Top Hoodlum

by Anthony M. DeStefano

  “The reason we got to organize is that we got to put ourselves on a business basis,” said Costello. “That is what we are in, a business. We got to stop the kind of things that’s going on in Chicago right now.

  “You guys are shooting at each in the street and innocent people are getting killed and they’re starting to squawk,” Costello continued. “If they squawk loud enough the feds get off their tails and start cracking down. And you know what that means. We got a thing where millions of dollars can be made just in getting people what they want. When I was on trial three years ago on the whiskey deal, all the people were behind me. And I was able to stay in business.”

  As he told it to Wolf years later, Costello said he insisted to his gangster pals that if they make people afraid of them then the government would start cracking down. It was a very brassy move by Costello, considering Capone’s volatility and that the boss of Chicago must have felt singled out. But Costello had a plan, which he wanted Capone to consider in order to stop the bloodshed.

  Torrio then, nudged by Costello at their end of the table, got up and told Capone the plan: He had to go to jail. Capone was perplexed, said Wolf.

  “To jail. We have to smooth this thing over right now,” said Torrio, according to Wolf. “You have to go back to Chicago after that Valentine Day shoot-out and O’Banion’s boys will be at war, the heat will go higher. We think you need a vacation, Al.”

  Capone thought Torrio was joking. But Costello emphasized that nobody was kidding around.

  “This ain’t a joke, Al,” said Costello, as Wolf recalled. “We got too much invested for you to ruin the gravy train. Make it easy on yourself. Think of a way. But we need you off at ‘college’ until things cool down.”

  Capone was angry. But he knew that the entire group was arrayed against him. He left the meeting. Later, he told police that he just effected a truce agreement which, as one newspaper account portrayed it was to “restore peace and cooperation in the ranks of Chicago’s beer syndicates.” He and Bugs Moran, the Northside Chicago gang leader who lost seven men in the St. Valentine’s Day Massacre, had signed “on the dotted line” to make peace.

  But just hours after the conference ended, Capone managed to do what Torrio and Costello asked him to do—he got arrested. The bust was for carrying a concealed deadly weapon as Capone was entering a theatre in Philadelphia early in the evening of May 16. Capone made no secret of his presence in the city and as he and Frank Cline exited the cinema, they were approached by police detectives. Things couldn’t have gone down easier.

  “Here’s my gun,” Capone said as he handed off a blunt-nosed .38 caliber pistol. Cline did the same, and both men were taken to appear before a magistrate, who set bail at $35,000. The next morning, May 17, Capone and Cline appeared in court and given time to confer with their lawyers. At noon, instead of going to trial, Capone and Cline pled guilty to the weapons charges.

  Before hearing his sentence, Capone bantered with newspapermen and spectators in the courtroom, pointing out that the big diamond ring he was wearing was 11.5 carats and worth about $50,000. The boss of Chicago crime seemed to be in a good mood.

  Earlier, Capone had spoken with a police official and told him about his career in the rackets and how disillusioned he had become of the gangster life. Capone even said he was “retired” and living off his money.

  “I went into the racket in Chicago four and a half years ago. During the last two years I’ve been trying to get out,” said Capone. “But once you are in the racket you’re always in it, it seems. The parasites trail you, begging you for favors and for money.”

  “I have a wife and an 11-year-old boy I idolize, and a beautiful home at Palm Island, Florida,” Capone continued. “If I could go there and forget it all, I would be the happiest man in the world. I want peace and I am willing to live and let live. I’m tired of gang murders and gang shootings.”

  In fact, Capone confirmed for the police that the reason he was in Atlantic City was to forge a peace pact between himself and a warring faction led by Moran, although he apparently didn’t name all the other gangsters like Costello and Torrio who forced him to bury the hatchet. Capone contended he had come out all right in the bloodshed but that the constant fighting was “an awful life to live.”

  “You fear death every moment and worse than death, you fear the rats of the game, who would run around and tell the police if you didn’t constantly satisfy them with money and favors,” added Capone.

