-Caveat Lector- excerpts from: On The Take - From Petty Crooks to Presidents William J. Chambliss©1978 Indiana University Press ISBN 0-253-34244-9 269 pps. – First Edition – In-print ----- 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 t heir 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 downt own who want to support you in your campaign." pps. 81-93 ===== CHAPTER SEVEN The Higher Circles DURING ONE OF Seattle's seemingly endless winters, I began to feel permanently enveloped in the greyness of sunshineless days. Basking in the gloom cast by the drizzle, I sat with a prominent local attorney in one of the better restaurants in the city. The attorney had on occasion invested in illegal ventures. We had become friends during the course of my research, and he had helped me penetrate the upper echelons of the criminal network that managed Seattle's illegal businesses. On this occasion he had called and asked me to lunch. After an appropriately unfocused conversation of fifteen minutes he paused and said, "Did you know that Meyer Lansky was in town the other day? You know his son lives in Olympia?" This attorney and I had talked about Meyer Lansky before. We both knew him to be one of the major financiers of illegal businesses in the United States. He continued, "Meyer contacted ___ [a lawyer known to be a principal go-between for network members]. He told him to pass the word to Rosellini that Meyer would pay everything necessary for Rosellini to run for governor." That was as gloomy as the weather. It nonetheless brightened the conversation. We talked at length about why Lansky would be willing to invest such a large sum of money in the state's governorship. We did not unravel the mystery that afternoon, but this information started me in the direction I needed to understand not only Lansky's unusual offer but the connection between what was happening in Seattle and what was happening elsewhere in the United States at that time. Outside Connections When the crime network was in full swing, on the fifteenth of every month a member of the state House of Representatives flew from Seattle to a city a thousand miles away carrying a satchel full of one-hundred-dollar bills. This was "washed money," which had been filtered from gambling profits through a bank. The amount in the satchel varied depending on how much of the bookmaking profits had to be "laid off' during the preceding month, how much the investors from other cities had coming as their share of profits from various illegal transactions in the city, and how much (if any) local profiteers wished to invest in businesses run by network operators in other cities. Despite the mythical character of the idea of a Mafia, there is nonetheless a national crime network, the structure and organization of which parallels rather closely the structure and organization of the network in Seattle. That is to say, it is a loose affiliation of businessmen, politicians, union leaders, and law-enforcement officials who cooperate to coordinate the production and distribution of illegal goods and services, for which there is a substantial consumer demand. The satchel the state congressman carried out of Seattle every month flew with him to an expensive bar, to a lawyer who represented illegal interests in that city. The lawyer took the satchel with him to his office, where he added its contents to an even larger amount gathered from his own city's illegal businesses. The entire amount was then flown to Las Vegas, where a representative took the money. A few days later the currency was converted to larger bills, added to the "skim" from Las Vegas casinos, and flown to Florida. Meyer Lansky took his share of the profits and sent the remainder off to investors and associates in other citiesNew Orleans, Cleveland, Detroit, and New York-whose investments entitled them to a certain share of the profits from Seattle, San Francisco, Las Vegas, and Miami. Crime networks flourished in the cities of America during prohibition. Many of the leading personalities in these associations had begun their upwardly mobile ascent out of poverty earlier, when they were employed by businesses as strikebreakers. Some were later employed by or actively engaged as members of labor unions to combat the violence of businesses that tried to break union inroads. But prohibition was the impetus for the emergence of organized efforts to provide the illegal commodities that people wanted, namely alcoholic beverages, and the services they were willing to pay for: gambling, prostitution, high-interest loans, and so forth. Following World War II the growth in wealth and power of crime networks was unmatched by the growth rate of any other industry. The nation's economy, which was thriving on the discovery of credit buying, on the wealth to be had from the expropriation of resources of less-developed nations, and on the markets won by dividing the world up with the Soviet Union, created an affluence that seemed boundless. Commodities and services that were illegal were in heavy demand. Profits were incredible. Restrictions were minimal.. The associations shared similar problems of existence. They had incredibly high profits from gambling, drugs, and usury which they wanted to invest. But where? How? The economy and criminal operations were expanding everywhere, and the investment of excess capital was critical. Furthermore, with their expanded operations, they were also in need