-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- an excerpt from: Crime on the Labor Front Malcom Johnson©1950 McGraw-Hill Book Company, Inc. New York. 243 pps. - First Edition - Out-of-Print --[4]-- CHAPTER EIGHT The Dock Rackets THERE ARE ANY number of methods by which a dishonest union can rob its members and the public. Organized theft, salary kickbacks, padded payrolls, excessive dues and initiation fees, bribery, and extortion are just a few of the commoner methods. The versatile and imaginative labor racketeer also presides over the bookmaking and numbers rackets in his area and probably runs a loan-shark office and a strikebreaking agency in his spare time. The danger of wholesale thievery is most prevalent in unions that handle consumers' goods, items which are practical to steal. The salary kickback develops in a union whose leaders have dictatorial control and hold their members in a vise of fear. The padded payroll is a common device, but one which exists most readily where the hiring and paying functions are handled by the union instead of by representatives of both union and the company. Many of the labor rackets seem to revolve about the function of the middleman in our economic setup. There is relatively little racketeering in the unions involved in the manufacturing process and even less in the unions that ultimately sell the product to the consumer. Between those two primary functions, millions of workers are employed in performing essential services. Between the farm and the plate, a pork chop passes through the jurisdiction of a number of different unions whose services in turn raise the price of the chop. If the unions in question are dominated by racketeers, the price of the chop will be that much higher. Unfortunately the housewife can complain only vaguely about "higher prices." If she knew exactly why prices were higher, her complaints would become angry accusations. Organized thievery is by far the most lucrative of the rackets flourishing on New York's waterfront. Losses from cargo thefts, most of which are carefully planned and executed, are estimated at a staggering total of $140,000,000 annually. According to a study made by the American Institute of Underwriters, 75 per cent of all the consumer luxury goods imported and exported in this country go through the Port of New York. This is the type of cargo most susceptible to theft. The result is that losses from theft in the Port of New York are easily three times greater than in all other American ports combined. During 1948 one steamship line alone—the Grace Line—suffered losses of about $3,000,000, 80 per cent of which disappeared from its New York piers. Whole truckloads of cargo are stolen from the piers without a trace. Hijackers—armed robbers of trucks—take an additional toll from shipments between the docks and inland freight terminals. Casual pilferage by individual thieves sends the loss totals higher, although this form of theft is negligible compared with the highly organized stealing by criminal gangs. The wholesale robbery is made easy by mob domination of union checkers and clerks. The mobsters dictate the hiring of the union members and see to it that the "right men" get the key jobs. A waterfront criminal, turned informant, drew a complete blueprint of a mob theft. "To do it right the clerical help must be in on these jobs. It's a mob operation from beginning to end. You can go in for larceny on your own, but it's dangerous. The gang bosses don't like it. Have you ever noticed how many times longshoremen get turned in for stealing a bottle or two of liquor or maybe a package of food to take home to their families? The mobs, working through the union, turn them in. They don't want any amateur thieves cutting in on them when they are out for bigger stuff. Sometimes the dock boss, usually a member of the mob, fingers the load to be stolen, taking his orders from a gang lieutenant. The dock boss goes to the checker, points to a truckload of merchandise on the pier and says: 'Danny said get this one.' The checker knows what to do. He measures the load, then gives the truck driver a receipt. Only it's a phony receipt signed 'Joe Blow.' He makes out a legitimate receipt too, but the trucker doesn't get that. All the other papers are legitimate, but before the consignment can be loaded on the ship the papers are taken back—this is where the clerical help comes in—and destroyed. The stuff never is loaded on the ship. It is hauled away at the convenience of the mob. They'll send a truck down for it. The driver will have papers. They look O.K. He tells the dock boss he's there for a load of silk, or whatever it is. The dock boss points it out to him and he loads up, checks at the gate with the checker and goes on his way. That's all there is to it. The consignment was bound for South America, say. It may be weeks before the loss is discovered. Months later an insurance investigator comes around. He has that phony checker's receipt. He inquires about the missing cargo. Nobody ever heard of it. It never got to the pier, they tell him. There is no record of it. "The insurance man says that it must have got to the pier for here's the receipt given to the truck driver. Where's Joe Blow, the checker? That gets a laugh. They tell him that there's nobody around there by that name, and never was. The stuff just never got to the pier. They keep telling him that. He knows better, but can't prove it. The stuff is never traced. It's listed as a nondelivery." This type of thievery is so prevalent and costly that the steamship lines several years ago organized the Security Bureau, Inc., in an effort to reduce losses. The bureau is headed by Edward E. Conroy, a veteran of the Federal Bureau of Investigation. With a trained staff of investigators, including undercover agents on the piers, Conroy devotes his full time to studying thefts and devising means of preventing them. He quickly found that records showed that ninety-nine out of a hundred cases of "nondelivery" were due to theft. A major part of Conroy's work is educational in