Supposedly, Touhy had kidnapped Petrillo and held him for $50,000. Later, he threatened to do the same to Stein or his wife, Doris—whom he had married in 1928—if he failed to cooperate. Stein insisted later that he stood up to Touhy and took out a $75,000 insurance policy, covering him in the event of his kidnapping. “They tried to muscle in on me, and I never let them,” Stein said. “I had the guts of a fool.”2
Despite all the alleged threats, Stein continued to keep the company of numerous Chicago racketeers and was frequently seen with them at Henrici’s Restaurant, the Home Drug Store, and the Palace Theatre, where such entertainers as Jack Benny, Sophie Tucker, and George Jessel performed.
Veteran Chicago crime investigators remained skeptical. “Both Stein and Petrillo made their deals with the major mob guys in this town,” one of them said. “Touhy was nothing next to Capone and his boys, and that’s where Stein and Petrillo’s connections were. All the rest of that stuff about kidnappings was nothing more than high drama, well-contrived and acted out.”
Whichever scenario is correct, it is clear that Stein had worked out some sort of accommodation or truce with the mob.
Jules Stein and James Petrillo had close ties to a paunchy little Chicago mobster named Willie Bioff. An ex-pimp and petty thief, the moon-faced and sleepy-eyed Bioff had been financially wiped out early in the Depression. “When things get bad,” Bioff lamented, “there ain’t no place for an honest pimp. The Johns are selling nickel apples and the broads are selling two-dollar cherries and who the hell needs me.”3
According to Justice Department documents, Stein occasionally employed the services of a Bioff employee who specialized in disrupting the operations of theatres and nightclubs that refused to contract business with MCA. A law-enforcement official in Chicago identified the saboteur as Fred “Bugs” Blacker, who specialized in throwing stink bombs into target locations or infesting them with bedbugs.
Around 1931, Bioff met George Browne, the head of the Chicago local union of the International Alliance of Theatrical Stage Employees (IATSE). Together, Bioff and Browne tried to develop some scams. Their first enterprise was a soup kitchen. Bioff’s friends in politics contributed money to a program in which Browne’s working members could be fed for thirty-five cents a meal and their unemployed brothers could eat for free. Occasionally, a local celebrity or politician would drop by for a bowl of soup and an opportunity to be photographed with the common man. On their way out, they occasionally made donations, sometimes as much as fifty dollars. From the money donated, it was estimated by the Internal Revenue Service that at least seventy-five percent of it was skimmed by Bioff and Browne.
Through additional contributions to the soup kitchen from local theatre operators, Browne became personally acquainted with many of them and their employees. Using these contacts, Bioff and Browne tightened their grip on IATSE, offering workers job protection and more money—but also giving management a no-strike clause in their contracts.
Balaban and Katz, Inc., of Chicago, which owned the largest theatre chain in the country, was the first beneficiary of a Bioff and Browne sweetheart arrangement. Singer Barney Balaban and pianist Sam Katz had begun their business in 1916 by operating a string of nickelodeons. They offered Bioff and Browne $150 a week for the soup kitchen, in lieu of restoring a twenty-percent pay cut forced upon the workers. Bioff, who handled the negotiations, countered by demanding a lump-sum settlement. In the end, Bioff and Browne received $20,000 cash in return for labor peace. But very little of that money was spent for the soup kitchen.
Instead, Bioff and Browne went to a gambling casino owned by Nick Circella, a Capone mob member, and lived it up, throwing lots of money around. Their gay mood did not go unnoticed. A few days later Browne received a telephone call from Mafia kingpin Frankie Rio, who demanded fifty percent of whatever business they were in—“or else.”
The Chicago underworld was deeply impressed with Bioff and Browne’s scam and invited them to two meetings at the home of Frank Nitti, the heir to Al Capone, who was doing time in Alcatraz for income tax evasion.*
Nitti told his guests that he wanted Browne to run for president of IATSE, an American Federation of Labor union which operated in both the United States and Canada. In 1932, Browne had run for and lost the presidency of IATSE. This time, Nitti explained, Browne would go to the union’s June 1934 international convention in Louisville, Kentucky, with the support of his people—namely, Capone’s and Nitti’s top musclemen, including Tony Accardo, Nitti’s number-two man behind Paul DeLucia, as well as Louis “Lepke” Buchalter, Cleveland racketeer Morris Dalitz, and Abner “Longy” Zwillman of Newark, New Jersey, who was one of actress Jean Harlow’s lovers and a familiar figure in Hollywood.
