The Corporation

by T. J. English

  Cops and federal agents were increasingly aware that some form of Cuban-centric organized crime was under way in the United States, but to most non-Latino citizens it was a foreign concept. Ever since the Godfather movies captured the public imagination a decade earlier, the only version of organized crime that registered for most people was Italian. This had consequences for more than just popular culture. Within law enforcement, at both local and federal levels, it was difficult if not impossible for agents to generate interest or enthusiasm among their superiors for cases involving any crime groups other than the Mafia. Arrests and indictments of Mafia figures made headlines and advanced careers; the others did not.

  The lethal arsons at known gambling spots throughout New York, and the killing of a prospective witness in a murder trial, signaled the beginnings of a shift. Cops and investigators were hearing more and more about the Corporation. Those in the know were aware that Cuban American gangsters had a controlling interest in bolita, but what they were hearing now was that the organizational structure, and the profits, were vaster than anything they had imagined.

  Throughout 1984 and into 1985, law enforcement intelligence about the Corporation began to work its way upstream from the streets to the hallowed halls of the federal government.

  The President’s Commission on Organized Crime was an investigative body created on July 28, 1983, when President Ronald Reagan signed Executive Order 12435. The purpose of the commission was “to make a full national and regional analysis of organized crime; define the nature of traditional organized crime as well as emerging organized crime groups, the sources and amounts of organized crime’s income; develop in-depth information on the participants in organized crime networks; and evaluate federal laws pertinent to the effort to combat organized crime.”

  Though the commission would not have the power to arrest or indict people (it was not a law enforcement entity), it did have the power to issue federal subpoenas, compelling witnesses to testify under rule of law.

  The commission was governed by a panel of nineteen dignitaries and crime experts appointed by President Reagan. In November 1983, it began hearing public testimony on the changing nature of organized crime, and by October 1984 an interim report was issued, with the title The Cash Connection: Organized Crime, Financial Institutions, and Money Laundering.

  By early 1985, the commission had turned its attention to the subject of illegal gambling as a long-standing, persistent criminal racket. The intention was to focus on the activities of the Mafia, but then the arsons in New York began to happen, and the idea to focus specifically on the illegal lottery, and the Cubans, gained critical mass.

  The hearings were held at Federal Hall in lower Manhattan, in the financial district and near federal and state courthouse buildings. The room was laid out for maximum dramatic effect, with the twenty commissioners seated as a panel, nameplates in front of each commissioner. Behind the panel were the flag of the United States and the insignia of the president. Witnesses giving testimony would sit at a table facing the panel. The rest of the room was set up for spectators, and there was a large area for the media.

  The chairman of the commission was Irving R. Kaufman, circuit judge for the U.S. Court of Appeals for the Second Circuit, and a former judge on the U.S. District Court for the Southern District of New York. In a prologue to the first day of testimony, on June 24, Judge Kaufman noted, “Gambling is as old as our nation’s history, and the incestuous relationship between illegal activities and gambling has existed for almost as long. Periodically every form of commercial gambling has been infected by organized crime groups . . . Horse racing, casino operations, professional sports, state-run lotteries—legal gambling of all kinds has been infiltrated in some form, at some time or other, by organized crime. Not only the traditional organized crime groups but also numerous emerging groups participate in the lucrative illegal gambling market.”

  One of the first witnesses to testify was a commission investigator named Anthony Lombardi, a former agent of the Internal Revenue Service. Lombardi was on hand to talk specifically about the Corporation, which would emerge as the most newsworthy angle at the hearings.

  Lombardi started by saying, “Mr. Chairman, commissioners, members of the commission, I am about to present a profile of José Miguel Battle Sr. A comprehensive review of the files of various federal, international, state, and local law enforcement agencies, and independent investigation by the staff of the commission, clearly reveals the existence of a tightly knit, well-financed, armed, and powerful group of Cuban racketeers known as the Corporation. These individuals are sometimes CIA trained and anti-Castro sympathizers that had taken part in the Bay of Pigs invasion . . . The evidence you are about to hear represents the first effort to develop a national picture of the Cuban organized crime group known as the Corporation.”

