The future always looks good in the golden land, because no one remembers the past.
JOAN DIDION1
BY THE LATE FORTIES, the Supermob's takeover of the Golden State was well under way: Paul Ziffren had relocated his law practice from 134 N. LaSalle Street in Chicago to 9363 Wilshire Boulevard in Beverly Hills and, through pal David Bazelon, had helped his Chicago friends invest their profits in numerous tracts of West Coast land; Al Hart was a thriving California distiller, racetrack owner, and soon-to-be bank owner; Joe Glaser had moved his Associated Booking to L.A., and likewise, Jules Stein and Lew Wasserman (who had been elevated by Stein to MCA president in December 1946) opened their MCA headquarters there and absorbed the 250-client talent pool of the Zeppo Marx Agency when they purchased that Hollywood powerhouse; MCA client Ronald Reagan was now in Hollywood, a bad actor, but a better politician who was about to become president of the Screen Actors Guild (1947-52, 1959), where he would protect MCA's interests; Jake Factor was finally in prison, but would soon land in Las Vegas before settling in L.A., with his brother Max, as a prominent real estate investor and philanthropist; Philadelphian Walter Annenberg expanded his publishing empire and built his palatial 392-acre estate, Sunnylands, in Rancho Mirage, California, going on to become a key supporter of both Ronald Reagan's and Richard Nixon's political careers; and Hilton scion Arnold Kirkeby had landed in the tony Bel-Air enclave, where he built the most expensive private home in America.
Remaining behind in Chicago—although financially connected to California—were Jake Arvey, the Pritzkers, Henry Crown, Alex Greenberg, and Arthur Greene. Sidney Korshak was still dividing his time between the two outposts, due in large part to his advisory role with the Outfit, which was now trying to secure an unthinkable early release for its brethren incarcerated in the Hollywood extortion case.
By the late forties, Bioff, Browne, and Schenck had already been released from prison, but the rest were still cooling their heels in stir, while their confreres on the outside lobbied the Truman administration for an early release. According to Bureau of Prison records housed at the National Archives, Sidney Korshak visited Charlie Gioe in Leavenworth twenty-two times. Korshak was not Gioe's attorney of record, and it is widely assumed that he acted as an information conduit, updating Gioe on the negotiations with Truman's parole board. Korshak told the FBI that the visits were merely to update Gioe on the status of an Antioch, Illinois, real estate sale by Gioe's wife, whom Korshak was helping.
Among other services rendered, Korshak admitted that he solicited letters of character reference for Gioe and enlisted one of his law associates, Harry Ash, to agree to act as Gioe's parole supervisor. Since Ash was also Chicago's superintendent of crime prevention, he was considered by Korshak to be above reproach.2
After intense pressure applied to politically vulnerable President Truman and his parole board, the convicted Outfit felons were indeed released early (over the objections of prosecutors and prison wardens) on August 18, 1947, their terms cut by a third. The subsequent uproar led to a major congressional investigation and forced Harry Ash to resign his Chicago civic post.* Although the Hollywood extortion convictions gave the outward appearance of rescuing the movie business from the underworld, it actually distracted the public from a handoff to the more sophisticated Supermob, which would control huge segments of the business with remnants of the underworld. The new partnership was, like the Bioff gambit, mutually beneficial, especially when entertainers found themselves in the mob's crosshairs. Such was the case in November of 1947, when the nascent comedy team of Dean Martin and Jerry Lewis were appearing in Chicago at the Chez Paree. When on the road, the duo famously partook in the female temptations that presented themselves; however, when Martin and Lewis sought to make whoopee with two lovelies that were already spoken for—by Joe Accardo's boys—they took their very lives in their hands.
"I got them out of Chicago about two steps ahead of Dean getting killed," recalled their agent, Abbey Greshler. "I did it with the help of Sidney Korshak. He's a very dear man, but some people say he's the mob's attorney. I never asked him that. You learn not to ask." It was to be one of countless rescues Korshak would perform over the years for celebrities who thought they could play ball with the boys in the big league.
It wasn't as if Martin and Lewis were naive as to whom they were entertaining. Lewis had first run afoul of a loudmouthed front-table thug when Lewis grabbed his shoulder and said, "Hey, pal, the show is up here!" The "pal," who turned out to be Outfit enforcer Charlie Fischetti, shot back "the look" and warned, "If you don't move away right now, I'll blow your fuckin' head off." When Lewis realized whom he had crossed, he apologized profusely. (For decades thereafter, the Fischetti family sent substantial checks each year to Lewis's muscular dystrophy telethon.)3
One year later, Lew Wasserman decided he wanted Martin and Lewis in the MCA stable. The MCA boss ordered two men to break into Greshler's
office to steal their contract, whereupon MCA made them a better offer. Although the duo ended up at MCA, Greshler obtained a huge legal settlement in the subsequent lawsuit filed against MCA. Of course, no one was about to charge Wasserman or Stein criminally, which should have occurred.4
As the second half of the century began, trouble for both the underworld and the Supermob loomed in the persons of journalist Lester Velie and ambitious politician Estes Kefauver, a freshman U.S. senator from Tennessee.
Forty-two-year-old Velie, an award-winning New York-based crime reporter, was an unlikely foe for the forty-one-year-old Korshak, given that he also hailed from Kiev and the University of Wisconsin, where he and Korshak were 1926-27 classmates. By 1950, Velie was writing crime exposes for Collier's magazine, where he was an associate editor. His most recent investigation, aided by Chicago Crime Commission director Virgil Peterson, was an in-depth profile of the Capone heirs' political connections. The seven-page article appeared in the September 30, 1950, Collier's issue and devoted the first-ever investigative ink to Sidney Korshak. The article noted Korshak's association with Jake Arvey, Alex Greenberg's Seneca, Charlie Fischetti, and others. During his research, Velie visited Korshak's LaSalle Street office, where he eavesdropped on visits and phone calls from Arvey, Arthur Elrod, George Scalise, Dan Gilbert, and "layoff " bookie Joe Grabiner.
The Velie investigation intrigued Kefauver, who was about to embark on a mammoth congressional probe of organized crime, with the subject of Sid Korshak. A legislator with presidential aspirations, Kefauver had persuaded Congress to have him oversee an ambitious, and first-ever, probe into the murky underworld. The senator and his investigators announced that they would crisscross the country in their efforts to clarify the state of American lawlessness.
Dalitz testifying before the Kefauver Committee in Los Angeles, February 28, 1951 (Cleveland State University, Special Collections)
Before Kefauver visited Chicago in October of 1950, he made it known that one of his prime targets would be one of Lester Velie's prey, the Supermob's Sidney Korshak. In July, shortly after receiving Velie's draft, Kefauver announced his committee staff's September trip to the Second City and obtained Korshak's tax records for 1947-49 from Secretary of the Treasury John Snyder.5 Those records showed that Korshak was declaring an average yearly income of approximately $94,000 ($1.4 million converted to 2004 dollars).6 His brother Marshall reported a $46,000 average for the same period. Committee investigators in Chicago also subpoenaed Korshak's financial records from 1945 to 1948, and Korshak promptly complied with the request. The full-court press continued as former Chicago detective William Drury was enlisted by a Miami newsman to monitor Korshak's movements, the reports of which were shared with Kefauver's investigators. The Drury surveillance operation ended abruptly on September 25, 1950, when Drury was shot to death in his garage. Thus, when the committee touched down in Chicago, the prospects for a Korshak inquisition were expected to intensify.7
Another potential pitfall for Korshak was the committee's interest in Dan Gilbert, Korshak's key connection in the Chicago State's Attorney's Office. Under oath, Gilbert admitted his gambling links with the Chicago Outfit, a disclosure that had to heighten the investigators' interest in his associates such as Korshak. But by the time the Kefauver Committee arrived in Chicago to conduct formal hearings, Korshak and the Outfit had devised a scheme to ward off the committee's namesake. Just like other Washington insiders, the Supermob was aware of Estes Kefauver's vulnerabilities.
