For example, Kearney Walton, Jr., was employed as an orchestra leader at the Biltmore Hotel in Los Angeles from 1936 to 1938. The hotel was owned by Baron Long, a tough businessman with longstanding ties to major Mafia figures. In 1938, an agent for MCA came to Walton and asked him to sign an exclusive contract. When Walton told Long that he had been approached by MCA, his employer told him that if he signed with MCA he would lose his job. Long simply did not want someone driving a hard bargain for his bands.
Walton didn’t sign with MCA then, but soon he was sent to Omar’s Dome, a nightclub owned by Long’s brother-in-law. After several months, the MCA representative made him another offer. This time, with his engagement at Omar’s Dome ending, Walton decided to sign. The MCA contract provided that Walton could not be represented by anyone else—but contained no guarantees for future work.
Walton did work, but not at clubs like the Biltmore. Instead, he played in small clubs in Laguna Beach and Pismo Beach—without any regularity. In the end, Walton “was starved out of the business.” Ironically, soon after, Baron Long signed with MCA to ensure entertainment for the Biltmore.
In desperation, Walton wrote a letter to the U.S. Department of Justice, complaining that “MCA had monopolized the big-band business by forcing its representation on nearly all of the industry—via its contracts with hotels, resorts, dance halls, and night clubs, as well as with the bands themselves.” In addition, Walton alleged that MCA had a sweetheart relationship with James Petrillo and the top officials of the American Federation of Musicians, who, in violation of AFM rules, permitted MCA to maintain exclusive contracts with hotels and nightclubs.
Walton’s letter touched off a storm of investigations focusing on MCA that would last for decades. In 1941, acting on one of Walton’s suggestions, George Maury, a special attorney for the Justice Department’s Antitrust Division in Los Angeles, interviewed Lindsey “Spike” Jones, the leader of a small, independent band. Jones, Walton had said, could be helpful to the government’s investigation because of his own experiences with MCA.*
Formerly represented by MCA, Jones, like Duke Ellington and Count Basie, had left the agency in 1939 after Willard Alexander, a top MCA agent, had defected to the William Morris Agency. Jones told Maury that MCA controlled most of the big-name bands in America and Canada, and at least seventy-five percent of the entire band-booking business.2
“How has MCA become so successful?” Maury asked.
“They’ve devised a system of rotating bands in all these places they play,” Jones replied. “The system’s so perfect that without the MCA contract, a bandleader can’t make enough bookings to make a living, and the clubs can’t get bands unless they sign their contracts with MCA.”
Jones charged that MCA engaged in a variety of “unethical practices” and would often “run down” and ridicule bandleaders not under its wing.
“What about Stein and the AFM?”
“Stein’s a member of the union, its Chicago local, and he’s present at nearly every AFM meeting.”3
Jones concluded the interview by telling Maury that MCA had made its big move in Hollywood—in an attempt to launch its drive to represent stars in the motion picture industry. Its only competition would come from the William Morris Agency, the Myron Selznick Agency, the Hayward-Deverich Agency, and the General Amusement Company. Already, Jones said, many of the bands represented by these companies were trying to buy out their contracts so that they could sign with MCA.
Meantime, Assistant Attorney General Thurman Arnold had become concerned that radio broadcasters were not only broadcasting but were also involved in phonograph and record production, and the business management and representation of some of their own employees. As head of the Antitrust Division under President Franklin D. Roosevelt, Arnold was responsible for forty-four percent of all the antitrust actions that had been taken by the Justice Department since the passage of the Sherman Antitrust Act in 1891. Earlier, Arnold had forced General Electric and Westinghouse to sell its interests in RCA—and, thus, NBC. Arnold demanded that if these companies were going to remain in the broadcasting business, they would have to compete with RCA and NBC.
Arnold authorized Victor Waters, another assistant attorney general, to call a meeting with the three principal radio networks—CBS, Mutual, and NBC—“to discuss various phases of chain broadcasting and the entire question of possible monopolistic practices on Saturday, October 25 [1941].”4
At the meeting with the network executives, Waters restated an FCC warning of the growth of conflicts of interest between broadcasters and artists, and “the unfair control by broadcasters over the supply of talent.” The networks were also told that if they “did not divest themselves of their activities in the artists’ management field the matter would be turned over to the Department of Justice for inquiry.”5 James Petrillo and the AFM agreed and pushed for action.
