SEC probe. Among the numerous questionable G&W activities described were:

  • Millions in profit hidden from stockholders.

  • Unreported use of company resources for the private use of senior company officials, including Bluhdorn.

  • The moving of all Paramount Pictures files from the New York office the day before an IRS audit.

  • The creation of a Canadian subsidiary that allowed G&W to dodge U.S. taxes much the same way as MCA-Universal was doing in Amsterdam.13

  It would later be disclosed that the SEC also alleged that Gulf & Western and the mob-linked Resorts International Corporation had inflated the value of real estate properties in the Bahamas. The SEC filed formal fraud charges in 1979, stating that Gulf & Western held undisclosed profits for sugar revenues from the Dominican Republic and occasionally took part in stock transfers to make losses look like profits. That year, Forbes magazine referred to Gulf's accounting as a "$400 million credibility gap." In addition, the SEC charged Bluhdorn with an outrageous scheme to turn Blake Edwards's DarlingTili (1970) into a profitable film.14 According to Gulf scholar Bernard Dick, Bluhdorn exchanged the rights for the $20 million bomb to a British firm, Commonwealth United Entertainment, for $31.2 million in Commonwealth debentures and a $10 million promissory note. As Dick summarized, "When Commonwealth suffered a financial crisis, rather than acknowledge the loss, Gulf & Western substituted income from other transactions and continued to carry the debentures on the books at $31.2 million, even though their market value was only one percent of that amount.15

  In 1981, after a four-year SEC investigation, Gulf ck: Western settled with the feds by agreeing to fund a $39 million economic and social development fund in the Dominican Republic;16 however, it never denied or admitted to the allegations, but, like a chastised child, promised to clean up its act and never to do it again.17

  One month after the newest Mersh disclosures, the Supermob experienced the beginning of a cascade of losses among its ranks, and the first earthly exit could not have been more significant. On August 26, 1977, patriarch Jake Arvey died at Chicago's Weiss Memorial Hospital. Over twelve hundred mourners showed for the funeral of the man who had dispensed countless patronage jobs over the years. However, few seemed to grasp the national influence he had exerted through proteges from Bazelon in the East, to Ziffren and Korshak in the West. His probate listed an estate valued at $1.75 million,18 although it was likely the tip of the iceberg, with pricey California property having already likely been bequeathed to his heirs. (Interestingly, Arvey's son Howard currently maintains a valuable mountaintop estate overlooking Santa Barbara.)

  Arvey's passing prompted the local press to seek a statement from a favorite Arvey ward, Marshall Korshak, who said, "What can I tell you? Can I tell you that he never felt the kind of power he had? Can I tell you that nobody in the history of the Democratic Party did what Arvey did? Can I tell you that the party was his life? He lived and breathed it. And no one left it with more friends, no one left it loved by more people."19 Twenty-five years later, the Chicago Jewish News would rank Arvey number three on its list of "Chicago's Top 100 Jews of the 20th Century," behind Philip Klutznick, downtown developer and international president of B'nai B'rith and president of the World Jewish Congress, and Julius Rosenwald, president and chairman of the board of Sears Roebuck and an extraordinary philanthropist.*,20

  Not long after, Marshall Korshak made his own symbolic exit—from the political stage. After over four decades in public life, Marshall had had enough and decided to step down from his current post of city collector, which he had held since 1971. Although his career had afforded him great rewards—with no small thanks to his brother's investment advice—it had come at a price. Not only had he been pursued publicly by the IRS and the SEC, Marshall had also garnered a fair degree of local negative publicity in recent years:

  • 1972—Korshak was named in an investigation that claimed that as city treasurer he owned stock in Metropolitan Bank and Trust Company, in which $1 million in city funds had coincidentally been deposited, thereby boosting Korshak's stock. The investment was perceived as a severe conflict of interest.21

  • 1973—A federal grand jury subpoenaed Marshall Korshak and nine others in an investigation of whether precinct captains had falsified their addresses to make it appear that they lived within their districts. The predominantly white captains had addresses showing that they supposedly lived in predominantly black precincts. This practice is known as plantation politics.22

  • 1974—The Illinois state's attorney Bernard Carey investigated Marshall Korshak and Mayor Daley's son Michael Daley for their roles in the contract negotiations between three major car-rental agencies and ChicagoO'Hare Airport. Korshak, who was city treasurer at the time, was alleged to have been representing Hertz Rental Agency, while Daley was representing Avis. It was claimed that the city was slighted by 2-3 percent of what the rental agencies should have been paying to operate at O'Hare. Due to Kor­shak's position as a city employee, Carey thought there was a "clear conflict of interest."23 The probe was soon bumped up to a federal investigation. City Corporation Counsel Richard Curry, who also had a hand in the negotiations, came forward to say Korshak had no involvement in the contracts or negotiations. Marshall Korshak also went to the press stating that he had no part in the negotiations or the preparation of the contracts. However, it was noted that Richard Curry was the cousin of Mayor Daley.24 In a round of political hardball, Korshak and Curry came forward to denounce Alderman William Singer's allegations that the men had violated public trust with regard to the car-rental airport contracts. Both Korshak and Curry called Singer a liar and reaffirmed there was no wrongdoing and that the city had made a good deal with the rental agencies.25