Prior to his marriage to the former Nancy Pigott in 1935, Estes Kefauver had a reputation as a stereotypical Southern ladies' man, a landed-gentry Lochinvar. After his marriage, Kefauver cleaned up his act—at least in Tennessee. Charles Fontenay, who covered Kefauver for the Nashville Tennessean, wrote, "A lot of people knew of his propensity for women, but he was clean as a whistle in Tennessee."8 However, in Washington, and wherever else his travels took him, Kefauver was known as a legendary drinker and womanizer. William "Fishbait" Miller, the longtime House "doorkeeper," who supervised some 357 House employees, called him the "worst womanizer in the Senate." On Kefauver's premature death of a heart attack, Miller wrote, "He must have worn himself out chasing pretty legs."9 The senator himself provided the fuel for the talk. When on tour in Europe, Kefauver caused a scandal after escorting a famous call girl to a society ball. On another occasion, he trysted with a woman in Paris who was not told of his wife in Tennessee. Afterward, Kefauver recommended his courtesan to a friend who was about to tour France.10
On future campaign junkets, Kefauver became infamous for dispatching his aides to procure women. New York Times columnist Russell Baker recalled one night with the candidate on the tour bus when Kefauver was feeling particularly randy. On arrival in a small town "in the middle of the night," Baker overheard Kefauver telling one of his minions, "I gotta fuck!"11 Irv Kupcinet called Keef "the worst womanizer I've ever known. Whenever he came to town . . . he let the word out: 'Get me a woman!' He would have put Gary Hart to shame."12 Capitol Hill lobbyist Bobby Baker, who would become the first American to have a scandal named after him, wrote that Kefauver regularly put himself "up for sale." According to Baker, "[Kefauver] didn't particularly care whether he was paid in coin or in women."13
On October 4, 1950, Kefauver and his senior staff descended on Chicago, where Kefauver took a room in the Kirkeby-owned Palmer House, while the rest of the staff and investigators stayed at the hotel that was also home to Outfit mastermind Curly Humphreys (as well as being the Outfit's former meeting place), the Morrison. Perhaps not coincidentally, Chief Counsel Rudolph Halley complained that the staff's phones were tapped. However, he never learned of the Outfit's planned setup of the committee's chairman. In June 1976, reporters Seymour Hersh and Jeff Gerth began to unravel the inside story of Kefauver and Korshak in a four-part profile of the well-connected Supermob lawyer in the New York Times. A close friend and business associate of Korshak's told the writers how Korshak and the Outfit blackmailed the ever-randy Kefauver. The informant, unnamed in the article, related that he had seen compromising photos of the senator taken in a suite at the luxurious Drake Hotel, which was of course owned by the Kirkeby-Cuba National-Lansky consortium. Recent interviews have shed more light on the incident.
The source who was shown the photos turned out to be none other than Joel Goldblatt, who, by the time he was approached by Hersh, had had a falling-out with his pal Sidney over Sidney's standing up for Joel's ex, Lynne Walker Goldblatt, in their divorce proceedings.14 Goldblatt was notoriously jealous, and Korshak's friendship with Lynne put him over the edge. "Sidney double-crossed him," remembered Goldblatt's then secretary and future wife, MJ Goldblatt. "He came into the courtroom and kissed Joel's ex on the cheek."15 It is now understood that Kefauver was enticed to the Drake, where two young women from the Outfit's Chez Paree nightclub entertained him. "The Outfit had a guy at the Drake, a vice cop who moonlighted as the hotel's head of security," a friend of the Korshak family recently divulged. "Korshak got the girls; the security guard set up an infrared camera and delivered the prints to Korshak." Sandy Smith, the veteran Chicago crime reporter, recently said, "I knew that district and its cops and the other people who were involved in that kind of thing."16
The confidential source added that a private meeting was arranged between Kefauver and Korshak. In the brief encounter, Korshak flung the incriminating photos on Kefauver's desk. "Now, how far do you want to go with this?" Korshak asked. Kefauver never called Korshak to testify before the committee, despite his being the first of eight hundred witnesses subpoenaed. A committee internal memo noted that they had hoped to interview Korshak, "but were forced to forgo that pleasure because of the chairman's recall to Washington."17
Finally, in October 1950, committee investigator George Robinson, who had merely intended to return Korshak's subpoenaed files, interviewed Korshak. Korshak told Robinson, and reporters afterward, that the committee's interest in him was generated by Lester Velie's article in Collier's.
Korshak informed Robinson that Velie not only exaggerated the facts, but often invented them. According to Sidney, Velie had a hidden motive for his broadside: he'd held a twenty-four-year grudge against Korshak since their college days at Wisconsin, where boxing champion Korshak punched Velie—then Levy—in the nose. Incredibly, Korshak told the press that he never met Scalise (whom Velie saw with him in Korshak's office) and never represented Charlie Gioe (Korshak had handled his Hollywood extortion difficulties). In a brilliant choice of words, Korshak declared, "My records will show that I never represented any hoodlums." Of course, Korshak was famous for his lack of record keeping. He called Velie's piece "a series of diabolical lies," and Velie "a journalistic faker and an unmitigated liar." Korshak's words to the press would be his last. If he had been discreet before, from now on he would be near invisible, his name all but vanishing from the public consciousness.18
Kefauver's kid-glove approach to Korshak was trumped by his virtual incompetence in dealing with another key Supermob member, Alex Louis Greenberg. On January 19, 1951, Greenberg testified before Kefauver and admitted to his co-ownership of both the Seneca and California's Store Properties with Paul Ziffren, Sam Genis, James Roosevelt, et al. His IRS statements in the committee's possession corroborated the partnerships. To what should have been an eye-opening revelation, Kefauver merely remarked, "I just marvel that you can have so many businesses." Greenberg replied, "Thank you."
Greenberg ended his testimony by offering the committee an invitation: "The next time the committee comes to Chicago, I would like to have the committee stop in the Seneca Hotel . . . We operate a very nice hotel . . . [we have] very liberal rates. We got good food over there. Might as well give the Seneca a boost."19 There was no follow-up questioning about Greenberg's investment role for Nitti, Capone, and the rest; no interest in the partnership with the notoriously connected Sam Genis or the myriad of properties obtained from Ziffren's close friend who headed the Office of Alien Property, Judge David Bazelon*20
Move to the West Coast
With Velie and Kefauver summarily dismissed, Sidney Korshak set about joining his compadres in California, albeit now with greater respect from the Chicago hoods.
"Sidney became a legend after the Kefauver incident," remembered a top Chicago PD detective. "It was the key thing that impressed [boss Tony] Accardo and the others."21
Korshak's gossip-writing pal Irv Kupcinet recently said about his high-flying friend, "He knew and had the backing of Tony Accardo. Tony Accardo loved him; he depended on him. [He] was considered to be the fair-haired boy in the organization with the blessings of Tony Accardo."22
Tony "Joe Batters" Accardo (author collection)
Korshak's future success would require a delicate balancing act consisting of serving his Outfit patrons in Chicago, who felt they'd "made" him, and promoting the interests of himself and the rest of the Supermob, now becoming entrenched in California business and politics. It is one of the many great "unknowables" in Korshak's life: how much of his West Coast relocation was based on his own desires and how much came from an Outfit dictum. "Turned" mobster Joe Hauser voiced his opinion to a House subcommittee in 1983, saying, "Organized crime leader Tony Accardo, who I have known for many years as Joe Batters, told me on several occasions that he had sent Korshak to Los Angeles to represent the mob there." Frank Buccieri, brother of infamous Outfit juice collector Fifi Buccieri, recently said, "Sidney paid homage to Accardo. Accardo was telling him what to do. When Sidney was in California, he was still taking orders from Accardo. Absolutely."23
Leaving his sponsors behind, Korshak said good-bye not only to bitter Illinois winters, but also to the normal workplace. As the new fixer for both the Outfit and the Commission, Korshak only required a telephone, which he wielded like a scepter in the coming years, playing the highly compensated middleman between corporate supplicants and the hidden Eastern powers in Chicago's Outfit and New York's Commission.
By this time the Korshak family had expanded to include not only Sidney and Bee, but also their two young sons, Harry (b. 1945) and Stuart (b. 1947), on whom Sidney doted. For relaxation Hollywood-style, the Korshaks often joined the Ziffrens and pals at the hottest Hollywood nightspot, the Mocambo, located at 8588 Sunset Boulevard, and later immortalized in James Ellroy's L.A. Confidential. A sort of West Coast Chez Paree, the Mocambo, which opened in 1941, was described as "a cross between a somewhat decadent Imperial Rome, Salvador Dali, and a birdcage." The latter reference was to the club's aviary, which housed macaws and cockatoos. In addition to virtually every notable Hollywood actor,* mobsters such as Mickey Cohen, Ben Siegel, Johnny Stompanato, and Johnny Rosselli frequented the club and were in fact rumored to have a stake in it. Author and Beverly Hills native Don Wolfe said that, among the "in crowd," the Mocambo's true ownership was well-known. "Charlie Morrison had Bugsy as a silent partner," said Wolfe. "That's why it was one of the hoods' favorite hangouts."24 In 1943, Frank Sinatra made his L.A. singing debut at the Mocambo.
