The Outfit

by Gus Russo

  Another movie house owner, Nathaniel Barger, recalled to an IRS investigator how he was coerced into paying Bioff approximately $50,000 over three years: ’After my theater had been opened for approximately two months, Bioff walked into the office and said, “Well, partner, how is business and how do we stand?” There seemed nothing I could do - either close up the theater and go out of the business I had been in all my life or bow to Mr. Bioff. So, later, I started paying Mr. Bioff half my profits. When there were losses in the theater, he did not share any loss, nor did he put in any money at any time.’

  Bioff later recalled, “Barger raved and said it wasn’t fair, but I told him that was the way it had to be if he wanted to stay in business. He went along.” When Barger was forced to divest himself of a burlesque house to offset his loss in profit, Bioff helped himself to half of the sales price. One harassed theater owner lamented, “We are being unmercifully persecuted by a notorious method of racketeering by a gang of inhuman scoundrels. Our theaters are being stench-bombed, tear-gas-bombed. Three have been burned. They are broken into at night and motion picture machines, seats, carpets, draperies, are destroyed.” The Outfit made it clear that their newest business plan was not to be denied. One by one, theater owners in Illinois and surrounding states caved in to the gangs’ will.

  In the near term, the Outfit was forced to proceed without the daily counsel of its Einstein: In October, Curly Humphreys surrendered himself to the authorities and began serving a prison term in Leavenworth. He had been indicted for tax evasion on a kidnapping ransom payoff he’d received, but had never been indicted on the kidnapping itself. According to Curly’s daughter, her father uttered an upbeat farewell as he packed for the big house: “While I’m down there, I intend to study English and maybe a little geometry.” However, many believe that he actually focused on business math, for when he was released fifteen months later, he helped design the Outfit’s strategy for ambitious business takeovers on a national level. Many government officials, as well as Humphreys experts in the fourth estate, are certain that the Brainy Hood was in constant contact with his crew during his stay in “college.” Royston Webb, a Welsh scholar who conducted a five-year doctoral study of Humphreys, noted recently, “There is no doubt that Humphreys, much as Capone had done years before, orchestrated the key decisions of the Hollywood takeover from behind bars. It was also to his great fortune that he was unavailable for the initial face-to-face meetings with Bioff and Browne. It gave him deniability in the future.” It also rendered Paul Ricca, Johnny Rosselli, and the others vulnerable, should the caper be unraveled by authorities.

  After giving Curly a rousing send-off, the Outfit mulled over where to install Nick Circella in the union hierarchy. At the time, Nitti was worried that Maloy would succumb to IRS pressure, and the Outfit’s titular head was not anxious to go back to the slammer. In a convenient turn of events, the solution to the Maloy problem simultaneously answered the question of Circella’s future. On Christmas Eve, 1934, the Outfit met and pronounced a death sentence on Maloy. At noon on February 4, 1935, as Maloy drove on Lake Shore Drive, along the now deserted “Century of Progress” grounds, the union boss received two fatal shotgun blasts from two gunmen in another vehicle. Chicago FBI agent Bill Roemer strongly asserted that the hit men were Joe Accardo and a young up-and-comer named Gus Alex.

  One of Maloy’s pallbearers was none other than George Browne, who, after the service, headed straight to the offices of Maloy’s Local 110. Not long after his coup, Browne named Nick Circella to Maloy’s vacant post. As with so many other figures of Chicago infamy, Tommy Maloy was given one of the largest funerals in the city’s history, marked by a three-hundred- car procession. In July, another obstacle was unceremoniously removed from the Outfit’s road to the promised land. Three Gun Louis Alterie, the stubborn holdout president of the Theater Janitors’ Union, and the executioner of the horse that had thrown Dean O’Banion’s partner years earlier, was shot to death. Still another unsolved Chicago gangland rubout.

  Another Battlefront

  With the Browne and Bioff situation now operating under its own inertia, the emboldened Outfit decided to spread its wings. As noted, one of the gang’s initial goals was the infiltration of the bartenders’ unions. Even with his union mastermind Curly Humphreys in jail, Nitti felt sufficiently confident for the assault and decided the time was right to make the move. The hoods’ chosen point of attack, George B. McLane, was the business agent for Local 278, the Chicago Bartenders and Beverage Dispensers Union. Although the local comprised only fifty-three hundred members, it was affiliated with fifteen other similar guilds with a combined thirty thousand members. The Outfit planned to take them all.

