-Caveat Lector- excerpts from: On The Take - From Petty Crooks to Presidents William J. Chambliss©1978 Indiana University Press ISBN 0-253-34244-9 ----- An amazing book. Quite interesting. Documents a national system of pay-off and corruption. Om K --[2]-- CHAPTER FIVE Maintaining Control SHARED INTERESTS are the root of the forces of social control that maintain silence and ensure mutual cooperation among the members of the network and those who work for it. The device by which all these people come to share an interest in maintaining corruption and widespread criminality is the payoff. Principally payoffs are in cash, the oil of capitalism's machinery. This money provides cash to meet monthly bills, to pay gambling debts, to finance political campaigns, to send children to private schools, to bribe officials for special favors, or simply to pay wages somewhat above those earned by comparable workers in "legitimate" employment. There are gifts that supplement payoffs: a color television given to the newscaster, an antique automobile for a bank vice-president, a loan to a local businessman. And there is the use of public office to gather information that gives someone a special advantage in making a handsome profit from a small investment. Those who cooperate and join the network are well rewarded. A routine and moderately paid government job can be turned into a source of wealth or at least considerable luxury. Seattle police captains received monthly stipends of five to eleven hundred dollars from the network. These, however, were the more blatant and in many respects less important techniques by which the network maintained control. More important by far were the people who moved from one position of power and influence in the government-business structures to another, all the time maintaining links with or control over important segments of crime enterprises. A few cases illustrate the interpenetration of different political and economic structures of network members. 1. A police officer and police inspector who worked directly under officers who coordinated payoffs within the police department was handpicked by a leading local politician to run for the office of sheriff when there was an opening. He was successful in his campaign. Afterward he received his salary as sheriff and large monthly sums as his share of network profits from the county. 2. A U.S. Coast Guard commander who was friendly with network members, upon retirement from the Coast Guard, was appointed to the state liquor board. 3. A fireman from the city cooperated with the crime interests by inspecting and harassing businesses or businessmen who refused to cooperate with the network. He also assisted in the destruction of some property network members wanted to burn in order to collect insurance. After five years as a fireman he joined the police force and was appointed to the vice squad, where he continued to work as a network member for seventeen years. With the support of leading people in the political power structure of the city, he was elected to the city council, where, along with the president of the council, he worked diligently to protect the interests of network members. While on the city council he was appointed head of the licensing committee, from where he was able to control the licensing of both legitimate and illegal businesses. 4. Agents of the Federal Bureau of Investigation who either worked closely with network members or were suspiciously unconcerned about corruption were able to remain in the Seattle office for unusual lengths of time. On retirement they were offered attractive jobs in government and business. Contacts with network members were then used to bring in substantial business to their companies or law firms. The companies were of course pleased with the business and with the political contacts a former federal law officer brought to the business. For his part, the agent might be increasingly important in network policies and could direct several businesses central to network interests. 5. A former sheriff who worked closely (but not too wisely) with the network was appointed to the state parole board. In this position he was able to manipulate prison terms for network members as well as to punish persons who did not cooperate with them. He was also in a position to shorten prison sentences for people able to make payoffs to leading members, including, of course, himself. Most important, he could see that network members were able to "do a favor" for a politician or businessman who wanted to "help out a friend" by getting someone out of prison. Such mutual aid was a crucial ingredient in maintaining control. This list of people who moved from position to position as the network solidified its control over local and state politics and law enforcement could be expanded to include judges, state legislators, and political officeholders at all levels. The examples selected are neither extreme nor unusual. They are, in fact, quite typical of how a crime network maintains control. They are typical of how American politics works. The fact that the profits that underlay the establishment of the network of crime were from business ventures that were illegal does not alter the fundamental fact that the process by which these interrelationships developed and persisted was no different from the process by which the same networks and interdependencies emerge and persist between enterprises that are legal and the political law-enforcement system. For the system to work effectively there must be enough income to warrant mutually shared interests protecting and perpetuating illegal activities. Such a network would not arise