  To give the commissioners an idea of the scope of what he was talking about, Lombardi estimated that the illegal lottery profits of the organization, based on seized records, reflected a weekly gross of over $2 million. “From this information,” said Lombardi, “we extrapolate that the Corporation earns a minimum annual net profit of $45 million from New York City gambling operations alone. This net profit has been estimated as high as $100 million.”

  Lombardi’s presentation took close to an hour. It was startling in its details. The investigator gave an overview of the life of José Miguel Battle Sr. He presented an organizational chart that named all the key players. Along with Battle Sr. were Abraham Rydz, Battle Jr., Nene Marquez, Lalo Pons, and others. Lombardi described recent events that had been in the newspapers, such as the arson deaths and the murder of Idalia, but he also broke new ground by detailing methods of the Corporation that were not commonly known. One of those revelations had to do with the Corporation’s use of the Puerto Rican lottery to launder criminal proceeds.

  Through an IRS investigation known as Operation Greenback, the feds had uncovered the scheme. Working with corrupt banking officials in Puerto Rico, the Corporation would determine who had won the Puerto Rican lottery. The organization would then purchase the winning ticket from that person who won for a price considerably more than he or she was to receive. If a bettor had a winning ticket for, say, a prize of $125,000, the Corporation would contact that person and offer to buy the ticket for $150,000. Explained Lombardi, “The winner is told that if he travels to Puerto Rico to collect the $125,000, then reports will have to be made to the IRS and the individual will only get a small portion of the winning ticket. The winners always take the $150,000 offer. The Corporation then takes the ticket to Puerto Rico, cashes the ticket, and pays the IRS the full amount of tax due. Our source advised that this is the way the Corporation launders its money. The Corporation has so much money that its members are willing to pay twice as much in illegal money in order to obtain legitimate money.”

  In an effort to illustrate how expendable large sums of cash were to the Corporation, Lombardi introduced the customs agent who had encountered Abraham Rydz and Battle Jr. at Kennedy Airport. The agent described how Rydz and Battle Jr. were transporting nearly half a million dollars in cash, wrapped up as Christmas gifts. The two travelers claimed the money was not theirs, and furthermore, though they claimed to have been delivering that money to a person in Miami, they had no idea who the man was they were delivering it to. Of special interest was Battle Jr.’s effort to destroy a piece of paper he had been carrying. The commission produced that paper, which had been salvaged by the customs agent and pieced back together. Investigator Lombardi explained that this paper, which he described as a weekly “tally sheet” for the Corporation’s New York numbers operation, would be explained in detail by an upcoming witness.

  That witness was of particular interest; in fact, this unnamed witness, touted as a high-ranking member of the Corporation, was the main reason the hearing room was filled with media and with spectators. Among those spectators was none other than Battle himself.

  A month earlier, whi
le tending to his mamey grove in Miami, Battle had been served with a federal subpoena to appear before the commission. He immediately contacted his lawyers, Raymond Brown and Jack Blumenfeld. Legally speaking, it was a no-brainer: Battle would refuse to testify, citing his Fifth Amendment privilege on the grounds that any testimony he gave would be self-incriminating. For that reason, the commission decided not to call Battle. Instead, he came as a spectator, tanned, well dressed in a dark blue suit, and sat in the spectators’ gallery.

  He was there to see for himself the witness to whom Lombardi had referred. The identity of this witness was a secret, and it had been learned that the person’s face would not be shown. Already to those in the Corporation, the witness was being referred to as “El Enmascarado,” the Masked One.

  Battle wanted to hear for himself what this turncoat had to say, and also he would thumb his nose at this presidential commission that, he believed, could quote all the numbers and statistics they wanted about illegal lottery profits in New York, but couldn’t do a damn thing about putting him in prison and keeping him there.