  McLane’s nightmare began, he later testified, in the spring of 1935, when an Outfit union slugger in Curly’s crew named Danny Stanton telephoned him at his union headquarters. McLane recalled, “I knew Stanton was a slugger for Red Barker and Murray Humphreys. He said he wanted five hundred dollars to go to the Kentucky Derby. He said he would send over two men for it. I told him I had no right to give out union funds.” Stanton ignored McLane’s rebuttal, saying, “I’ll have two men over in a half hour to to pick up the money.” When the thugs showed up, McLane turned them away, which prompted an angry Stanton to call again. “You son of a bitch,” Stanton yelled. “We will get the money and take the union over.” Within days, McLane was summoned to Nitti’s office at the LaSalle Hotel. Nitti demanded that McLane install an Outfit member in his union’s hierarchy. The courageous (or foolish) McLane refused Nitti’s demand. Nitti exploded. “We have taken over other unions,” he blustered. “You will put him in or get shot in the head.” Within days, McLane was brought to Nitti again, this time at the Outfit’s private third-floor dining room at the Capri Restaurant. Once inside, McLane was confronted by a star chamber that included Nitti, Ricca, Campagna, and partners of the imprisoned Curly, Fred Evans and Sam “Golf Bag” Hunt. Again Nitti threatened, “How would your old lady look in black?” This time McLane softened, saying he’d see what he could do.

  When months went by with no action, McLane was back at the Capri before an Outfit that was losing its patience. McLane explained to Nitti that he had asked his board if they would accept an assistant named by Nitti, and they had turned down the suggestion. Nitti demanded to know the names of the opposing board members. This time he told McLane, “This is your last chance. Put our man in or wind up in an alley.”

  “I went back to the union and told them about the threats to me and to them - what it meant,” McLane later testified. “They had no alternative. They agreed to putting a man on.” In short time they were introduced to one Louis Romano. “His salary will be seventy-five dollars a week out of the union treasury,” Nitti ordered McLane. “You’ll have to make provisions to raise it later. Romano will see that all the Outfit places join the union.” The Outfit clearly had its sights fixed on the thirty thousand members of the affiliated unions. For the next five years, the gang, via Romano, called the shots in the bartenders’ union, while collecting $20,000 per month in dues. According to McLane, Romano admitted that he was whisking the money off “to the boys in Cicero.” McLane said that over the years, Johnny Patton, “the boy mayor of Burnham” and Outfit racetrack maven, attended the Outfit’s board meetings. Patton gave reports about which brands of booze were being sold at the gang’s dog tracks. “Patton said the bartenders were not pushing the right stuff,” McLane said. The brands manufactured by the Outfit, especially Fort Dearborn whiskey, were “the right stuff.”1 “Tell those bartenders that if they don’t push our stuff, they will get their legs broken.” The Outfit and McLane maintained the status quo of the bartenders’ union until Curly was released from prison to oversee its expansion. Until then, the gang profited (approximately $3-5 million per year) from their liquor sales and the monthly dues extracted from the union’s five thousand members.

  Meanwhile, the movie scam began to get serious. Browne and Bioff were soon ordered to New Y
ork, where they were brought further into the loop of the New York-Chicago national crime consortium. As it was learned in subsequent testimony, the duo, accompanied by Paul Ricca and Nick Circella, was directed to Tommy Lucchese’s Casino de Paree restaurant in Manhattan, where they were joined by gang leaders from other major cities. Among the attendees were Rosselli’s partner Jack Dragna from Los Angeles and New York associates Lucky Luciano and Frank Costello. After the meeting, Ricca instructed Bioff that he would soon be working both coasts, ferrying between Manhattan and Hollywood. “Feel free to call on Charlie Lucky or on Frank Costello if you find any difficulties here in our work,” instructed Ricca. “If you need anything, be free to call on them, because they are our people.” Torrio’s dream of a national crime consortium had come to fruition.

