The Outfit

by Russo, Gus

  With Ragen’s continued refusal to fold, heated words were exchanged as the summit broke up.

  Joe Accardo then declared war, ordering his army of bookmakers to stop using Ragen’s service. A now desperate Ragen turned to the politicians he had been paying off so handsomely for years. To his great dismay, Ragen was informed that the pols had a higher allegiance, and it was not to justice, but to the Outfit. It should have come as no surprise to the embattled wire king that Al Capone’s heirs practically owned City Hall, the mayor’s office included. Ragen wrote that he then realized that the Outfit “is as strong as the United States Army.”

  Ragen next sought relief from the Cook County state’s attorney, William Touhy. One year later, county officials released details of their meeting. In a transcript comprising ten thousand words, over ninety-eight pages, it was finally learned what had transpired at the showdown with Humphreys and his associates. According to a congressional probe that later obtained the statement, Ragen said his life had been threatened, and he fully expected the threat to be carried out. “If he were killed,” the congressional report summarized, “he said the probable killers would be Accardo, Guzik, and Humphreys . . . it is corroborated in part by the testimony of Dan Serritella, Jake Guzik’s partner in [the Outfit’s] scratch sheet.” Ragen apparently did not believe that Touhy would do much more than the impotent City Hall officials. Ragen’s next move pushed the Outfit’s patience over the limit: he went to J. Edgar Hoover’s FBI.

  Until James Ragen sauntered into the Chicago Field Office of the FBI, J. Edgar Hoover, whose jurisdiction forbade local crime investigations, had avoided delving into the murky world of organized crime. Convinced until this time that there was little hard evidence of interstate gangsterism, Hoover was content to chase bank robbers and “Commies.” Hoover was obsessed with success, and he knew that pursuing the shadowy connections of far-flung hoods could prove disastrous to the Bureau’s vaunted reputation: “We always get our man.” Now comes James Ragen, who described to the agents the national scope of his illegal race wire. Although Ragen himself admitted he had paid over $600,000 to pols over three years (nicknamed “the widows and orphans fund”), the agents were more interested in another aspect of his tale, namely Ragen’s charge that Al Capone’s heirs had also muscled into the game. It was now impossible for Hoover to ignore the obvious. It is not clear if the Bureau offered Ragen immunity for his cooperation, but it appears it did, since Hoover decreed the formation of a special investigation with a code name that gave away their focus: CAPGA. The name stood for “Capone Gang.”

  Soon, Accardo, Humphreys, Guzik, and their buddies were being followed by agents from the G. More important, the agents succeeded in gaining access to the gang’s Morrison Hotel headquarters. There they tapped into the phone in the hotel’s barbershop that served as the hoods’ key link to the outside. This last affront pushed the hoods past the breaking point; they had had enough and needed to act fast. Meanwhile, the local police concluded that the threat against Ragen was serious and gave him twenty-four-hour protection. Ragen, however, soon hired his own bodyguards, but they were unable to prevent the inevitable. On April 29, 1946, Ragen found himself pursued in a fifteen-mile, sixty mile-per-hour car chase, which he was able to deflect only by heading straight for a suburban police station. It was to be a temporary reprieve.

  On June 24, 1946, Ragen’s fatal prediction came true. On that day, under heavy police protection, Ragen was driving down State Street on the South Side during rush hour. With his protectors in a follow-up car, Ragen saw a hoary, tarpaulin-covered delivery truck pull alongside his vehicle. When the truck got close, the tarp was raised and the shotgunners underneath began firing from behind orange crates. Ragen’s trailing guards fired at the fleeing truck in vain. When the abandoned vehicle was later located, it was found to have been fortified with quarter-inch steel plates over its rear section.

  Turning to their boss, the bodyguards found Ragen with serious wounds to his right arm and shoulder. Rushed into emergency surgery at Michael Reese Hospital, his blood was transfused ten times. Over the next few weeks, Ragen appeared to be recovering when, to everyone’s surprise, his kidneys, which had not been injured in the attack, began to fail. On August 8, Ragen again underwent emergency surgery. However, four days later he died. His autopsy revealed that his blood contained traces of the lethal chemical mercury. It was widely believed that Joe Accardo had gotten to someone on the hospital staff, bribing the employee to dose Ragen with the poison. Sergeant William Drury, a twenty-four-year veteran Chicago detective, spent months running down leads in the case, putting particular heat on Jake Guzik. The gang’s accountant, and chief palm-greaser, responded by putting his own spin on the case. “If I were to talk,” Guzik told all within earshot, “some of Chicago’s best citizens would go jumping out of windows.” When Drury hauled Guzik in for a lie-detector test, Drury’s boss, Outfit-friendly Police Commissioner John Prendergast, shook his head and said, “They won’t like it.” Thus it came as no real surprise when, for his efforts, Sergeant Drury was fired from the force for harassing Outfit members.