  • 1974—Reporters probed into whether Chicago was being cheated out of $3 million in cigarette tax revenue, claiming that the Department of Revenue director Marshall Korshak and his sixty department inspectors were doing little to arrest those responsible for selling cigarettes without the state tax stamp.26 The day after the expose ran, Marshall Korshak's team of inspectors seized vending machines selling unstamped packs of cigarettes and promised to audit three cigarette wholesalers.27

  After Marshall's declaration that he was leaving the public arena to concentrate on his law practice, brother Sidney led a group of Marshall's friends and relatives in hosting a farewell luncheon at the Bismarck Hotel. One friend who was there recalled how Sidney took the opportunity to point out what he considered to be a lack of respect shown his brother in recent years by Chicago's Democratic bigwigs. "After a number of little comments and remarks and humorous little sayings," remembered the attendee, "Sidney rose from this long table of probably like twenty-four people in attendance and said, 'I am very happy that my brother will be leaving City Hall. My brother and I are very close; we talk on the phone just about every day. And every day, my brother tells me that he saw Mayor Daley in the lobby of City Hall and
the mayor said, "Hi, Marsh." Or he saw Mayor Da­ley going out the exit of City Hall and the mayor just brushed him off and said nothing to him. Or he was walking down LaSalle Street and the mayor smiled at him. I am so tired of having my brother's days shaped by whether Mayor Daley smiled at him or didn't smile at him. I am relieved that now he'll be leaving city government and never again will I have to receive one of those phone calls.' "28

  A few years earlier, a local politician had expounded on the same theme: "Daley really shortchanged him. Daley made him run for the Sanitary District trustee, but that was a dead end, and Korshak was very disappointed. Daley was very ungenerous to him in awarding patronage and so on."29 Korshak made a brief return to politics in 1979, when Mayor Jane Byrne appointed him to the Chicago Police Board, a nine-member commission whose purpose was to study the feasibility of legalized gambling.30 But controversy continued to follow Korshak. In 1983 he became executive director of the late Sam Rosen's estate, for which he and two other lawyers split $70,000 in fees. At the same time, Mayor Byrne's administration approved a $900,000 bond for the Rosen estate to be used to rebuild Sam's Liquors, which was dubbed The World's Largest Wine Cellar. Korshak denied using his influence at City Hall to push the industrial revenue bond through the city bureaucracy for his client.31

  Nonetheless, in retirement, Korshak continued to receive accolades, much as he had since the early sixties. In 1989, Marshall received the Torch of Learning Award from The American Friends of the Hebrew University of Jerusalem.32 In 1990, at Korshak's eightieth-birthday celebration, ChicagoSun-Times columnist Steve Neal praised him as one of the best politicians ever to have served the city of Chicago.33

  The anecdotes shared around the dais at Marshall's farewell bash were anything but ancient history. One of the many common memories held by the Korshak brothers was about to be revisited in the person of Hugh Hefner, whom the brothers had helped with his liquor license difficulties in 1961. In March 1978, Hefner and Playboy were being sued by Lew Wasser­man, who claimed that Hefner had obtained numerous videotape copies of Universal films for his vaunted private library. Although Hefner retained licensed attorneys to handle the suit, he decided to recruit Sidney Korshak, still unlicensed in California, to intercede with his good friend Wasserman.

  As Hefner described in testimony five years later, Korshak demanded, and received on March 16, 1978, his standard $50,000 retainer in return for placing a call to a man he was ordinarily speaking with twice a day anyway. But money was no object for Hefner, who was hoping to avoid bad publicity surrounding the films, which certainly appeared to be stolen property. Some have opined that Hefner had read of Korshak's close relationship with Wasserman in Hersh's 1976 New York Times series, but Hefner denied it; he did admit to being aware of Paul Steiger's 1969 Korshak profile in the TosAngelesTimes.54 In actuality, it is inconceivable that Hefner was unaware of the friendship between Wasserman and Hefner's fellow Chicagoan Sid Korshak.

  However, this time Korshak either lost his magic touch or pulled a classic "sweetheart" deal and never even called Wasserman, preferring instead to just abscond with Hefner's money. After being forced to return the films to Universal, Hefner called Korshak "remarkably unsuccessful."