Of the three networks, only CBS agreed to relinquish its representation of artists, selling its rights to MCA for a reported $500,000. The others, NBC and Mutual, decided to ignore the FCC—although rumors were afloat that William Morris was going to bid for NBC.6
“[W]hat gave MCA its great impetus on bands was its deal with CBS when the AFM forced the [radio] networks to get out of the big-band business,” a Justice Department memorandum reported. “MCA not only obtained all of the CBS bands, but also got access to CBS lines for radio broadcasts any time MCA wanted it. This meant that many of the bands gravitated toward MCA to get national exposure on CBS.”7
The same week as the hearings with the networks, Tom C. Clark—the chief of the West Coast Regional Office of the Justice Department—following up on Maury’s investigation, sent a letter to Thurman Arnold, citing the Walton letter and more information on the sweetheart relationship between Jules Stein and James Petrillo. Arnold replied to Clark two weeks later, asking him to monitor the MCA situation in California. But the Justice Department’s investigation of MCA remained dormant for several months.
On April 3, 1942, another dissident MCA client brought the FBI into the act. Al Stone, representing the vaudeville team of Stone and Lee, wrote a letter to J. Edgar Hoover, the director of the FBI. Stone reported that he was in the midst of litigation against MCA, charging the talent agency with, among other things, breach of contract. Stone claimed that, although MCA had offered a settlement, he was going to fight the matter in court to draw public attention to MCA’s tactics and attempts to monopolize the entertainment business.
Stone alleged that MCA and entertainer Danny Dare were involved in an exclusive representation contract with the Danny Dare Review. Stone and Lee were one of the acts in the show. While with the Review, they played for three and a half weeks at the El Cerrito and four weeks at the Ambassador Hotel in Los Angeles, followed by twelve weeks on the road with the comedy team of Laurel and Hardy in the summer and fall of 1940. According to Stone, MCA raked in all profits above the salary list at both the El Cerrito and the Ambassador, in addition to its ten-percent commission for Dare’s show while it was on the road. Stone charged that the Dare Review received $7,000 for the El Cerrito engagement though the salary list was only $2,695, and $5,000 from the Ambassador while the salary list was $2,200.
When Stone discovered the extent of MCA’s cut—in addition to its ten-percent commission—he and his partner said they would go to court. Consequently, Stone claimed, MCA threatened to keep them out of work. “That is another evil in show business,” Stone wrote. “If an actor steps out of line with any of these big [corporate] agencies or bookers, they have enough influence to call the proper people and give the word … DON’T BOOK STONE AND LEE [emphasis Stone’s]. This has been a common practice in show business for many years.… I am sure, Mr. Hoover, that if this organization was investigated you would find that they have nothing on an octopus.”
Blackballed by MCA and back on the street, Stone and Lee had tried to file for unemployment compensation but were rejected. Deciding to take MCA to court, Stone a
nd his wife sold nearly all their possessions and spent everything they had fighting MCA. Several of their colleagues, like Laurel and Hardy, who had also been hurt by MCA, feared similar reprisals and refused to testify on their behalf. Stone and Lee eventually lost their case and faded into obscurity.
Over a year passed after Stone’s complaint to Hoover. Then, on April 30, 1943, Tom C. Clark sent a memorandum to the attorneys on his staff, advocating a government investigation of MCA. Antitrust attorney George Maury dissented, stating that only two witnesses, Kearney Walton and Spike Jones, had been interviewed, and no clear evidence showed a conspiracy between MCA and the AFM. In addition, Maury said, most of the big-name band members had joined the military in the midst of World War II.
“In view of the scantiness of the material and the almost impossibility of aiding the war effort by any such investigation at present,” Maury wrote, “it is my best suggestion that any further investigation of this situation should be postponed for the duration of the war.”8
*Goodheart later became the vice-president of network sales at NBC.
