How the Mafia Dealt with J. Edgar Hoover?

Excerpt from Official and Confidential: The Secret Life of J. Edgar Hoover, by Anthony Summers:

To Costello, and to his associate Meyer Lansky, the ability to corrupt politicians, policemen and judges was fundamental to Mafia operations. It was Lansky's expertise in such corruption that made him the nearest there ever was to a true national godfather of organized crime.

Another Mafia boss, Joseph Bonanno, articulated the principles of the game. It was a strict underworld rule, he said, never to use violent means against a law enforcement officer. "Ways could be found," he said in his memoirs, "so that he would not interfere with us and we wouldn't interfere with him." The way the Mafia found to deal with Edgar, according to several mob sources, involved his homosexuality.

The mob bosses had been well placed to find out about Edgar's compromising secret, and at a significant time and place. It was on New Year's Eve 1936, after dinner at the Stork Club, that Edgar was seen by two of Walter Winchell's guests holding hands with his lover, Clyde. At the Stork, where he was a regular, Edgar was immensely vulnerable to observation by mobsters. The heavyweight champion Jim Braddock, who also dined with Edgar and Clyde that evening, was controlled by Costello's associate Owney Madden. Winchell, as compulsive a gossip in private as he was in his column, constantly cultivated Costello. Sherman Billingsley, the former bootlegger who ran the Stork, reportedly installed two-way mirrors in the toilets and hidden microphones at tables used by celebrities. Billingsley was a pawn of Costello's, and Costello was said to be the club's real owner. He would have had no compunction about persecuting Edgar, and he loathed homosexuals.

Seymour Pollack, a close friend of Meyer Lansky, said in 1990 that Edgar's homosexuality was "common knowledge" and that he had seen evidence of it for himself. "I used to meet him at the racetrack every once in a while with lover boy Clyde, in the late forties and fifties. I was in the next box once. And when you see two guys holding hands, well come on! ... They were surreptitious, but there was no question about it."

Jimmy "The Weasel" Fratianno, the highest-ranking mobster ever to have "turned" and testified against his former associates, was at the track in 1948 when Frank Bompensiero, a notorious West Coast mafioso, taunted Edgar to his face. "I pointed at this fella sitting in the box in front," Fratianno recalled, "and said, 'Hey, Bomp, lookit there, it's J. Edgar Hoover.' And Bomp says right out loud, so everyone can hear, 'Ah, that J. Edgar's a punk, he's a fuckin' degenerate queer.'"

Later, when Bompensiero ran into Edgar in the men's room, the FBI Director was astonishingly meek. "Frank," he told the mobster, "that's not a nice way to talk about me, especially when I have people with me." It was clear to Fratianno that Bompensiero had met Edgar before and that he had absolutely no fear of Edgar.

Fratianno knew numerous other top mobsters, including Jack and Louis Dragna of Los Angeles and Johnny Roselli, the West Coast representative of the Chicago mob. All spoke of "proof" that Edgar was homosexual. Roselli spoke specifically of the occasion in the late twenties when Edgar had been arrested on charges of homosexuality in New Orleans. Edgar could hardly have chosen a worse city in which to be compromised. New Orleans police and city officials were notoriously corrupt, puppets of an organized crime network run by Mafia boss Carlos Marcello and heavily influenced by Meyer Lansky. If the homosexual arrest occurred, it is likely the local mobsters quickly learned of it.

Other information suggests Meyer Lansky obtained hard proof of Edgar's homosexuality and used it to neutralize the FBI as a threat to his own operations. The first hint came from Irving "Ash" Resnick, the Nevada representative of the Patriarca family from New England, and an original owner-builder of Caesars Palace in Las Vegas. As a high-level mob courier, he traveled extensively. In Miami Beach, his Christmas destination in the fifties, he stayed at the Gulfstream, in a bungalow next to one used by Edgar and Clyde. "I'd sit with him on the beach every day," Resnick remembered. "We were friendly."

In 1971, Resnick and an associate talked with the writer Pete Hamill in the Galeria Bar at Caesars Palace. They spoke of Meyer Lansky as a genius, the man who "put everything together" -- and as the man who "nailed J. Edgar Hoover." "When I asked what they meant," Hamill recalled, "they told me Lansky had some pictures -- pictures of Hoover in some kind of gay situation with Clyde Tolson. Lansky was the guy who controlled the pictures, and he had made his deal with Hoover -- to lay off. That was the reason, they said, that for a long time they had nothing to fear from the FBI."