  On April 9, 1978, the Korshaks attended a $l,000-per-plate private fundraising dinner for Governor Jerry Brown, held at the home of Lew Wasser­man, taking Teamster chief Andy Anderson and his wife as their guests.35 Also at the dinner was another Curly Humphreys protege, the former head of Chicago's mob-saturated Bartenders Union, Edward T Hanley, who now presided over the oft-investigated Culinary Workers Teamsters Union, which worked closely with Korshak. Korshak played a vital role in the event, which raised $50,000, by pulling one hundred invitee names from his personal address book—Joyce Haber's "A-list."36 Republicans later charged that Brown accepted an additional $50,000 contribution from the Culinary Workers.37 When Peter F. Vaira and Douglas P. Roller, attorneys in charge of the Cleveland Strike Force, wrote a briefing paper for the White House in 1978, they noted the following about Hanley: "Edward Hanley was elected president of HRE [Culinary] International in 1973 on the power and influence of Aiuppa and the Chicago mob . . . Ed Hanley represents the classic example of an organized crime take-over of a major labor union. Since his election, Hanley has moved to solidify his power, both in terms of the local Union officials and elements of organized crime. Likewise, the HRE [Culinary Union] under Hanley's guidance has moved to insure support in the appropriate government circles by carefully selected and generous political campaign contributions . . . Many of the persons placed on the payrolls as organizers are organized crime figures or friends of Hanley, mostly from Chicago."*

  Supermob observers like Jack Tobin found it curious that Brown shortly thereafter appointed Hanley's brother-in-law, Ted Hansen, to be the director of the Fifty-second District of the California Agricultural Association, which named the concessionaires at all the state's racetracks and county fairs. One woman who ran a concession at the fair—coincidentally held at Del Mar, formerly owned by Al Hart—told reporter, and Supermob watcher for the Santa Monica Evening Outlook, Dick Brenneman that she personally skimmed $17,000 per day, which was sent to Joe Batters Accardo's Palm Springs home.38

  Brown's links to the Culinary Workers went even further: one of Brown's key advisers, future U.S. circuit court judge Stephen Reinhardt (sponsored by Paul Ziffren), had been on an $833 monthly retainer from the Culinary Workers International from 1974 to 1976, when Hanley was president, and in that position had personally negotiated a $2 million Teamster loan for Hoffa's attorney—and Korshak's St. Louis alter ego—Morris Schenker for the purpose of building a resort in Murrieta Hot Springs, near Riverside, California (Schenker was already the owner of the Teamster-funded Las Vegas' Dunes Hotel and Casino). The Los Angeles Herald-Examiner, in noting the Reinhardt-Schenker loan, wrote, "Schenker is viewed by law enforcement officials as a major figure in organized crime."39

  This was far from the first hint of Brown's coziness with questionable supporters. In 1976, Governor Brown was observed meeting and traveling with Herman "Blackie" Leavitt, head of the Chicago Outfit-infiltrated Hotel and Restaurant Employees and Bartenders International Union (HREU). On February 4, 1976, Leavitt and Brown attended HREU's executive board meeting at D'Amico's Restaurant in Palm Springs; D'Amico was a known close associate of alleged Chicago organized crime subject Frank Buccieri.

  Washington Post columnist Jules Witcover noted Brown's strategy sessions for the 1976 run were held at Paul Ziffren's home at 23920 Malibu Road,40 while other observers, especially those in the L.A. District Attorney's Office, began noticing Korshak's growing association with Brown's chief of staff, future governor Gray Davis.* It was said that Korshak appealed to Davis because of his influence with Teamsters such as Hanley, who attended Wasserman's fund-raiser. DA investigator Frank Hronek went so far as to describe Korshak as Davis's mentor, telling his son Steve, "Gray Davis was a protege of Korshak's."41 Fellow DA investigator Jim Grodin recently agreed, saying, "I saw Gray and Sid together at the Bistro a number of times."42 NBC crack investigative reporter Brian Ross (now with ABC), who would soon expose many of these relationships on national television, remarked, "Gray Davis and Korshak admired each other's style."43

  Just three weeks after the 1978 Brown fete, California attorney general Ev-elle Younger, himself a Republican gubernatorial hopeful, released the eighty-six-page First Report of California's Organized Crime ControlCommission, which gave the names, photographs, and home addresses of the state's ninety-two leading organized crime figures. Based on nine months of work, the report was billed as the most comprehensive study of organized crime ever conducted in the state. Among those included in the sensational list was none other than Governor Brown's good friend the "well-known Los Angeles labor lawyer, Sidney R. Korshak." The report called Korshak "the key link between organized crime and big business." Next to Korshak's smiling driver's-license photo was the following summary: "His name has been linked with organized c
rime for more than 30 years, and he has been the subject of several organized crime investigations. A U.S. Justice Department official has described Korshak as a 'senior adviser' to organized crime groups in CA, CHI, LV and New York."

  Also on the list were Korshak's great friends boss Joe Accardo, who had a home in the desert, and Moe Dalitz, who the report stated came to Las Vegas and "began investing and supervising organized crime investments in The report also called attention to Dalitz's involvement in a partnership that had invested between $10 million and $13 million in the state's San Joaquin Valley wine vineyards. However, Korshak's and Dalitz's names stood out in the report's list, which otherwise read like a page from the Rome phone book, with all the other politically connected, Russian-pedigreed Supermob associates, aside from Korshak and Dalitz, assiduously avoided. (It should be noted, however, that a second "secret" list was released only to law enforcement officials. That list has never surfaced.) It likewise made no mention of the hundreds of millions in mob lucre that had been invested in the state or the massive offshore tax dodges of the movie studios.