In August 1952, Korshak pal Harry Karl threw a bash at the club in honor of Sidney Korshak and Jake Arvey, who flew out West for the event. The Chicago Tribune covered the Korshak-Arvey lovefest at the club and reported, "The guests numbered some 300 from the Hollywood blue book, or telephone book, and some politicians."25 Karl, the adopted son of Russian immigrants Pincus and Rose Karl, had inherited his father's $7 million estate (and shoe factories and three hundred retail outlets) and moved from New York to Beverly Hills.^'26 According to a Karl family member, Korshak and Karl were "as close as brothers" since the 1930s, when both were chasing starlets in Hollywood. According to the LAPD, there were hidden dimensions to the Karl-Korshak friendship. An informant told officials (just before he was blown up) that "Karl's Shoe Store was a front for the Chicago mob and that Korshak was the contact man."27
Professionally, Korshak continued to network with the best of them, not skipping a beat when it came to courting important L.A. lawyers, judges, police officials, and corporate moguls. During these years, Korshak was also often seen at Hillcrest, working the power-wielding clique, as opposed to the celebrities who drew the attention of most.** While the showbiz types frequenting the "men's only" dining room were entranced by iconic regulars such as Groucho or Milton Berle or George Burns, Korshak was buying lunch for brokers he might need at some future time. Fellow L.A. attorney and Korshak friend Leo Geffner recalled meeting him for lunch one day: "This guy sits down with us—I didn't catch his name. He was very friendly with Sid. After he left, I asked who he was. The Beverly Hills chief of police!"28
Among Korshak's earliest dining partners was San Francisco district attorney and future governor of California Edmund "Pat" Brown, whom he met in the midforties. The commonalities of Korshak and Brown included their lenient views toward the underworld. Korshak's ethics were well-known nationally, and Brown's were certainly familiar to San Franciscans.
Among his other curious actions, in 1947 Brown asked that murder indictments be dropped against three Colombo crime-family members, after a jury was already thirty hours into deliberations. He then promised the prosecutors that he would resubmit the case—he never did.29 Brown, the son of a San Francisco gambler, would display this curious attitude as a private citizen in 1977, when he wrote a character reference letter for New Mexico organized crime boss John Alessio when Alessio applied for a racetrack license.30
By 1947, a new lunch partner, attorney and future L.A. Superior Court judge Laurence "Larry" Rittenband, had joined Korshak's entourage. After Korshak introduced Brown to Rittenband that year, the two formed one of L.A.'s most powerful law firms. Rittenband went on to become the most senior judge in Santa Monica. According to former Sacramento Bee reporter Richard Brenneman, who interviewed Rittenband extensively in 1976, "Rittenband topped the Santa Monica courthouse seniority list, where he handled his pick of the criminal cases—he loved mysteries—and presided over the courthouse's weekly Friday-morning law and motion calendar, ruling on all pretrial motions and arguments for all the Superior Court civil departments in the building."31 Two decades later he would officiate at the marriage of Sidney's son Stuart. Pat Brown became California attorney general in 1951, and then governor of the state in 1959. Sid Korshak was a key supporter of both Pat's and his son Jerry's future political careers.
When Brenneman asked Rittenband how he justified his association with Korshak, given his ties to the Chicago underworld, the judge seethed. As Brenneman later noted, "His face burning, he made a dismissive wave of the hand and muttered, 'Hell, that's what you had to do in those days to get by.'"
Another new and important Korshak L.A. friend was the prominent Hollywood divorce lawyer Gregson "Greg" Bautzer. A Los Angeles native and son of a Yugoslavian fisherman, Bautzer began his legal career in the thirties, calling studio mogul Joe Schenck "my mentor." A partner in the Beverly Hills law firm of Bautzer, Grant, and Silbert, he was the prototypical Hollywood ladies' man: a handsome, impeccably dressed defender of maligned actresses caught up in nasty divorce squabbles. Among his clients were Lana Turner, Joan Crawford, Marion Davies, Ginger Rogers, and Jane Wyman (Reagan's ex). He never tired of telling his tale of deflowering Lana Turner ("I didn't enjoy it at all" was Turner's less-told side of the story).
Male clients included George Raft, Clark Gable, Rock Hudson, and Arvey partner Henry Crown. Bautzer was also a volatile drunk, kicked out of places like the Beverly Hills Hotel dozens of times for besotted behavior. His name appeared regularly in the local rags, which reported on his babe of the month, usually a beautiful young starlet, or his long-running relationships with A-listers such as Turner and Crawford. (The term A-list was coined by gossip columnist Joyce Haber in reference to revelers on Sidney Korshak's
invitation list to his sumptuous holiday parties.)
As in any good networking friendship, the benefits were mutual. When Bautzer client Susan Hayward was scheduled to be the focus of a 1955 Confidential magazine expose, Korshak had it spiked. (Hayward tried to kill herself that year during a bitter child-custody battle, and public screaming matches with her ex were grist for the local media.)32 On November 29 of that year, Confidential publisher Bob Harrison, a Korshak pal, wrote Korshak at his 134 N. LaSalle office, "Dear Sidney, In accordance with your request, we are dropping the Susan Hayward story from the upcoming issue of Confidential. Love and Kisses, Bob." For his part, Bautzer introduced Sidney to up-and-coming film producer Albert "Cubby" Broccoli and his cousin Pat DeCicco, a hard-partying Hollywood agent, and an alleged Hollywood front for New York's Lucky Luciano.33 Broccoli went on to produce the lucrative James Bond film franchise, occasionally with the labor-consultation expertise of Sid Korshak.
Eventually, Bautzer graduated from the divorce courts to the world of corporate law, which opened up vast new possibilities for himself and his friends such as Korshak. Later, he formed the L.A. powerhouse law firm Wyman, Bautzer, Christianson, and Kuchel.34 Thomas Kuchel, a protege of Earl Warren's, would become a U.S. senator from California, a position from which he introduced tax legislation at the urgings of Lew Wasserman that allowed huge tax write-offs for the movie industry. Bautzer helped Bugsy Siegel and Meyer Lansky set up the corporation from which the Flamingo Hotel-Casino was born. Bautzer had actually been deeded the land by Moe Sedway and then transferred it to Siegel. At the Flamingo,
Howard Robard Hughes (Library of Congress)
Bautzer associated with another investor, Al Hart. The two had known each other since at least 1937: it was Bautzer who originally owned Maier Brewing and sold it to Hart that year.35
By far the most brilliant, powerful, and eccentric person that Bautzer brought to Korshak was a Susan Hayward boyfriend and Bautzer client soon to be dubbed "the billionaire kook," Howard Robard Hughes. The Texas-born Hughes had taken a sizable inheritance from his father, the founder of Hughes Tool Company, and parlayed it into numerous profitable endeavors when he started Hughes Aircraft, a major World War II contractor, and Trans World Airlines (TWA). In the early 1920s, Hughes entered the world of motion pictures through his uncle, Rupert Hughes, a famous author and movie producer. Howard produced twenty-six films, each of poor to average quality. However, he excelled in the role of producer-cum-babe-magnet, dating an enviable roster of the most desired women in Hollywood.*
Greg Bautzer met Hughes in 1947, when the competing cocksman made a pass at Bautzer's latest flame, Lana Turner. Hughes not only landed Turner, but also engaged Bautzer as his Hollywood attorney. Within a year, Hughes had achieved the producer's dream, acquiring his own studio, the Joseph Kennedy-created RKO, for $8.8 million. The purchase was a steal, as RKO was one of the most powerful studios of its time. But Hughes's Midas touch deserted him as a studio honcho, leading to massive financial losses and employee layoffs. Part of the reason for the decline was that Hughes's interest in the studio was, like that of many moguls before and after him, motivated by factors other than the bottom line. Noah Dietrich, Hughes's right hand, and director of Hughes Tool Company, described his boss's connection to RKO: "Howard's involvement with RKO had other motivations than the pursuit of profits and furtherance of the art of the cinema. It also aided the exercise of his libido. I was never certain throughout Howard's long association with the motion picture industry whether his amours were an offshoot of that activity or film production was a screen for his romantic adventures."36
By 1952, Hughes, who was enduring endless complaints from the company's stockholders, was ready to sell RKO. Hollywood had "grown too complicated," he said. Bautzer's firm was to handle the details of the sale.37 When Bautzer passed Hughes's dictum on to Sid Korshak, the former Chicagoan seized the opportunity to solidify his entrenchment in the movie business. While not yet possessed with pockets deep enough to contribute to the $1.25 million down payment,* Korshak was happy to be the behind-the-scenes facilitator, putting together a purchasing syndicate, with the understanding that he would become the new owners' "labor consultant" at a rate of $15,000 per year. He proceeded to convince Bautzer's law partner Arnold Grant to become chairman of RKO (for $2,000 per week), if Korshak could assemble a group of investors. When Grant (who was already the president of Al Hart's Del Mar Turf Club) agreed, Korshak set about synthesizing a motley group of investors hailing from his corrupt Midwest stomping grounds.
