Chapter Seven

Luciano’s Deal

In early 1942, the war in the Atlantic was going badly for the Allies. In the ten months January – October 1942, 521 Allied ships were lost to enemy action. Packs of Axis submarines were operating without hindrance in the north-west Atlantic, hunting their prey close to the US East Coast.

In January 1942, a Norwegian oil tanker was torpedoed just sixty miles off the coast from Montauk Point, New York State. In the same month, U-boats sank a US merchant steamer, a Latvian freighter and a US tanker off North Carolina. These were just a few of the twenty-one vessels lost in that month. In February, off Cape May, New Jersey, a US destroyer on patrol duty was torpedoed and sunk – along with twenty-six more ships that month. On 23 February 1942, President Roosevelt had to admit on radio that the situation was not looking good. ‘We have most certainly suffered losses’, he said, ‘from Hitler’s U-boats in the Atlantic as well as from the Japanese in the Pacific – and we shall suffer more of them before the turn of the tide.’ The roll call of destruction would peak in May with 102 losses and June with 111 lost ships. In April 1942, all lights visible from the sea along the waterfront areas of Brooklyn, Queens and Richmond in New York City were turned off for the duration of the war.

It was a time for strong action and the pressure was on Naval Intelligence to secure further results in its campaign to protect the East Coast. But, as Naval Intelligence agents spread their enquiries beyond the immediate waterfront, they became aware of Joseph Lanza’s limits as a fixer. They needed someone with greater authority in the underworld – and that person, undoubtedly, was Lucky Luciano.

Lanza was extremely valuable in making contacts at those various piers [said Lieutenant Commander Maurice Kelly]. But our responsibility was all over the Port and we found places where Socks Lanza did not have direct contact . . .

We had to seek the cooperation of somebody that had an over-all control or interest. Because it was found out early in the stage of this thing that union officials and people in illegal operations along the waterfront had as much influence with conditions on the docks as the shipping people themselves, and in many cases, more.

Police Inspector Howard Nugent had lunch with Commander Haffenden and the naval officer told him that Lanza was providing him with good information on the activities of the offshore fishing fleet but they had to get the ‘okay from Charlie Lucky’ to have Lanza go further. Nugent told Haffenden to talk to the chief of prisons in New York State.

It was left to Murray Gurfein to make the move to get Luciano on board. In April 1942, Gurfein contacted Moses Polakoff, the attorney who had defended Luciano against Thomas Dewey in 1936. Polakoff had served in the US Navy in World War I and was sympathetic to the naval cause, but his first reaction was to say he was no longer interested in the Luciano case. He did not care to discuss the mobster any further. So Gurfein had to work a little harder. ‘This is rather important and I wish you’d come to see me’, he said. ‘If you put it that way’, said Polakoff, ‘I’ll be in to see you.’

At the District Attorney’s office, Gurfein told Polakoff that Lanza was already working for US Navy Intelligence and if Luciano could be involved then the operation could be widened. ‘We want to set up a network of informants among the Italian element concerning any information about sabotage’, explained Gurfein. ‘We want the help of Italian fishermen who operate fishing fleets, concerning any possible enemy submarines off our shores.’

‘On an occasion like this’, said Polakoff, ‘if I can be of any service to you or the Navy, I am glad to do so. But I don’t know Luciano well enough to broach the subject with him. But I do know a person who I have confidence in and whose patriotism, or affection for our country, irrespective of his reputation, is of the highest.’ That person was Meyer Lansky.

That afternoon Polakoff phoned Lansky and then called back Gurfein. ‘Mr Lansky, who knows Luciano better than I do, volunteers to do all he can to accomplish the result desired.’ Lansky was pleased to receive the call. According to him and Luciano, the whole procedure up to this point had been a dance to get the two sides talking. This was finally happening, as he later described:

Mr Polakoff called on me and told me that the Naval Intelligence was very much interested in getting Italians that could be helpful in the war effort. He was seen by the District Attorney and he had a conference with Mr Gurfein, and he told me that he would take the responsibility if I would come into the picture and go to Charlie ‘Lucky’ and ask his assistance to solicit Italians that could be helpful in various parts in this City pertaining to watch out for sabotage or anything else, that it would be a duty to the country.