nature. He makes extensive surveys of conditions at specific piers with the view of eliminating obvious "threats to security." Investigation showed that many thefts were committed with the active cooperation of pier guards assigned to watch cargo. These guards were members of a watchmen's union which, until the passage of the Taft-Hartley labor law, was affiliated with the ILA. Theoretically, to comply with the law, the watchmen's union is now divorced from the longshoremen's union and has independent status. It is significant, however, that the officers of the watchmen's union are also officers in the ILA. The Security Bureau found that many of these guards (union men) were ex-convicts with serious criminal records, yet were placed in positions of trust to prevent theft of cargo worth millions of dollars. Conroy launched a vigorous campaign for legislation requiring the fingerprinting of the pier watchmen to prevent the hiring of men with such records and to give the steamship companies the same protection afforded other industries whose private detectives and watchmen are required by law to be fingerprinted. Led by Joe Ryan, the ILA and the watchmen's union bitterly opposed passage of the legislation, arguing that it was discriminatory and "un-American." Organized labor's opposition succeeded in defeating the bill in two legislative sessions, but with public support it finally was passed in the 1949 session. A similar bill was passed by the New Jersey Legislature in 1948. At the outset, a serious handicap in combating thievery was the attitude of the steamship companies themselves. They displayed a puzzling reluctance to prosecute thieves, even those caught red-handed in actual possession of stolen goods. Their excuse was that they were afraid of suits for false arrest. Although the Security Bureau carefully refrained from saying so, this hesitancy on the part of the steamship companies was for the most part a product of two kinds of fear-fear of the waterfront gangsters, and fear that any change in the status quo would mean smaller profits for the company. Almost invariably [the Security Bureau reported], police officials have complained that they have been handicapped by the lack of cooperation on the part of the transportation companies. They state specifically that representatives of these companies often refuse to swear complaints against thieves found in possession of stolen property, and that as a result the police are powerless to have warrants issued for the arrest of those thieves. When officials of steamship lines have been confronted with this criticism by the police they have contended that the situation was due to the fact that they were fearful of civil suits for false arrest. When these officials have cited specific cases it has been found that they had little actual basis for this fear. It has been determined generally that the attitude was due to a lack of knowledge of legal procedure. Some of the world's greatest steamship companies, with investments of millions of dollars to protect and highly trained legal staffs and expensive counsel in their employ, thus were pleading ignorance of fundamental processes of the law! Taking the official explanation at its face value, Conroy began bombarding the steamship companies with digests of laws pertaining to larceny, false arrest, malicious prosecution, libel, and slander- all designed to show that with the proper evidence they had nothing to fear from vigorous prosecution of thieves. The campaign helped, and the steamship companies gradually began to show less timidity in dealing with thefts. Their professed fear was a feeble excuse at best. A more realistic interpretation of their attitude is that they were influenced by the knowledge that, in the final analysis, the losses from thefts did not come out of their own pockets. The cargo was heavily insured. If the increasing losses caused insurance rates to skyrocket, the cost could ultimately be passed on to the consumer. The tremendous toll from thievery and the other dock rackets results in higher shipping costs, which in the end must be borne by the public in higher prices. Unfortunately, a large segment of the consuming public, which pays the bills, seems blissfully unaware that crime in labor inevitably affects its pocketbook in higher taxes and higher prices. Another contributing factor to the waterfront problem is an air of bleak defeatism affecting workers and industry alike. The industry is inclined to regard the rackets, even including thievery, as "necessary evils." They have always existed, they always will, and there is nothing much that anybody can do about it. Thus an organization like the Security Bureau, with a limited staff and with no police powers, is up against a powerful combination of apathy and fear. Under the circumstances it cannot hope to eliminate systematic thievery entirely, but only to reduce it and warn against conditions encouraging it. To that extent Conroy's agency, half-heartedly supported by the steamship companies, is doing a commendable job. It is a step in the right direction, but only a step. A catalogue of other dock rackets would include duplicate hiring, or payroll padding; smuggling and traffic in narcotics; bookmaking and the numbers game; extortion; kickbacks on wages; loansharking; and a wide variety of petty grafts which in the aggregate run into big money. Since gang control of the piers is absolute, the gangsters take a cut on everything. It all comes under the heading of "something for the boys." Consider the matter of duplicate hiring, which is worked with the knowledge and cooperation of the hiring stevedores and the pay clerks. It is fairly common practice for longshoremen to have more than one social security number, the extra ones obtained under fictitious names. The extra cards for nonexistent employees are easily obtainable. For each social security card the longshoreman then gets a registration card with steamship and contracting stevedoring companies. In the shape-up, the hiring stevedore, choosing the workers he wants, will pretend to hire ten