The Outfit

by Gus Russo

  Robert C. Greenlease, Bobby’s seventy-one-year-old father, contacted the president of a local bank, Arthur Eisenhower, the brother of the president of the United States, Dwight D. Eisenhower. Before releasing the funds to Mr. Greenlease, Eisenhower had his staff make note of the serial numbers on each and every bill. After the money was delivered, the kidnappers had the bad luck of taking a St. Louis cab from a fleet owned by Joe Costello, a local gangster in the Wortman sphere. Costello had strong ties to Chicago and was married to a Chicago girl. The cabbie, John Oliver Hager, took the kidnappers to a motel run by John Carr, another Wort-man-connected hood. Paying with fistfuls of cash, Hall and Heady hired Hager as their personal chauffeur, and he eventually ferried them to an apartment rental in St. Louis. By now, with the abduction a nationwide sensation, Hager became suspicious of the source of the lucre. After Hager informed Costello about the low-rent pair with bags of money, Costello quickly tipped St. Louis police lieutenant Louis Shoulders, a friend of both Costello’s and Wortman’s, who years later was placed in a position of power in Wortman’s St. Louis Steamfitters Union.

  Hall and Heady were arrested on October 6 and quickly admitted their roles, telling police where to find Bobby Greenlease’s body. A mere eighty-one days later the pair were sitting side by side in the gas chamber - Heady earned the distinction of becoming the only woman ever to be so executed. All the loose ends appeared to be resolved, except for one: At the time of their arrest, Heady and Hall held only $298,000 - less than half the delivered ransom money; it was never determined what became of the missing loot. (At the time of their arrests, Hall and Heady were adamant that all the money was in their apartment when they were arrested.) Over the years, the serial numbers of the ransom bills were repeatedly printed in Midwestern newspapers, becoming a story every time one surfaced. On May 31, 1959, some of the bills turned up in a Chicago bank, the charge for a $686 money order paid to the Outfit’s gambling boss Lenny Patrick. The purchaser of the money order was Fred Evans.

  James Deakin, the longtime White House correspondent for the St. Louis Post-Dispatch, spent years researching the Greenlease case. After spending weeks with the lead FBI investigator, Phil King, and obtaining more than three thousand pages of the Bureau’s Greenlease file, Deakin wrote the book A Grave for Bobby. “The book should have been titled Blood Money,” Deakin recently said. “The only real mystery was who took the money; but the FBI was certain it went to Chicago to be ’cleaned.’”

  In 1962, the same year Dowling was executed, both Shoulders and Costello died of natural causes. Thus, Lieutenant Shoulders’ partner, Officer Elmer Dolan, concluded it was safe to tell the truth of what he knew about the missing ransom money. Dolan confessed that he had witnessed Shoulders and Costello take the money to a three-hundred-pound Chicago Teamster leg-breaker, who precisely fit the description of one Barney Baker, a close associate of both Jimmy Hoffa’s and the Chicago Outfit’s. Both Dolan and the FBI concluded that Baker was a courier, hired to transport the marked notes to Chicago, where, Dolan was told, the hot money was sold for a mere twenty cents on the dollar. In fact, of the 115 bills recovered, 58 turned up in Chicago, and many of those surfaced at the Outfit-controlled Southmoor Bank & Trust Company.

  And Elmer Dolan was not the only confessor. A prostitute named Sandy O’Day, who was hired by killer Hall after the murder, admitted to James Deakin that she went out looking for Wortman to inform him of the booty. When she did not locate Wortman, she sought out a close associate of his, whom she did not name, but possibly Dowling. Also coming forward was Mollie Baker, Barney’s divorced wife, who told Bobby Kennedy during the McClellan hearings that Barney had admitted to her that “Joe Costello got the Greenlease money.” Lastly, a former prostitute named Pat A. has admitted in recent years that she was Lieutenant Shoulders’ girl on the side, and that he confessed to her that he had made off with the Greenlease money.