  Capone and Cline were each sentenced to one year in prison, the maximum term. Capone’s lawyer said after sentencing that any report that his client had invited arrest to protect himself was false. Nevertheless, back in Chicago the word on the street was that the gangster world was thanking Philadelphia and was relieved that Capone and Moran had come to an agreement. There were also rumors that Johnny Torrio, the elderly man who Capone had once chased from Chicago, would assume leadership of some of the city’s mob.

  The deal Costello had helped to broker would stabilize things in Chicago for a while, at least for as long as Capone was in jail. Back in New York, the situation was still volatile. Masseria, the man to whom Costello owed some allegiance but who wasn’t invited to the Atlantic City meeting, was feeling threatened in his position and was preparing to lash out against his growing list of enemies.

  Masseria had a significant group of Italian men under his command: Luciano, Costello, Moretti, Genovese and Adonis. Also nominally in alliance with Masseria was Capone, although through May 1930 he was cooling his heels and doing gardening in a Pennsylvania jail for the weapons charge. The bootlegging money was what drove the group, and there was still plenty of it coming into the coffers.

  Masseria’s men were largely immigrants from the area around Naples and parts of the southern Italian mainland. Another faction, composed mainly of Sicilians was led by Salvatore Maranzano and included men such as Thomas Lucchese, Joseph Bonanno, Joseph Profaci, Joseph Valachi and others, many of whom hailed from the area around Castellammare del Golfo, a key port city in Sicily. Maranzano himself looked like a banker, unlike the stout Masseria who looked more like a laborer. From his Brooklyn base, Maranzano and his men ran their own bootlegging operation.

  Frank Costello and Johnny Torrio may have done a real service by getting the Capone situation all straightened out. But back in New York, by 1930 the Neapolitans under Masseria and the Castellammarese with Maranzano were approaching the boiling point. Masseria struck first against one of his own when he ordered the slaying on February 26, 1930, of Gaetano “Tommy” Reina, an ice distributor in the Bronx. Like Frankie Yale, Reina had run an ice-distributing cartel. A cartel is a form of restraint of trade that carved up the territory for ice distribution and kept prices high. Masseria apparently wanted Reina to give up some of his profits. Reina resisted and was assassinated.

  The murder of Reina, according to fabled Mafia informant Joseph Valachi, who was married to the slain man’s daughter, caused some of his men to shift allegiance to Maranzano, who was plotting major moves against Masseria. It was a time when the factions “went to the mattress,” hiding out in secret locations, armed and wary about where they went. The killings continued.

  As he later confided to Wolf, Costello thought the war started by Masseria was pointless. The dangers forced him to stay away from his office in Manhattan, which was still running his bootlegging operations. Luciano was kind of a favorite son of Masseria, and since Costello was close to Luciano he had a kind of favored status as well. But in the volatile world of the mob you could be a favorite one moment and then on the outs the next. Masseria was on a course of war, and the situation was very unstable. As Valachi remembered and told Peter Maas in The Valachi Papers, the fighting was taking its toll on Masseria.

  “The tide of battle swelled in Maranzano’s favor. There had been so many defections to him, like that of Carlo Gambino, that his forces actually outnumbered the enemy,” said Maas. “Moreover, for those who still sided with Masseria the
re was an increasing economic problem because of the struggle. Their well-fixed rackets were rapidly becoming a shambles.”

  Valachi may have overstated the financial impact on Masseria allies like Costello and Luciano from the fighting. But both Masseria allies saw that the situation was becoming more untenable. In a meeting on Broome Street in lower Manhattan, Costello told Wolf that he, Luciano, and Genovese decided that Masseria must be killed. Luciano came up with a plan.

  Coney Island was a premier restaurant and fun location in the city, and on April 15, 1931, both Masseria and Luciano traveled there for lunch. Luciano suggested the Nuova Villa Tammora, a family-run place run by Gerardo Scarpato at 2715 West Fifteenth Street, a few blocks north of Surf Avenue. A total of four people were at Masseria’s table at one point, and Scarpato’s mother-in-law went out to get some fish to bring back for the luncheon.