First there was Ray Ryan of Evansville, Indiana. Ryan was a gambler and a partner in a Texas oil venture with New York mafioso Frank Costello, his lieutenant Frank Erickson, and George Uffner, an ex-con and underworld leader.38 Other Korshak recruits were the regionally notorious Ralph Stolkin and his father-in-law, Abe Koolish. Chicagoan Stolkin had amassed a fortune by selling a sort of take-home lottery contraption known as the punchboard, which had been invented in 1905 in Chicago.^ This easily rigged contraption, although legal, paid off so rarely that complaint letters about Stolkin filled boxes in Better Business Bureau offices nationwide. The device, like the modern lottery, preyed on the poorest people and predictably drew its share of mob and small-time con-man purveyors. For a time, the hapless Chicagoan Jack Ruby ran a punchboard con before moving to Dallas, where he would take out JFK's assassin Lee Harvey Oswald in 1963. But Stolkin turned the scheme into an art, earning over $4 million as the "Punchboard King of America" in the 1930s to 1950s.
The third partner, Stolkin's father-in-law, Abe Koolish, was no shrinking violet himself, having been indicted in 1948 after years of warnings by the Federal Trade Commission in a mail-order insurance fraud scheme. The charge was dropped only because the indictment was "faultily drawn."'* With Stolkin, Koolish also plied the old con of running "charity drives" that were actually profit-making machines wherein the managers siphoned off most of the donations for "expenses." It is a classic con that is still ongoing. Rounding out the quintet of investors were a Ryan partner, Edward "Buzz" Burke, and Sherrill Corwin, a Los Angeles-based director of the Theater Owners of America.
After negotiations, the RKO sales agreement was signed in Hughes's Beverly Hills Hotel bungalow on September 23, 1952, and within three weeks it started to fall apart. On October 16, the Wall Street Journal began a series of exposes regarding the new owners. RKO's NEW OWNERS: BACKGROUND ON GROUP WHICH NOW CONTROLS BIG MOVIE MAKER: A PUNCHBOARD KING, A MAIL ORDER CHARITY MOGUL, AND A GAMBLING OILMAN blared the first headline. Describing Sid Korshak as the "catalytic agent" in the sale, the story recounted all the aforementioned details about the new owners' true professions. Over the next few days, the Journal and Time magazine continued to pound away at the new owners, citing, among other evidence, Frank Costello's recent Kefauver testimony wherein he disclosed his partnership with Ryan.
Six days after the first Journal piece, the new owners began resigning from the RKO board; none of them could easily afford the glare of increased public (or official) scrutiny. Sid Korshak and Arnold Grant were the last to go, on November 13. For the next few weeks, RKO was in disarray, as the syndicate defaulted on their next installment. However, by February 1953, Hughes had named a new board and taken control of the stock. In what the Journal called "the financial feat of the year," Hughes also kept the $1.25 million down payment proffered by the Korshak syndicate, moved to Las Vegas, and continued to search for new buyers. But he had ignited a lifelong feud with Sid Korshak that would play out over the next two decades in the Las Vegas gambling mecca.39
Years later, Korshak disclosed the reason for the depth of the vitriol to a business partner. "Korshak told me that Hughes himself had leaked the [Stolkin] story," the associate wrote, "knowing it would kill the deal and make him over $1 million richer, the down payment that Hughes never returned to the potential buyers. Hughes had bested Korshak, a fact that the latter neither forgot nor forgave."*'40 A former Hughes employee seemed to corroborate Korshak's intuition, saying, "Howard Hughes knew the kind of people he was dealing with; he knew their backgrounds, and he knew their associations. That was the way he operated. In the case of the Stolkin group, he took their down payment and then waited. At the right time, he leaked the story to the press."41 Former L.A. private detective Ed Becker agrees, saying, "Howard Hughes and his entourage had about ten trained security people, and they of course would have checked out Korshak immediately because Hughes obviously killed the RKO deal."
Another possible reason for Hughes's alleged leak was that in January 1953, Sidney Korshak filed a divorce suit on behalf of Chicagoan Theodore Briskin against his wife, twenty-one-year-old starlet Joan Dixon, an actress under contract to Hughes.42 (Typically, Korshak would get the last word when he brokered the sale of five of the Outfit's hottest Vegas hotel-casinos to Hughes on April Fools' Day, 1967. The underworld, however, kept its boys in the pits and count rooms and, over the next three years of Hughes's custodianship, relieved the recluse of over $50 million of his profits.)
RKO continued its free fall, as stockholder lawsuits began piling up. The troubled studio's featured player Dick Powell chided, "RKO's contract list is now down to three actors and one hundred and twenty-seven lawyers." Hughes finally sold RKO in 1955, netting himself a $6 million profit.
Stolkin bounced back quickly, but temporarily, hawking a thirty-two-hundred-acre Florida pastureland he dubbed Coral City.^43 Abe Koolish and his son had a more ignominious future, continuing their bilking of unsuspecting charities. From 1952 to 1959, the Koolishes siphoned an astounding $11 million from the Sister Elizabeth Kenny Foundation of Minneapolis, their fee for soliciting $19 million in contributions to the fund for polio-afflicted children. The Koolishes' plundering of Sister Kenny prompted a state prosecutor to later say, "The Kenny Foundation was like a subsidiary of Koolish." The scam was finally broken in 1960 by thirty-two-year-old Minnesota attorney general Walter Mondale, making headlines for a year, and catapulting Mondale into prominence. "I went into office in May unknown, untested and very young and inexperienced," Mondale later said, "and within a month I was a very well-known state figure . . . It was a major source of strength to me." Mondale went on to become a leading Democratic senator (1965-76), vice president of the United States (1977-81), and a Democratic presidential nominee (1984). The Koolishes spent seventeen months in the federal penitentiary in Terre Haute and repaid a mere $1 million to the Sister Kenny Foundation.44
Of course, much more would be heard from Howard Hughes as well. In the aftermath of the RKO sale, Hughes personally authorized a $205,000 loan to Vice President Richard Nixon's brother, Donald, allegedly to boost the sagging finances of Donald's restaurant (which featured the appetizing-sounding "Nixonburger") in Whittier, California. However, just days after the December 1956 "loan," Hughes's TWA airlines was granted a lucrative route to Manila, then a route to Frankfurt, and a fare increase. Within a few months more, according to the director of the Hughes Tool Company, Noah Dietrich, the IRS granted Hughes tax-exempt status for his Hughes Medical Institute, a shell organization created to foster the illusion that Hughes Aircraft was controlled by a public trust. On the first day alone that the exemption took effect, Hughes saved $1 million. Two decades later, the loan would play a huge role in the careers of both Richard Nixon and David Bazelon.45
With the advent of the Velie and Kefauver investigations, the Supermob was beginning to lose its cloak of invisibility, if only to a few far removed from the nation at large. The most public difficulties centered on a Supermob partner in the Ohio Franklin Investment deal. In 1952, Art Greene was found guilty of stock fraud by the Securities and Exchange Commission and sentenced to two years in prison. Considering his affiliations with notorieties such as Gioe, Zwillman, and Lansky, Art Greene, the Franklin partner of Pritzker, Bazelon, and Ziffren, got off easy.
Most of the attention to the Supermob was occurring well behind the scenes, especially in Washington, where both Congress and the FBI were receiving disturbing reports about the workings of David Bazelon's Office of Alien Property. Among the protestations arriving on Capitol Hill was one from a confidential informant who advised, "Bazelon, while with the Office of Alien Property, saw to it that concerns in which he had an interest received preferential treatment in obtaining material from sources under the control of the Office of Alien Property."46 The first reports found their way to the House Judiciary Committee, which oversaw the OAP.