With support from his mobster backers, Browne was easily elected as president of IATSE. (Two of his rivals for the presidency had withdrawn from the race after receiving death threats.) After the IATSE convention, Tom Maloy, the business manager of the Motion Picture Operators Union Local 110 in Chicago, was found murdered gangland-style, as was Clyde Osterberg, a IATSE union dissident, who had earlier complained of Bioff’s threats against him. Neither killing was ever solved, but the Chicago underworld had made it clear that it would accept no interference from anyone with regard to its takeover of the national IATSE union. Upon his election, Browne immediately appointed Bioff as his personal, full-power representative. In return, the Chicago Mafia was to receive two-thirds of whatever Browne and Bioff took or shook down.
Wasting no time, Bioff returned to Balaban and Katz, making big demands for better employment conditions and wages. The result was another large payoff—this time for $100,000. Bioff’s shakedown scam also worked in New York and in other cities around the country.
The Chicago crime syndicate decided to hunt for bigger game. The new target was the film industry—a cash-rich business that promised fast and steady skim money. In late 1934, Bioff was sent to Hollywood, where IATSE had just lost a prolonged strike against the motion picture studios and, in the process, much of its membership.
The Depression had hit the film industry hard. Universal Studios, which had been built on a chicken farm by Carl Laemmle in 1912, had dramatically cut back its employment rolls, as had Warner Brothers, established by Jack, Harry, Sam, and Albert Warner in 1919. Such studios as Paramount, which had been founded in 1914 by W. W. Hodkinson and was operated by Adolph Zukor, and United Artists—a 1919 creation of actors Douglas Fairbanks, Sr., Mary Pickford, and Charlie Chaplin, and producer D. W. Griffith—had nearly been driven out of business.
The film industry was ripe for extortion. The Mafia knew that the studio moguls would cave in to its demands, trying to avoid future labor problems. As president of IATSE, the mob-controlled Browne, who was also a vice-president of the AFL, had the authority to order movie projectionists to strike throughout the country.
Mobsters Nick Circella and Johnny Roselli were sent to Hollywood by the Chicago Mafia to oversee its interests. Benjamin “Bugsy” Siegel was already in California, protecting East Coast underworld investments. It was time to achieve trade union dominion in Hollywood.
Bioff and IATSE met a jurisdictional dispute head-on. War broke out between IATSE and the rival United Studios Technicians Guild. Bloody battles were fought on Cahuenga Boulevard in Hollywood and at the gates of one of the studios on Pico Boulevard. According to one account, “The United Guild charged strong-arm tactics and ballot-box-stuffing by Bioff and hired its own ‘heavies,’ more than 150 longshoremen from the L.A. waterfront. The ‘longies’ waded into battle with Bioff’s soldiers.… Heads were broken, blood spilled, and cars overturned and torched.… Bioff’s routed the Guild’s forces with clubs, gunbutts and fists.” Bioff’s forces—primarily professional thugs hired by Johnny Roselli—won easily.4 Roselli had been in Hollywood for several years, working as an “undercover agent” for Pat Casey, a labor conciliator for the Motion Picture Producers and Distributors of America (MPPDA).
The head of the M
PPDA was Will Hays, whom the Hollywood moguls had imported to be the moral “watchdog” of the motion picture business.
Hays had been the postmaster general under President Warren G. Harding and had been deeply involved in the Teapot Dome scandal, having taken a $260,000 bribe on behalf of the Republican Party. Ironically, the “Hays Office” had been created, in part, to survey the impact of gangster films on the American public. Nonetheless, mobsters continued to be portrayed as anti-heroes while the police were made to be shadowy figures who were generally as corrupt and violent as the targets of their investigations. Hays routinely hired gangsters to bust unions and break heads to avert strikes against the film industry.