  The meal lasted until about 3:30 P.M. and by that time most of the other customers had left. Luciano suggested a game of cards to Masseria, and they started playing. At some point Luciano excused himself to go to the bathroom. When he left the room, two or three men—accounts vary as to how many—suddenly entered the Nuova Villa Tammora and started shooting at Masseria. About two dozen shots were fired, and five found their mark in Masseria’s plump body. He had no chance and was dead at the scene.

  Luciano exited the bathroom and called police and when the cops arrived they found Masseria sprawled on the floor. A news photograph showed a playing card in his dead hand but there was speculation that the shot was staged. In any case, Luciano bemoaned his boss’s death to the officers, saying he couldn’t figure out who would do such a thing. The gunmen had got away unscathed in a waiting car and were never caught. Various accounts later alleged the gunmen to be Joseph Stracci and Frank Livorsi, with Ciro Terranova, the old “Artichoke King” from the Morello gang, as the driver of the getaway car. Frank Costello may have known about what was going to happen but he was nowhere in the vicinity.

  The immediate result of the killing of Masseria was that Maranzano was emboldened to be the top boss among the Italian gangsters in the city. Still, he had to be assured that others like Luciano and his money-making allies like Costello backed him. To cement his position, Maranzano called a number of meetings of gangsters, including one in Chicago. But the big one was in the Bronx, at a social hall on Washington Avenue in which many sent money to Maranzano as tribute. Valachi said that $9,000 came from Capone and $6,000 from Luciano, for a total of $115,000. There was never any mention of cash from Costello, but it is likely that he followed Luciano’s lead and gave something.

  The mob structure that emerged from the meeting was the Five Family organization, which has survived to this day in New York City. Costello’s friend Luciano was given control of Masseria’s old family. The other bosses were old Maranzano supporters: Tom Gagliano, Joseph Profaci, Joseph Bonanno, and Vincent Mangano. As far as Valachi could remember, there were only three underbosses who stood out: Luciano had Vito Genovese, Mangano had Albert Anastasia, and Thomas Lucchese was the right hand of Gagliano.

  But while Maranzano said that things were going to be organized and that he was going to be the supreme boss “Boss of All Bosses” among the Italians, there was already trouble brewing. In a move spawned by Maranzano’s paranoia, he wanted to kill many of the old Masseria allies: Costello, Luciano, Capone, Genovese, and Dutch Schultz. It was supposed to be a long list and apparently it wasn’t a very well-kept secret.

  Costello never liked Maranzano. He saw through his well-dressed façade and told Wolf that “a greaseball is a greaseball.” Maranzano seemed to have a Julius Caesar complex and his plan to kill off Costello, Luciano, and the others was enough justification for them to take action to defend themselves. Since Luciano and Costello had close ties through bootlegging with the Jewish groups of Meyer Lansky and Longey Zwillman, they were able to draft them into helping with a preemptive strike against Maranzano.

  On September 10, 1931, at about 2:00 P.M. a group of four men assembled by Lansky and dressed as cops entered the offices of Maranzano on the ninth floor of 230 Park Avenue. Maranzano heard the commotion and when he came out to investigate he saw the menacing armed team, which included Lansky men Red Levine and Bo Weinberg. Maranzano retreated to his office where he was stabbed and then shot four times in the head and chest. The gunmen fled and as they did so passed coming up the stairs a group led by Vincent Coll, a hired killer who was supposed to ambush Luciano and Genovese at a bogus meeting Maranzano called so that he could ambush the pair. Told to “beat it, the cops are on their way,” Coll did what he was told and fled.

  There were never any arrests made in the slaying of Maranzano. Luciano then emerged as the major Mafia leader in New York, having engineered two stunning coup d’etats by killing off two bosses. He kept the basic five-family structure and added positions of consiglieri, advisors to give sage advice to the bosses, and made sure the bosses or their designees would meet in a commission to settle disputes among the families and develop policies. Organized and with the bad blood from the Castellammarese war in the past, Luciano and the other bosses could concentrate on making money.