  It was as clear as ever that Chicago’s infrastructure was corrupt from top to bottom. Ragen had done as much as he could to encourage authorities to clamp down on the Outfit, and he was killed in broad daylight for it - again without a suspect arrested. A Chicago News editorial asked its readers, “How do you like it, Chicagoans?” The scathing diatribe was noteworthy for its denunciation of the system as much as the gangs themselves: “[The Ragen murder] paints a sordid and depressing picture of what happens to a community when politicians consort with thieves and criminals; when a political machine allies itself with racketeers, when the racketeers, in fact, become the real power behind local government.”

  Although indictments were returned against Outfit hitmen William Block, Lenny Patrick, and the gang’s Miami liaison Dave Yaras, the charges were dropped when the star witness backed out of the case. Soon, it was announced that Mickey McBride’s twenty-three-year-old son, Eddie, would run Continental. One month later, the Outfit closed down its Trans-America operation, fooling no one. During a 1951 Senate probe, McBride senior was asked: “Weren’t you afraid that your boy would be bumped off?” After he responded in the negative, this question was put to young Eddie: “You are a complete figurehead and dummy, is that right?” To which the young man candidly replied, “I guess you could put it that way if you wanted to.” The committee’s report concluded the obvious: “The Continental Press national horsetrack service is controlled by the Capone mob in Chicago.” The gang from Cicero, after a two-decade struggle, had finally attained its goal, and the rich rewards that followed.

  A congressional investigation estimated that the combined take from all the nation’s bookies ran into the billions of dollars, and many experts believed the race wire to be the savior of organized crime after the repeal of prohibition. Len O’Connor, a Chicago newsman and political analyst, wrote that “the instantaneous transmission of information vital to illicit bookmaking was the nerve system of organized gambling, the foundation stone of syndicate crime.” In his 1975 book, Clout, O’Connor described the Outfit’s role in the national wire network: “The Chicago race wire was the nation’s bookmakers’ only available source of instantaneous information concerning all the betting opportunities currently existing at all the tracks, and, indeed, the cash flow of the bookie joints was significantly greater than that of the tracks.”

  Dying along with James Ragen was Hoover’s short-lived interest in organized crime. With his key witness gone, Hoover lacked the enthusiasm to pursue the case. To make matters worse, orders came down from the executive branch to cease and desist, according to Hoover’s number two, Cartha DeLoach. “Then, quite suddenly, the attorney general, Tom Clark, told us to discontinue our operations,” DeLoach later wrote. It will be seen that Clark was understandably viewed in Chicago as Outfit-friendly. The CAPGA unit was thus disbanded until eleven years later, when events forced Hoo
ver back into the investigation of organized crime. The decision to close the CAPGA case was a costly one, for it gave the Outfit a virtual free ride to expand its empire into domains as far removed as the Nevada desert and the White House. And they never relinquished their hooks into Hollywood, or their liaison, Sid Korshak.

  Moe Annenberg’s son Walter went on to exponentially increase the value of the tattered business he’d inherited, founding such publications as TV Guide and Seventeen. In 1969, Walter was appointed U.S. ambassador to Great Britain by Richard Nixon. And in a manner that even eclipsed the rebirth of Jake Factor, W’alter devoted the second half of his life to philanthropy, establishing a foundation valued at over $3 billion. In 1991 alone, he gave away $1 billion; likewise in 1993. In his father’s honor, Walter endowed the prestigious M. L. Annenberg Schools of Communication at the University of Pennsylvania and the University of Southern California.

  1. Tennes tried to warn Sox owner Charles Comiskey, who couldn’t do anything, since, if it was true, the revelation would destroy his franchise, which was built by underpaying his players by 50 per cent. Although Rothstein fixed the players’ 1921 trial, they were banned for life by the just installed first commissioner of baseball, Judge Kenesaw Mountain Landis.