to protect the interest of people devoted to the rehabilitation of derelict alcoholics. The Business Community People engaged in the manufacture, sale, or distribution of goods or services that are legal get involved with crime networks by pursuing profits in precisely the same way they pursue profits in legitimate business. The "decision" to join a network is often more an accident than a design: I met Jay(P) at the Rainier Club. We liked each other. We both had played sports in college and had a lot in common. We also like to drink and horse around. Then one day he called and told me he knew of a possibility for turning a nice profit if I had some unused cash lying around. It was a perfectly natural thing. Businessmen are always doing things like that. So I invested a good deal of money on Jay's recommendation. I guess I should have looked into it more carefully, but I had no reason not to trust him. After all, he was a well known politician at the time. He told me it was to be used to import some things from Taiwan. I never saw a bill of lading though I see now I should have asked. Only later did I discover that I had purchased ten percent of a heroin shipment. I doubled my money in two months. Naturally, I didn't want to ask too many questions with that kind of profit. The next time Jay called I was ready to sell my wife to make the investment. We bought land together and some phony business connected with an amusement company, and Jay passed on tips to me about land deals. I liked the guy, and we agreed politically on most Issues though he was a little too conservative for my blood. Still, in view of our friendship and everything I contributed heavily to his political campaigns and even supported him publicly.... Similar patterns prevailed throughout the community. A realtor became involved by learning of an opportunity to invest in a hotel. The realtor was approached by a lawyer who did not identify his clients. The lawyer's clients, the realtor was told, were interested in purchasing an old hotel suitable for renovation. The location was not important, but the hotel did have to be in poor condition. The realtor found a suitable hotel, which the lawyer then authorized the realtor to buy for his clients. The realtor agreed to accept a share of the hotel as his commission. The lawyer and his clients formed a corporation. They became a public corporation and sold stock. The proposed purpose of the stock was to raise capital to renovate the hotel. Few of those who invested over a million dollars ever saw the hotel. Nor were they ever aware of the caper in which they took part. The corporation borrowed several million dollars (from the bank of which a member was vice-president) on the strength of the capital raised by selling stock. Contracts were granted for reconstruction. The principal contractor was a man who had moved to Seattle from Detroit, where he had been a member of a crime network that controlled much of the building industry in that city. The contractor agreed beforehand to kick back to the lawyer and his clients 50 percent of the value of the contract. When reconstruction of the hotel supposedly began, the insurance was increased commensurate with the construction that was allegedly taking place. The insurance was prorated according to reports given to the insurance company by the contractor as to how far along construction had progressed. When the construction was supposedly nearly completed and insurance was close to its peak, the hotel burned down. In actuality, of course, the hotel had barely been touched. The money that was to have gone for reconstruction had mostly been skimmed off by those who formed the corporation and by the contractor. The insurance company paid the full amount. The stockholders were paid off, the company was liquidated, the state purchased the vacant lot on which the hotel had stood, and the stockholders profited a little. The criminal network profited a lot. Not only had they increased their capital by making a "shrewd investment," but they had along the way gained the friendship and allegiance of an important local realtor, who was most pleased that his commission had turned into such a handsome profit. The insurance company raised the price of next year's insurance by a fraction of a penny to cover the loss. Property and the State State, county, and municipal governments manage an enormous amount of property. They manage buildings that house government offices, municipal parking lots, jails, courts, roads, highways, and public buildings. They also manage and control licenses, franchises, and other forms of property that are the source of incredible profit to those who can acquire them. Property, whether in the form of land, buildings, or franchises and licenses, is the cornerstone of capitalism. The property managed by the government for the most part (but not entirely) is "soft" property in the form of licenses, franchises, and information. The governor of the state, the county board of supervisors, the municipal governing board or mayor, the heads of licensing committees in the legislature or in the government control much of the soft property. It is used for a variety of purposes, of which the cementing of power and the conversion of power into wealth are the most important. In 1964 a Republican replaced the incumbent Democrat who had been governor for two terms. One of the new governor's first official acts was to transfer over one million dollars in state insurance to the insurance company for which the governor had worked before his election.