by Dick Lehr
Bulger was heartened when the agents said they would go to bat for him. He immediately told Flemmi they were off the hook. Bulger explained that “John Connolly had told him that we would be taken out of the case and we would not be indicted.” It was music to Flemmi’s ears.
Within days Morris and Connolly were crossing the few city blocks separating their FBI office in downtown Boston at the John F. Kennedy Federal Building and prosecutor O’Sullivan’s office on the upper floors of the John W. McCormack Courthouse in Post Office Square. O’Sullivan was not pleased to be taking up a matter like this so late in the game. The intense prosecutor, a bachelor in his midthirties, was all business, nearly all of the time. To many lawyers who went up against him he came off as a self-righteous zealot. But to his associates he was a relentless crime fighter, even if humorless and demanding. He’d grown up in a three-decker in nearby Cambridge, graduated from Boston College and Georgetown Law School, and was determined to work his way through the ranks of local organized mobs until he reached his ultimate ambition, nailing the Mafia.
By the time Morris and Connolly walked into his office, the finishing touches were being put on indictments in the race-fixing case, and at that point Bulger and Flemmi were indeed in the mix of the nearly two dozen figures facing arrest. This was hardly the right time—the final days of a two-year investigation—to come asking for favors.
Morris and Connolly had no way of knowing the extent to which Ciulla had implicated Bulger and Flemmi. But O’Sullivan knew. In debriefing sessions in Sacramento, California, with agent Tom Daly, before the grand jury and, later, at the federal trial itself, Ciulla had been consistent and convincing. He’d described exactly how Winter and his six key associates—John and James Martorano, James Bulger, Stephen Flemmi, Joseph McDonald, and James Sims—shared the proceeds. “Profits were divided from this illegal scheme as follows: 50 percent to Howard Winter and his six abovementioned associates; 25 percent for Ciulla and 25 percent for Ciulla’s partner, namely William Barnoski.” He’d described the various duties: “Mr. Winter said that him and his partners would finance the situation, would be responsible for placing bets outside with illegal bookmakers, also supplying runners to the racetracks and various parts of the country. He would be responsible for collecting money with bookmakers.”
Most troubling, he’d put Bulger and Flemmi right in the middle of the whole scheme. “I had them dead to rights,” Ciulla recalled. Bulger and Flemmi might have left before Ciulla and the gang began partying and snorting coke, but they were around when it mattered. “Did I hang out with him?” Ciulla said about Bulger. “Socialize after the day’s business? Go with him to Southie? No.
“But there was always money for him and Stevie.”
The visit to O’Sullivan was stealth: without permission from FBI headquarters, the agents had no business confiding in a prosecutor. In addition, the identity of an informant was considered a palace secret; disclosure, even to a prosecutor, violated FBI rules. But that didn’t stop Morris and Connolly from telling O’Sullivan about their arrangement with Bulger and Flemmi.
“We went to the prosecutor,” Morris recalled, “and we told him that they had represented to us that, first of all, they weren’t in it, that it was not their scheme.”
Just as important, the two agents brought up a matter they knew was dear to the intense prosecutor’s heart—Gennaro Angiulo. Morris said they told O’Sullivan, “These guys were in a position to help us in what was our number-one priority, the Mafia, and we asked O’Sullivan to consider these facts and consider not indicting them based on this.”
The prosecutor did not press the FBI agents for the basis of their trust, why they took the gangsters at their word or whether they had undertaken any investigation to corroborate the claims of innocence. But Morris knew that for O’Sullivan to go along the prosecutor was going to have to find a way around his star witness. The entire prosecution was being built around Ciulla. His credibility was paramount to winning at trial, and here were Bulger and Flemmi pitting their word against his.
Though still not happy that the agents had waited so long—it was virtually the eve of the indictments—O’Sullivan listened intently to their pitch. When they finished, he said he would get back to them. “He would consider it,” Morris recalled O’Sullivan saying. “He was favorably inclined toward it, but he wanted to discuss it with Tom Daly, who was the case agent.”