of federal influence. The growth of the bureaucracy in Washington posed an ever-increasing threat to criminal operations. Payoffs and cooperation of local and state governments were sufficient to ensure relatively trouble-free operations locally, but federal agencies, controlling drugs and federal crimes as well as federal legislation that could either facilitate or impede operations, became increasingly important. Crime networks benefited from the same economic and political climate that benefited other businesses from 1945 on. The situation was replete with opportunities for someone who could provide investment opportunities and federal political clout. As is always the case in situations such as this, someone came along for the job. That person was a man long associated with criminal operations in New York and a close associate of most of the leading crime figures of the thirties, Meyer Lansky. Meyer Lansky had a shrewd businessman's eye for discovering new territories and creating impressively high profits for his associates, namely people who ran or profited from network operations in cities like Cleveland, New York, Cincinnati, and Kansas City. Lansky's empire began with a fairly modest investment in Broward County, Florida. The Colonial Inn was south Florida's first major gambling and entertainment establishment outside of Miami Beach. Investors in the club included the major figure in Detroit's crime network, Mert Wertheimer, who owned one-third of the Colonial Inn, and Joe Adonis, leading racketeer in one of New York's networks, who owned 15 percent. Lansky kept 16 percent for himself and distributed the remainder among his close friends and relatives. The profits were staggering, even by syndicate standards where profits less than 20 percent are considered losses. From Florida, Lansky moved into Cuba, where profits were even more impressive and where he also purchased the goodwill, friendship, and protection of Fulgencio Batista, the Cuban president before the socialist revolution. To top off these investments, Lansky invested heavily in the heroin traffic from Turkey and France and opened a hotel gambling casino in Las Vegas. By so doing, Lansky assured himself of the undying loyalty and admiration of even the most anti,-Semitic members of crime networks across the nation. Mark it, however, that he was no 1, godfather." He was simply a well-respected, trustworthy investor with excellent political connections-connections which were able to get even Lucky Luciano out of prison on a pardon. Lansky also had an almost unerring eye for the political payoff system. He chose his candidates well, but he also covered himself (and those who depended on him for help) by financing candidates who competed with each other. Thus, he paid handsomely into the campaigns of both Thomas E. Dewey and Franklin Roosevelt. He contributed to the political campaigns of Lyndon Johnson, as well as Hubert Humphrey, George Smathers, Russell Long (and Huey Long before him), John Connolly, Richard Daley' Albert Rosellini, and Edmund Brown, to mention only a few.[10] But he paid more here than there, a fact that was ultimately to be his undoing. Those who play the political payoff game take the chance of financing the loser. When that happens, their fortunes fall as surely as they rose when they financed the winner. Like his brothers and sisters in private industry, a syndicate leader is measured by the profits he produces. The stockholders are the profiteers from crime operations in New York, Trenton, New Orleans, Las Vegas, Seattle, Portland, and cities across the country. Also, like his brothers and sisters in private industry, a successful syndicate operator must manage political payoffs to ensure the protection of crime network interests. Meyer Lansky probably has done both jobs better than anyone in the history of organized crime. The years from 1932 until 1964 were Democratic years almost everywhere. Naturally Lansky placed his money, at least a disproportionate amount of it, in the hands of Democrats. In Seattle as elsewhere he worked diligently for Democrats. It paid off. judges were appointed, legislation passed, and protection provided. Lansky's investments in the Democratic Party were often coordinated with, or given through, trade unions, especially the Teamsters.[11] Whether given directly or indirectly, the money funneled to politicians in the form of "campaign contributions" or bribes was designed to purchase influence. As newscaster David Brinkley observed: George Meany of the AFL-CIO is fawned over in Washington but not entirely for his intellectual brilliance. And not because he can deliver labor's votes. He can't. What he can deliver and does deliver is political money. The present U.S. Ambassador to Great Britain was not appointed for his contributions to creative foreign policy and diplomacy but for his contribution of political money. This is not new. Back in the fifties, the President appointed one of his big contributors ambassador to a country, then it was found he didn't even know where the country was. So, jobs like that, and Washington influence, are in effect for sale. All it takes is money, political contributions in election years. If you give enough, Washington's favors can be yours—influence, flattery, social success, invitations to swell affairs, and even ambassadorships to countries with nice climates and cheap servants. Perhaps more important, influence on domestic policy, such as taxes, affecting your own business and income. Running for office has become incredibly expensive, and candidates have to get money somewhere. The Democrats get a lot of it from the unions, and the Republicans get a lot of it from rich individuals and corporations. No doubt, there are some rich unions and people charitable soul, who will give money expecting nothing return, but they are scarce. A big political contribution usually is seen as an investment. It's a scandal everyone admits. But it's worse now, because running for office costs more. Public cynicism about politics and politicians already runs high. If this is not cleaned up, the political system will come apart-with influence, dominance, and even control put up for sale to the highest bidder.