The Outfit

by Russo, Gus

  Unbeknownst to both Anhalt and DeCarlo is a paragraph from the recently released FBI file on Siegel: “Early in June 1947, Siegel had a violent quarrel with Virginia Hill at which time he allegedly beat her so badly that she still had visible bruises several weeks later. Immediately after the beating she took an overdose of narcotics in a suicide threat and was taken unconscious to the hospital. Upon recovery she immediately arranged to leave for an extended trip to Europe.”

  And there was more. Another of Bugsy’s egregious foul-ups was the cavalier manner with which he had been addressing the Outfit’s cash cow, the wire service. Bugsy’s Chicago employers had been telling him for months to surrender the Trans-America wire service, which they no longer needed since seizing Ragen’s Continental. When Joe Accardo personally ordered Siegel to relinquish his outlets, Siegel unwisely balked at the directive, attempting instead to extort his Chicago boss by telling him he could have Trans-America back for $2 million.

  Given all the backroom disparaging of Siegel, Bugsy’s ears must have been on fire. For the most part, the complaints slid away like water off a duck, but when Siegel learned that the Commission had discussed his fate at the Christmas, 1946, Havana conference, to which he was not invited, he was seized with fear. As recounted by Ed Reid and Ovid Demaris in The Green Felt Jungle, Siegel flew to Havana to beg the deported supreme Mafia boss Lucky Luciano for more time. Supposedly, Luciano was intransigent.

  “Look here, Ben,” Luciano said. “You go back there and start behaving. You give the Chicago boys the wire and no more bullshit. Those boys are fed up. This has gone far enough. You understand?”

  “You bastard,” Bugsy screamed back, “No one dismisses me. And no son of a bitch tells me what to do. Go to hell and take the rest of those bastards with you. I’ll keep the goddamn wire as long as I want.”

  Quite possibly there was no one reason for the rubout of Ben Siegel. His numerous offenses may have had a cumulative effect that forced his bosses to say “Enough is enough.” With so many aligned against Siegel, there was little shock among insiders when the events of June 20, 1947, transpired. On that balmy southern-California evening, Bugsy was sitting with local hood Alan Smiley in the living room of a Beverly Hills mansion (810 Linden Drive) rented by Virginia Hill, where he had arrived from Las Vegas that very morning. While talking with Smiley and reading the Los Angeles Times, Siegel was shot four times by a gunman positioned outside the living room window. Hit twice in the face and twice in the chest by slugs from a .30-caliber M-l, the forty-one-year-old Bugsy died quickly, or as Flamingo comic Alan King put it, “Bugsy took a cab.” Alan Smiley later told a Chicago friend, “His right eye flew right past my face.” It was found by police fifteen feet away on the dining room floor. John DeCarlo said that the blasts to Siegel’s face were no coincidence, but poetic justice for his disfigurement of Hill’s visage. “ ’A face for a face’ was what I was told,” says DeCarlo.

  If Siegel lived long enough to feel the first shot hit him, it surely came as no surprise. The previous day in Vegas, he had been stalked by four underworld goons, who consistently missed him by minutes. Throughout that day, the Flamingo received anonymous long-distance phone calls, with the caller warning Siegel, “Bugsy, you’ve had it,” before hanging up. On that same day, Siegel gave his bodyguard, Fat Irish Green, a briefcase that government investigators believe held as much as $600,000. Siegel informed a stunned Green, “If anything happens to me, you just sit tight and there’ll be some guys who’ll come and take the money off your hands.”

  Twenty minutes after the shooting, before police even arrived, the Outfit’s Phoenix bookie chief, Gus Greenbaum, along with Moey Sedway and Morris Rosen, walked into the casino at the Flamingo and announced that they had taken over. The next day, Virginia Hill’s Chicago paymaster, Joe Epstein, arrived to do the books.

  Over the next year, Greenbaum used $1 million in borrowed Outfit money and bank loans to enlarge the hotel’s capacity from ninety-seven to more than two hundred rooms. It turned out to be a good investment, since in its first year the Flamingo showed a $4-million profit, skim not included. Although Greenbaum did a brilliant job as the Flamingo’s manager, his own alcohol and gambling addictions would ultimately produce tragic results. In the meantime, Greenbaum was proclaimed the first mayor of Paradise Valley - or the Strip.