Morris and Connolly left the meeting feeling encouraged. It would not be the first time that informants had been held out of harm’s way in a criminal case—and properly so—in order to nurture them for bigger payoffs in the future. Indeed, at this time in the history of the FBI’s ties to Bulger and Flemmi, they believed they had a strong argument for cutting the informants some slack. There was, as they’d told O’Sullivan, their potential value in developing the mega-case against Gennaro Angiulo. Moreover, Bulger and Flemmi were not the primary targets in the race-fixing case. Howie Winter was the main man. Bulger and Flemmi were midlevel, not the top dogs, and as such ideally positioned to help the FBI. O’Sullivan, the FBI could argue, should go ahead and topple the Winter Hill gang, but amid the rubble, he should just let the two lieutenants stand.
Within days O’Sullivan sent word to Morris at his FBI office that Whitey Bulger and Stevie Flemmi would be dropped from the indictment. There was some talk about how, with Bulger and Flemmi, he didn’t have the kind of corroborating evidence in place, like telephone records and hotel receipts, that would buttress Ciulla’s account, as they did for the other defendants. But this was simply taken as prosecutorial spin to cover their tracks. Morris quickly passed along the good news to Connolly, who was pleased. Connolly later recalled his own conversation with O’Sullivan. “He hoped they [Bulger and Flemmi] appreciated this, and that the FBI appreciated this, because he felt we waited a little bit too long in telling him their identities,” Connolly said. It turned out, added Connolly, that the government had the goods on Bulger and Flemmi. “Ciulla had actually buried them, apparently, in his grand jury testimony.”
Nothing, however, comes without a price. Fat Tony was now beside himself. “They tried to con me,” he said. O’Sullivan “tried to justify Stevie’s not being in the indictment by the fact he was a little bit on the lambrooskie. Then he said they couldn’t correlate certain dates.
“I said, ‘Fuck that. That’s not true.’” Bulger and Flemmi had rounded up bookies to unwittingly take bets on fixed races. After suffering huge losses, the bookies would be indebted to—and controlled by—Winter Hill. “And Whitey was there all the time.” Ciulla fought O’Sullivan. “Things didn’t add up, and I’m not a total buffoon. Why are these guys being left out? They were partners. Why leave them out when I had direct dealings with them?” O’Sullivan kept up the double-talk, but his FBI handlers finally told Ciulla the truth.
“They had to tell me because I was going fuckin’ nuts.” To Ciulla it was about self-preservation, not justice. “The more of them left out on the street,” Ciulla said he realized, “the more likely I get killed.”
After getting back to the FBI with the good news, O’Sullivan, continued Connolly, required that Bulger and Flemmi promise not to even think about taking out Ciulla. “He told me that as a condition of their being cut loose from the race-fix case they had to give their word that they would play no role in hunting down Anthony ‘Fat Tony’ Ciulla.”
Ciulla, still dissatisfied, felt reassured. “I wasn’t okay about Stevie and Whitey, but I had to swallow that load.
“That’s how it was.”
Several weeks later, and amid much anticipation, federal indictments in the celebrated case were handed up. It was Friday, February 2, 1979, and the news was splashed across the front pages of the city’s two daily newspapers.
In all, twenty-one men were charged, led by forty-nine-year-old Howard T. Winter and including nearly all of his associates in the Winter Hill gang, along with three Las Vegas casino executives, three jockeys, and two racehorse
owners. Police were unable to round up everyone. Bulger and Flemmi, knowing from Connolly that indictments were coming down, had taken a couple of preventive measures. They warned John Martorano in time so he could get out of town, and they notified Joe McDonald, who was already a fugitive, that he had new troubles. “Because Mr. Bulger and I had been told that the indictment was imminent, we were able to warn them,” said Flemmi. “Martorano fled, and McDonald remained a fugitive.”
The indictment itself skipped over Bulger and Flemmi. The more than fifty-page federal court filing mentioned them only in a two-page attachment in a list of sixty-four “unindicted co-conspirators”: James Bulger, South Boston, and Stephen Flemmi, unknown. “The winnings,” wrote O’Sullivan, “were divided by defendants Howard T. Winter, John Martorano, James Martorano, Joseph M. McDonald, James L. Sims, and others.”