Seymour Pollack, the criminal who saw Edgar and Clyde holding hands at the races, knew both Resnick and Lansky well. When Lansky's daughter had marital problems, it was Pollack who dealt with her husband. He and Lansky went back to the old days in pre-revolutionary Cuba, when Havana was as important to the syndicate as Las Vegas. "Meyer," said Pollack in 1990, "was closemouthed. I don't think he even discussed the details of the Hoover thing with his brother. But Ash was absolutely right. Lansky had more than information on Hoover. He had page, chapter and verse. One night, when we were sitting around in his apartment at the Rosita de Hornedo, we were talking about Hoover, and Meyer laughed and said, 'I fixed that son of a bitch, didn't I?'" Lansky's fix, according to Pollack, also involved bribery -- not of Edgar himself, but men close to him.

Lansky and Edgar frequented the same watering holes in Florida. Staff at Gatti's restaurant in Miami Beach recall that the mobster would sometimes be in the restaurant, at another table, at the same time as Edgar and Clyde. One evening in the late sixties, they were seated at adjoining tables. "But they just looked at one another," recalled Edidio Crolla, the captain at Gatti's. "They never talked, not here."

If Edgar's eyes met Lansky's, though, there was surely an involuntary flicker of fear. "The homosexual thing," said Pollack, "was Hoover's Achilles' heel. Meyer found it, and it was like he pulled strings with Hoover. He never bothered any of Meyer's people.... Let me go way back. The time Nevada opened up, Bugsy Siegel opened the Flamingo. I understand Hoover helped get the okay for him to do it. Meyer Lansky was one of the partners. Hoover knew who the guys were that whacked Bugsy Siegel, but nothing was done." (Siegel was killed, reportedly on Lansky's orders, in 1947.)

According to Pollack, Lansky and Edgar cooperated in the mid-fifties, when Las Vegas casino operator Wilbur Clark moved to Cuba. "Meyer brought Clark down to Havana," Pollack said. "I was against him coming. But I understand Hoover asked Meyer to bring Clark down. He owed Clark something. I don't know what.... There was no serious pressure on Meyer until the Kennedys came in. And even then Hoover never hurt Meyer's people, not for a long time."

Like Frank Costello, Lansky did seem to be untouchable -- a phenomenon that triggered suspicions even within the Bureau. "In 1966," noted Hank Messick, one of Lansky's biographers, "a young G-Man assigned to go through the motions of watching Meyer Lansky began to take his job seriously and develop good informers. He was abruptly transferred to a rural area in Georgia. His successor on the Lansky assignment was an older man who knew the score. When he retired a few years later, he accepted a job with a Bahamian gambling casino originally developed by Lansky."

Also in the sixties a wiretap picked up a conversation between two mobsters in which, curiously, Lansky was referred to as "a stool pigeon for the FBI." The Royal Canadian Mounted Police, taping a conversation between a criminal in Canada and Lansky in the United States, were amazed to hear the mob chieftain reading from an FBI report that had been written the previous day.

There was no serious federal effort to indict Lansky until 1970, just two years before Edgar died. Then, it was the IRS rather than the FBI that spearheaded the investigation. Even the tax evasion charges collapsed, and Lansky lived on at liberty until his own death in 1983.

New information indicates that Lansky was not the only person in possession of compromising photographs of Edgar. John Weitz, a former officer in the OSS, the predecessor of the Central Intelligence Agency, recalled a curious episode at a dinner party in the fifties. "After a conversation about Hoover," he said, "our host went to another room and came back with a photograph. It was not a good picture and was clearly taken from some distance away, but it showed two men apparently engaged in homosexual activity. The host said the men were Hoover and Tolson...."

Since first publication of this book, Weitz has revealed that his host was James Angleton, a fellow OSS veteran and -- in the fifties -- a top CIA officer. A source who has been linked to the CIA, electronics expert Gordon Novel, has said Angleton showed him, too, compromising pictures of Edgar.

"What I saw was a picture of him giving Clyde Tolson a blowjob," said Novel. "There was more than one shot, but the startling one was a close shot of Hoover's head. He was totally recognizable. You could not see the face of the man he was with, but Angleton said it was Tolson. I asked him if they were fakes, but he said they were real, that they'd been taken with a special lens. They looked authentic to me...."