*Jones and his ragtag band, which included washboard and kazoo players, would later sell millions of copies of their first big hit, “My Two Front Teeth.”
CHAPTER FOUR
In 1938, Jeff Kibre, a studio craftsman and head of the IATSE progressives, filed a formal complaint with the National Labor Relations Board on behalf of the Motion Picture Technicians Committee. Based on information he received during an IRS audit of Joseph Schenck’s 1937 income tax returns, Kibre charged that Willie Bioff and George Browne had taken a $100,000 payoff from Schenck, the president of the Motion Picture Producers Association, “in return for which the IA locals were turned into company unions which have been going through the motions of collective bargaining.”1
A 1931 graduate of UCLA, Kibre came from a family of Hollywood set decorators. He had wanted to become a writer but went into the labor movement when he first became a studio craftsman. Kibre was viewed by nearly all who knew him as a good, honest, and dedicated man. Becoming more militant and aligning himself with leftist causes, Kibre was an easy target for those who disagreed with him—because of his politics. On at least one occasion, Bioff’s goons came to Kibre’s home and beat him up. Nevertheless, Kibre’s charges—and the investigation that followed—shook Hollywood like an earthquake.
Others also went after Bioff. Arthur Ungar, the crusading editor of Daily Variety, began writing a series of exposés about Bioff, Browne, Schenck, and the whole IATSE scam, which was now threatening the independence of writers, directors, and actors. The Screen Actors Guild (SAG) had also grown fearful of Bioff’s pressure. It published a full-page ad in The Hollywood Reporter,* which stated, in part: “The IATSE is a very real menace.… Writers will find themselves in a boss-ruled union overnight if they stand alone.… IATSE can never take over writers if writers stand shoulder to shoulder with the actors’ and directors’ guilds.…”2
Former SAG president Robert Montgomery proposed that the Guild appropriate $5,000 to hire a private investigator to look into Bioff’s background. That probe yielded details of Bioff’s sleazy criminal past and associations.† Information was fed to Ungar, who, in spite of Bioff’s threats against him, declared all-out war against the labor racketeer. But Bioff’s problems were just beginning.
The break in the investigation came when federal investigators discovered that Schenck had received thousands of dollars in unreported cash through some of his investments and had been making payoffs to Bioff. Charged with income tax evasion and faced with stiff fines and a long stretch in prison if convicted, Schenck decided to talk and provided federal agents with details of the studios’ $1.2 million in payoffs to Bioff and Browne. However, Schenck claimed that he was not aware of the extent to which Bioff and Browne were involved with the Chicago Mafia and could offer no information about it.
In return for Schenck’s cooperation, the government dropped its tax evasion charges against him. Schenck pleaded guilty to one count of perjury. Sentenced to a year in jail, he was paroled after serving only four months and was later given a full pardon. He was, however, replaced as president Twentieth Century–Fox by Spyros Skouras.
On May 23, 1941, Bioff and Browne were indicted on charges of extortion and racketeering by a federal grand jury. With Joseph Schenck’s testimony, Bioff and Browne were convicted and sent to Alcatraz for ten and eight years, respectively. After being indicted, Bioff waved the American flag and told the press, “The unions on the West Coast are infested with communism. We expelled eighteen members during the last four years on charges that they were members of the Communist Party. We eliminate them as fast as we can. Our position won’t allow anything to stand in the way of the defense program [World War II].”
The U.S. government bought the story that the studio moguls had been subject to extortion and were the poor victims of Bioff—not that they had been co-partners in a conspiracy to keep employees’ wages low and their union under tight control.
Two years later, government investigators in New York uncovered evidence of the Mafia’s earlier plot to take over Hollywood through Bioff and Browne. Confronted with the information, Bioff decided to talk, implicating Frank Nitti, Johnny Roselli, Phil D’Andrea, Charles “Cherry Nose” Gioe, Paul Ricca, Nick Circella,* and Louis Campagna.