Bulger and Flemmi had become a couple of friendly ghosts.
COME summertime, John Morris decided to host a party at his home. He lived outside Boston in the quiet, tree-lined suburb of Lexington, Massachusetts. It was a bedroom community with a bedrock place in U.S. history. His house was not far from where, in 1775, the opening shots in the American Revolution had been fired; the modest, colonial-style home was located near streets named after giants in American history, like Hancock and Adams.
Morris had a small guest list in mind. John Connolly was invited; it was he, in fact, who had urged Morris to hold the gathering. Nick Gianturco was going to come, all finished now with life undercover and back safe at home with his family. Then there were the special guests: Whitey and Stevie.
Morris’s home life was increasingly troubled—his marriage was stormy—but professionally he and the others had much to celebrate. The FBI agents were on cloud nine. They’d blocked the indictment of Bulger and Flemmi; the race-fixing trial was under way with Tony Ciulla, on the witness stand, pummeling Winter; and third, the truck hijacking case, Operation Lobster, had gone to indictments on March 15, also making front-page headlines. It was as if they’d hit a trifecta—win, place, and show.
Back at the office, Morris and Connolly had made certain to take care of some FBI paperwork. Morris sent a teletype to FBI headquarters on May 4 saying that Bulger was “being reopened inasmuch as source is now in a position to provide information of value.” The storm had passed. Seven days later Morris and Connolly added a second teletype that more fully explained the basis for the move. Bulger, wrote Morris, had not been closed in January
due to unproductivity, but due to the fact that he became a principal subject of a Bureau investigation.
In view of source’s status at that time, a decision was made to discontinue contacts with him until the investigative matter was resolved. Since then, the matter has been resolved resulting in numerous indictments.
Most important, the two Boston agents reported, Bulger had not been charged. “No prosecutable case developed against source in the opinion of Strike Force attorney handling matter. Accordingly, source was recontacted and continues to be willing to furnish information.” It didn’t matter to the agents that this information was false, and Morris made no mention to FBI headquarters of their backroom lobbying.
“Boston,” concluded Morris, “is of the opinion that this source is one of the most highly placed and valuable sources of this division.” Morris said later he’d puffed up Bulger at Connolly’s urging, recommending he be elevated back to his top echelon rank. Morris didn’t care what Bulger was called so long as he gave the FBI information it wanted. But Connolly cared. “Top echelon informant is a credit to him,” Morris noted. “In other words, that’s reflective of his work and the caliber of informants that he’s operating.” The label was mostly about an agent’s ego and had no bearing on how the office worked with Bulger. “It made no difference whatsoever,” said Morris about the ranking of FBI rats. But Bulger was indeed quickly restored to his top echelon status.
These were the sorts of developments the group could toast. Moreover, Bulger would soon turn fifty, on September 3. Morris turned his attention to deciding what food to serve, what wine would be on hand. He was a wine connoisseur, an interest Bulger and Flemmi had noticed. They would bring bottles for John to subsequent soirees, and they eventually nicknamed the FBI supervisor “Vino.”
Together, as a group, they could consider what a new good thing they had. Look at Nickie Gianturco. He might have been dead if not for the alliance Connolly had made with Bulger and Flemmi. In a sense, as a result of the race-fixing case, they had even enlarged the family to now include prosecutor O’Sullivan. Connolly said later that O’Sullivan’s intervention provided a new layer of protective veneer to the FBI’s deal. It was as if the prosecutor had sanctified the notion that Bulger and Flemmi were protected from prosecution. “The first few years I met with Flemmi and Bulger there was no understanding. The understanding didn’t come until the race-fix case, and the conversations that I had with Jerry O’Sullivan,” Connolly later said.
Even though no government document would ever be drafted that reflected any kind of immunity or no-prosecution clause to the deal the FBI had with the two informants, that didn’t trouble Connolly. To him it was all in the secret talk, the wink, the body language, and, most important to this agent from South Boston, his word. To make the alliance seem more palatable, the FBI began portraying Bulger and Flemmi as a couple of leftovers from the now devastated Winter Hill gang. As John Connolly always liked to say, they were merely a “gang of two.”