Novel said Angleton showed him the pictures in 1967, when he was CIA Counter-Intelligence Chief and when Novel was involved in the furor swirling around the probe into the investigation of the assassination of President Kennedy by New Orleans District Attorney Jim Garrison. "I was pursuing a lawsuit against Garrison, which Hoover wanted me to drop but which my contacts in the Johnson administration and at CIA wanted me to pursue. I'd been told I would incur Hoover's wrath if I went ahead, but Angleton was demonstrating that Hoover was not invulnerable, that the Agency had enough power to make him come to heel. I had the impression that this was not the first time the sex pictures had been used. Angleton told me to go see Hoover and tell him I'd seen the sex photographs. Later, I went to the Mayflower Hotel and spoke to Hoover. He was with Tolson, sitting in the Rib Room. When I mentioned that I had seen the sex photographs, and that Angleton had sent me, Tolson nearly choked on his food. Hoover told me something like, 'Get the hell out of here!' And I did...."

With Angleton dead, there is no way to follow up this bizarre allegation. While Novel is a controversial figure, his account of seeing compromising pictures must be considered in light of other such references -- not least that of former OSS officer John Weitz. For Novel added one other significant detail, that "Angleton told me the photographs had been taken around 1946, at the time they were fighting over foreign intelligence, which Hoover wanted but never got."

During his feud with OSS chief William Donovan, dating back to 1941, Edgar had searched for compromising information, sexual lapses included, that could be used against his rival.

His effort was in vain, but Donovan -- who thought Edgar a "moralistic bastard" -- reportedly retaliated in kind by ordering a secret investigation of Edgar's relationship with Clyde. The sex photograph in OSS hands may have been one of the results.

It may be significant, too, that compromising pictures are reported as having been in the hands of both the OSS and Meyer Lansky. The OSS and Naval Intelligence had extensive contacts with the Mafia during World War II, enlisting the help of criminals in projects including the hiring of burglars and assassins, experimentation with drugs, the protection of American ports from Nazi agents and the invasion of Sicily. Lansky helped personally with the latter two operations, meeting with Murray Gurfein, a New York Assistant District Attorney who later became one of Donovan's most trusted OSS officers.

At least once, Lansky worked alongside U.S. intelligence officers on exactly the sort of operation likely to turn up smear material on prominent public men. In 1942, he arranged for the surveillance of a homosexual brothel Brooklyn suspected of being the target of German agents. "Clients came from all over New York and Washington, Lansky recalled, "and there were some important government people among them .... If you got hold of the names of the patrons you could blackmail them to death... some pictures through a hole in the wall or a trick mirror and then squeeze the victim for money or information."

There is no knowing, today, whether the OSS obtained sex photographs of Edgar from Lansky, or vice versa, or whether the mobster obtained them on his own initiative. A scenario in which Lansky obtained pictures thanks to the OSS connection would suggest an irony: that Edgar had tried and failed to find smear material on General Donovan, that Donovan in turn found smear material on him and that the material found its way to a top mobster, to be used against Edgar for the rest of his life.

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Chicago Outfit and New York Families Stretch their Connections Beyond Las Vegas to San Diego

On August 31, the Union-Tribune printed an obituary on the death of Allard Roen, one of the original developers of Carlsbad’s La Costa Resort and Spa. He was living there when he died August 28 at age 87.

The U-T’s obituary was a typical, dutiful encomium. It did not mention the background of one of Roen’s major partners in La Costa and other projects, Moe Dalitz. He was among the 20th Century’s most notorious gangsters, as the Senate Special Committee to Investigate Organized Crime in Interstate Commerce, known as the Kefauver Committee, pointed out in 1950 and 1951. In fact, a book that is now a best seller, T.J. English’s Havana Nocturne: How the Mob Owned Cuba and Then Lost It to the Revolution, notes that Dalitz, then 47, attended the famed Havana Conference at Cuba’s Hotel Nacional in late December 1946. According to English, a select group of 22 dignitaries caucused to strategize the American mob’s plan to make Cuba a Western Hemisphere vice haven. The group included Giuseppe (Joe Bananas) Bonanno, Vito (Don Vito) Genovese, Meyer Lansky of Murder Inc. and the Bugs and Meyer Mob, Charles (Lucky) Luciano, Luciano’s sidekick and “Prime Minister of the Underworld” Frank Costello, Carlos Marcello, Santo Trafficante Jr., Joe Adonis, and Tony (Big Tuna) Accardo, former bodyguard for Al (Scarface) Capone and later head of the Chicago mob. The book points out that Dalitz had been a partner with Lansky in the Molaska Corporation.

Timothy L. O’Brien, author of Bad Bet : The Inside Story of the Glamour, Glitz, and Danger of America's Gambling Industry, writes that Dalitz had run “the Cleveland branch of Charlie ‘Lucky’ Luciano and Meyer Lansky’s nascent Mafia.” Decades later, Dalitz was known as the caretaker “of underworld investments in Las Vegas.”

