Friday, June 19, 2015

The Dealmakers Behind the Chicago Mob

For most Americans, real racket power in the last century hovered somewhere over the Hudson River, and no wonder. They saw New York-area gangsters featured in the best books and movies about the Mafia. Flamboyant bosses like John Gotti grabbed headlines with good sound bites and flashy trials, or the occasional high-profile hit in a crowded restaurant. But while East Coast mob families splattered each other's brains in the marinara, the Second City's less-colorful Mafia, known as the Outfit, built a criminal empire that was truly second to none. Its tentacles stretched to the West Coast and wrapped securely around Las Vegas. Not that its members didn't whack their own wayward bosses along the way, but their executions were mostly private affairs, often dispatched with a few well-placed .22s to the back of the head.

Author Gus Russo has done yeoman's work in pulling the Outfit bosses from the shadows to show how their muscle and methods came to dominate organized crime. In his 2001 book, suitably titles "The Outfit," he chronicles the Chicago mob's rise to national power after Al Capone.

Now, he weighs in with "Supermob: How Sidney Korshak and His Criminal Associates Became America's Hidden Power Brokers." If you know about the short shrift the Outfit has received in the popular imagination, you can almost forgive the breathless title, but Russo pointedly uses the term "Supermob" to describe a band of Jewish lawyers, politicians and businessmen who acted as cat's-paws for some of the Outfit's most ambitious scams. Although he credits a Senate investigator with first using the term "Supermob," Russo takes it to a new level, suggesting a gang of white-collar kingpins as ruthless and tightly knit as a Mafia family. He is also serious about the "Super," claiming that the members of his "Kosher Nostra" would ultimately profit more from their "amoral, and frequently criminal careers" than did their Outfit allies.

Like all other Chicago gangster stories, Russo's starts with Capone, a criminal mastermind far more sophisticated than the brutal Scarface we know from the movies. Unlike gang leaders before him, he was not content with cornering the market on gambling and bootlegging. The "financial wiz" who showed him the way was Alex Louis Greenberg. He put Capone's money into real estate and service industries with free flowing cash, such as banks, entertainment venues and hotels. In the beginning, to protect the various investments, the mob used its excess money to buy politicians and its excess muscle to strong-arm unions. Eventually these inroads into the public sector and labor organizations would become lucrative sources of income themselves.

As the schemes got more complicated, the mobsters needed the help of lawyers, politicians and frontmen with relatively clean criminal records. It was a Faustian bargain, but it helped launch some of the most prominent names in Chicago's Jewish community. For example, according to Russo, Outfit funds and connections formed the foundation on which lawyer Abe Pritzker's family built the Hyatt hotel chain.

At the nexus of mob influence and political corruption was lawyer Jacob Arvey, the most important Jewish cog of the city's multiethnic Democratic machine. His clout with the Truman administration put a protege in charge of property seized from German companies and interned Japanese-Americans. Russo documents how these West Coast assets were sold for a fraction of their value to silent mob partners and the young lawyers, Arvey accomplices, who served as their frontmen. Some of these young lawyers then set up shop in California and duplicated Chicago's Democratic machine there, fueling their candidates' campaigns with money donated by the mob and its related unions. But the Outfit's insidious control of unions most drove its westward expansion. Back in the earliest days of moving pictures, Chicago mobsters used the threat of projectionist walkouts to shake down local theaters. These extortion schemes worked their way back to the studio lots. According to Russo, the movie moguls did not mind seeing leftist organizers pushed to the side by mob goons, who could at least be paid off to keep the cameras rolling.

Producers also got squeezed by the stars in front of the cameras, especially those managed by Jules Stein and Lew Wasserman of MCA, Hollywood's first powerhouse talent agency. Back in Chicago when Stein started the firm as Music Corporation of America, he was booking area bands and using a "union racketeer" to throw stink bombs in nightclubs that wouldn't take his acts. He was supposedly a silent partner with Outfit bosses in the hot spots where his bands played, and according to Russo, he would continue to blur the line between ownership and union influence throughout his career.

Later, when Wasserman client Ronald Reagan assumed the presidency of the Screen Actors Guild, he helped push through a waiver permitting MCA to be the only agency that could also produce programs for the burgeoning TV industry. This competitive edge helped Stein and Wasserman gain control of Universal Pictures and create Hollywood's first multimedia behemoth. In return for the SAG waiver, Russo asserts, Wasserman secretly cut Reagan into production deals (counter to SAG rules) and helped transform him into the ubiquitous TV presence that launched his political career.