  THE PERSON RESPONSIBLE FOR FINDING EL ENMASCARADO AND DELIVERING HIM TO the commission was Detective Kalafus. For nearly a decade, Kalafus had been working Cuban organized crime cases in the New York area, and he had developed some impressive sources. Some he had coerced into cooperation when they were facing criminal charges; others were people who had run afoul of the Corporation and came to him. In the case of El Enmascarado, Kalafus didn’t have to do much. The man reached out on his own, motivated by a fear of El Padrino.

  Among the small group of super-bankers who kept the Corporation afloat, the man met regularly with Battle and the other bankers. He believed that he had their trust and they had his. They didn’t prick their fingers to extract blood and pledge allegiance to the group, as the Mafia did, but without a doubt, loyalty to the organization was believed to be the highest value.

  One evening about six weeks before the commission hearings, the man was kidnapped off the street by three young hoodlums. At gunpoint, he was taken to an abandoned building. He was tied and bound to a chair and then doused with a can of gasoline. The man’s eyes felt as if they were on fire, and the stench of the gasoline made him feel as if he was going to vomit. One of the thugs stood over him with a lighter and said, “We know you are a snitch. We know you talked to the cops. Tell us the truth or you will be set on fire.”

  At that point, the man had never snitched, so it was easy for him to proclaim, “That’s a lie. I never snitched in my life.”

  “El Gordo knows you are the snitch. If you confess, you can save your life. Tell us the truth.”

  The man was terrified, but he knew that if he “admitted” he was a snitch, he would be killed immediately. “It’s not true,” he said. “Whoever told you I’m a snitch, that’s the man you want.”

  It went back and forth for half an hour, with the kidnappers threatening to light the man on fire, and him holding firm that they had the wrong man.

  Eventually, out of the shadows walked Battle himself. He told his men to untie the man. To the man, he said, “Mira (look), I’m sorry. But this had to be done. I’m afraid we have a rat amongst us. I had to be sure that it wasn’t you.”

  The man left that abandoned warehouse that night still shaking from the experience. If Battle didn’t trust him now, he would always be under suspicion. He was happy to be alive, but the sense of relief was tempered by the realization that he would never be safe as a banker with the Corporation.

  The man found a pay phone and called Detective Kalafus, whom he had never met, but who everyone knew was the cop covering the Cuban gangster beat. “Let’s meet,” the man said. He and the detective met at a secret location. The man said, “I am a marked man. I want to get out of the Corporation. But it’s not that simple. If I leave, given what I know, I will be hunted down and killed. If you can give me a new identity, relocate me somewhere, I will tell you all I know about the organization.”

  “Well,” said Kalafus, “how much do you know?”

  “I know a lot. Since 1980, I’ve been in on every meeting, part of every major decision. I can tell you who the players are—El Gordo, Battle Jr., El Polaco, Nene Marquez, their hired assassin, Lalo Pons. I know everybody.”

  Kalafus thought about what the man was offering. It took him a while to figure out how best to utilize this golden opportunity that had fallen into his lap. The man had not been directly involved in murders. He alone was not enough to make a racketeering case against Battle, but what he knew and was willing to divulge was unprecedented. Kalafus was still mulling it over when he learned about the upcoming presidential commission hearings. He met with investigators from the commission and was told, “Are you kidding? Having this guy as a witness would be tremendous.”

  Kalafus said, “I don’t know if he’ll do it. The guy is living in fear. We have to be able to guarantee that his identity will not be divulged.”

  The investigators explained that they would have a hood over his head while he was testifying. They would use an interpreter, so that when a question was posed by one of the commissioners, the man would whisper the answer to the interpreter, who would answer for him. “No one will see his face or hear his voice,” promised the investigator.

  It took Kalafus a while to convince the man to testify. A presidential commission? Public hearings covered by the news media? Are you trying to get me killed? Kalafus explained that here it was, his chance to escape the Corporation. After his testimony, he would be relocated—not immediately, because they did not want Battle to know that he was the witness. But eventually they would lay the groundwork so that he could make a complete break from the Corporation without El Padrino ever knowing that he was El Enmascarado.