  Soon Browne, accompanied by Bioff and Circella, flexed his muscles. On July 15, Browne called an IATSE strike in New York against the Loew’s and RKO theater chains. It was his way of introducing himself to the moguls of the movie business. By noon, General Leslie Thompson, chairman of RKO, became the first victim of the grand scheme. After a period of tense negotiating, Thompson handed over $50,000 for strike insurance, adding another $37,000 the next morning. “A good morning’s work,” Bioff said, laughing.

  Next, the trio paid a visit to Nick Schenck, president of Loew’s. Willie Bioff and the Schenck brothers shared similar backgrounds, being Russian-born Jews who knew the value of mixing a criminal and honorable ethos simultaneously. Joe Schenck, Nick’s brother and L.A. based partner, was another known to walk through life with one foot in the upperworld and one in the underworld. On one hand, his generous donations to Roosevelt gave him carte blanche with the White House, especially with Jim Farley, FDR’s New Deal director. In addition, Schenck’s cozy relationship with the California state legislature, again thanks to donations, saw him well treated on the local level. “Whatever Joe Schenck wanted, I got for him,” said the de facto boss of the state legislature, Arthur Samish. On the other hand, Schenck was well known to be in bed with the famous gangsters of the era. As has already been noted, Schenck had been a close friend of Johnny Rosselli’s for years. But Johnny was just one of Schenck’s many hoodlum acquaintances. “He came to know every element of the gangster world, from the lowest ranks on up to the top echelons,” recalled Schenck’s screenwriter friend Anita Loos.

  Johnny Rosselli, meanwhile, continued to ingratiate himself with Hollywood’s movers and shakers, performing favors for them that only a man with his resume could undertake. In 1935, Johnny was given a delicate task by Will Hays, who now ran the AMPP. It had long since become customary for thugs to attempt to shake down Hollywood’s glitterati through blackmail. Now a case had arisen where some freelance extortionists had put their hands on a pornographic film, one of several made by a starving nineteen-year-old actress who was now one of MGM’s hottest upcoming stars. Her name was Joan Crawford. Although the blackmailers demanded $100,000 to turn over the negative, the studio would go no higher than $25,000. Rosselli was asked to be the “nego­tiator.” Now the freelance hoods were in way over their heads. Rosselli met with them and calmly explained who he was and whom he really worked for, the Outfit. Unless the print was handed over, Rosselli told them, their corpses would make those of the St. Valentine’s Day massacre victims seem unscathed. Sooner than they could say “Chicago type­writer,” the amateurs handed over the print, never to be heard from again. And Johnny Rosselli pocketed the $25,000.

  In New York, Joe Schenck’s brother Nick was now also about to cut a deal with the devil. The producers readily agreed to pay the gangsters $150,000 for a seven-year no-strike contract, two thirds of which went to the Outfit. But it was anything but simple extortion. Not only would producers profit from a no-strike, low-wage deal, but it gave them a buttress against the National Labor Relations Act (the Wagner Act), passed just weeks earlier on July 5, 1935. The act was a pro-worker bill that codified their rights to collective bargaining. Just as the movie industry was beginning to come out of its Depression-era financial doldrums, the Wagner Act threatened to derail its progress. Schenck and his peers also feared the recent establishment of the Congress of Industrial Organizations, or CIO, by John Lewis and Sidney Hillman. Worried that new labor organizations would demand profit-sharing, producers were ready for a savior in the form of the Outfit. Thus the deal also held that Browne would reduce worker wage-increase demands by two thirds.

  But Schenck and friends feared that somebody might get wise if the deal was arrived at too quickly, so the Outfit offered the skittish producers an ingenious way out: In typical Hollywood fashion, it decided to “put on a show.” Browne would call a phony strike, forcing the moguls to “capi­tulate” and grant IATSE total control over the studio’s workforce. The producers would grant IATSE the first “closed shop” agreement in the history of the entertainment business. In return, the Outfit-backed Browne and Bioff would suppress any worker calls for wage increases.