[12] It has been commonly accepted by those who play the political game seriously that a major source of Democratic Party revenue for the past fifty years has been a laborunion-crime network coalition. The most important source of political money for the Democrats and Republicans alike is, of course, the contributions that flow from "legitimate" business, that is, from those businesses whose principal product is a legal one, although the means by which the business is conducted may be highly illegal. The means of conducting the business and the business itself may, in fact, be far more harmful to more people than the business of organized crime. Nonetheless, it makes sense to differentiate businesess whose main product or service is illegal, since this difference in legality does create important differences in the way the businesses are managed and how they function. Despite the fact that both Democratic and Republican parties receive their major share of financing from legal businesses, the sad fact (from the Democratic Party's point of view) is that the Republicans receive the greater share of that political money. However, the labor-union-crime network funds that oil the Democratic Party's machinery help to equalize the disproportionate share of political money that legitimate business and industry give to the Republican Party. >From the 1930s and into the 1960s, there emerged an unspoken detente between Republican and Democratic leaders with respect to some of the major sources of campaign contributions. The Democratic and Republican parties came to control different sources of the available political money. Obviously, if either party could undermine a major source of the other party's political money, the balance of power so crucial to any workable detente would be severely threatened as the money shifted into the coffers of one party. Shortly after his election to the Presidency in 1968, Richard Nixon began a campaign which, had it been successful, would have shifted much of the labor-union-crime-network political money from the Democratic to the Republican Party. Whether this was a knowledgeable plan on the part of Nixon and his political advisers is something we do not know. judging from the now available insights into how this group of men planned numerous political forays to increase their position of power, one suspects that the attempt to corner funds for their political interests may have been quite rationally made. In any case, whether by design or simply as a by-product of other decisions, the consequence for the balance of power between the Republican and Democratic parties would have been the same. Nixon had long-standing and very close ties to a number of people whose business profits derived at least in part from illegal businesses. Regardless of how heavily involved in crime enterprises these associates and partners of Nixon were, it is tempting to speculate that they were involved enough in such places as Dade County, Florida; the Bahamas; Costa Rica; and Las Vegas, and in such enterprises as drug trafficking, stock frauds, bank swindles, and gambling casinos to have the wherewithal to run illegal businesses profitably. The Nixon administration's campaign against "organized crime" was in fact a campaign against those crime networks that were most closely connected with Nixon's political foes, Republicans and Democrats. This campaign had the effect of eliminating the entrenched owners and managers of crime cartels, thus affording Nixon's associates and partners an opportunity to increase their share of criminal enterprises. To bring this about, the Nixon administration systematically exposed networks in Democratic Party strongholds, while ignoring networks who supported Nixon's wing of the Republican Party.[13] At the same time, the campaign against organized crime attempted to purge Meyer Lansky from his position as a major link between different organized crime interests and the Democratic Party. Lansky's empire was vast. The Republicans' first attack was on his Las Vegas holdings. For this attack Howard Hughes was available to invest in the casinos and hotels, which Lansky was being forced to sell by state political pressure that threatened to end the skimming of profits which made the casinos so profitable, by subpoenas and indictments brought by Republican-appointed U.S. attorneys where Democrats had reigned heretofore, by Internal Revenue agents under Republican control, and by FBI agents under Republican control. So he sold out of Las Vegas, and Howard Hughes came in. Immediately the profits that were for political payoffs began moving into the Nixon campaign fund and out of the Democrats'. In south