[5] The outgoing governor amassed a personal fortune while in office. In one instance he purchased a piece of land for $8,327 and sold it for $250,000. There are good reasons in the legitimate business community for a crime network. Many of the city's legal businesses thrive or decline to the extent that goods and services provided by a crime network are available. One such industry is tourism. Hotels, restaurants, and taverns profit and thrive on vice. An important ingredient in Seattle's economy is tourism. An important fact of tourism, in turn, is the attraction of conventions. Men who come to conventions are attracted to cities where gambling, prostitution, pornography, and various other "pleasures" are readily available. No one has to articulate this fact of life in order to have people in politics, business, and law enforcement adopt policies that conform to it: ... everybody knew that a decent city that is growing has to have whores, has to have accessible liquor, prohibition or not, has to have a place where a guy can go and shoot craps, either for penny ante or high stakes, has to have a place where a guy can go and play cards. There's no reason putting somebody in jail for it, because it is what all good, righteous Christians do. Law-Enforcement Agencies Shared interests stretch farther than mere economic ties. Shared interests occur on a very broad level and should be understood as stemming basically from contradictions which inhere in the political and economic structure of American cities. To understand this, it will help to view the role of laws in the shaping of crime networks. Laws prohibiting gambling, prostitution, pornography, drug use, and high-interest rates on personal loans are laws about which there is a conspicuous lack of consensus. Even persons who agree that such behavior is improper and should be controlled by law disagree on the proper legal response. Should persons found guilty of taking drugs, gambling, or visiting a prostitute be imprisoned or counselled? Reflecting this dissension, large groups of people, some with considerable political power, insist on their right to enjoy the pleasures of vice without interference from the law. Those involved in providing gambling and other vices enjoy pointing out that their services are profitable because of the demand for them by members of the respectable square-John community. Prostitutes work in apartments located on the fringes of the lower-class area of the city, rather than in the heart of the slums, precisely because they must maintain an appearance of respectability so that their clients will not feel contaminated by poverty. Professional pride may stimulate exaggeration on the part of the prostitutes, but their verbal reports are always to the effect that "all" of their clients are "very important people." My observations of the comings and goings in several apartment houses where prostitutes work generally verified the women's claims. Of some fifty persons seen going to prostitutes' rooms in apartment houses, only one was dressed in anything less casual than a business suit. Watching those who frequented panorama gave me the same impression that the principal users of vice are middle and upper class. During several weeks of observations (leaning against the wall), I observed that more than 70 percent of the consumers of these pornographic vignettes were well-dressed, single- minded visitors to the slums who came for fifteen or twenty minutes of viewing and left as inconspicuously as possible. The remaining 30 percent were poorly dressed, older men who lived in the area. Information on gambling and bookmaking in the permanently established or floating games is less readily available. Bookmakers report that the bulk of their "real business" comes from doctors, lawyers, and dentists in the city: A: It's the big boys-your professionals—who do the betting down here. Of course, they don't come down themselves; they either send someone or they call up. Most of them call up, 'cause I know them or they know Mr. ____ [one of the key figures in the gambling operation]. Q: How 'bout the guys who walk off the street and bet? A: Yeah, well, they're important. They do place bets and they sit around here and wait for the results. But that's mostly small stuff. I'd be out of business if I had to depend on them guys. The poker and card games held throughout the city are of two types: 1) the small, daily game that caters almost exclusively to local residents of the area or working-class men who drop in for a hand or two while they are driving their delivery route or on their lunch hour, and 2) the action games that take place twenty-four hours a day and are located in more obscure places, such as a suite in a downtown hotel. Like prostitution, these games are on the edges of the lower-class areas. In Seattle the action games were the playground of men who were by manner, finances, and dress clearly well-to-do professionals and businessmen. Not all business and professional men partake of the vices. Indeed, some of the leading citizens sincerely oppose the presence of vice in their city. Even larger numbers of the middle and working classes are adamant in their opposition to vice of all kinds. On occasion, they make their views forcefully known to the politicians and lawenforcement officers, thus requiring public officials to express their own opposition and appear to be snuffing out vice by enforcing the law. The law-enforcement system is thus placed squarely in the middle of two essentially conflicting demands. On the one hand, the job obligates police to enforce the law, albeit with discretion; at the same time, considerable disagreement rages over whether or not some acts should be subject to legal sanction. This conflict is heightened by the fact that