  Costello was the man who could show everyone how to make money and to do it peacefully. His modus operandi was to work out disputes and come to accommodations, a method Luciano preferred. Costello was the diplomat, a mob minister without portfolio who didn’t head any crime family but could get things done. He was the political animal who strived to build consensus so that everyone could make money. It would be an approach Costello would take time and time again as he cemented business deals—legal or illegal—all around the country. As his friend and attorney George Wolf would later say: “It was during this period that Frank earned the title ‘Prime Minister of the Underworld,’ a role which he liked and for which he was ideally suited. Let others become the boss of bosses. Frank would show the boys how to make money and how to stay out of jail, the two most important factors of underworld life, next to sheer survival.”

  CHAPTER TEN

  “THE MOST MENACING EVIL”

  AS THE 1930S GOT UNDERWAY, Frank Costello had been very lucky. He had dodged the bullet in the federal bootlegging case. Since he wasn’t a shooter or a guy who needed to resort to violence, he survived the Castellammarese War by having the good fortune of having his friend Luciano come out on top. Costello was making money with bootlegging and started to plow his profits into legitimate businesses. There was a realty company in the Bronx, which built homes, and the Frank Costello Auto Company, also in the Bronx. Teaming up with old partner Harry Horowitz, the pair started a company that marketed chocolate-covered ice cream pops. Costello also put his money with other partners in a night club known as Club Rendezvous.

  It made perfect sense for Costello to diversify because as the decade progressed it was becoming increasingly clear that Prohibition, the unwitting cash cow of the Mafia and organized crime generally, wasn’t going to be around forever. Sentiment was growing that the dry laws should be abolished, and if that happened booze would again be legal and the mob would have to look for another way of making money.

  With thousands of speakeasies in a place like New York City, clandestine breweries were springing up and rum runners were having a field day around the country. The public knew that Prohibition was a bust. But politicians need a commission or study group to show them the obvious, and in 1929 President Herbert Hoover established the Wickersham Commission to determine how Prohibition was impacting the country, particularly the criminal justice system. Chaired by former U.S. Attorney General George W. Wickersham, the eleven-person panel studied the situation for two years. In 1931, the panel issued a report the findings of which were certainly anticipated by Costello and the rest of the Mafia bootleggers, who could have saved the commission a lot of the time it spent trying to uncover the obvious.

  The report concluded that the public, including some politicians and labor leaders, viewed Prohibition with disdain. Enforcement of th
e Volstead Act was next to impossible, with widespread corruption in law enforcement at every level. The commissioner still concluded that Prohibition should continue. But one member of the panel, Monte Lehman, decided in his own written opinion that the situation was hopeless: do away with the Eighteenth Amendment he said.

  With the election of President Franklin Delano Roosevelt in 1932—something Costello helped bring about and will be dealt with a little later in this book—the anti-Prohibition sentiment gained traction. Soon after his election, Roosevelt revised the Volstead Act to allow the production of beer with 4 percent alcohol by volume, as well as certain wines. Prohibition was hemorrhaging to death from the proverbial thousand cuts. Then on December 5, 1933, with Utah ratifying the Twenty-first Amendment, which repealed the Eighteenth Amendment, Prohibition ended on the federal level.

  The end of the national experiment in temperance was a time of great rejoicing in New York City. But among the gangsters like Costello, it was also a time where they knew they had to start looking at other ways of making money. Bootlegging had made them rich beyond their earliest dreams. Costello would likely have been mired in a life of street extortion, theft, and scams had he not started moving liquor. But to sustain that income flow, he and people like Luciano, Genovese, veteran gangster Owney Madden, Schultz, and Lansky needed to look to other rackets—or go straight, which Costello was trying to do with other businesses.

  For Costello, the new frontier was a variation on the old punchboard business he had worked on with Horowitz in the early 1920s. By 1930, the new device Costello turned to was the slot machine, the proverbial one-armed bandit where a patron inserted a coin, or a metal slug bought from a vendor, and tried his or her luck. Unlike what the public would see later in Las Vegas and other gambling meccas where somebody could win money, the patron would either be unlucky and throw away money or receive a token prize of nominal worth. Costello’s idea was to have the machines dispense candy mints or slugs that could be redeemed for money from the store owner where the machine was situated.