  Putting the pieces together, it can be surmised that, through Shoulders-Costello, it was leaked to Wortman and Dowling that the drifters held the $600,000 treasure, which they may have taken to be an extortion payoff.5 Wortman likely concluded that only one organization was capable of laundering such a large amount of cash, the Chicago Outfit, with which he had a close association through Humphreys. Seemingly without Humphreys’ knowledge, a decision was made to launder the money in the massive Evans-Humphreys dry-cleaning empire, and possibly thereafter apply it to Evans’ looming travails with the taxman. There is also the remote possibility that Costello had a more active role in the planning of the kidnapping, which went awry when the constantly drunk Hall murdered the child.

  All the puzzle pieces will likely not be found, but it is clear that Accardo and Humphreys were not happy with what they learned of Evans’ and Dowling’s connection to the Greenlease caper. And even a long-trusted ally like Buster Wortman could not save them.

  Although there were fewer and fewer high-profile rubouts in the Outfit’s sphere, the Evans killing was not to be the last that year. Four months later, on December 16, 1959, the double-dealing Roger Touhy was similarly executed.

  The Black Book

  In Nevada, the fallout from the discovery of Frank Costello’s link to the Vegas skim continued, and in 1959 Nevada authorities attempted to place tighter controls over the burgeoning Las Vegas gambling empire. Shepherded through the legislature by Mormon politician James Gibson, the Gaming Control Act of 1959 called for the creation of a five-member Gaming Control Board, which would grant licenses and, supposedly, keep unsavory characters out of the industry. The performance of the Board would soon demonstrate, however, that its real agenda was to guarantee that the gambling treasure remained in the hands of Nevada’s WASPs, and not with swarthy outsiders, especially Italians.

  In their groundbreaking study of the history of Nevada’s gambling regulation, The Black Book, University of Nevada professors Ronald Farrell and Carole Case found that the “social control” exerted by the board was but a thinly veiled attempt to wrest control of the lucrative (albeit essentially immoral) gambling industry from those who had created it. The authors’ inspection of the licensing record was especially telling. Among those approved for licensing in the board’s first year were:

  • Frank Soskin, who had a record of illegal gambling.

  • Lincoln Fitzgerald, a functionary of the Michigan gambling syndicate, with a criminal record for tax evasion, gambling, bribery, and conspiracy to run a gambling operation.

  • Sanford Waterman, a convicted bookmaker who had worked for Meyer Lansky.

  • Morris Lansburgh, who the board was informed was fronting for “notorious hoodlums.”

  • Ike “Cheesecake” Berger, a convicted bookmaker.

  • Charles “Babe” Baron, convicted of carrying a concealed weapon, and rwice arrested for murder.

  The above Anglos had little trouble convincing the board to overlook their bootlegging, bookmaking, and possibly murderous backgrounds. However, it was a different story for the Italian entrepreneurs who wished to enter Nevada’s gaming industry. Joseph D. Pignatello, for instance, was a gourmet chef from Chicago who applied for a permit to purchase a restaurant with four slot machines on-site. Although he had no criminal record or history of gambling, Pignatello was denied the license because he had cooked for, and chauffeured for, Mooney Giancana. The board claimed to worry that the restaurant would be a front for Giancana, although one wonders what interest Giancana would have in a mere four slot machines when he was pulling down millions per month from the skim and his interest in many major casinos. (Pignatello got the last laugh when he eventually purchased Vesuvio’s Restaurant on East Desert Inn Road, an eatery that thrives to this day.)

  Soon, the board established the infamous Black Book, which listed “unsavory characters” who not only could never be licensed, but were barred for life from setting foot in a Las Vegas casino. Accompanying the list was a statement rich in contradiction. The introductory remarks noted that the list had been devised so that certai
n individuals “not discredit the gaming industry.” Discredit gambling? This is the same pastime that the board’s Mormon dogma prohibits and labels immoral. All those listed were so included without any formal notification, hearing, or appeal. And the reasons for their inclusion could be mere hearsay.6 Of the initial eleven placed in the Black Book, eight were Italian, and most had been implicated or convicted in the same sorts of crimes as the WASPs who were licensed: bootlegging and bookmaking. Included in the first eleven were the Outfit’s Mooney Giancana and Curly Humphreys. (So strong was the board’s opposition to Curly that his name was kept in the book for ten years after his death.)