A Federal Bureau of Investigation official said in 1978, “The individual who oversees the operations of the La Cosa Nostra families in Las Vegas is Moe Dalitz,” according to James Neff’s Mobbed Up: Jackie Presser's High-Wire Life in the Teamsters, the Mafia, and the FBI.

After Prohibition’s repeal knocked out his bootlegging business, Dalitz went into the illegal casino business in southern Ohio and Kentucky. He then became the Big Boss in Vegas, arranging casino financing from the mob-tainted Teamsters Central States, Southeast and Southwest Areas Pension Fund and keeping track of the books at such spas as the Desert Inn, where Roen was also a key figure. In the late 1940s, Dalitz resurrected crooner Frank Sinatra’s sagging career by giving him gigs at the Desert Inn.

Roen, who in the 1960s pleaded guilty in the United Dye and Chemical securities fraud, joined with Dalitz, Irwin Molasky, and Merv Adelson to build Las Vegas’s Sunrise Hospital with Teamster funds. They tapped Teamster funds for other investments. That Central States fund was essentially a piggy bank controlled by Jimmy Hoffa.

The fund played a key role in San Diego. It loaned $100 million to San Diego’s Irvin J. Kahn, a mobbed-up financier who used the money to develop Peñasquitos. He also got a concealed loan of $800,000 from a tiny Swiss bank named the Cosmos Bank, which made other mob-related loans before being closed up by joint action of the United States and Switzerland in the 1970s.

But the Central States Teamster fund’s big investment was La Costa. The interim loans were made by U.S. National Bank, controlled by C. Arnholt Smith, named “Mr. San Diego” by the Downtown Rotary Club and “Mr. San Diego of the Century” by a reporter for the San Diego Union. Following the interim loans, the Teamster fund would assume the U.S. National loans. There was a cozy relationship. Frank Fitzsimmons, who became head of the Teamsters after Jimmy Hoffa was exterminated, used to come down to watch the Smith-owned minor-league Padres play. And Fitzsimmons would play golf in San Diego with politician Richard Nixon.

The Union-Tribune’s recent panegyric to Roen mentioned that in 1975 Penthouse magazine ran an article charging that La Costa was a hangout for mobsters, and the founders sued for libel. Here’s how the U-T summed up the result: “A 10-year court battled ensued until La Costa accepted a written apology from the magazine.” This is a rank distortion. A joke.

“San Diego leadership has a tendency to fall in love with people with big bucks who come into town,” says Mike Aguirre, city attorney. The La Costa founders “were one of the first big-bucks boys who rode into town, and the welcome wagon was driven by C. Arnholt Smith.” The U-T then, and to this day, protects the roughriders who bring their sacks of money to San Diego.

Aguirre was one attorney representing Penthouse in the suit. He and his colleagues parsed every sentence in the article. The Penthouse trial lawyer rattled off to the jury the names of those who had shown up at La Costa, including Hoffa, Dalitz, Lansky, and many other hoods. And here is the key: the jury exonerated the magazine, agreeing that it had proved that everything it said was true.

It turned out that the judge, Kenneth Gale, had formerly been a lawyer for Jimmy “the Weasel” Fratianno, a notorious mob hit man who had begun cooperating with the government. Fratianno was to testify for Penthouse about the mobsters who habituated La Costa. Gale wouldn’t let the magazine’s lawyer question Fratianno. Judge Gale had also previously represented an infamous union racketeer, as related by Matt Potter in a 1999 Reader story.

After Gale threw out Penthouse’s victory, the magazine thought it could win a retrial, but after ten years and $8 million in legal expenses, Penthouse issued an innocuous statement, saying that it “did not mean to imply nor did it intend for its readers to believe that Messrs. Adelson and Molasky are or were members of organized crime or criminals” (italics mine). Note that Dalitz and Roen were not included in that statement. The magazine praised Dalitz and Roen for their “civic and philanthropic activities.”

Then La Costa owners lauded Penthouse for its “personal and professional awards.” It was a détente sans sincerity.

Dalitz died in 1989 at age 89, leaving a daughter in Rancho Santa Fe. She is involved in many peace and politically progressive activities. Her attorney was once San Diego’s James T. Waring, who didn’t last long as Mayor Jerry Sanders’s real estate czar.

The information on Waring ran in detail in the Reader in early 2006. San Diego’s leaders, always friendly to moneybags, didn’t appreciate the story.