At the time, popular forty-six-year-old Kentucky Democrat Frank Chelf, who went on to serve ten successive terms, chaired the committee. Chelf initially assigned a subcommittee to look into the possibility that OAP had favored certain companies in making allotments of materials recovered from seized enemy properties. The congressional investigators chose to begin by focusing on two specific allegations: (1) whether Bazelon had obtained lucrative stocks in German banks seized by the Custodian Office, and (2) if it was a mere coincidence that as custodian he appointed a Chicago friend to appraise a seized German coal mine and that when the mine was auctioned, it was purchased by another friend of Bazelon's.
However, during the committee's investigation, highly placed confidential sources attested to a litany of disparaging allegations about the OAP custodian, including:
• Bazelon saw to it that concerns in which he had an interest received preferential treatment in obtaining property and goods under the control of the Office of Alien Property.47
• Bazelon was given his judgeship thanks to an inner circle of the Democratic Central Committee, which regularly met with Bazelon in "an unidentified room in the Mayflower Hotel."
• Bazelon appointed attorney friends such as Democratic Party honcho William Boyle, Harold Horowitz, and Arnold Shaw (Shapiro) to be the legal representatives of vested companies, which resulted in their obtaining lucrative fees.48 According to the president of the Norfolk and Southern Railway, Joseph Kingsley, Boyle had paid large sums of money to Bazelon, who, to conceal it, used the name Weld in his dealings with Boyle. Kingsley added that Bazelon was "scared to death" that this information would be disclosed. 49 Shaw was a former assistant to Bazelon and was "said to have done the 'dirty work' for Bazelon."50
• Bazelon, according to "reliable information," had "obtained control of certain hotel interests on the West Coast, formerly in the hands of [Office of] Alien Property," and "Ziffren and Bazelon formed a partnership for the purpose of administering warehouse properties which were under the control of Alien Property."51
• Bazelon "shows up in San Francisco in a shady manner as aligned with a Los Angeles lawyer [Ziffren] in owning or being equal counsel for hotels in Stockton, Modesto, San Francisco, Fresno, Bakersfield, etc., which were formerly handled by OAP after being taken over from Japanese and others."52 (Author's italics.) (Note: Bazelon's benefactor Abe Pritzker was also heavily invested in San Francisco. According to a former Department of Justice Strike Force officer, Pritzker worked in partnership there with hotel and real estate tycoon Donald Werby, who the source believed was dispatched westward from Chicago by none other than Al Capone.)*
• David Bazelon's brother Gordon, also an attorney, appeared to be the recipient of special treatment when he was indicted by the IRS for income tax evasion. The committee noted that "the case was extremely good from a prosecutorial viewpoint." However, when the case was forwarded to the Department of Justice, where brother David was assistant attorney general, it simply vanished. Recall that David had previously been assistant U.S. attorney in Chicago in charge of federal tax matters. (There were also uninvestigated reports that David Bazelon's father-in-law, corporate executive M. J. Kellner, relied on David when he got into tax trouble.)53
The "Chelf Committee" declined to publish a report of its findings, opting instead to forward the material directly to the Justice Department for further disposition. In those days is was not uncommon for a committee to avoid writing a report on a politically sensitive investigation. Pulitzer Prize-winning journalist and racketeer specialist Clark Mollenhoff wrote of how Congress demurred when investigating labor corruption: "It is often forgotten that pitfalls were there for committee members or staff investigators who tackled the job . . . Where investigations could not be stopped, union influence was used to cripple the investigators by sharply limiting their funds or curtailing their jurisdiction . . . One of the finest investigators to tackle the union racket was out of a job for six months because he was blackballed by union-influenced Congressmen . . . The heroes of the 1953 to 1957 period were Republicans and Democrats, liberals and conservatives. Some had their investigations ended by political pressure; some gave up in frustration."54
With the buck thus passed, the responsibility to act shifted to the Department of Justice. After receiving the Chelf data, Attorney General James McGranery on August 8, 1952, instructed J. Edgar Hoover to look into the Bazelon affair, but drastically limited its scope to just the Franklin Hotel allegations—understandable since McGranery was Bazelon's boss and friend at the department.55 The FBI thus opened a new subject header: "Judge David L. Bazelon; Misconduct in Office." Their investigation proceeded quietly for the next five years and, as noted in the previous chapter, corroborated the accuracy of the Goe/White research, labeling the Bazelon-Ziffren dealings in Rohm Haas and other OAP transactions "suspicious." But since their initial charge was to conduct a narrow investigation of just the Franklin deal in Ohio, they conservatively refused to expand the probe. The FBI's liaison to the Department of Justice, Courtney Evans, wrote, "We will take no action in this matter in the absence of a request from the Attorney General [Herbert Brownell]."56 Brownell and his Justice Department, however, declined to pursue the evidence against a sitting federal judge (Bazelon) and the man who had, by the report's closing, become the Democratic National Committee chairman from California (Ziffren). Interestingly, after an exhaustive search by National Archives staff, all Justice Department records on the Bazelon investigation have turned up missing.57
David Bazelon successfully weathered the 1952 House Judiciary probe, the protracted five-year investigations by the FBI (which yielded a 561-page report), the LAPD investigations, and a two-decade, if below-the-radar, investigation by reporters Robert Goe and Art White. Bazelon's future accomplishments as a jurist were groundbreaking, transforming the U.S. Court of Appeals (where he mentored clerks such as Alan Dershowitz) into the second most powerful judicial jurisdiction after the Supreme Court. Among his many praised opinions: he extended the rights of the accused and the breadth of the insanity defense to include those with inborn mental defects; in 1973, as head of the nine-judge appellate panel ruling in the Watergate case, he ruled that President Nixon had to hand over the infamous White House tapes; and he ruled that patients confined to public mental institutions were entitled to treatment, as opposed to being merely warehoused.
In 1962, Bazelon would briefly be considered for a Supreme Court post by the Kennedy administration, which was considering candidates to replace the retiring Judge Felix Frankfurter.58 However, for reasons unknown, the Bazelon nomination was never proffered,"" and another Chicagoan, Arthur J. Goldberg, got the nod. Goldberg was not just another friend of Abe Pritzker's, having been a partner in his law firm, but more interestingly, an investor with Paul Ziffren and Benjamin Cohen in the San Diego Hotel.
Judge Bazelon (far right) and fellow members of Big Brothers of America meet President Kennedy, April 4, 1961 (Corbis/Bettmann)
In February 1970, according to the FBI, Bazelon stayed at the mob-frequented La Costa Resort, his bill comped by the hotel. David Bazelon passed away in February 1993, whereupon the D.C.-based Mental Health Law Project changed its name to The Bazelon Center for Mental Health.59
Meanwhile, undeterred journalists Lester Velie, Robert Goe, and Art White continued the thankless job of poring over real estate records and business filings, stored in clerks' offices and corporate records warehouses around the country. They were energized by the realization that Paul Ziffren was becoming a major political force in California and in the nation. In truth, his ascension was nothing short of meteoric.
Ziffren's early strength came from his ability to raise money for Democratic candidates. When he solicited funds for Helen Gahagan Douglas in her senatorial campaign against Richard Nixon, Ziffren's methods were mysterious, but few Democrats cared. When a naive young Colorado businessman was recruited by Ziffren to be Douglas's campaign finance chairman, the Coloradan knew something was wrong. "Paul was really the finance chairman," the businessman candidly admitted to Lester Velie. "I was the front.
When I tried to determine the sources Paul was tapping, I got nowhere. He wasn't going to let me know the sources." The young man recalled how he could hardly pry Ziffren away from his long-distance phone calls to Chicago. He never learned who was on the other end.60
In 1953, Ziffren had been elected the Democratic national committeeman for California, a position that saw him hailed for "reinventing" the California Democratic Party, which captured both houses of the state government for the first time in seventy-five years. National Democratic Chairman Paul Butler said, "Paul Ziffren has been the greatest single force and most important individual Democrat in the resurgence of the Democratic Party in California."61 That same year, Bautzer-Korshak pal Pat Brown became attorney general of California, and Lester Ziffren, Paul's brother, became Brown's assistant attorney general for the Southern California Region, where he would serve for seven years.
If anyone doubted that the Supermob was now untouchable, these developments should have proved dispositive. In fact, the goings-on were still far from public scrutiny. However, the trio of investigators remained undaunted and labored to stop what they perceived as a legitimizing of shady operators and mob-tainted money in California. Often their discoveries were forwarded to the FBI and absorbed into its investigation of the Supermob. The problem for the tireless reporters was getting their work into print. A veteran Chicago newsman who followed Korshak's career recently recalled two instances when he was ordered by a senior editor to remove Korshak's name from unfavorable articles. And articles about Korshak specifically were never even green-lighted. "You couldn't get a story about him in the paper," the Chicago Tribune scribe said. "How many battles do you have to lose before you get the message? There was something special about Korshak."