Gurfein, Polakoff and Lansky all met for breakfast at Longchamps Restaurant on 57th Street, between Fifth and Sixth Avenue. ‘I told Gurfein that I loathed Adolf Hitler’, recalled Lansky, ‘and that I was a patriot. I was grateful that America had given me a home and that America had been good to me through the years.’ But then he warned Gurfein. ‘We have to be very careful in making any moves because Mussolini is very popular with some Italians in New York.’

‘The government is fearful of sabotage’, responded Gurfein. ‘We want to get some prominent Italians to get active in a movement to stop sabotage. It is a duty to our country.’ Lansky agreed. Then the name of Charlie Luciano came up.

‘Can we trust him?’ said Gurfein.

‘Sure you can’, said Lansky – and then in a typically Mafia afterthought added, ‘his whole family is here – his mother and father and two brothers and sister with children.’

Lansky proposed seeing Luciano in jail with Polakoff to discuss the matter. At this, Polakoff winced.

‘Snow’s still on the ground up there’, he said, ‘and travelling is too hard.’ They then discussed transferring Luciano from Dannemora to a place where it would be easier to interview him.

At the end of the meeting, Lansky remembered that Gurfein made it clear to them that no compensation was to be offered to Luciano and that it was strictly a duty to their country. They then went along to the Hotel Astor where Lansky and Polakoff were introduced to Commander Haffenden in his office. On his desk was a dossier containing information on every aspect of Lansky’s criminal career. Haffenden knew he was a major Mafia figure, but he needed his help. He told Lansky:

I’m going to ask you to keep what I say a complete secret. I’m risking the lives of many men by mentioning it. A very large convoy of American troops is shortly going overseas from here. I want their safety to be absolutely guaranteed. We’ve got to make sure no word of this leaks out from the men who work the docks.

Haffenden admitted that they were still rattled by the burning of the Normandie. He knew the Mafia ran the docks and wanted their help. He knew also that Lansky had been active in battling Nazis on the streets of Manhattan. He told him to think of the Jews suffering under Hitler in Germany. Lansky needed no reminding and pledged his support:

Mr Haffenden told us where we were weak. Where he felt the Government needs lots of assistance such as the waterfront; pertaining to loaders of ships; employees on the docks; receiving knowledge as to fishing boats – whatever they do in their movements outside; and he wanted people that could be of assistance in that way so that nothing is brought out to any submarines. He was afraid that they were getting fuel out and they may have gotten notes of movements of important loading – just where things were being loaded. And then he went on to other assistance that he may need such as hotels; that they have suspicion of different Germans or Italians; that he would want to get assistance in there of the employees to be able to report these things.

Lansky was happy to oblige and used his union connections to help with watching hotels. He told Frank Costello to cooperate and Anastasia too. He told Socks Lanza to offer the Navy only low-level help on the waterfront – they would take care of everything else. According to Lansky’s recollections, Lanza then asked him how much money he should ask from the Navy for his services. ‘You’re going to be a patriot’, said Lansky. ‘You do it for nothing. Even your expenses have to come out of your own pocket.’ Lanza accepted the situation as it was. Two brothers, Dominick and Felix Saco, were hired by Commander Haffenden to act as liaison agents with Lanza.

Then Lanza met a problem in the docks. He had already explained this to his attorney but he also told Lansky:

Lanza told me that the Italian people around there thought that he had a personal motive [he was indicted for a crime]. They didn’t believe him that it was a movement that Italians should get interested; and he asked me to take him up to Charlie Luciano, and if Charlie Luciano would send word to these people he thought that resistance would stop.

In the meantime, the official procedure started for moving Luciano from Clinton Prison at Dannemora to Great Meadow Prison at Comstock. It was a far more convenient and comfortable prison, but the authorities went out of their way to make the point that Great Meadow was still a maximum security institution. ‘The word “meadow” in the name of Great Meadow is not descriptive’, said the Herlands Report.