On the day the indictments were returned, Nitti, who had already done time for income tax evasion, shot and killed himself.†
Generally overlooked in press accounts during Bioff’s testimony were his statements about a young labor lawyer he had been introduced to in 1939 at the Bismarck Hotel in Chicago by mobster Charles “Cherry Nose” Gioe. Bioff testified that, in very explicit terms, Gioe pointed to the lawyer and told Bioff, “[He] is our man, and I want you to do what he tells you. He is not just another lawyer but knows our gang and figures our best interest. Pay attention to him, and remember, any message he may deliver to you is a message from us.”
The young attorney’s name was Sidney R. Korshak.
Prior to Bioff’s extortion indictment, Korshak—who was also a friend of Johnny Roselli—had called Bioff and asked to talk.
Bioff said that he and Korshak had a meeting in the attorney’s room at the Ambassador Hotel in Los Angeles and “talked about everything in general.” Bioff recalled, “He [Korshak] asked me about all these indictments [of Bioff and Browne]. I says, ‘All I know about them at this time is what I have read in the newspapers.’ He says, ‘Well, are you prepared with your defense?’ I said, ‘No, not altogether.’ He said, ‘Well, Joe will be the next victim. Joe will be the man that you [gave] the money to, Joe Schenck’; that he [Korshak] had seen a transcript of Schenck’s [statement]; that there is enough material left there by the government to give any jury good reason to believe that I turned this money over to Joe Schenck [making Schenck the fall guy].…”
“In other words, at your forthcoming trial you were to testify that way?” federal prosecutor Boris Kostelanetz asked.
“Yes.”
“… Sidney Korshak in this case deceived you, is that right?”
“Well, I don’t know whether he deceived me. He advised me to lie.”
Later, Bioff testified that Korshak—who had also represented George Browne after his conviction—had arranged for him to get $15,000 for his defense.3
Born on June 6, 1907, and raised on Chicago’s West Side, Korshak was the son of Sidney and Beatrice Korshak, refugees from Lithuania. A basketball star in high school, he graduated from the University of Wisconsin, where he was a champion boxer. He earned his law degree in 1930 from DePaul University in Chicago.
At the time of Bioff’s testimony, Korshak was in the U.S. Army, serving as a military instructor at Camp Lee, Virginia. Two months after entering the service, he ran into Bernice Stewart, a former model, dancer, and ice-skating star whom he had met in Los Angeles in 1941. Two years later, they were married at the Ambassador Hotel in New York City by a city magistrate. He was disc
harged from the service as a corporal two years later. Upon his return home, he and his brother Marshall—a graduate of John Marshall Law School in Chicago—set up a legal practice in downtown Chicago. Marshall was actively involved in the local Democratic Party. Both of them quickly achieved legitimacy, socializing with bankers, business executives, show people, sports figures, and politicians.
According to statements made to government investigators by Gioe—who had been sent by the Chicago underworld to run the mob’s rackets in Iowa until 1939—he had met Korshak in or about 1933, three years after Korshak graduated from DePaul. Soon after, Korshak was formally introduced to the Chicago underworld by Gioe associate Gus Alex, a Greek member of the local syndicate who handled the mob’s operations in and around the Loop. Alex was a favorite of Tony Accardo and Jake “Greasy Thumb” Guzik, who was in charge of making the Chicago mob’s political payoffs.4
After Korshak’s name came out in Bioff’s 1943 testimony, FBI agents did a background check on Korshak but discovered nothing in their files; he had no criminal record. He had been arrested only once, in May 1931, along with his brother Ted, for starting a brawl in the Show Boat nightclub in the Loop. When the police searched the Korshak brothers, a gun was found in Sid’s pocket. Charged with carrying a concealed weapon, Korshak was held on $2,400 bond. At his arraignment, the charges were dropped.
Further inquiries made by the FBI revealed that Korshak, who lived in the mob-owned Seneca Hotel in Chicago, “had represented one George Scalise, who was at that time international president of the Building Service Employees with offices in New York City. In 1940 Korshak was receiving a $1,200-per-month retainer fee from Scalise to draft a new set of by-laws for the union that would enable him, among other things, to break up any union local into small units which he could reassemble as he saw fit. This would be a potent weapon against any recalcitrant local. Scalise was a New York hoodlum and ex-con and was indicted in New York City by Thomas Dewey for alleged extortion from hotels and contractors.”5
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