With these investigations ongoing, sources kept a steady stream of Korshak intelligence flowing into various agencies:
• In July 1951, an informant reported that Korshak was making an effort to fix the case of an arsonist.
• Virgil Peterson of the Chicago Crime Commission noted that just after Christmas, 1954, Jake Arvey flew to New Orleans to meet Frank Costello's slot machine and jukebox partner, "Dandy" Phil Kastel, at Kastel's palatial Louisiana estate. In noting "unimpeachable sources," Peterson reported that Arvey's travel arrangements were made by Korshak, who drove Costello to the house.62
• LAPD intel sources in 1954 reported that, even on the West Coast, Korshak was "currently in touch with Capone Syndicate members."
• Other sources reported that Korshak was "sponsoring" First Ward alderman John D'Arco's Anco Insurance Company, a partnership of D'Arco and Buddy Jacobson (an aide to Korshak mentor Jake Guzik). Anco had been set up as a means for funneling graft money to First Ward secretary Pat Marcy, and from there to the Outfit*
By 1954, the yeomanlike work of Goe, White, and Velie was gaining more adherents. In addition to the Judiciary Committee's and FBI's plumbing of the Bazelon allegations, the LAPD opened its investigation of the Hayward Hotel.63 The directors of the LAPD intel division also began corresponding with the Chicago Crime Commission regarding the Hotel Hayward ownership. 64 LAPD intel chief James Hamilton also sought Peterson's advice regarding Bazelon, Ziffren, and Warehouse Properties.65 Suddenly, Los Angeles authorities were interested in all things Chicago. LAPD intel chief Hamilton wrote Peterson with a query about Abe Pritzker after he was prompted by an intel division report that noted suspicious movements by Pritzker in Los Angeles:
Abe Pritzker, a Chicago attorney with offices at 134 N. La Salle Street, which is the same address as that of Sidney Korshak's office, has been closely connected with members of the Capone syndicate, Tony Accardo, and other underworld characters. It is believed by the undersigned that Pritzker may be active locally, as a front for eastern hoodlum money to be invested in the Los Angeles area. Pritzker was at the office of attorney Louis Hiller, 6399 Wilshire Blvd., LA; was there discussing the investment money without the definite plan being indicated. Those present at the meeting included Hiller, Pritzker, and Louis Tom Dragna [L.A. Mafia underboss, brother of "the Al Capone of Los Angeles," Jack Dragna]. Hiller indicated that he had a million dollars available for investments.66
Meanwhile, the business aspirations of the Pritzker legal clan began to explode. In 1957, they created the Hyatt chain of hotels when Jay Pritzker bought a small motel near the Los Angeles airport from Hyatt von Dehn, a real estate developer. Pritzker's intuition was that business executives craved luxury hotels near major airports—and time would prove him correct. The seminal purchase was initiated in a coffee shop named Fat Eddie's outside LAX, where Jay scribbled down his $2.2 million purchase price on a napkin.
The Pritzkers soon developed a reputation for their canny business modus operandi, being fast to move into a deal and quick to get out if they had to minimize a loss. They also became the avatars of a business technique called asset management, wherein the backer does not directly manage the property and the managers do not directly fund the projects. Since it is so expensive to build hotels and takes three to five years to see profits, the Pritzker family and the management teams of the Hyatt hotels only invest $400,000 to $800,000 per hotel and then get a backer like Prudential Insurance or the Ford Motor Company, companies with "staying power" to foot the several-million-dollar bill to actually build the hotel. Five decades later, the Hyatt chain (with over seventy-four hotels in twenty-seven countries), and other Pritzker holding companies, are worth anywhere between $5 billion and $7 billion, with annual revenues of $1.3 billion. The Pritzkers also became one of the country's largest hospital operators, acquiring six of their own and operating fifteen more under lease and contract management. 67 (See appendix B for more examples of Pritzker business interests.)
Profits, however, were not the only constants in the Pritzker saga. Rumors flew that, as with their questionable real estate partnerships in the forties, the Pritzkers' new Hyatt endeavor was similarly tainted. One IRS informant who was quoted as saying that "the Pritzker family of Chicago through their Hyatt Corp. initially received their backing from organized crime" was later identified as F. Eugene Poe, the late president of a bank in Perrine, Florida, and vice president of the offshore tax haven where the Pritzkers hid their wealth known as Castle Bank, about which more will be seen.
Michael Corbitt, who was recruited as a teenager into the operation of Outfit slot boss Pete Altieri, got a glimpse of what lay beyond the Hyatt facade. After he was promoted into the world of mysterious Chicago slot king Hy Larner, who trafficked in drugs, guns, and gambling machines in far-flung locales such as Spain, Japan, Iran, and throughout Central America, Corbitt kept running into the name Hyatt. As he later wrote in his book, Double Deal, "Whenever possible, Hy wanted us to put his guests up at a Hyatt . . . It was common knowledge that most of the Pritzkers' financial backing at that time came from the Teamsters, meaning pension fund manager Allen Dorfman."68 Corbitt, who ran a Chicago security company as his "day job," elaborated about the Hyatt connection shortly before his death in 2004:
"My first job was the construction of the Hyatt at 151 East Wacker. After the Hyatt was built, I became the security director for the Hyatt chain in Chicago. They were a big Chicago chain—they weren't around the world like the way they are now. I had very close ties to the Pritzker family only through my Outfit connections. Our connections to the Hyatts all over the country were solid. At the time, we were dealing directly with Abe Pritzker. We could get in places that were sold-out; even if they were sold-out, we'd get the presidential suite. I know for a fact that we never got a bill. There is no way Larner wasn't with the Pritzker family."69
Like James Hamilton, Los Angeles district attorney Thomas C. Lynch wrote to the CCC's Virgil Peterson for information on Paul Ziffren and Jake Arvey.70 That same year, it had been disclosed that Ziffren was the subject of a federal probe into the activities of Enterprise Construction and its subsidiary, United Credit Corp., of which Ziffren was VP and tax attorney. A high government source reported that Enterprise, which had made over $10 million in loans to home buyers, would be charged with misuse of FHA mortgage funds, including kickbacks from loan proceeds, failure to require down payments, exorbitant prices, etc. The source noted that the statute of limitations might inhibit prosecutions for crimes that may have been perpetrated in the late 1940s. Ziffren was reported to have financed United Credit with a fund set up for his wife, Muriel.71 One U.S. senator referred to Enterprise/ United as "the top racketeering outfit in the fleecing of home owners in the Los Angeles area."72
When an FHA officer investigating so-called suede-shoe artists visited Enterprise and attempted to warn them that they were on the verge of getting into a legal quagmire, he was quickly advised as to exactly who was calling the shots.
"I went to United Credit to induce them to be more careful in choosing their contractors," said FHA officer William Murray Jr. "Morrie Siegel, a vice president of Enterprise, tried to impress me by mentioning names of influential people he knew. He intimated he could make things uncomfortable for me. There was a signed picture of President Truman on the wall. I couldn't see to whom it was autographed, but Siegel and the others of the company there kept looking at it, as if to leave me draw the conclusion how important they were."
If the show-and-tell failed to impress, what happened next certainly did, when Murray was reassigned and demoted. "Later I heard that United Credit was responsible for my being banished to the salt mines of Long Beach [California] because I had gotten in the company's hair," he told a Senate committee investigating FHA fraud.73 Eventually, Enterprise saw its California contracting license revoked and was forced out of business.
Investigators' interest in Ziffren heightened when they noticed the removal of Ziffren's name from the Warehouse Properties partnership papers in exchange for that of his best friend, David Bazelon, the man who was in charge of selling it for the government eight years earlier (see chapter 5). There is no public record that Ziffren received even one penny for his interest. The new partnership papers state candidly that the purpose of the partnership is "for convenience, in connection with the contemplated sale to the City of Los Angeles."74 The notary on the papers of incorporation was Leo Ziffren, Paul's brother. As previously noted, the Warehouse property sale to the city eventually netted Bazelon a $100,000 windfall.