John A. Lyons was the New York State Correction Commissioner and it was up to him to authorise the prison transfer. Commander Haffenden ordered one of his agents to present a written request to Lyons and then destroy it after he had read it. Several witnesses later testified that the letter said that Luciano’s transfer was in the interest of the United States – making it easier for the mobster to furnish Naval Intelligence with information to help with the war effort. Lyons had no problem with the proposed transfer. He would do it if stopped the sinking of Allied ships and saved the life of ‘at least one American abroad’. He went further. He instructed the Warden of Great Meadow, Vernon Morhous, to waive the usual fingerprint requirements of visitors to Luciano and that they should be allowed to talk to him in private.

In order to avoid any publicity, Luciano was transferred along with a number of other inmates from Dannemora to Great Meadow on 12 May 1942. It was time to put the deal directly to Luciano.

Some time between 15 May and 4 June 1942, Lansky and Polakoff made their first visit to Luciano to discuss the Naval Intelligence business. Since every subsequent meeting was precisely dated, it is surprising that the date of this initial meeting is not recorded. They took the train to Albany and then drove sixty miles to Great Meadow prison. According to Polakoff and Lansky, Luciano stretched out his arms and shouted: ‘What the hell are you doing here? I never expected to see you fellows here.’ Apparently, he had no idea why he had been transferred either. They then explained to him the Navy’s need for his help.

Luciano remembered this first meeting somewhat differently. He claimed that Haffenden and probably Gurfein – ‘Dewey’s guy’ – were at the meeting and he spoke to them directly. Lansky says that Luciano spoke to his mobster associates and then Lansky relayed the information to the government. What both agreed on is that Lansky brought a hamper of food to the meeting, as Luciano remembered:

Before I even had a chance to say hello to anybody, I spot a table in the middle of the room loaded down with all kinds of cold cuts – just like the table we used to have in the back room of Dave Miller’s Delicatessen. So I said, ‘Fellas, before we talk, you’ll have to excuse me’, and I made a dive for that table. It was Lansky’s idea to load it up with all the stuff he knew I liked, and he even had them kosher green pickles and the Dr Brown’s Celery Tonic I loved . . . The taste of them pickles was almost as good as freedom.

Lansky explained that by cooperating with Navy Intelligence, Luciano might well get a reduction of his sentence. Otherwise he would have to wait until 1956 for his first chance of parole. Luciano said he was happy to help the government. He knew the important people on the waterfront and if he asked them to get interested in the war effort – then they would. But he had one major reservation. He was not a citizen of the United States and he knew that a warrant of deportation had been lodged against him. ‘When I get out – nobody knows how this war will turn out – whatever I do’, he said, ‘I want it kept quiet, private, so that when I get back to Italy I’m not a marked man.’

Lansky corroborated this story: ‘We convinced Charlie that it was a duty of us to give assistance’, he recalled. ‘Charlie agreed with one exception: to keep this secret because he had a deportation warrant attached to his papers and if he were ever to be deported, he might get lynched there [in Italy]’. He feared the punishment for breaking omerta.

Haffenden later reassured Lansky that he had a code system. Contacts were referred to by numbers and no names would be revealed. With that agreed, Luciano gave Lansky the authority to talk to all other mobsters in New York. Word was to go out that Luciano okayed the project to help Naval Intelligence secure the docks.

The Herlands Report recorded that Lansky’s function was to act as a liaison between Luciano and other Mafiosi. Lansky told Naval Intelligence:

There’ll be no German submarines in the Port of New York. Every man down there who works in the harbor – all the sailors, all the fishermen, every longshoreman, every individual who has anything to do with the coming and going of ships to the United States – is now helping the fight against the Nazis.

It was a guarantee backed by Lucky Luciano.

The Herlands Report recorded at least twenty meetings between Luciano, Polakoff and Lansky between 15 May 1942 and 21 August 1945. But it also says that many more meetings involving other associates of Luciano were not recorded. Some of the mobsters seeing Luciano were Lanza, Frank Costello, Mike Lascari, Mike Mirandi, and Willie Moretti (the man who first welcomed Joseph Bonanno to America).