Florida Lansky was indicted by a Republicancontrolled grand jury for perjury. In Las Vegas he was indicted for tax evasion. Control of a Miami-based bank shifted from Lansky to Nixon associate Bebe Rebozo. Union funds that had gone to Lansky for investment and into Lansky's banks were transferred. Law firms that had had lucrative union contracts lost them to Republican firms; the Teamsters hired Nixon's own law firm. For all of this, the Republicans paid off. Nixon granted Jimmy Hoffa executive clemency, and Hoffa was released from prison. Frank Fitzsimmons, who was the replacement for Hoffa as head of the Teamsters, was publicly acknowledged by Nixon as being "welcome in my office any time; the door is always open to Frank Fitzsimmons." It was not only the door to his office that was open; so too was the door to his airplane. In January 1973 the Los Angeles office of the Federal Bureau of Investigation learned that a syndicate leader from the Midwest was coming to Los Angeles to work with Teamsters officials to arrange a billion-dollar health insurance contract for Teamsters' members. Frank Fitzsimmons came to attend the final meeting. The FBI bugged the offices for seventytwo hours preceding the major meeting, but when they requested permission to continue the bug (which by federal law they had to do), the attorney general's office turned down the request. The meeting between Fitzsimmons, a Midwest associate, and insurance company officials took place, and the contract was signed. Fitzsimmons left immediately to meet Richard Nixon in Palm Springs, and they flew back to Washington, D.C., together. The International Herald-Tri bune reported these events in the April 30, 1973, edition as follows: Two ranking officials to the Department of justice eight weeks ago turned down a request by the Federal Bureau of Investigation to continue electronic surveillance that had begun to penetrate Teamsters's union connections with the Mafia, according to reliable governmental sources. Attorney General Richard G. Kleindienst and Assistant Attorney General Henry E. Petersen were said to have made the decision after 40 days of FBI wiretapping had begun to help strip the cover from the Mafia plan to reap millions of dollars in payoffs from the welfare funds of the International Brotherhood of Teamsters. The officials acted on the grounds that investigation had failed to show "probable cause" to continue eavesdropping, the sources said. They reportedly acted after having received a memorandum, prepared at the direction of L. Patrick Gray III, who was then the bureau's acting director. The memorandum, which made no recommendations, indicated the sensitivity of the investigation, which was reportedly producing disclosures potentially damaging and certainly embarrassing to the Teamsters' president, Frank E. Fitzsimmons, the Nixon administration's staunchest ally within the labor movement. Endorsement The administration's cultivation of the two-million-member union culminated last year in a Teamster endorsement of the President's reelection, and Mr. Nixon has made it clear that the door to his office is always open to Mr. Fitzsimmons. The Kleindienst- Petersen decision came less than a month before Charles W. Colson, special counsel to the President, left the White House to join a Washington law firm to which Mr. Fitzsimmons had transferred the union's legal business. Before leaving the White House, Mr. Colson had been instrumental in formulating administration political strategy regarding organized labor. The electronic surveillance began on January 26, under an order of the Federal District Court in Los Angeles authorizing the FBI to tap 11 telephone numbers in the offices of People's Industrial Consultant, 9777 Wilshire Blvd., Los Angeles, justice Department sources said. The consulting firm is a Mafia front set up to channel Teamster welfare money to underworld figures, the sources said. On February 14, the court authorized an extension of the tap until March 6. The taps were requested and installed under the omnibus Crime Control and Safe Streets Act of 1968. FBI Affidavit What was learned from the taps was described in an FBI affidavit submitted to justice Department lawyers. The affidavit asked for continuance of the existing surveillance for 20 days and installation of new taps on a public telephone and the office telephone of an alleged mobster implicated in the plot to siphon money from the Teamsters. The affidavit said that investigation up to then, including the use of electronic listening devices, had indicated "a pattern of racketeering activity-that is, a series of payments of commissions or kickbacks" flowing from corporations controlled by a doctor in league with the mob through People's Industrial Consultants "to the officers and agents of the employee-welfare benefit plan," in violation of federal statutes. Mr. Petersen and Mr. Kleindienst, however, would not allow an application for renewal of the court order. A request Friday to the justice Department for comment from the two government officials went unanswered. The FBI affidavit cited information reportedly given to the bureau by an informant in contact with an associate of Allen Dorfman, consultant to the Teamsters' billion-dollar Central States, Southeast and Southwest Areas Pension Fund, who began a federal prison term a month ago for conspiring to receive a kickback in connection with a loan application made to the pension