As the Supermob prospered, investigators noticed another curious trend under way in 1954: Sidney Korshak and Frank Sinatra, who were by now good friends, began directing their pals to a recently opened bank, guaranteed to be friendly to the Supermob. In no time, studio moguls and A-list celebrities closed accounts in their former institutions and opened them with the City National Bank of Beverly Hills, founded on January 1, 1954, by none other than Al Hart with the intent of servicing the real estate and entertainment industries.75 Initial capitalization for the bank was provided, according to Dunn & Bradstreet, by Chicago's American National Bank, the same institution that provided additional financing for the likes of Arthur Greene and the Hilton chain. According to the IRS, Sidney Korshak held stock in American National, and, completing the circle of insiders, the American National officer who facilitated the capitalization was William J. Friedman, the same man who was Ziffren's partner at Gottlieb, and who became the director of the Rohm Haas enterprise that was seized by David Bazelon's OAP.
One of Hart's partners in the new venture was Samuel W. Banowit, who was in turn partners with both Alex Greenberg in the Spring-Arcade Building, and with David Bright, associate of Gerry Restituto, the Mafia boss of San Joaquin Valley, with whom he invested in the three-hundred-thousand-acre Bright-Holland Ranch in Lassen County, California.
A young Francis Albert Sinatra (Library of Congress)
Hilton's Arnold Kirkeby was also a director of the bank, and Sidney Korshak a major stockholder.76 Paul Ziffren's son Ken, himself a future L.A. power attorney, would eventually join the bank's board of directors as well.
An LAPD memo of August 3, 1958, lists City National Bank among a dozen businesses believed to be fronting for and/or doing business with the mob. Robert Goe's sources stated that the bank had "a number of directors who appear to be nominees or 'front men' for such individuals as Joseph Fusco."77 However, given the extreme laxity of law enforcement in L.A., not to mention Hart's great friends in the attorney general's office, the bank was never adequately investigated, and it would become the largest independent bank in Los Angeles, with $3 billion in capitalization and a total of fifty-four offices throughout California.78
Like so many other mysterious Chicagoans now doing business in L.A., Al Hart was a mystery to some in law enforcement, but not all. David Nissen, former chief of the L.A. division of the U.S. attorney's office, recently said, "Al Hart was a big Democratic fund-raiser. I always thought he was with the mob people, but I never had any actual basis for that."79 Nissen was likely unaware of the FBI's file on Hart, which noted his partnership with Bugsy Siegel, and numerous convictions with the Chicago mob. But others had no doubt about Hart's leanings. "Hart was Korshak's banker and he was the banker for the Democratic Party in California and later the Republican Party—whichever side they decided to support," said veteran Chicago private investigator Jack Clarke recently. "Hart was the major banker and a major player in politics, and he was well-known among the organized crime guys because when they were investigated, they would put money in his bank. They knew he wouldn't allow the IRS inside the front door of the bank, and he wouldn't turn over his records. Hart and Korshak were really tight. All the friends of Korshak who wanted to protect their money but to still have it close at hand put all their money there."80
Pulitzer Prize-winning journalist Wendell Rawls, who spent years investigating corruption in the Southern California entertainment community, heard the same thing. "You could deposit any amount in Hart's bank without letting the IRS know," said Rawls. Hart's unusual business practices were well-known in the state attorney general's office in Sacramento. "We had a joke that City National Bank was the closest thing to a Swiss bank in the United States," said the AG's investigator Connie Carlson. "Al would handle any transaction that you needed handled discreetly."81 A 1970 FBI memo summarized, "Cleaning up [mob] money by a bank is an old trick, but an effective one and the City National Bank is as uncooperative [with IRS] as the bank of Las Vegas and a known front for the mob in Los Angeles."82
When he was tipped to Hart's possible connection to Meyer Lansky, L.A. district attorney crime investigator James Grodin did a background check and learned a fraction of the true story. "I went to the DA's office and ran a criminal history on Hart," Grodin remembered. "I learned that he went to prison in the thirties for some kind of land fraud in San Bernardino." Further proof of Hart's dubious associations comes from former L.A. private detective Ed Becker. When he needed a $10,000 loan, Becker was advised by Chicago's Johnny Rosselli to "go see Al." Becker said that Hart came through, despite being unable to read the business proposal. "He was illiterate," said Becker.83
With his client-friendly banking practices, Hart became the banker to the stars, often seen socializing with them. "Al Hart was a great friend of everybody," said acclaimed television comedy producer George Schlatter recently. "I managed Ciro's, and when we were running short, Al Hart would delay payment of the bill for liquor—which was not totally legal, but very friendly."84 Helping his friends with investments was just part of what made Hart a good friend. He was said to have had a $250,000 investment in the Broadway musical My Fair Lady, among others, and that he often tipped his friends and bank clients to similar opportunities. 85Hart's celebrity clients were, and are, countless, from Frank Sinatra on down. Sinatra's (and later JFK's) He was always using foul language, even in front of women. But the members tolerated him because he gave them no-interest loans from his bank."
Despite the lack of deference to the distaff side, Hart had a reputation as a player. "Al Hart had many mistresses," said Peter Lawford's longtime manager Milt Ebbins. "And he made them a lot of money in investments."86 Sid Korshak's daughter-in-law Virginia Korshak is more blunt, saying that Hart was a serial womanizer: "Al Hart was a little dog. He was a little weasel."87 MCA starlet Selene Walters, whose great looks made her one of Hollywood's most in-demand dates, knew Hart and went on one date with him.51' "Hart took out very young starlets while he was married," said Walters. "I didn't like him—he was crude and sinister. I was wary and afraid of him. His bank was the only one that terminated my account because he said it wasn't large enough. That hurt me very much because I had gone out with him."88
Among those most frequently linked to Hart were actresses Martha Hyer and Pier Angeli. According to Hart's FBI file, one of his women reported that her home had been burglarized of $79,000 in furs, jewelry, and paintings on the evening of October 31, 1959. It was being widely reported that Hart, who admitted to the LAPD that he had a key to the house, had engineered the break-in after the affair fizzled. He allegedly told one friend, "[Name deleted] was no damn good, and if he [Hart] went to her house and took his things back, it would not be burglary since, after all, he had given them to her in the first place."89 The FBI was not allowed to pursue the case because there was no evidence of an interstate crime, and the Beverly Hills police typically treated Hart with the same preferential treatment afforded celebrities.
With the exception of Charlie Gioe, who was gunned down on a Chicago street in August, 1954 was notable for Supermob close escapes. The next year was not so fortuitous. Among those whose luck ran out in 1955 was Willie Bioff, who had assumed a false identity after his Hollywood-extortion prison term and lived for a decade in Phoenix, where he befriended and advised Senator Barry Goldwater, who only knew him as William Nelson. In 1955, Bioff had the temerity (or lunacy) to take a job under the name of Nelson as an entertainment consultant for Las Vegas' new Riviera Hotel and Casino, built with $10 million in Outfit money, behind a front group of Miami investors. Interestingly, the Riviera land was leased from an L.A. consortium that included Greg Bautzer's law partner Harvey Silbert, who was also Frank Sinatra's personal attorney, and a close Korshak friend. When the Chicago Outfit ID'd Bioff, his days were numbered. On November 4, 1955, as Bioff left his Phoenix home's front door and entered his pickup truck parked in the driveway, he had no idea that the Chicagoans were onto the man who'd testified against them. If he had had that knowledge, he would never have cranked the ignition that blew him into a hundred pieces.
A month later, on December 8, 1955, sixty-five-year-old Alex Louis Greenberg, the man who could link so many California up-and-comers to questionable Chicago investment money, was killed gangland-style as he and his wife, Pearl, were leaving Chicago's Glass Dome Hickory Pit Restaurant on the South Side's Union Avenue. As the couple walked to their parked car, two gunmen emerged from the shadows and dropped Greenberg with four .38-caliber bullets before calmly walking away; Paul Zifrren's real estate partner had been hit in the forehead, chest, left arm, and groin. Just months earlier, Greenberg had orchestrated the merger of Wisconsin's Fox Head Brewing Company, which was heavily invested in by Murray Humphreys and Joe Batters Accardo, and Fox Deluxe Beer Sales of Chicago. The new company served as a legit front and money-laundering sieve for the Chicago Outfit.90 At Greenberg's funeral, one of Frank Nitti's cousins stayed on to make sure the body was properly disposed of. He reported back to his family, "Now he's the richest son of a bitch in hell."91 In the coming weeks, police rousted over seventy-one hoods in their attempt to break the case. They never did.
The Chicago Tribune's obituary concisely described Greenberg's legacy, although it has long since been forgotten: "Under his guidance, it is understood, the mob moved into ownerships of hotels, restaurants, laundries, cleaning establishments, and bought stock in banks, major industries, and entertainment enterprises. 92
Alex Louis Greenberg handled all investments and financial matters of every type for and on behalf of Frank Nitti.