Polakoff found these numerous journeys to and from Great Meadow tedious. ‘We slept in Albany or Glens Falls’, he said, ‘and got to the prison early in the morning. The visits were usually concluded by 1 o’clock so that we could travel back to Albany and make a train back to New York and get in about 8 o’clock or so.’ Visits usually started at 9.30 or 10.00 a.m. and Polakoff would be excluded from the whispered conversations by sitting at a table at the far end of the room, usually reading a newspaper. It is likely that Luciano was discussing more than just ways to win the war – but was administering his criminal empire. It is little wonder that Polakoff asked if visitors could see Luciano without him. The answer was a firm ‘no’ – he was there to be an insurance against any violation of prison rules. That was Polakoff’s contribution to the war effort.

In these dealings, Luciano himself claimed a more hands-on approach. When he later spoke to undercover FBI agent Sal Vizzini in 1959, there was no mention of Lansky:

One day the warden calls me in his office and there’s a navy commander with him. They want to know if I’ll get the boys into a meeting and set up a kind of organization that will watch out for any screwy stuff going on around the docks. I called a meeting of longshore guys right up there in the warden’s office and we set up just what they wanted.

According to the Herlands Report, however, it was Lansky who operated as Luciano’s intermediary in this operation. Lansky had regular meetings with Haffenden in New York and discussed in detail how the Mafia could best help the war effort. Together, they discussed more efficient ways of loading and unloading ships; how to prevent strikes; how to keep troop movements secret and how to secure the area against sabotage. On one occasion, Haffenden suspected there were German and Italian enemy agents staying at certain hotels:

He wanted waiters that could be trusted [said Lansky] to mix up in the union office and to hear what the different waiters were talking about as to conversations that sailors or any military men may have been in their different stations. He also thought that we may have to get in waiters and place them in certain restaurants and hotel lounges. One of the places he mentioned was the Pierre Hotel. He also told me about a place in Brooklyn – some sort of seamen’s club – but we never had a chance to complete the mission because it got out in the newspapers.

Lansky got Johnny ‘Cockeye’ Dunn out of prison to act as his enforcer on the piers. Everyone was frightened of Dunn. When he walked into a dockside bar, everyone shut up. He was there to ensure that no one blabbed about troop movements or gave out details about secret missions. He had strong connections with the freight handlers’ union on the waterfront.

One time, Haffenden got information on possible German agents staying at a waterfront hotel. Dunn went to investigate and the two men promptly disappeared. ‘They’ll never bother us again’, said Dunn. Naval Intelligence asked him to clear with them beforehand any further such terminations of enemy activity. Despite that, according to Lanksy, Dunn was soon working directly for Haffenden:

Dunn’s job was to be a watchdog on the piers to have entrusted employees amongst the loaders . . . to make friends with the crew and to stay with them to get reports if there was any bad men around the crowd. Men that may lend themselves to sabotage or leakage. He also got friends along the waterfront in the bar rooms. If any of the crews got drunk and they would talk something that you would feel is subversive, to report to him or whomever else he placed on that to assist him on that.

Dunn became concerned about the way ships were being loaded in the docks. He thought bombs could be placed on them and passed this on to Haffenden.

Another enthusiastic helper was John McCue, released from Sing Sing after serving ten years for murder. He was the right-hand man of Joseph Ryan, president of the International Longshoremen’s Association. When Navy men reported difficulties with certain dockyard workers, McCue broke their arms or legs to ensure future compliance.

So effective was the Mafia network of enforcers and informers that Meyer Lansky claimed it was he who first got information about Operation Pastorius – the landing of German agents by submarine at Long Island. He said he was approached by the brother of an Italian fisherman who had seen the four agents clamber out of the U-boat and row ashore. Lansky then told Haffenden who passed on the information to the FBI.