“At that time,” Roselli said, “I didn’t have too much money. About 1933 or 1934 they had a strike in the [movie] industry, and the unions, that is the studios, were in difficulty. The unions were trying to get on to this, I don’t know whether it was a demand for higher wages or recognition or what it was. I have forgotten what it was at the time. There was a little rough play around and the studios naturally didn’t want it. They didn’t want their workers hurt. They needed some cameramen to go back to work, and they had been threatened through some people. They had asked if I could help. I said, ‘The only way to help is to fight fire with fire. You don’t have to knock anybody on the head doing it, but you can just get enough protection for these fellows so no one will approach them with any rough play.’
“They asked me how much I would charge for this performance of duties. I said, ‘I don’t want anything, but I would like to get a job.’ I said, ‘You just pay the men that I will go out and hire to protect these people going to work in the studios, and later on … negotiate or [become an] assistant or something,’ which later developed. He gave me some expenses. I said, ‘You couldn’t give me $100,000 to do this thing, but I will do it for nothing. I will help you all I can.”5
In 1935—while the Mafia was playing ball with both the unions and the studios—Barney Balaban and Sam Katz moved to Hollywood, where they—along with Leo Spitz, who had negotiated the Balaban and Katz payoffs to Bioff and Browne in Chicago—became three of the biggest names in show business. Balaban was named as the president of Paramount; Katz became a vice-president of Metro-Goldwyn-Mayer; and Spitz became legal counsel for the MPPDA before becoming the president of the studios of Radio-Keith-Orpheum, RKO, which had been consolidated in 1928 by none other than Joseph P. Kennedy, Spitz’s predecessor. Later, Spitz founded International Pictures and would be named as president of Universal by its new owners, Robert H. Cochrane and Nate J. Blumberg, who bought out Carl Laemmle in 1936.
By 1937, Bioff and the Chicago Mafia had started shaking down the major film studios, including Twentieth Century, Paramount, MGM, and Warner Brothers, for $50,000 a year each and the smaller studios—like RKO and Harry Cohn’s eleven-year-old Columbia Pictures—for $25,000.6
Bioff told one studio executive, “I want you to know I elected Browne president, and I am his boss. He is to do whatever I want him to do. Now your industry is a prosperous industry, and I must get $2 million out of it.”
Bioff later boasted, “It was like taking candy from babies. When I snapped my fingers, them producers jumped.”
The middleman between Bioff and the studios was the president of the Motion Picture Producers Association, the lumbering, squinty-eyed Joseph Schenck, a former New York pharmacist who had moonlighted as an illegal drug dealer. In 1935, Schenck and former Warner Brothers executive Darryl F. Zanuck founded Twentieth Century, Inc., which merged with William Fox’s Fox Film Corporation in 1938; the new company was Twentieth Century–Fox. Schenck—whose brother, Nicholas, had founded Metro-Goldwyn-Mayer and the Loew’s theatre chain in 1924 with Marcus Loew*—had given Bioff a $100,000 payoff in return for guarantees of labor peace between IATSE and the studios. Schenck tried to disguise the extortion money as a loan.
The payoffs simply ensured that motion picture productions came off on schedule without problems from the 12,000 IATSE members, who were assessed two percent of their earnings by Bioff and Browne for no particular reason for forty-three weeks, beginning in December 1935. The total skim from the IATSE membership alone was over $1.5 million.
A top IATSE official recalled, “They got the two percent, and they never accounted for that. We agreed to give it to them on those terms, because we were in trouble. And we were being pushed around by big guys. And it took money, we knew, to save our union and to save our jobs.”7
Some of the studio moguls tried to appear acrimonious, but they could see the figures: movie profits were up and unemployment was up with fewer people, now under tight union control, to pay. It was a perfect setup for management. The Internal Revenue Service estimated that by making the payoffs, the studio moguls saved $15 million that would have gone toward employee wages and benefits.
Bioff explained, “I’ve found that dickering with these picture producers goes about the same all the time. You get into a room with them, and they start yelling and hollering about how they’re bein’ held up and robbed. That goes on and on. Me, I’m a busy man and don’t get too much sleep. After a while it dies down, and the quiet wakes me up, and I say, ‘All right, gentlemen, do we get the money?’”8
By 1937, with Bioff and Browne controlling IATSE, Petrillo cemented into power at AFM, and friends—like Balaban, Katz, Spitz, Cohn, and the Schencks—at the major studios, the Mafia had a stranglehold on the film industry.