  Part Three

  Scandals

  and Investigations

  10.

  Playing Politics II:

  The Truman Connection

  By 1945, barely one year into their ten-year term, Paul Ricca and his incarcerated cohorts had reached the end of their patience. Enduring the privations of their Atlanta prison hellhole was bad enough, but doing so while their fellows on the outside lavished in the wire and numbers profits was unbearable. Rubbing salt into their wounds were the early releases, in December 1944, granted to stoolies Willie Bioff and George Browne, both of whom immediately went into hiding. The situation was especially intolerable for the forty-seven-year-old Ricca, who, had he not been pinched for the Hollywood scam, would now be the boss of the Outfit. Thus Ricca made his decision: He and his fellows wanted a quick transfer to Leavenworth, a prelude to an unthinkable early parole.

  Ricca initially attempted to obtain the transfer in the traditional way by having his attorney, Edward Monaco, who had brokered Ricca’s Indiana farm purchase, write a letter asking for it. When prison warden Joseph Sanford wrote to the Bureau of Prisons opposing the request, he noted his fears that “money is being paid to obtain the transfer of these men to Leavenworth.” Sanford added that he wanted the Atlanta prisoners sequestered from Nick Circella, who was already at Leavenworth, and kept distanced from their Chicago allies. The Atlanta Parole Board agreed with Sanford and let its federal superiors know it. When he was told of Sanford’s stance and the Atlanta board’s agreement, Ricca was shocked, so unaccustomed was he to having his demands refused. He decided to go over their heads, resorting to a strategy that had always succeeded: He called Chicago. When Ricca got word back to Accardo and the Outfit, the seemingly impossible task predictably fell to the gang’s political mastermind, Curly Humphreys. This would be verified fifteen years later, when the FBI overheard Accardo describing how the events had played out. Curly knew that such an undertaking would require every bit of political leverage he had acquired over the years, and then some. Fortunately for Ricca and the rest, Humphreys had spent the recent past forging alliances with pols whose influence extended even into the Oval Office. After considering the problem, Humphreys hit upon the solution: He would tap a sixty-eight-year-old Missouri attorney named Paul Dillon, a litigator he had employed in 1939 when he’d needed to obtain indictment dismissals for two Outfit thugs named John Nick and Clyde Weston, strong-arms used in the IATSE takeover. Humphreys’ kinship with the Missouri-based Dillon was a natural result of his role as the Outfit’s political liaison to that state. And in the shadowy world of underworld-upperworld collusions, this linkage gave Curly Humphreys leverage over the most powerful politician in the United States.

  Truman’s Shadow World

  When Curly Humphreys hit upon Paul Dillon as the solution to Ricca’s problems, he did so with the knowledge that Dillon was the St. Louis, Missouri, version of Chicago’s Sid Korshak, with one notable exception: Dillon’s gangster associates in Kansas City, Missouri, had sponsored the ascendancy of the thirty-third president of the United States, Harry S Truman. Humphreys knew that by playing the Kansas City card he was subtly threatening to open a Pandora’s box that Washington would be forced to address. For those like Curly Humphreys who knew the level of corruption in the upperworld, the rules of the game had to be bent. The Missourians were a Capone-like gangster named John Lazia, a Kansas City Democratic boss named Tom Pendergast, and an eager politician named Harry Truman. This triumvirate gave rise to President Truman and his appointees; their subservience to the Chicago Outfit virtually guaranteed that mountains would be moved for Paul Ricca.

  Kansas City was known far and wide as Cow Town, since much of the cattle slaughtered in the Chicago stockyards originated from sales in Kansas City’s Livestock Exchange, a 205-acre parcel known as the Kaw, where ten thousand Western cows were sold daily. And the cattle connection to Chicago was merely the beginning. If Chicago was the most corrupt city in the country, Kansas City was a close second, with its municipal police department run by a former Capone gangster. Imported as prohibition muscle from Chicago by the Kansas City machine, ex-con Johnny Lazia quickly rose in the ranks from bootlegger to gambling czar. During Volstead, Lazia kept in regular contact with the Capone Syndicate, which counted Kansas City as one of its bootlegging distribution hubs. On one visit to Chicago, Lazia was officially anointed by Capone as the boss of Kansas City. Lazia mimicked his Chicago superior and alter ego in many ways. Using brute muscle, Lazia controlled not only local politicians, but also the city’s police force. At one point, Lazia forced the Kansas City Police Department to hire sixty ex-cons as cops. A former Kansas City FBI man recently recalled, “If you called the police station, Lazia was more than likely to answer the phone.”