To spy on Nazi sympathisers in New York, Lansky persuaded associates of his who owned restaurants in Yorkville to hire German-speaking Navy agents as waiters to listen in on conversations. So intimate did the relationship get between Lansky and Haffenden that Navy agents ended up servicing Mafia-run vending machines in clubs. ‘So we had naval officers being collectors for the Mafia’, said Lansky. ‘They handed over the money they collected and were always honest in their dealings. I think this must be the only time the US Navy ever directly helped the Mafia.’

Socks Lanza continued to help Naval Intelligence after contact had been made with Luciano. He visited him several times in jail and got his seal of approval. ‘Joe, you go ahead’, said Luciano. ‘I will give word out and everything will go smoother.’ Lanza noticed the difference straight away: ‘Costello was helpful in the way that he would OK me to go and see people where I got the right of way through Charlie.’ When Lanza approached Costello with a project for Naval Intelligence, the Mafioso would consider it and then say ‘It’s a good thing and you go along with it.’

Lanza often introduced Naval Intelligence agents to his associates on the waterfront, saying they were ‘okay, regular guys’. This meant they could go about their business without being asked awkward questions. That included surveillance operations on suspicious figures on the piers or ships. Lieutenant Commander Maurice Kelly, a cop in civilian life, was one of these investigators and he noticed a distinct change in mood on the waterfront following the Navy’s contact with Luciano:

There was a decided and definite cooperative approach to all those people after that. There was no hedging. We met the assigned person we were designated to see on the particular pier – because Commander Haffenden would lay the plans for you. They spoke straight from the shoulder. They assisted you in obtaining the information you wanted to obtain. They would finger people for you. Watch out for certain baggage – whatever problem was at hand – and it was full and whole-hearted cooperation.

Before Luciano’s involvement, confirmed Kelly:

We ran in to great difficulty in obtaining reliable informants along the waterfront . . . Because of the make-up of the people that work these piers – they were suspicious of any investigators and it was part of their being that they just refused to talk to anybody, war effort or no war effort.

To ensure that the relationship between the US government and the underworld was working correctly, wire taps were authorised to monitor telephone calls to and from Lanza’s headquarters at Meyer’s Hotel, in the heart of the Fulton Fish Market at 117 South Street, Manhattan. The wire taps corroborated a number of missions carried out by Lanza for Haffenden. Sometimes they sounded faintly ludicrous. A printing plant in Harlem was producing and distributing subversive literature so Haffenden asked Lanza to help place agents in relevant locations. This included providing union cards for agents working undercover as hat-check girls in a Harlem cabaret club.

This close relationship served the Mafia very well as it ensured their grip on various enterprises. It also consolidated their domination over the East Coast longshoremen’s union. For some time, Harry Bridges, a tough union leader who ran the West Coast longshoremen’s union had been a threat to them. He was trying to clean up activities in the East and he made a move on the Brooklyn waterfront. There were rumours he was organising a strike there. Haffenden phoned Lanza.

‘How about that Brooklyn Bridge thing?’ he said, meaning Harry Bridges. ‘I don’t want any trouble on the waterfront during the crucial times.’

‘You won’t have any’, Lanza reassured him. ‘I’ll see to that. I’ll give you a ring. We’ll get together.’

Bridges tried to hold a union meeting at Webster Hall – but Lanza got to him first. He gave him a beating. He did not bother coming east again. When Haffenden phoned Lanza again about this matter he did not ask for details, as the wire tap records confirmed.

‘How about the waterfront condition in Brooklyn?’

‘Bridges’ men were stopped’, said Lanza. ‘We saw to that. Everything is under control.’

‘Swell’, said Haffenden.

‘There was peace on the waterfront’, noted Lansky. ‘It was kept with rough methods. But that’s what the Navy asked us to do and that’s what the Navy got.’

Captain MacFall, Chief of Naval Intelligence in New York and along the East Coast, knew he was taking a risk by employing gangsters but considered it worthwhile. He also kept it to himself and his department, as he told the Herlands investigation:

The use of underworld informants and characters, like the use of other extremely confidential investigative procedures, was not specifically disclosed to the Commandant or other superior officers as such use was a calculated risk that I assumed as District Intelligence Officer. It was my responsibility to use my best judgement as to the ways and means of getting information in which Naval Intelligence was interested . . .