some influential persons in the community insist that all laws be rigorously enforced, while others demand that some laws not be enforced, at least not against themselves. Faced with such a dilemma and such an ambivalent situation, the law enforcers do what any well-managed bureaucracy would do under similar circumstances. They follow the line of least resistance. Using the discretion inherent in their positions, they resolve the problem by establishing procedures that minimize organizational strains and that provide the greatest promise of rewards for the organization and the individuals involved. Typically, this means that law enforcers adopt a tolerance policy toward the vices, selectively enforcing the laws when it is to their advantage to do so. Since the persons demanding enforcement are generally middle-class and rarely venture into the less prosperous sections of the city, the enforcers can control visibility and minimize complaints merely by regulating the location of the vices. Limiting the visibility of such activity as sexual deviance, gambling, and prostitution appeases those who demand the enforcement of applicable laws. At the same time, since controlling visibility does not eliminate access for persons sufficiently interested to ferret out the tolerated vice areas, those demanding such services are also satisfied. Cooperation and Control The policy of cooperating in order to control the vices is also advantageous because it renders the legal system capable of exercising considerable control over potential sources of real trouble. For example, since gambling and prostitution are profitable, competition among persons desiring to provide these services is likely. Since legal remedies are lacking, the competition tends to become violent. If the legal system cannot control those running the vices, competing groups may well go to war to dominate the rackets. If, however, law-enforcement agents unofficially cooperate with some, there will be enough concentration of power to minimize conflicts. Prostitution can be kept clean if the law enforcers cooperate with the prostitutes; the law can thus lessen the chance, for instance, that a prostitute will steal money from a customer. In this and many other ways the law-enforcement system maximizes its visible effectiveness by creating and supporting a shadow government that manages the rackets. Initially, people may have to be brought in from other cities to help set up the necessary organizational structure. Or the system may have to recruit and train local talent or simply co-opt, coerce, or purchase the knowledge and skills of entrepreneurs engaged in vice operations. This move often involves considerable strain, since some of those brought in may be uncooperative. Whatever the particulars, the ultimate result is the same: a crime network emerges—composed of politicians, law enforcers, and citizens—capable of supplying and controlling the vices in the city. The most efficient network is invariably one that contains representatives of all the leading centers of power. Businessmen and bankers must be involved because of their political influence, their ability to control the mass media, and their capital. The importance of cooperating businesses was demonstrated in Seattle by the case of a fledgling magazine that published an article intimating that several leading politicians, in particular the county prosecutor, were corrupt. Immediately major advertisers canceled their advertisements in the magazine. One large chain store refused to sell that issue of the magazine in any of its stores. When one of the leading members of the network was accused of accepting bribes, a number of the community's most prominent businessmen sponsored a large advertisement declaring their unfailing support for and confidence in the integrity of this "outstanding public servant." The network must also have the cooperation of lawyers and businessmen in procuring the loans which enable them individually and collectively to purchase legitimate businesses, as well as to expand the vice enterprises. One member not only served along with others in the network on the board of directors of a loan agency, but he also helped wash money and advise associates on how to keep their earnings a secret. He served as a go-between, passing investment tips from associates to other businessmen in the community. In this way a crime network serves the economic interests of businessmen indirectly as well as directly. The political influence of the network is more directly obtained. Huge tax- free profits make it possible to generously support political candidates. Often the network members assist both candidates in an election, thus assuring influence regardless of who wins. While usually there is a favorite, ultra- cooperative candidate who receives the greater portion of the contributions, everyone is likely to receive something. Like all activities of the criminal network, political influence is obtained in a variety of ways. An ambitious and talented young lawyer decides to run for senator. He is running behind his opponent. He knows that his main problem is inadequate campaign financing. One night he receives a telephone call from a lawyer acquaintance asking to talk with him. They go for a drive, and in an isolated parking lot outside the city the young candidate is given an envelope containing thirty-five thousand dollars in onehundred-dollar bills. The acquaintance tells him, "This is from some of the businessmen downtown who want to support you in your campaign." pps. 81-93 --[cont]-- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. 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