  Typically for gangland rubouts, Siegel’s murder, the first ever of a Commission board member, was never solved, but “solutions” to the Siegel killing were as numerous as his enemies. Some have claimed to know that Lansky or Luciano or Accardo or local Las Vegans ordered the hit. Lansky, for his part, strongly denied any sanction of his lifelong friend’s murder. Shortly before his own death in 1983, Lansky told writer Uri Dan, “If it was in my power to see Benny alive, he would live as long as Methuselah.” One piece of evidence, long buried in the files of the Chicago Crime Commission, seems to tilt the possibilities in favor of the Outfit, which was seething over Bugsy’s theft of its lucrative wire. The artifact is a letter originally mailed to Beverly Hills police chief Clinton H. Anderson from Chicago three weeks after Siegel’s slaying. The unsigned letter read:

  Dear Chief,

  Here is the real inside on the Bugsy killing. One week before he was killed, Murray Humphries [sic], a Capone gangster, and Ralph O’Hare one of the mob’s front men, were at the Beverly Wilshire Hotel under phoney names. The story is that Bugsy owned the Golden Nugget News Service in Las Vegas. He owed the Trans-America Wire Service $25,000. O’Hare was the head of that outfit which the Capone gang owned. It seems there was quite an argument in Humphries room when Bugsy stalled about the 25 G’s. Humphries told him to pay O’Hare the dough or he would have a lot of bad luck.

  The “Ralph O’Hare” mentioned in the missive was actually Ralph J. O’Hara, the kingpin appointed by the Outfit to run the day-to-day affairs of its wire service. Police Chief Anderson also learned that Bugsy’s Baby, Virginia Hill, had been ordered by the Outfit back to Chicago on June 10, ten days before Siegel’s murder. From there she traveled to Europe, where some mistakenly believed she begged Lucky Luciano to intercede on her lover’s behalf. In fact, according to both the FBI and John DeCarlo, Hill went to Europe to recuperate from her recent savage beating by Siegel and possibly undergo plastic surgery. In the days after the Siegel killing, Chief Anderson gave a series of press statements in which he hypothesized about the ultimate authors of the murder: “There was money - a lot of money behind this killing. It wasn’t just a cheap gambling murder, you know. I do not believe that Siegel was wiped out because of anything which occurred in Las Vegas . . . a Chicago racketeer probably engineered the killing . . . Benjamin Siegel was killed because he demanded hush money from the Chicago mob . . . probably the Fischetti brothers, Charles, Rocco, and Joe.”

  Not only was the planning of the murder unresolved, so too was the identity of the actual shooter. Recent interviews suggest that the contract for the hit, whatever its origin, was accepted by a California entity. John Carter (pseudonym), a Chicago investigator who prefers to remain anonymous, claims that he was told details of the shooting by Bobby Garcia, the skipper of Tony Cornero’s luxury gambling ship, The Rex. Cornero had partnered with Siegel in the Rex operation, and for years Siegel had refused to cut Jack Dragna, Johnny Rosselli, and the Outfit in on the action, even after Dragna had help set up Siegel when he’d arrived out West. “Bobby Garcia told me the contract went out to an Italian immigrant from San Diego who wanted to get staked in the olive-oil import business,” says Carter, who himself had personal relationships with Outfit members dating back to the 1930s. “The shooter had become an American citizen by joining the army during World War II. He used his army carbine to hit Bugsy.” Carter claims that he has forgotten the name of the shooter, who he said drove up to Beverly Hills from San Diego in a little pickup truck and waited in the bushes for Bugsy.

  In the immediate aftermath of the Bugsy episode, the Chicago-New York Commission began investing in other Sin City casinos, s
uch as the New Frontier (formerly the Last Frontier), then the Thunderbird (owned by Meyer Lansky), and the Desert Inn (Moe Dalitz of Cleveland). By 1952, with newly empowered local crime commissions placing gangsters in many major cities under the microscope, the hoodlum exodus to Nevada increased dramatically. The “Kefauver refugees” from around the country made the trek into the Nevada desert, anxious to shed their past like some desert reptile sheds its skin. Soon, more gang-controlled facilities such as the Sands (opened in 1952 by numerous Commission members, the Outfit, and Frank Sinatra) and the Sahara (Al Winter of Portland) opened for business. In some cases, the hotels were owned, or fronted, by an upperworld consortium, while the hoods managed the all-important casinos. “The hotels and the lounges were just window dressing,” said one Outfit member. “All that mattered were the casinos.”

  During this period, Chicago’s interests, as coordinated by Curly Humphreys, were limited to minor investments in a number of the casinos. But with the Outfit pushing to go increasingly legit after Kefauver, Joe Accardo and associates decided it was time to own some Las Vegas properties outright. Accardo therefore packed his bags in early 1953, bent on checking out the desert opportunities for himself.