  The sham walkout was triggered in late November 1935, when a non-IATSE Paramount film crew arrived in New York to film aerial footage for the movie Thirteen Hours by Air. On Saturday night, November 30, with date-night crowds filling movie theaters, a seemingly irate Browne ordered his IATSE projectionists to walk out of more than five hundred Paramount theaters from Chicago to New York. According to later testimony by Bioff, the double-dealing allies then staged an “emergency” closed-door meeting at the Union League Club in New York to settle the strike. Since the deal had been cut in advance, one can only wonder what went on behind the closed doors - perhaps a discussion of the most recent New York Giants game. When the partners emerged from their confab, it was announced that IATSE would be granted a closed shop, 100 percent labor jurisdiction on the studios’ lots. This of course presupposed that the producers had legal rights to make such a pronouncement; they did not. In later testimony involving the estate of Frank Nitti, the studio executives sheepishly admitted that their labor-racketeering partnership with the Outfit had saved the studios approximately $15 million.

  Variety and the rest of the national press were completely hoodwinked by the charade. No one suspected that greedy producers had formed an unholy alliance with embezzling union leaders willing to sell out their own membership in exchange for bribes. Of course, the Outfit’s backstabbing of the workers was only a temporary stepping-stone to the its real goal: double-crossing the conniving producers once the gangsters were granted complete control of the studio shops.

  December 1935 was a festive month for the Outfit, starting with the release from prison of its accounting wizard, Jake Guzik. According to Outfit tradition, a lavish “coming out” party was thrown whenever one of its members was sprung from the big house, and the venerated Guzik undoubtedly received the full treatment at one of the gang’s favorite restaurants. Within days, the Outfit’s leadership, including Rosselli from Los Angeles, headed to the Sunshine State where their itinerary included both business and pleasure. The business involved the annual IATSE executive board meeting at the Fleetwood Hotel in Miami. With the Outfit brain trust by his side, Browne introduced the IATSE executives to their new bosses, adding that Bioff would now head the Hollywood local. After leaving the grim IATSE officials to contemplate their new lot, the Outfitters repaired to Big Al’s Palm Island estate, where Ralph Capone hosted his Chicago pals. George Browne, the legendary quaffer, was stunned by the Outfit’s work ethic, even here in Florida sitting by Al Capone’s pool. He later remarked to Bioff, “These guys don’t know how to relax. They just work all the time, day and night, and never take time to spend their money.” The frustrated Browne implored Nitti, “Jeez, Frank, we just got here. I haven’t had a dozen bottles of beer today. Nobody has been in the pool. Nobody went over to look at Miami Beach. Can’t I get a little bit of this sun?” Nitti was stunned by Browne’s backward priorities. Nitti sternly informed Bioff that Rosselli would be his overseer, and that he must also find a way to put Rosselli on the union payroll. He then said, “OK. Go ah
ead. Have a night on the town.” But it would soon be back to work, with assaults to be mounted on movie business fronts in New York and Hollywood.

  The new year, 1936, brought more good news for the Outfit. On January 8, its legal and political shaman Curly Flumphreys was released from Leavenworth, mandating yet another coming-out gala. Almost before recovering from his welcome-home party, Humphreys got back to work, quickly taking over the Individual Towel Company, which had a $45,000 annual contract with the Chicago Board of Education, and becoming an executive with an entity known as the Mid West Oil Corporation. With his brother, who went by the name Jack Wright, Humphreys seized control of a number of local movie houses, where the duo were known as the Wright Brothers.

  With Curly and Jake back in the game, the gang was now fully armed for its assault on the entertainment industry. Simultaneously, Willie Bioff and his wife, the former Laurie Nelson, relocated to Hollywood, where their cruise ship was met on arrival by Rosselli and Browne. In short time the scheming trio tended to the key first item on their agenda: informing the local IATSE rank and file that the Outfit was now in charge. Bioff muscled the holdout unions into joining IATSE. Having been granted the franchise by the studio bosses, Bioff presented the twelve thousand studio technicians with both the carrot and the stick: sign on with IATSE and get a 10 percent raise; otherwise, get no work at all. Writer George Dunne, who closely studied Bioff’s time in Hollywood, described one pivotal meeting at the union’s headquarters: “Bioff walked into a meeting of the union officers on Santa Monica Boulevard with these two hit men from Chicago, one on either side. Each one had a violin case under his arm, just like they do in the movies. Bioff stood up and said, ’We’re taking over the union - the international is,’ and they dismissed the local officers right there.”