  By 1934, 10 percent of the city’s police force had a criminal record. In 1934, a reporter for the New York Herald-Tribune wrote, “If you want excitement with roulette, cards, dice, the races . . . ask a patrolman on the Kansas City streets. He’ll guide you.” One thief recalled, “This town was fast, had good booze joints, plenty of targets, and some of the laziest cops in the country.” During Lazia’s tenure, which lasted until he was murdered in 1934, Kansas City possessed a host of social ills that rivaled those of its Windy City big sister: unsolved kidnappings and murders, rigged elections, and labor sluggings. In 1939, federal judge Albert L. Reeves said, “Kansas City is a seething cauldron of crime, licensed and protected.”

  Lazia was allowed to flourish for decades due to his partnership with Democratic boss Tom Pendergast. In a city with a mayor’s office that was legislated to be weakened, ward boss Pendergast thrived. Much as Jake Guzik sat on his throne in Chicago dispensing the Outfit’s largesse to a line of supplicants, so did Pendergast rule from his dingy Main Street office in Kansas City. All morning long (the office only stayed open until noon), Pendergast handed out political favors and city contracts to his subjects. “All right, who’s next?” Pendergast would grumble from his swivel chair and rolltop desk.

  Tom Pendergast’s machine mirrored Big Al’s Syndicate in other ways. When his favored pols faced election day, Pendergast’s organization brought in Chicago-like vote sluggers. In the 1936 general election, Pendergast oversaw the posting of more than eighty thousand “ghost” votes. Like Capone with the Sportsman’s Park sideline, Pendergast brought horse racing to Kansas City at his Riverside Park Jockey Club. As Kansas City grew increasingly amoral under Lazia-Pendergast, the predictable vices such as gambling and prostitution took hold, all dancing to the tune of the world-class jazz musicians who gravitated to Kansas City as they did to Chicago. Rising stars included Lester Young, Coleman Hawkins, and arguably the world’s greatest jazz sax player, Charlie Parker, who was born in Kan
sas City in 1920. “Most of the jazz spots were run by politicians and hoodlums, and the town was wide open for drinking, gambling, and pretty much every form of vice,” pianist Mary Lou Williams remembered.

  As his stature grew, Pendergast formed an alliance with the Chicago New York Commission. When he traveled to New York, Pendergast was seen in the company of Lucky Luciano and Frank Costello. He showed up at the infamous 1929 Atlantic City gangster convention and was on hand with the Outfit in Chicago when they and their New York brethren decided to support the presidential candidacy of Franklin Roosevelt. The Kansas City contingent also delivered the vote for FDR. According to IRS investigations, Pendergast delivered 20,687 votes in his First Ward, although the sector only maintained 19,923 registered voters. A local reporter found that one voter had registered forty times, using different names, but the same birth date. When the Lazia-Pendergast alliance was held responsible for a botched hijacking of a federal prisoner in 1933, in which four federal agents were killed, the machine rocketed to the top of the federal authorities’ priority list.

  What is most critical in any discussion of corruption in Kansas City is an understanding of the relationship between the Outfit and the Pendergast machine, a relationship that figured into Curly Humphreys’ overall strategy. From the days of Al Capone, the Pendergast-Lazia machine fell under the ultimate control of the Chicago Syndicate, and later, the Outfit. Bill Roemer, an FBI agent in Chicago who would later use hidden microphones to eavesdrop on the Outfit’s most private conversations, summed up what he learned of the Chicago-Kansas City gangster linkage: “The Kansas City mob is a subsidiary of the Chicago mob. Every family of La Cosa Nostra west of Chicago belongs to Chicago . . . the Outfit takes a hunk of their income and oversees their activity.” As his personal representative in Missouri, Curly Humphreys utilized the talents of St. Louis’ Egan Gang muscleman Thomas Whalen. Humphreys also formed Outfit partnerships with St. Louis handbook operator Tony Giardano and racketeer Frank “Buster” Wortman. Authorities noted frequent trips by these men to Chicago, especially Wortman, who became a close personal friend of Humphreys’.