Thanks to Don Bauder

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Frank 'The German' Schweihs - "A Killer, That's All, A Killer of a Girl"

Diane Pappas learned that Chicago isn't Camelot a lifetime ago when a tugboat captain found her sister's murdered body in the Chicago River. Eugenia "Becca" Pappas was only 18.

So last week, 46 years after Becca's death, when Diane heard the German was dead, she knew what to do: Drive out to the cemetery, to Becca's grave in the shade of a giant Norwegian pine, and talk to her little sister. "I'm going to the cemetery right now," Diane said. "I've got to be there. Now I want to tell Becca. The big, tough man. The big killer. The murderer of my sister. The German. The murderer of a girl."

If Frank "The German" Schweihs ever wondered about hell, he's not wondering now. He died last week, at 78, of cancer, waiting to stand federal trial in the Family Secrets case.

The FBI considers him the Babe Ruth of Outfit hit men, with dozens of Outfit victims, mobsters from New York to Los Angeles, murderous bosses and their turncoat business associates. Other hit men were terrified to be near him, even when he was sleeping. A glimpse of the German in Los Angeles, a chance sighting in a car window, frightened Jimmy "The Weasel" Frattiano so much that the mobster ran shrieking into the federal witness protection program.

Schweihs the enforcer was the reason those frail, old men could run things without worrying about ambitious underlings. He's the reason they made fortunes, and a president and mayors and judges.

The list of the German's dead is a history of organized crime in America. Except for Becca Pappas, a beauty, tall, slim, black eyes, black hair. "I know he killed her. I just know. She was in his car. She was driving his car the last time anyone saw her. His car disappeared. Then it was auctioned a month later, totally stripped clean, washed down," Diane said.

Becca's murder was investigated by corrupt Chicago lawman Richard Cain. This being Chicago, Schweihs was released without charges. Still, I agree with Diane that Schweihs killed her sister.

Why? Because, as explained to me by mob-watchers and former FBI agents, no man in Chicago, or anywhere else, would have dared approach the German's girlfriend. Not even to say hello. They wouldn't have allowed their brains to think of it. Not one. Schweihs would have skinned them alive with a paring knife.

The German is said to have later shotgunned Cain at Rose's Sandwich Shop. And killed Jimmy "the Bomber" Catuara. Teamsters lawyer Allan Dorfman died in a parking lot, shot in the head with a .22. Joe Testa was blown up in his car. Sam DeStefano's arms were shotgunned off in his garage. Patsy Riccardi, Chucky Nicoletti, the list continues.

The Chicago Outfit's flamboyant Hollywood connection, Johnny Rosselli, was found stuffed into an oil drum, floating at sea. Angelo Boscarino was shotgunned, though his son was later given a piece of the failed Rosemont casino deal.

If I've missed a few names, Schweihs didn't miss.

In the late 1980s, he was held in the federal Metropolitan Correctional Center at the same time as Outfit member-turned-federal informant Gerald Scarpelli. The official story is Scarpelli committed suicide. He must have seen the German in the day room and then decided to tie his own feet and hands and choke himself to death with a plastic bag in the shower. The German is also credited with torturing and killing several burglars who dared rob the home of Anthony Accardo.

"He never informed. He killed who they told him to kill. And if he was involved in the killing of that young woman—it sheds an entirely new light on his personality," said FBI Special Agent John Mallul, a supervisor of the Organized Crime Unit. "No criminal ever wanted to see this guy around. Even if they knew that Frank was coming around and knew why, they were still terrified."

Law enforcement says that just about his only friend was Chicago political figure Peter Schivarelli, currently the manager of the rock group Chicago and the former 43rd Ward supervisor of Streets and San. Schivarelli is reputed to have been around Outfit types all his life and is the nephew of late mobster Johnny "The Bug" Varelli.

One night, Schweihs was arrested after fighting with police. "Schivarelli came down to the station trying to get him out, throwing his political clout around, and all hell broke loose," former FBI agent Jack O'Rourke recalled a while back. "It was a madhouse."

"That's not my recollection," Schivarelli said when I tracked him down. He talked on the phone as if I held a subpoena. "But I'd rather not debate it. I'll respectfully decline to comment."

Too bad. I was waiting to hear that the German was kind to tiny children and animals and helped old women cross the street. None of it matters to Becca Pappas' sister. "Schweihs still lived 46 years when he shouldn't have. And people glorify him, and they glorify the mob with their movies and TV shows. But all he was, was a killer. That's all. A killer of a girl."

Thanks to John Kass

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