  Over the years, 62 percent of those placed in the Black Book have been Italian, dwarfing the numbers of the runners-up, Anglo-Saxons (15 percent). They were judged by a board that has been 75 percent WASP, with most of those Mormons, and of the forty-seven regulators to date, only two have been Italian, despite the long history of Italian industry in Nevada that preceded the gaming industry, and which helped build the infrastructure of the state. Farrell and Case wrote, “The mere Italian sound of a man’s name generated considerable suspicion.” In a candid moment, board chairman Harry Reid once said, “The reasons for their being singled out are not important as far as we’re concerned.”

  Farrell and Case were not looking for the pattern they discovered. Nonetheless, they were forced to conclude the obvious:

  The disproportionate selection of Italians for inclusion in the Black Book raises important legal questions regarding regulatory compliance with the 1989 law stating that entry must not be based on ethnicity . . . [Those listed] have presented little threat to the industry. These observations suggest that the function of the regulatory mechanism are indeed symbolic . . . The Black Book also serves to illustrate patterns of dominance and subordination in Nevada: certain groups make the selections, and other groups are selected.

  The board’s philosophy reverberated into the executive suites of the Mormon-controlled Bank of Las Vegas, which accelerated its denials of Italian business-loan applications. (Until this time, the Bank of Las Vegas had been instrumental in financing the Sahara, the Fremont, the Sands, the Desert Inn, the Dunes, the Hacienda, the Stardust, and the Riviera.) But despite the xenophobia, the Outfit merely implemented Plan B, a strategy that gave it independence from the local banks.

  Toward the end of the year, the Chicago underworld, with new upperworld partners, made its first major loan from the First National Bank of Accardo, aka the Teamsters pension fund. On September 3, 1959, a new Las Vegas partnership recorded a deed of sale in Nevada’s Clark County Courthouse for a desert tract consisting of hundreds of acres two miles southwest of the Strip. On the same day, papers were entered in Chicago to obtain a 6 percent interest, $1-million loan from the pension fund, with Jimmy Hoffa and his fourteen trustees signing on as beneficiaries. Surprisingly, the intended investment had nothing to do with casino construction. In a move that demonstrated the underworld’s awareness of their upperworld predecessors’ transition to legitimacy, the hoods decided to build a hospital.

  The resultant hundred-bed Sunrise Hospital was more than a public relations ploy. The venture, a for-profit undertaking with built-in guarantees for the investors, would be but a prelude to an even bigger Sin City investment. The partnership chose as the hospital’s president Mervyn Adelson, the transplanted son of a Beverly Hills grocer, and currently the “clean” owner of the Strip’s Colonial House club (known locally as a magnet for Sin City hookers). Adelson had teamed up with local Realtor Irwin Molasky to build the much needed hospital, but the partnership came up short before they could realize their dream. The duo thus turned to Moe Dalitz (a boyhood friend of Hoffa’s) with his Chicago Teamster connections. “We ran out of money and had to take in some investors,” Molasky explained to the Las Vegas Review-Journal. The hospital’s success was made certain when Jimmy Hoffa decreed that the Teamster and Culinary unions’ medical fund would pay for treatment only if the rank and file were treated at Sunrise. Thus, the new hospital saw an influx of thousands of “captive” patients. Irwin Molasky called it “an early form of managed care.” The lucrative facility also boasted the Sunrise Hospital Pharmacy, Inc., the Sunrise Hospital Clinical Laboratory, and the Sunrise Hospital X-Ray Lab, the only one in the county. Adelson and Dalitz would later parlay their huge Sunrise profits, with the aid of a $27-million loan from Allen Dorfman’s fund, into the construction of the luxurious Rancho La Costa Resort, a favorite meeting spot for Joe Accardo and Dorfman, outside San Diego. Federal officials referred to La Costa as “a playground for the mob.” One FBI report alleged that La Costa “is used as a clearinghouse for bookie operations. The phones are used to receive incoming lay-off bets.” Adel-son’s share of the Las Vegas and La Costa profits were in turn utilized in 1966 to bankroll his Hollywood juggernaut, Lorimar Telepictures Productions, which produced television’s Dallas and The Waltons series. Adelson and Molasky would also make the original land bequest that endowed the University of Nevada at Las Vegas.7