gangs when he actually needs only nine, the extra gang being represented in the surplus cards. He collects the cards and gives them to the pay clerk with instructions to "put these through." The clerk does so and the gang collects the extra pay checks. The irony of it is that the longshoremen, while participating in the deception at the behest of the gang bosses, get none of the graft. The average citizen always seems surprised to learn that bookmaking and the numbers game-another form of gambling—are widespread waterfront rackets. Operation of these lucrative sidelines is handed out by the union bosses in the form of "concessions" to favored racketeers. The latter then kick back a cut of the proceeds to the bosses. The numbers game, also known as policy, originated in Harlem and consists of betting on a combination of numbers, usually chosen from published bank clearing house figures. It yields millions of dollars to the criminals controlling it and was one of the most profitable of the rackets dominated by such gangsters as Dutch Schultz during prohibition. Why should the hardup, exploited longshoreman, trying to buck a system in which there are far more workers than jobs, add to his misery by betting on the horses and the numbers game? The answer is that these gambling games are actually an integral part of the system. The longshoreman who makes bets finds that he can get work more easily; if he doesn't bet, he often doesn't work. The traffic in narcotics is a fantastically profitable underworld enterprise in which the dock gangsters serve as intermediaries for efficiently organized international smuggling rings controlled by top figures in the so-called crime trust, or world-wide syndicate of criminals. Agents of the Federal Narcotics Bureau have identified Charles (Lucky) Luciano, recently deported to Italy, as one of the bosses of the crime syndicate specializing in the narcotics trade. The waterfront racketeers play an important role in the smuggling of narcotics, although they do not participate in the final distribution of the illicit drugs. Their part is to get the contraband off the ships, and this is made comparatively easy, despite the vigilance of the Customs authorities, by the longshoremen's easy access to and from the incoming vessels. The drugs, usually smuggled from abroad by crew members, are passed on to the longshoremen, who in turn slip the packets of dope to other members of the smuggling ring at a designated time and place. Eventually, they reach the higher echelons of the ring for final distribution to the retail peddlers who supply the drug addicts. Every step in the process is so carefully planned and executed that even when there is a slip-up, and millions of dollars' worth of drugs are seized, the top directors of the ring are protected, for their identities are unknown even to other criminals in the organization. The waterfront operatives get fat cash fees for their part in the transactions. There are several forms of extortion practiced on the piers. Salary kickbacks are one. "Voluntary contributions" is another. The workers are the contributors. Longshoremen describe the kickback on wages as being as regular as social security tax deductions. They simply pay for the privilege of getting a day's work, the fees ranging from 10 to 20 per cent of their pay. The mobsters get the money through their hiring bosses on the piers. With no security under the present hiring system, the longshoremen never know from day to day whether they have a job. In their eagerness to get work in an industry where there are too many workers and too few jobs, they are easy prey. They find that if they do not pay the kickback they do not get work. They pay and they do not talk about it. President Ryan of the ILA has admitted that there might be such a thing as the kickback on the docks, but adds piously that he doesn't condone it and that it is a matter for the police to handle. Of course, Ryan and other union officials know, as do the police, that concrete legal evidence is almost impossible to obtain. To get such evidence as the basis for prosecution there must be complaints backed by sworn testimony. Such complaints can come only from the longshoremen victims of the kickback, and the lonashoremen know better than to buck the system. The exact techniques of extortion are intriguing. At the shape-up when the hiring is done, prospective workers willing to kick back make the fact known by prearranged signals or by advance agreement off the pier. The hiring boss then gives them preference. Flourishing in Harlem and among Italian longshoremen in Brooklyn are numerous so-called clubs through which the kickback fees are collected in the guise of membership dues. There are hundreds of such clubs in which the members pay weekly sums to get work. In Harlem the average rate is $1.25 per day for a day's work; in Brooklyn the fee is about $1 a day. Sometimes the members get a chit from the club operators to show the hiring boss at the pier, indicating that they have paid and are therefore eligible for jobs. More often a straw boss takes the men directly from the club and stands there with them until they are hired. The kickback and loansharking go hand in hand. The loan sharks lend money to the hard-pressed longshoremen at skyscraping rates of interest, ranging from 10 cents to 25 cents weekly on the dollar. In recent years the police Waterfront Squad has conducted a vigorous, relentless campaign against the loan sharks, but the evil persists and will continue to persist until the labor practices which foster it are corrected. Cases prosecuted have shown that, almost without exception, the sharks are able to collect the identification pay discs of the workers in advance and deduct their interest b efore the men receive their pay. The sharks, with the cooperation of pay clerks, turn in a batch of discs, collect the entire wages of their victims from the clerks, deduct their cut, and give the remainder to the men. At many piers longshoremen have found that they could not get jobs unless they agreed to borrow money from