From time to time, Lt Commander Haffenden (who worked directly under me) gave me significant information about waterfront activities that came through the underworld. It developed that some of these informants had previously been members of a gang headed by one named Charlie Lucky Luciano, a notorious underworld gangster, in jail under a long sentence. Lt Commander Haffenden also informed me that Luciano still had influence in his underworld organization and had given orders for his henchmen to assist the District Intelligence Office ...

When underworld sources were used or informants turned up by underworld characters, their names would not be kept and no filed records were maintained of their information, as their activities and identities were considered extremely confidential.

According to the Herlands Report and the many Naval Intelligence officers cited in it, there is no doubt that Luciano, Lansky, Lanza and their mob associates helped them. They provided assistance and information that kept the East Coast docks working efficiently. They provided a front line of intelligence against any agents sent by Hitler or Mussolini to sabotage Allied shipping. The end result was that Allied convoys could carry on their vital job of moving soldiers and supplies to Europe to fight the war. That this was achieved by gangsters who used violence and illegal methods is true, but that aspect of the operation is not admitted in the US government report. That information comes from the personal memoirs of the gangsters involved – Lucky Luciano and Meyer Lansky. Today this might seem morally dubious, but at the time, in 1942, it made good sense, as the Herlands Report concluded:

No practical purpose would be served by debating the technical scope of Luciano’s aid to the war effort. Over and beyond any precise rating of the contribution is the crystal-clear fact that Luciano and his associates and contacts during a period when ‘the outcome of the war appeared extremely grave’, were responsible for a wide range of services which were considered ‘useful to the navy’.

Meyer Lansky had his own take on the affair. ‘If they had wanted to’, he said, ‘the Mafia could have paralysed the dock area.’ He asked Haffenden what would happen if there was a shutdown. ‘Without the supplies we’re sending to Russia and Britain’, said the Naval Commander, ‘the war would go on a lot longer. It could even change the course of the war.’

‘So’, said Lansky in his memoirs, ‘in the end the Mafia helped save the lives of Americans and of people in Europe.’

When asked openly by the Herlands investigators what good had been achieved by the ‘Luciano project’, he stumbled a little. ‘I cannot give you any specific results’, said Lansky, ‘but I don’t know how much has been avoided that if this didn’t happen – I don’t know how much sabotage this has stopped, and I feel it should have stopped plenty. I feel that it was a great precaution.’

In February 1943, Lucky Luciano hoped to capitalise on his contribution to the war effort. A motion was made in the Supreme Court, New York County, to modify the sentence imposed on Luciano. It came before Justice Philip J. McCook, the judge who had originally sentenced Luciano in 1936. The judge denied the motion but in his summing up, Justice McCook did hold out some hope for Luciano:

Finally, we reach the argument that the defendant has assisted the Government in the war effort. Following the precedent in the Metropolitan matter, the authorities have been interviewed, privately, in the public interest. As a result, the court is able to conclude that the defendant probably attempted to assist them, and possibly with some success . . . If the defendant is assisting the authorities and he continues to do so, and a remains a model prisoner, Executive clemency may become appropriate at some future time.

‘The nature of Lucania’s [sic] aid to the war remained a mystery’, said a New York Times report of the February legal plea:

Mr Wolf [Luciano’s attorney] was not at liberty to disclose what he described as a military secret, but told Justice McCook that the cooperation of his client had been sought by the military authorities, and had been given without ‘any thought of consideration or hope of consideration’.

He said he would call two ‘high ranking military officials’ to appear privately before the court, and declared later that they had conferred with Justice McCook, but that their testimony could not be made public.’

The US government wanted Luciano to stay in jail. There was still a lot more fighting to be done in the war. Besides, if Luciano had been released he would have been deported immediately to wartime Italy, which would not have served him very well.

But did Luciano and the Mafia have any more help to give? Could they take a more direct role in the action? As Allied troops won victories in North Africa, they came closer to the homeland of the Mafia – Sicily.