The Outfit had its hooks in Las Vegas from the start (a Chicago mobster bribed Nevada legislators to pass the Wide Open Gambling Bill), but if the bosses hadn't had their fingers in the Teamsters pension fund, the city wouldn't be what we know today. From 1959 to 1961, they took $91 million from the union to build or improve one casino after another. Over the next decade, as Las Vegas' popularity soared, the Outfit was perfectly positioned to dominate the scene, with its control of corrupt politicians from both parties, its manipulation of the service unions and even its access, through Hollywood back channels, to the hottest entertainers, like Frank Sinatra, Dean Martin and Sammy Davis Jr. Eventually millions in cash skimmed from the casino counting rooms would make its way to Chicago's mob bosses.

Members of Russo's Supermob were pivotal resources in each of the Outfit's connections to Las Vegas, but none more so than Sidney Korshak. An obscure labor lawyer from Lawndale, Korshak would ultimately be dubbed the most powerful man in Hollywood. By the mid-'60s, the same would be true in Las Vegas. His brother Marshall had gone on to a very public career in Chicago as a lawyer, Democratic politician and city officeholder. Though Sidney would have his own notoriety, the source of his power would lurk in the shadows. Working on a flat retainer of $50,000 per job, Korshak was anointed the official labor negotiator for almost all of the Outfit-connected businesses. With just a phone call he could spark or quell strikes--a fearsome power in the seasonal hotel industry or during the massively expensive process of film production. But the contacts with his clients went far beyond labor matters. Moguls like Wasserman called him virtually every day. He helped negotiate deals for casinos and even business conglomerates on the backs of envelopes, often keeping a small piece of the action for himself. No favors were too big or too small for his clients, whether a Chicago hotel room for Warren Beatty during the 1968 Democratic National Convention, or a pardon from President Richard Nixon for ex-Teamsters leader Jimmy Hoffa. Ironically, he may have even contributed to the success of the film "The Godfather" by prying Al Pacino away from another studio.

Many a Korshak miracle was worked from the corner booth at Bistro, a posh Beverly Hills eatery, where a private phone was brought to his table. Russo fails to note that this setup closely emulated the notorious corner table at Counsellors Row, a restaurant across from Chicago's City Hall where the Outfit's kingmaker, Pat Marcy, ruled supreme. Like Marcy, Korshak would walk guests outside the restaurant to talk about especially confidential subjects. Some of the best yarns in "Supermob" come from a book written by Bistro's owner, Kurt Niklas, who kept tabs on the strange bouillabaisse that simmered around Korshak: It could include producer Bob Evans, actor Kirk Douglas, Gov. Jerry Brown, coarse Teamsters and, on rare occasion, cursing mobsters. One later testified that an Outfit boss warned him to stay away from Korshak because " `he's our man, been our man his whole life. [But he] can't be seen in public with guys like us.' "

In other words, the mob had to keep him subservient and separate. This was one of many conflicts in Korshak's fascinating life. He went to great ends to quash any media coverage of his activities, but he gladly relented to fawning mentions by Joyce Haber, the Los Angeles gossip columnist who, Russo says, coined the term "A-list" to describe the celebrities in the Korshak inner circle. He was a doting husband to his glamorous, shopaholic wife and a serial philanderer, not embarrassed to be seen on the town with paramours like Jill St. John. He dressed and collected art with impeccable taste but still exuded a threatening though soft-spoken manner. At one moment he could lament the unbreakable ties to his Outfit overseers and in the next threaten a recalcitrant business executive with " `cement shoes.' " In the words of one producer, " `Sidney was a very loud man in a very quiet way.' " Unfortunately, Russo does not give us much insight into how Korshak or his friends could bridge such contradictions. While "Supermob" is long on anecdote, it's much too short on analysis. No doubt there was something different about either Chicago or its Jewish community to produce the players Russo writes about. He only scratches the surface in trying to understand the world they came from. The closest he gets is a quote about Greenberg: " `[L]ike almost everyone who became rich through racketeering, respectability was what he sought most.' " The words came from long-time Sun-Times reporter Irv Kupcinet, a close friend of Korshak's and another macho Jewish guy who loved rubbing shoulders with the mob.

In fact, most of the Supermob families Russo writes about did find legitimacy, if not for themselves then for their heirs; hence the shock some of us may feel at discovering the roots of their fortunes. The same is true for some Outfit clans as well. Perhaps there is something about the institutional memory in Chicago that has helped ease the transformation. Kupcinet was a gossip columnist but a nice one, the sort who never delved too deeply into the dark sources of power. When he spotted you on a prestigious perch, like Booth One at the Pump Room, a mention in his column brought some glow of fame without the painful questions about how you got there.

Thanks to Hillel Levin

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