*Also in attendance at the sitdowns were other Capone associates: Phil D’Andrea, Charles “Cherry Nose” Gioe, Paul “The Waiter” DeLucia, and Louis Campagna. A New York mob figure was present, too: Louis “Lepke” Buchalter, the head of Murder, Inc., who had been sent by Charles “Lucky” Luciano to represent the interests of the Eastern crime families.
*Nicholas Schenck and Marcus Loew had merged Metro Pictures and Goldwyn Pictures and named Louis B. Mayer as its head. When Loew died in 1926, Schenck renamed the company Metro-Goldwyn-Mayer.
CHAPTER THREE
In 1937, the same year that Bioff began shaking down the studios, Stein decided to challenge the William Morris Agency as the top talent agency in the country by creating an office in Beverly Hills. He placed a young agent, Taft B. Schreiber, in charge. Schreiber had walked into MCA’s Chicago office eleven years earlier, looking for a job with a band, and was hired as Stein’s messenger boy. “I had been a high school musician in Chicago,” Schreiber said. “At the time there were only three people in MCA: Jules Stein, Billy Goodheart, and a secretary.”1
Earlier, on December 16, 1936, Stein had hired Lew R. Wasserman, a Cleveland theatre usher and former candy peddler in a burlesque house. Born on March 15, 1913, Wasserman had moonlighted as the publicity director for the Mayfair Casino, a local nightclub in Cleveland. Although Wasserman had no more than a high school education, Stein made him MCA’s national director of advertising and publicity. Wasserman’s starting salary was $60 a week. Within two years—during which he wrote and handed out press releases—Wasserman was tapped as Stein’s protégé and made a company vice-president.
Another early MCA employee, who would become a phenomenon in the entertainment business, was David A. Werblin. Born in Brooklyn in 1910, Werblin, a ruggedly good-looking former football player at Rutgers University, had studied to be a journalist and had worked as a copy boy for The New York Times. At MCA, he started with a part-time job, working as Goodheart’s office assistant in New York, performing menial chores for twenty-one dollars a week. Goodheart frequently taunted Werblin, calling him “Sonny boy.” The nickname “Sonny” stuck, but the bad treatment did not. Werblin solidified his role as a “go-fer” when he became the band-boy for Guy Lombardo’s orchestra; his jobs were primarily carrying instruments for the musicians and fetching coffee. But when Goodheart left MCA just prior to World War II, Sonny Werblin was selected to succeed his boss as head of the New York office.*
In California, Stein quickly moved MCA Artists, Ltd., into the business of representin
g general talent, not just musicians. He targeted Hollywood’s most famous and established movie stars to become clients with his company. His first campaign was for actress Dorothy Lamour, but he failed to sign her until years later.
However, soon after, MCA scored its first big Hollywood triumph, signing actress Bette Davis, who had won the 1935 Academy Award for Best Actress for her role in Dangerous. (Her performance in Jezebel in 1938 would win her a second Oscar.) Stein had been so obsessed with landing Davis as a client that he placed her husband Harmon Nelson’s best friend, Eddie Linsk—who for unknown reasons was nicknamed “Killer”—on the MCA payroll for two hundred dollars a week. Within a few weeks, Linsk had convinced Davis to switch agencies and join MCA.
More stars followed Davis’s lead, among them Joan Crawford, John Garfield, Betty Grable, Bill Demarest, and Jane Wyman—just as bandleaders had followed Guy Lombardo to Stein a decade earlier.
During the early years of World War II, MCA continued to raid other agencies, stealing away clients. MCA had little interest in discovering new talent—it wanted big-name stars. If those stars were already represented by someone else, no problem; they could be bought off one way or another. Agent Jimmy Saphier lost bandleader David Rose when MCA offered Rose $20,000 cash to change firms and become one of its clients. Jules Stein also tried to woo Harry James’s solo vocalist Kitty Kallen away from his band for a career of her own. The problem was that James was an MCA client—as was his wife, Betty Grable—and bad feelings resulted. Johnny Beck, the top agent with Associated Artists, was also bought out by MCA, and he was put in charge of MCA’s motion picture division.
Perhaps the biggest losers during the early MCA empire-building days were the small, unknown groups. These bands were treated like common freight, haphazardly thrown onto shipping vessels and sent from one port to the next. MCA’s common practice was to organize these groups and then ignore them, or to force them out of business to make way for someone else.
Dark Victory Page 4