  1. The entire episode recalls a story told by bandleader Tommy Dorsey to American Mercury magazine in 1951. For years the story had circulated that when Sinatra’s singing career had first taken off, he was desperate to escape a long-term contract with Dorsey. As the persistent rumor went, Sinatra went to Costello, who sent his goons to visit Dorsey. The thugs allegedly shoved the barrel of a gun in Dorsey’s mouth until he signed Frank’s release agreement. After years of such rumors, Dorsey himself admitted that he was in fact visited by three enforcers who instructed him to “sign or else.”

  2. Most were desperate unemployed Depression victims. In the first three weeks after the project was announced, some twelve thousand employment hopefuls contacted the planners, willing to work in the 130-degree desert seven days a week for $1.15 per day. They would be allowed only two days off per year - Christmas and the Fourth of July.

  3. Humphreys often visited St Louis, Kansas City, Los Angeles, and Dallas, where he helped expand the gang’s numbers racket; in Oklahoma, he was believed to have masterminded the flow of booze into that dry state; he made frequent trips to the nation’s capital to visit with the “mob’s congressman,” Roland Libonati.

  4. The others were the Northern, the Rainbow, the Big Four, the Railroad Club, and the Exchange Club.

  14.

  The Frenzied Fifties

  Surveillance records maintained by both federal and local authorities reflect that Joe Accardo set out for Las Vegas by way of Los Angeles on January 15,1953. Accardo’s itinerary included a brief stopover in L.A. to confer with Johnny Rosselli before traveling on to Sin City. Accompanying Accardo was his personal physician, Dr. Eugene Chesrow, whom Joe had maneuvered into the top post at Oak Forest Hospital, and fast-rising underboss Mooney Giancana.1 The foray also represented something of a school field trip for Giancana, who was being groomed by Accardo to take over the day-to-day running of the Outfit. In addition to the constant harpings of Clarice for Joe to retire, the IRS was making rumblings that it was going to do to Accardo what it had done to Capone twenty-four years earlier. Joe wisely decided to concentrate on his tax case, with Curly as adviser, while Mooney Giancana fronted the organization, much as Nitti had done after Capone’s imprisonment. Although key decisions would still be authorized by the old guard of Accardo, Humphreys, and Ricca, for public consumption Mooney was now the boss. With his elevation came the ascendancies of his crew, many of whom were buddies from the old 42 Gang: Sam Battaglia, Felix Alderisio, Marshall Caifano, Jackie Cerone, and Butch Blasi among them.

  At the time of the Chicago trio’s westward journey, the L.A. Police Department (LAPD) was focused on discouraging any more out-of-town hoods from setting up shop in the City of Angels, as Accardo (ticketed under the name S. Mann) was soon to discover. With the country’s most aggressive intelligence unit on guard at the city’s key points of entry, the LAPD gained a reputation for spotting gangsters as they alighted from trains, planes, and buses, mugging them and then tossing them back aboard for a painful return trip home.

  After being met at LAX airport by two Outfit members on assignment in L.A., the group proceeded to Perino’s Restaurant in Beverly Hills, scrutinized all the while by plainclothes LAPD officers from the “airport squad,” who had ID’d them on arrival. Before the group had time to digest their meal, the cops swooped down. Accardo and friends gave the officers their true names after the police had frisked them and discovered the three travelers carried over $12,000 in cash, which may have represented the gang’s newest Vegas investment fund. However, before the trio could transport the cash to Nevada, they were sent back to Chicago by the LAPD’s front guard, the Organized Crime Intelligence Unit, or OCID.

  For the next two years, the Outfit maintained a low profile in Las Vegas, awaiting the perfect opening to make their big move. But the gang was never content to ignore new opportunities while waiting for another to coalesce. According to a long-withheld 224-page report by Virgil Peterson, “The Jukebox Report of 1954,” Curly Humphreys devised a scheme wherein the Outfit would “take over ASCAP.” The American Society of Composers, Authors, and Publishers (ASCAP) was formed in 1914 by songwriter Victor Herbert as a nonprofit clearing house for coordinating the collection of song-performance royalties as a service to composers. In 1954, ASCAP was pushing to obtain royalty payments from the nation’s jukeboxes, many of which were controlled by the Outfit. Humphreys saw this as an opportunity for his gang to complete its vise grip on the entertainment industry: They already controlled the jukes, which were manipulated into creating Top Ten hits for their stable of performers, who in turn were booked by Jules Stein’s Outfit-friendly MCA into their clubs in Las Vegas and elsewhere, and finally, the performers’ record companies were often run by the Outfit, and when not, the gang simply flooded the market with their own counterfeit versions.