the loan sharks. "I have had the loan sharks ask me, before I got a job, if I wanted to borrow any money on my check," said a longshoreman bitterly. "If I refused, I didn't get the job. At some piers where the sharks are working with the hiring bosses, the men can work as long as they stay in debt to the loan sharks. If they are lucky enough to get out of debt in cases where they borrow heavily, they soon learn that they can't get any more work unless they borrow some more and get in debt again." Every time the police have arrested them, the loan sharks have been found to possess numerous pay discs belonging to the longshoremen. The atmosphere of fear and intimidation on the waterfront was impressively demonstrated in the prosecution of several cases in 1949, when complaining witnesses suddenly suffered a lapse of memory and were reluctant to testify, obviously in fear of reprisals. In one trial it was necessary for the judge to clear the courtroom of all spectators before a reluctant witness would testify, despite assurance from the court that he would be fully protected and had nothing to fear. It was clear that mobsters, of whom the witness was terrified, were in the courtroom, intimidating him by their presence. In sentencing one convicted loan shark, Special Sessions justice Irving Ben Cooper commented: "I am filled with unrestrained amazement at the loose practices of those who pay the longshoremen where one man can turn in many pay discs and get the pay of the men those discs represent. The companies are under a duty to plug up this loophole which makes it possible for loan sharks to take advantage of these poor men who borrow only to make ends meet." In the case of Frank Savio, a boss checker and strong-arm man for the ILA who was convicted of usury, the Distrtict Attorney estimated that the waterfront criminals in Manhattan were extracting $200,000 a year through the loan-shark racket. Although President Ryan publicly deplores this racket, he appeared as a character witness in behalf of Savio on the occasion of a previous arrest for assault. Most loan sharks insist that the longshoremen turn over their pay discs in advance when they get loans. Some sharks even have the audacity to tack on a "service" fee Of 25 cents, in addition to their interest charges, for collecting the pay of their victims. At many piers representatives of the mobs solicit "voluntary contributions" from the workers. There is little pretense about this racket; the rank-and-file longshoremen recognize it for what it is—a cut taken from them on pay day for the benefit of "the boys." Describing these payoffs in the territory controlled by gangster Mickey Bowers, a longshoreman said, "Every pay day, as regular as clockwork, they come around for the voluntary contributions. They pass a cigar box around and the collections are made by the union shop steward. Every man is expected to kick in a dollar. They give all kinds of excuses. They are collecting a fund for one of the boys in trouble, or buying flowers for a sick member, or paying off the cops. They tell us anything. They get at least $150 from each pier every pay day." "And if a man refuses?" The informant smiled. "He might refuse once, and maybe nothing would happen to him. But then again something might. He might find he couldn't get work, or he might get kicked around. A man soon gets the idea; he doesn't refuse more than once." Petty grafts on the piers include what truckers and shippers call "hurry-up" fees, which the trucker pays to racketeers for preferred position in a line of trucks waiting to be loaded with inbound freight. The truckman who does not pay encounters serious and costly delay. His truck may be tied up for hours, so he finds it cheaper to pay. This cost, usually a couple of dollars per truck, is passed on to the consignee. The receivers of freight have learned that their merchandise may stay on the piers indefinitely unless they, along with the truckmen, also pay a fee to have it expedited. Thus the receiver pays for promptness in handling his freight and the truckman for a favored position in line. None of these grafts and rackets could exist without the active cooperation of union bosses. Far from protecting the workers and striving for better working conditions, the ILA under its present leadership keeps them in a grip of fear and encourages their exploitation. Union members tell time and again of outsiders who pay for work slips and get jobs while the regular members go jobless. "The union doesn't even try to get the men jobs," said a Negro longshoreman. "There are more men than they can handle. Anybody can get in. Sometimes, standing there on the pier with my union button and my union book, the hiring boss acts like he hates me because I'm a union man. I've seen nonunion men pay a union delegate $10 Or $15, get a slip of paper, and go to work. It happens all the time." Crime on the waterfront and in the ILA has been developed into a fine science involving false cargo receipts, checkers with phony pseudonyms, and watchmen who turn their backs at the right moment. Loan sharks are permitted to collect the dockworkers' pay, and one steamship company loses as much as three million dollars annually from organized theft. Fortunately the ILA is not a typical American labor union. Yet there are too many other labor organizations which, because of faulty structure or lax administration, are potential goldmines to organized groups of criminals. Top echelon gangsters are shrewd and clever men, oftentimes as capable as our biggest industrialists and government officials. If labor is beginning to appeal to them as a field for exploitation as strongly as bootlegging did in the twenties and early thirties, then the unions are going to be hard pressed indeed to withstand the onslaught. pps. 104-116 --[cont]-- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations. Omnia Bona Bonis, Adieu, Adios, Aloha. Amen. Roads End <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are not allowed. Substance—not soap-boxing! 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