If only it were true. Bulger and Flemmi were hardly passive, sitting idly by. Instead, beyond the FBI’s radar, they’d spent the better part of 1979 taking care of business, masters of their own destinies. Bulger especially was proving to be the grand puppeteer, pulling the strings of both the FBI and La Cosa Nostra.
Early in the year they’d had a sit-down with Gennaro Angiulo in a room at the Holiday Inn in Somerville. The Mafia underboss wanted to discuss the more than $200,000 debt that Bulger and Flemmi had inherited from their fallen boss, Howie Winter. Angiulo wanted to talk interest rates and timetables for repayment. Bulger put him off, pleading hard times given the race-fixing probe, and he and Flemmi even managed to leave the meeting with $50,000 in cold cash that Angiulo gave them as a token of goodwill. Bulger and Flemmi might well have snickered afterward; they knew the FBI had begun poking around surreptitiously in the North End, looking for a way in. In fact, a few months later they overheard that Angiulo had erupted angrily after discovering two surveillance cameras aimed right at his 98 Prince Street office. Bulger knew the cameras belonged to the FBI, and he knew that if the FBI eventually made good on its promise to bring down Angiulo, he and Flemmi were never going to lose any sleep over the repayment of the $200,000 debt. Bulger eagerly told Connolly about Angiulo’s temper tantrum.
In more ways than one, the underworld picture was in flux. By the time of Morris’s party Howie Winter was out of the way. Bulger and Flemmi were no longer anybody’s sidekicks, and Bulger was making his move upward as a crime boss in his own right. He and Flemmi were moving out of Winter Hill and relocating into new quarters in Boston not far from the Boston Garden, the aged home of the Celtics and Bruins. But by far the biggest change was a whole new approach that he and Flemmi had devised to conduct their underworld affairs. Gennaro Angiulo might enjoy the day-to-day of running an illegal gambling business. Howie Winter too. But Bulger and Flemmi had come up with a new idea that would not only take them out of the daily grind but also provide them with added insulation from law enforcement. They decided to strong-arm gamblers and loan sharks into paying them for the right to do business. They would extort from them a user’s fee. Like a credit card company, they would take a percentage out of every transaction, reinventing themselves as chief operating officers, as collectors of cash payments. It was a brilliant strategy that would soon have Gennaro Angiulo, with an unmistakable trace of admiration, calling the pair the new “millionaires.”
In 1979 Bulger and Flemmi began making the rounds to
independent bookies to explain the new deal. Bulger, for instance, cornered one of the smartest sports-betting bookies in the region, Burton L. “Chico” Krantz. The two had a prior history: Bulger had once threatened to kill Krantz over an unpaid $86,000 debt Krantz had incurred to one of Howie Winter’s bookies. Krantz could offer little resistance, and soon he began paying Bulger and Flemmi $750 a month. The bookie, along with increasing numbers of other bookies, kept up those payments until well into the 1990s. By then Krantz’s monthly tribute had risen to $3,000.
These activities had not gotten completely by the FBI’s radar. Trickling in from other informants was word about the moves that Bulger and Flemmi were making on the bookmakers and loan sharks. In June, around the time of Morris’s party, another informant told the FBI that “Whitey Bulger and Steve Flemmi have been in the Chelsea area shaking down local independent bookmakers for payment.” Morris even had an informant who told him Bulger and Flemmi had expanded their collection business to include drug dealers.
But it was as if Morris and Connolly and the Boston FBI didn’t want to hear any of this. Like a drug, their ties to Bulger and Flemmi had evolved into a dependency that was hardening quickly into an addiction. Coming together for dinner at Morris’s Lexington home, they were all having too good a time. It was the end of a decade, and the ambitious agents stood atop a slope with their prized informants, a perch from which they took a long view over their city and saw the promise of FBI careers on the rise.
They saw only what they wanted to see. It was a moment built on a shared premise: the future belonged to them. They’d feed the Mafia to the beast that was FBI headquarters, the press, and even the public’s imagination. It didn’t matter how they did it, or what methods they used, so long as they got there. Glory awaited.