  Now Humphreys saw still one more way to squeeze profit from the operation by obtaining either an interest in ASCAP or negotiating a kickback deal, wherein the gang would receive a cut of the composers’ royalties for the privilege of allowing their material to be placed in the Outfit’s jukes. At the time, ASCAP was realizing approximately $18 million per year in payments. According to Peterson’s sources, ASCAP president Stanley Adams and the company attorney, Herman Finklestein, came to Chicago in February 1954 to negotiate with the manager of Jake Guzik’s Century Music Company, Daniel Palaggi. At the time, Century was believed to control more than 100,000 of the nation’s 575,000 jukeboxes. ASCAP initially proposed that Century contribute one dollar per juke per year into the fund. During the two days of meetings at the Palmer House, Century Music (aka the Outfit) agreed to the payout, but only if ASCAP would kick back 30 percent of the collected royalties to Chicago’s Jukebox Operators Association, controlled, of course, by the Outfit. The deal would cost the Outfit $100,000 per year, but the 30 percent cut of ASCAP’s $18 million in yearly royalties came to $5.4 million, a $5.3-million profit per year for two days’ work at the Palmer. Peterson’s report noted, “It is understood that ASCAP is inclined to accept the proposed deal.” No further details are known of the duration of the alleged relationship.

  During this period, the Outfit also worked to solidify affairs on the home front. One such endeavor entailed throwing their considerable political clout behind a Democratic machine politician’s bid for mayor of Chicago. Having backed his career for twenty-odd years, the Outfit brought out the votes in its wards to help ensure the February 1955 election of Richard J. Daley.

  Boss Daley

  Joe Accardo’s gang toiled so diligently on Daley’s behalf because they knew him and felt certain he would look the other way while they conducted their business. Their prognostications proved accurate, as Daley neither persecuted nor elevated the Outfit bosses during his long tenure at the mayoral helm
. He just seemed to ignore them. Richard “Boss” Daley’s laissez-faire attitude toward the Outfit came as no surprise to the Chicago electorate. Savvy locals remembered that the Boss’ early patrons were machine pols such as Big Joe McDonough, widely believed to have been in league with the Outfit’s predecessor, the Torrio-Capone Syndicate. Daley was also the protege of Eleventh Ward committeeman Hugh “Babe” Connelly, likewise known to have been the recipient of Outfit payoffs. When Daley assumed Connelly’s post in 1947, it was believed that the gang had merely decided it was time for a change. As Alderman Edward Burke told writers Adam Cohen and Elizabeth Taylor, “They were sick of the old man [Connelly]. He was probably taking too big a slice of the gambling and whatever.” Just prior to the 1955 mayoral election, the Chicago Tribune warned, “If Mr. Daley is elected, the political and social morals of the badlands are going, if not to dominate, then surely to have a powerful influence on its decisions.” Despite the warning, Daley won the 1955 contest, due in no small part to a 13,275-to-l,961 plurality in the Outfit-controlled First Ward.

  The paper was proven correct when Mayor Daley quickly made three executive decisions clearly favorable to Accardo and Co. First, he replaced the powerfully antimob head of the important, contract-granting Civil Service Commission, Stephen E. Hurley, with William A. Lee, the head of the Humphreys-infiltrated Bakery Drivers’ Union. Chicago news analyst Len O’Connor said that the appointment was “patently a political payoff.” Second, according to the FBI, when Humphreys ordered the gang’s First Ward alderman, John D’Arco, to arrange for the Outfit’s man to be appointed that precinct’s police captain by Daley, D’Arco and Daley delivered. “D’Arco then contacted Mayor Daley,” the report stated, “and advised him that he wanted this captain to command his district. . . The appointment was then announced by [Police] Commissioner [Timothy] O’Connor.” Third, in 1956, Daley disbanded the city’s intelligence unit known as Scotland Yard. This elite wing of the police department had been compiling thousands of dossiers on Chicago’s hoodlums, the result of years of painstaking surveillance. According to the FBI, the unit was disbanded when Daley learned that they had bugged a bookmaker in the gang’s Morrison Hotel hangout, where Curly Humphreys had coincidentally lived for a time, and where Daley had had his campaign headquarters. Daley had also been informed that during the campaign, Scotland Yard had bugged Daley’s Morrison offices, supposedly under the orders of his incumbent opponent, Mayor Martin Kennelly. After the Yard’s offices were padlocked, the Chicago Crime Commission lamented, “The police department is back where it was ten years ago as far as hoodlums are concerned.” That year’s annual Accardo Fourth of July cookout was thus especially festive, as noted in the July 16,1956, issue of Time magazine: “Chicago hoodlums and their pals celebrated around a champagne fountain at the plush River Forest home of Mobster [Joe] Accardo . . . The Accardo soiree, an annual affair, had a different spirit this year. Where once his guests had slipped their black limousines into a hidden parking lot on the Accardo property, they now made an open show of their attendance, and the Big Boss’ gardens rang fresh with ominous joy.”