fund. "Source No. 3" The informant, identified in the affidavit as "source No. 3," said that on February 8, at the Mission Hills Country Club in Palm Springs, California, Dorfman's associate introduced Mr. Fitzsimmons to Peter Milano, Sam Sciortino and Joe Lamandri, identified, by the FBI as southern California members of the Mafia. The Teamster leader was in Palm Springs participating in the Bob Hope Desert Classic golf tournament. justice Department sources reported that, according to the informant, the three men presented to Mr. Fitzsimmons a proposal for a prepaid health plan, under which members of the union covered by its welfare program would be provided with medical care by Dr. Bruce Frome, a Los Angeles physician. Monthly medical fees for each union member would be paid by the central states fund from the millions of dollars contributed to it by employers under Teamster contracts. In a 15-minute conference with the three, the informant added, Mr. Fitzsimmons gave his tentative approval and sent the group to a Palm Springs residence for definitive discussions with Dorfman. The FBI were said to have learned that the next day Mr. Fitzsimmons met with Lou Rosanova, identified by justice Department sources as an envoy for a Chicago crime syndicate, which sought a percentage of the Los Angeles mob's take on the health plan. Justice Department investigators say that they have evidence that the Chicago branch of the Mafia is determined to retain the access it had to the pension fund through Dorfman during James R. Hoffa's Teamster presidency. Hoffa was imprisoned after being convicted of tampering with a federal jury and pension fund fraud. As a result, according to the federal agents, the Chicago Mafia members have kept a sharp eye on Dorfman and Mr. Fitzsimmons since Mr. Fitzsimmons gained clear control of the union. In 1971, President Nixon commuted Hoffa's eight-year prison sentence, with a provision that precludes his holding union office until 1980. Nixon's Plane Rosanova and Mr. Fitzsimmons had talks again on February 12 at La Costa, a plush resort and health spa in San Diego County, according to the Orange County and San Diego County authorities. The same authorities reported that a few hours after that meeting Mr. Fitzsimmons boarded President Nixon's plane and flew to Washington with the President. Both Rosanova-Fitzsimmons meetings were reportedly observed by informants of the Orange County District Attorney's Office. On February 27, at La Costa, the same informants say that they heard Rosanova boast of a future payoff split between him and Mr. Fitzsimmons. In its affidavit seeking an extension and a broadening of electronic surveillance, the FBI cited as a basis for its request Title 18, Section 1954, of the U.S. code, which prohibits commissions and kickbacks to union and welfare plan officials in return for the placement of union business. Corroboration During the 40 days the devices were in operation, the sources said, recorded conversations greatly supplemented and tended to corroborate information gathered in other phases of the investigation being carried on by the bureau and authorities in Los Angeles, Riverside, San Diego, and Orange Counties. On February 9, the day after Milano, Sciortino and Lamandri allegedly met with Mr. Fitzsimmons and Dorfman in Palm Springs, the taps at People's Industrial Consultants were said to have picked up a conversation between Dr. Frome and Raymond de Derosa, identified by the California authorities as a muscle man for Milano, who operates out of the consulting company's offices. The FBI affidavit said that de Derosa had told the doctor that "the deal with the Teamsters is all set." De Derosa indicated to Dr. Frome, according to the affidavit, that People's Industrial was in the line for a 7 percent commission, and they talked about a possible $1 billion-a-year business. In other tapped conversations, de Derosa reportedly said the PIC would get a 10 percent cut of the medical payments. He reportedly complained that the concern had to "give away three points (3 percent) to get the deal." This is apparently a reference to that part of the deal surrendered by the Los Angeles Mafia figures to pacify the Chicago representatives. Meyer Lansky was left out of the Teamsters-Republican Party coalition. Several years later it was reported that Nixon could get $1 million from the Teamsters Union. He told John Dean that this fund could be used for hush money. The Washington Star reported on Sept. 29, 1977: . . . the $1 million may have been what Nixon referred to in the March 21, 1973, White House meeting with Dean concerning the Watergate burglars, demands for huge sums [of] money in return for keeping quiet. According to a transcript of a tape of that conversation, Nixon said to Dean: "What I mean is you could get a million dollars ... And you could get it in cash. I know where it could be gotten.... We could get the money. There is no problem in that." But Lansky's empire was much more than a link with the Teamsters. His investments in Las Vegas were supplemented by major holdings of casinos and hotels in the Bahamas, which he helped open up after Cuba was brutally thrust outside the gambling circuit for American tourists. Businessmen who supported the Republican Party attempted to wrest control from Lansky in the Bahamas by manipulating political leadership. Bebe Rebozo made extensive investments in hotels and casinos and tried to buy up and compete with Lansky's enterprises. Someone attempted to murder a leading politician who was favoring Rebozo in the struggle. The final attack on Lansky was probably the most successful and the most serious. The Republicans attempted to close off his sources of heroin. They did this by pressuring the Turkish government to enforce the law prohibiting the growing of opium, the plant from which all heroin is refined. At that time (late 1960s) Turkey accounted for probably go percent of the opium processed into heroin and shipped to the United States. By 1972 Turkey was accounting for less than 40 percent, and Lansky had lost control over a major source of his financial empire.