  But the hospital provided one other service, and this was to the underworld. Per custom, the Dalitz-Outfit faction overlooked no ancillary devices for squeezing profits from the Sunrise Hospital operation. Ed Becker, the former public relations man for the Outfit’s Riviera Hotel, recently disclosed one of the hospital’s most appealing hidden advantages. According to Becker, Joe Accardo and associates used the hospital to fill the void left when their courier Virginia Hill fled to Europe. “They would send a man out and he would be met at [Las Vegas”! McCarran Airport,’ Becker recently recalled. “He was put in an ambulance, driven to Sunrise Hospital, spend a few days there; [then] back in the ambulance, back to the airport, then back to Chicago. That’s where the skim was going.” Becker, who went on to have business relationships with a number of underworld luminaries, eventually became a Las Vegas private detective and author. And Sunrise Hospital remains a highly regarded Las Vegas moneymaker. The Sunrise Hospital “mediplex” is the largest hospital west of Chicago, with 688 rooms and 1,200 doctors on staff.

  The Sunrise Hospital conglomerate was but a prelude to an even bigger moneymaker, the Paradise Development Company. Employing great foresight, the Sunrise partners began developing the adjacent land tract, with the kind assistance of $5 million in government-guaranteed Federal Housing Authority (FHA) loans. With names like Paradise Homes, Desert Palms, and Paradise Palms, the consortium’s homes, in the $22,000-$42,000 range, sold by the hundreds. In fact, during one two-year stretch, the abodes were selling at a rate of one per day. Authors Roger Morris and Sally Denton wrote accurately that the “Paradise Development Company shaped the emerging commercial and residential map of the city.” The company’s profits would be used to underwrite even more massive withdrawals from the pension fund, the result of which transformed Las Vegas from a gambler’s getaway into a vibrant Western city. The U.S. Department of Labor estimated that the pension fund’s, loans in Las Vegas ultimately totaled $300 million, or one sixth of the fund’s total assets, all of which was repaid. Since the underworld began to develop the town in the early fifties, the city’s population has exploded from under fifty thousand to 1.5 million today. Clark County sheriff Ralph Lamb succinctly summarized the importance of the underworld on the development of Las Vegas. “Don’t forget this town owes something to these people,” Lamb said. “Without them there wouldn’t be a Las Vegas.” And none of it would have happened if Joe Accardo and Curly Humphreys had not put their man in charge of the pension fund.

  Perhaps in celebration of his gang’s successful hijacking of the pension fund, Joe Accardo took his wife, Clarice, and longtime friends Mr. and Mrs. Anthony DeGrazia on a European holiday. The trip featured a stop in Zurich, where Joe probably made a deposit in his Swiss account. What made the vacation even more newsworthy back in Chicago was that DeGrazia was a lieutenant in the Chicago police department. When the press reported the story, the chagrined police commissioner quickly suspended the thirty-seven-year vet
eran and later fired him upon his return. However, few worried about the financial health of DeGrazia, with his police pension and the friendship of Joe Accardo.

  Before the Outfit could continue to siphon pension fund treasure into the development of Las Vegas, it was distracted by the pull of dramas on the national stage. On the less significant side, some gang members were, like many of the country’s Italian immigrants, in a lather over the fall 1959 debut of the ABC television series The Untouchables, a less than accurate retelling of Eliot Ness’ battles with Al Capone and Frank Nitti. The show was a virtual slander of all things Italian and quickly elicited howls of protest from concerned Italian-American organizations across the country. Angered by the “goombah of the week” theme of the show, the protesters pointed out how the show conveniently ignored all upperworld corruption.

  The backlash started even before the show’s two-hour pilot aired, after word of producer Desi Arnaz’s purchase of Oscar Fraley’s book of the same name hit the press. In Hollywood, Arnaz braced for the inevitable. “Having gone to high school and been such good friends with Sonny Capone [Al’s son],” Arnaz wrote in his autobiography, “I knew damn well, even though I hadn’t seen or heard from Sonny in years, that I was going to get a call from him.” Coincidentally, Desi and Sonny had attended St. Patrick’s High School in Palm Beach together, and Desi described his basketball teammate Sonny as “my best friend there.”

  On the very day the story hit the papers, Sonny Capone called Arnaz. “Why you? Why did you have to do it?” Sonny asked.