  On the day of the hearings, the witness was brought through a basement garage into Federal Hall. Not only was he fitted with a black hood, but he was dressed in a loose-fitting black gown that looked like a cross between a judge’s robe and a prison jumpsuit.

  The room was packed with spectators and media personnel as the witness was led into the room and seated at the witness table. A female, Spanish-speaking interpreter sat down next to him.

  After a few preliminary questions to establish the witness’s bona fides as a member of the Corporation, the questioner asked, “Does the Corporation have a leader?”

  “Yes,” said the witness.

  “What is his name?”

  “José Miguel Battle.”

  “Is he also known by the name Padrino?”

  “Godfather. Yes.”

  It was probably to the witness’s advantage that he did not know Battle was in the room that day watching from the spectators’ gallery. Having to testify was unnerving enough, much less knowing that the man you had just fingered for the first time ever in a public forum as the boss of the Cuban Mafia was in the room, staring you down.

  Battle was shocked by what he saw and heard. Not only did the witness identify by name the primary bankers in the organization, but there were organizational charts, with photos of Battle Sr., Battle Jr., Abraham Rydz, and others displayed in the room for all to see. This was, to put it mildly, a potential disaster for the Corporation. For a criminal conspiracy that had been functioning mostly in the shadows, benefiting greatly from the culture and law enforcement’s singular obsession with the Italian Mafia, they were now being “outed” in a big way.

  Battle was apoplectic, but he knew there were news cameras on him that day. He had to appear as if he had nothing to hide. Afterward, when a photographer from the Daily News asked to take his picture, Battle did not object. On the surface, he was placid, but anyone who knew him would have known that below the surface was a smoldering volcano.

  Battle had called for an emergency meeting of the super-bankers, to take place immediately following the testimony of the commission’s star witness. The meeting was to take place at their old standby, the Colonial restaurant on St. Nicholas Avenue in Washington Heights.


  As a reigning banker in the Corporation, the Hooded Witness, as he was now referred to by the media, was expected to be an attendee at the meeting called by Battle. After his testimony, Hoodie, as Kalafus and the investigators preferred to call him, was rushed to the basement garage. Inside a van, he removed his hood and black robe. He was driven to a location where he had parked his own car, in which he drove to the Colonial restaurant. He was seated inside the restaurant with a couple of the other bankers before Battle had even arrived.

  When he did arrive, Battle was spilling over with rage. “I knew it,” he said. “I knew we had a rat in our midst. We must determine who is this son of a bitch. We must find him and have him killed, otherwise, who are we? Men, or weaklings?”

  Battle proposed that a contract of $50,000 be extended to anyone who could find and kill the Hooded Witness. It was agreed that they would all pay an equal share of $10,000 to bankroll the contract.

  Hoodie, as one of the boliteros, voted with the others to kick in his share. He contributed ten grand to what was essentially his own death warrant.

  IT DIDN’T TAKE LONG FOR THE CONSEQUENCES OF THE COMMISSION HEARINGS TO BE felt. First, there was a flurry of media attention. The New York Times ran an article that focused on the Corporation’s gambling empire, quoting the Hooded Witness, who claimed that the organization had twenty-five hundred people working at seven hundred bolita sites. The most lavish coverage of the hearings was in the Miami Herald. “Crime Boss Rules with a Deadly Fist” was the above-the-fold headline of a front-page story that focused almost exclusively on Battle. Though José Miguel declined to comment for the article, the reporters asked lawyer Jack Blumenfeld if his client had a response. “Bullshit, that’s his response,” Blumenfeld was quoted as saying. “If he’s guilty of all these things, then arrest him . . . He’s being accused by dead men and confidential sources . . . It’s hard to fight shadows.” Blumenfeld added, “He’s a Cuban patriot.”