[14] The Republican administration also pressured the Latin American governments whose countries were layover points in the heroin route to America, and Lansky's principal Latin American coordinator of heroin traffic, Auguste Ricord, was forced out of Argentina, where he had been managing the traffic for years. He was eventually arrested in Paraguay.[15] Meanwhile, the heroin traffic from southeast Asia, especially from the Golden Triangle of northern Thailand, Burma, and Laos, expanded production and a new source of heroin for the incredibly lucrative American market opened up. It is unknown whether this new heroin source was linked to Republican politicians, but the fact that the CIA and the South Vietnamese governments under generals Ky and Thieu actively aided the development of this heroin source suggests that such a link is not beyond the realm of possibility.[16] Lansky must have known he was fighting for his life. Always a heavy contributor to the Presidential election, in 1968 he outdid himself by a good margin. Through his agent, Sam Levinson, Lansky contributed at least $240,000 to Hubert Humphrey's campaign against Nixon. Lansky also contributed heavily in support of the Democratic governor of Washington. In fact, so heavily did he contribute that according to political observers there the Democratic candidate was able to ignore altogether the usually timeconsuming task of raising campaign contributions. The format of the attack against Democrat-controlled crime networks was much the same everywhere. Newly appointed Republican U.S. attorneys called grand juries to investigate corruption and racketeering. In Chicago one of Illinois's leading Democratic politicians, Otto Kerner, who had formerly been the governor of Illinois and was at the time of his exposure a U.S. judge, was indicted, tried, found guilty, and sentenced to prison for accepting a payoff while he was governor. As we have seen, in Seattle the bulk of the political, law-enforcement network members and even a few of the racketeers were indicted. In the state the Democrats lost the governorship despite Lansky's heavy financing. Moreover, the state attorney general's office was also won by a Republican, and to make matters totally unliveable for the existing network, a Nixon-affiliated Republican won the county prosecutor's office. These shifts in state and local political fortunes would mean considerably less money for Democrats in the state, because the new network would be formed around a moderate Republican-oriented group. It would thus mean considerably more money for the Republicans. Thus it was that the network in Seattle came to its demise. Newspaper reporters who reported the comings and goings of the network, and law-enforcement officers who exposed the guilty culprits took well-deserved pride in their role. The county prosecutor and the U.S. attorney, who worked long hours to build cases against network members, were pleased with their role. It was a marvelous experience in which the righteous thought they were spearheading a campaign against evil. What they did not realize was that they, in fact, were only pawns in a much larger game that was going on at the highest levels of government. This began to dawn on some when, after the indictments were brought and some key players in the network had been removed from their positions of power and sufficiently compromised so that new appointments could be made, the word came from Washington, D.C., to stop further investigations. The governor suddenly cooled on the idea of seeing the indictments through to prison sentences. The FBI and other investigative units denied the rumor that gambling, drug trafficking, and prostitution were coming in again under new management. The Republican judge, whom the defendants had all agreed on as presiding judge, dismissed the indictments on all but three of the key defendants. Or maybe those most involved in the network's demise simply turned their heads and began looking to their careers and their political futures. Maybe the reaction of a reporter who early on tried to expose the network was typical: "It's all over. There is no more gambling." This same reporter, six years before, had gone to see whether or not there was gambling. Now he was willing to accept the myth that prevailed that the network had been broken, that Seattle was "clean." The network's demise did not usher in a new era of freedom from the rackets or from the influence of crime. The evidence at hand suggests that the whole process of exposing the crime network resulted from political and economic struggles taking place outside of Seattle, King County, and the state. pps. 150-169 --[cont]-- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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