NITTI'S WIDOW, ANNETTE, IN HER PROBATE LAWSUIT AGAINST THE GREENBERG ESTATE (1957)
With so many diverse holdings, Greenberg's probate took over five years to sort out. However, as expected, the final accounting stated that the estate included $964,252 in stock in the Seneca, over $1 million in liquid assets, dozens of real estate parcels, and thousands of shares in a variety of blue-chip stocks. It came as no surprise to those familiar with the financial connection between the mob and the Supermob that the family of Frank Nitti, Al Capone's successor, made claims against the estate. The Chicago Daily News wrote, "The widow of Frank 'the Enforcer' Nitti charged that Greenberg failed to repay more than $2 million entrusted to him by Nitti for investments." (Author's italics.) The probate also noted that Paul Ziffren owed Greenberg's estate $19,939.50.93 Annette Nitti finally agreed to a $35,000 settlement in 1960.
While Greenberg's murder hogged the Chicago headlines, Sidney Korshak continued to fight his battles in private. In 1955, he narrowly escaped prosecution for possible violation of the Labor Management Relations Act of 1947. He and Murray Humphreys had been implicated in their dealings with Goldblatt Brothers, accused of using strong-arm tactics to prevent Goldblatt employees from unionizing.94 The Bureau learned that Pritzker was Goldblatt's attorney of record, but Pritzker would defer to Humphreys and Korshak whenever a stalemate occurred.95 Federal agents also noted that one union organizer at Goldblatt's had been murdered in 1933.
Korshak was first put on Goldblatt's retainer in 1950 for $6,000 a year, increased to $10,000 by 1954. According to the FBI, the IRS had carefully been watching Korshak's finances for at least four years, but found nothing out of order. When interviewed by Bureau agents, Korshak admitted that he had known Humphreys since about 1929.96 Indeed, Korshak had been seen for years meeting with Humphreys at Fritzel's Restaurant. Prosecution of Korshak was ultimately (and typically) declined by the Department of Justice.
Like the reporters whose editors blanched at the prospect of a Supermob expose, FBI agents knew all along that their superiors did not share their interest in men like Korshak. One memo generated by the L.A. Field Office stated the obvious: "Due to his position as a prominent attorney, and because of the Bureau's previous instructions that any Korshak investigation be handled in a circumspect manner, [the L.A. office] does not desire to write a report or make Korshak the subject of an active investigation under the Criminal Intelligence Program."97
Sidney Korshak was not alone in his feeling of legal invulnerability. The same FBI kid-glove approach applied to Ziffren, despite what the LAPD was telling them. "He is considered by officials in the Los Angeles Police Department as a vociferous enemy of law enforcement," an FBI memo noted, "and has been described by LA Chief of Police William H. Parker as a 'force of evil.'"98 But Paul Ziffren had little to fear from the FBI, Chief Parker, Hamilton, or the rest—he simply informed his brother, the assistant attorney general, and his pal the attorney general, that he was upset. On May 22, 1956, Ziffren wrote a letter to his brother's boss, Attorney General Pat Brown, saying, "I want to congratulate you upon your decision to investigate law enforcement in Los Angeles . . . I have been increasingly alarmed by the activities of the Chief of Police of the city of Los Angeles, with particular reference to the mysterious and highly secret intelligence division operated under his direction."99 However, on this occasion, Ziffren's impressive connections failed him. Brown, who now seemed to want to distance himself from the Ziffren taint, responded vehemently, calling his blast "unfortunate . . . unjudicious . . . and unwelcome." It was to be merely the first salvo in Brown's attempt to discard any negative baggage that might forestall his quest for higher office.
The national political stage was no less bothersome for Ziffren as Estes Kefauver, who was attempting to parlay his crime-probe celebrity into a presidential candidacy, began blasting Ziffren from the stump—something he had avoided in his vaunted investigation. In a speech given in San Diego on May 30, 1956, Kefauver singled out Ziffren in a stinging condemnation of "bossism" in California. Noting Ziffren's backing of his Democratic opponent, Adlai Stevenson, Kefauver declared that if Stevenson won, Ziffren and his associates would become "the czars of California democracy." Kefauver referred to Ziffren as "Arvey's protege here."100 A Chicago Tribune columnist wondered, "How much of a piece of Stevenson does [Arvey] own, and, by extension, how much of a piece of the candidate does Korshak own? And, if they have a piece, how much of that piece can the mob call theirs?"101
*For a complete discussion of the Outfit's links to Truman and his parole board, see my previous book, The Outfit, chapters 10 and 11.
*Interestingly, many of the Kefauver Committee's files, including some of the most sensitive, were looted before being transferred to the Library of Congress (Washington Daily News, 3-17-55). When the holdings were opened for the first time for this writer, much of the Korshak and Greenberg files were gone, as were the photos the committee had obtained of Frank Sinatra in Cuba at a Mafia convention with Luciano, Lansky, et al.
*Celebrity regulars included Errol Flynn, Marilyn Monroe, Henry Fonda, Jimmy Stewart, Burgess Meredith, Clark Gable, Carole Lombard, Lucille Ball and Desi Arnaz, Louis B. Mayer, Humphrey Bogart and Lauren Bacall, and Lana Turner.
†IRS investigator Andy Furfaro watched Karl's career closely and recently opined, "Harry Karl didn't exist. It was what they called the orphan train. A lot of these guys like Ziffren and Karl had no parents; suddenly they're adopted by these high muckety-mucks. A big shoe man from New England adopts Harry Karl."
**One FBI memo called Korshak "a director of the Hillcrest Country Club." (Memo from DELETED to SAC L.A., 12-8-75)
* Peter Brown's book The Untold Story of Howard Hughes contains an appendix (p. 394) that lists forty-four of the most well-known Hughes lovers, among them Jean Harlow, Jane Russell, Ava Gardner, Ginger Rogers, Bette Davis, Lana Turner, Yvonne DeCarlo, Gloria Vanderbilt, Rita Hayworth, Jean Peters, Terry Moore, and Kate Hepburn.
*Hughes was so anxious to unload the albatross that he let it be known that he would hold the mortgage on the remainder of the $7 million price tag, in addition to loaning the new buyer(s) $8 million in transition capital.
†The punchboard consisted of an eight-inch-square, half-inch-thick piece of cardboard with hundreds of holes drilled into it, some of them supposedly containing a prize slip. The holes were covered with a sheet of paper, and the purchaser would punch out a hole with a nail in search of a prize—usually a cheap wristwatch, a pair of sunglasses, a pocketknife, or—rarely—cash.
*A typical Koolish scam involved advertising, in bold letters, $25 A WEEK DISABILITY BENEFITS. But buried in the fine print were the terms: "For eight weeks after the seventh day of confinement in your home if you are over 60 and under 80, for chicken pox, mumps, diphtheria, measles, typhoid, yellow fever and undulant fever."
* Korshak may also have had ill feelings for Hughes because of Hughes's 1932 movie production Scarface: The Shame of the Nation, which portrayed Korshak's friend Al Capone as a one-dimensional beast. He and his associates come off like ignorant, remorseless, and childish criminals.
†Now known as Carol City (changed when Stolkin was threatened with a suit by the city of Cape Coral), the development today boasts a population of fifty-nine thousand.
*In 1990, Werby avoided child rape charges in their entirety by pleading guilty to two misdemeanor charges of contributing to the delinquency of a minor. Werby agreed to pay a $300,000 fine and was sentenced to three years' probation. Originally, a grand jury had indicted Werby on twenty-two felony sex and drug charges stemming from his hiring of underage prostitutes and furnishing them with crack cocaine for sex. All the felony sex charges, with their potential for prison time, sex offender registration, civil commitment, etc., were quietly dropped.
* According to the JFK Library, it would be likely that Robert Kennedy had some input into the decision not to proceed with the Bazelon appointment. Regrettably, the Kennedy family continues to withhold forty boxes of RFK's files, including voluminous "name files" that might provide the answer.
*Typically, if a Chicago businessman wanted patronage contracts or help with striking unions, he was advised to buy insurance policies from Anco, and—presto!—their problems would go away.
Once the FBI had installed bugs in the First Ward offices, they listened as Marcy and D'Arco received their marching orders from the Outfit bosses, especially Humphreys and Sam Giancana, who often strategized over which judges and police officials were corruptible. The Bureau also noted D'Arco meeting with the hoods at Postl's Health Club at 188 W. Randolph. (See especially Roemer, Man Against the Mob, chs. 13, 22.)
* Among Walters's many suitors were George Raft, Howard Hughes, Frank Sinatra, Gary Cooper, and Greg Bautzer.