J. Edgar Hoover: The Man and the Secrets (74 page)

Nichols did not retire to his farm. He went to work for Lewis Rosenstiel, the founder of Schenley Industries, as executive vice-president of the firm, at a huge increase in salary. A former Prohibition era bootlegger, like his friend Joseph Kennedy, Rosenstiel craved respectability and was willing to spent vast amounts of money—some $75 million—to establish the image of a publicspirited philanthropist. Lou Nichols knew a lot about image making.

Roy Cohn had introduced them.
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“Naturally when Mr. Rosenstiel began talking to me about coming with the Schenley Company I started checking on him,” Nichols later testified before a New York State crime commission. “I used every resource available to me and I found no information, much less credible evidence, of Mr. Rosenstiel’s alignment with the underworld. Needless to say I would never have become associated with him if there was the slightest taint on his record.”

The purchase of the services of the former assistant to the director of the Federal Bureau of Investigation gave Rosenstiel a much needed veneer of respectability.
^‡
It was a part of Nichols’s job to testify before various investigative agencies that Mr. Rosenstiel had “never, directly or indirectly, had any dealings or associations with Meyer Lansky, Frank Costello, or any other underworld characters.”
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But Nichols was more than a front man. In addition to being a public relations genius, he was also a master lobbyist, who had—to Hoover’s intense
displeasure—left the Bureau with a copy of the FBI’s Capitol Hill contact list. During Nichols’s first year with Schenley, he lobbied the Foran bill through Congress, saving the company—which was still almost solely owned by Rosenstiel—somewhere between $40 and $50 million in excise taxes.

That Nichols had gone to work for Rosenstiel was an embarrassment to Hoover. But what most embittered him was the timing of Nichols’s move. He retired from the FBI on November 2, 1957, just twelve days before the greatest public relations crisis in the Bureau’s history.

Saturday mornings there was usually little activity in Apalachin, New York, a small village located in the mountains just north of the Pennsylvania state line, and even less so in the hills outside of town where the New York state trooper Edgar Croswell was parked, but November 14, 1957, was an exception. As Croswell watched, one long, black limousine after another disappeared through the gates of the large, secluded estate of Joseph Barbara, Sr. In Apalachin one such vehicle was an oddity. But Croswell had counted five in the last couple of hours—all Lincolns or Cadillacs, all with out-of-state plates, and all with the same destination. It was enough to make a man curious.

Although he had no reason to suspect that Barbara was anything more than what he appeared to be—a Canada Dry soft-drink distributor—Croswell had run a check on him shortly after he’d purchased the property, on hearing that he carried a gun, and had found that Barbara had a Pennsylvania rap sheet with more than a dozen arrests, including two for murder, but only minor convictions and none in recent years.

Now the limousines. And the butcher’s comment that Barbara had placed a special order for an unusually large number of prime steaks. Plus the block of reservations at a local motel, in Barbara’s name, which he’d noticed while checking the register during a bad-check investigation. In his mind he tried to fit the pieces together, only to find the interlocking parts still missing. Ed Croswell couldn’t abide unsolved puzzles.

Having no evidence that a crime had been committed, he couldn’t raid Barbara’s home. But there was a way he could satisfy his curiosity about the identity of his guests. Under the state motor vehicle laws, Croswell could stop any vehicle on a public roadway and require its occupants to produce valid identification. Since there was only one road to the estate, he need only block it, then wait. Figuring that the limousines would depart as they’d arrived, separately, he wouldn’t even need many men, and so he radioed for only a backup car and three deputies. They were just setting up the roadblock when they heard a deafening roar and looked up to see bearing down on them not five but
dozens
of limousines.

A deliveryman from the village had only to mention the word “police” when Barbara’s house seemed to explode, more than fifty men flying out the doors and windows. Many made for the cars and fell into Croswell’s trap. Others
took to the fields and sank knee deep in mud. One man (later identified as a Buffalo city councilman) was caught astraddle a barbed wire fence. When finally noticed by a deputy, he seemed more concerned about damage to his camel’s hair coat than to his private parts. The deputy boosted him over, then, as soon as his feet touched ground on the other side, pointed to a nearby NO TRESPASSING sign and placed him under arrest.

Only those wise enough to stay where they were (some forty in all, including the entire Chicago delegation) avoided being questioned, although several were later identified through motel registration cards or auto rental forms.

As for the others, a total of sixty-three were rounded up, identified, and released. Of that number, sixty-two were active or retired “businessmen” of Italian extraction (the single exception being one of Barbara’s servants, who’d run when everyone else did). When asked the reason for their presence at Apalachin, most said they’d heard Barbara wasn’t feeling well and had decided to visit him. It was just coincidence that all had arrived on the same day.

J. Edgar Hoover discovered the existence of the Mafia the next morning when, with his cairn terriers nipping at his heels, he reached down and retrieved the Sunday paper from his front steps.

Since even the top brass were expected to work at least part of Saturday (most did so of necessity, in a vain attempt to keep up with the work load), Sunday was the only day with their families. Not this Sunday. Breakfast left unfinished, they converged on Justice, to find the situation even worse than expected.

According to a headquarters official of the time, the FBI not only had no idea the hoodlums were going to meet but didn’t even know who they were.

Vito Genovese, Joseph Bonanno, Joseph Profaci, Carmine Galante, Thomas Lucchese (New York City); John Scalisi (Cleveland); Stefano Magaddino (Buffalo); Joseph Zerilli (Detroit); James Lanza (San Francisco); Frank DeSimone (Los Angeles); Joseph Civello (Dallas); Santos Trafficante (Miami/Havana)—to none were these and the other fifty-three names more foreign than to the Federal Bureau of Investigation.

For over three decades, the director had assured the country that there was no such thing as a nationwide criminal organization. If the newspaper accounts were correct—and Hoover was far from conceding that—someone was at fault for not informing him of the true facts. And that person was obviously the head of the investigative division—Assistant Director Al Belmont.

Belmont, who was undoubtedly guilty of repeating the director’s own pronouncements, admitted he alone deserved censure; his men had nothing to do with it.

But there was blame enough to share. Most of the director’s choicest invectives were hurled at the former head of Crime Records. But Lou Nichols, the first Judas, was twelve days on the safe side of retirement. The truth was, he
badly needed Nichols, for this was a public relations crisis of major magnitude. But not only had Nichols deserted him; he was now working for a man many believed to be linked with the underworld.
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Nor did the pressure lessen. In addition to the jackals of the press, Joseph Kennedy’s arrogant young son Robert, the chief counsel of Senator McClellan’s racket committee, had stormed in, without an appointment,
demanding
everything the Bureau had on the hoods.

Nor did it help Hoover’s mood to learn that after leaving the FBI, Kennedy and the reporters had gone straight to the Federal Bureau of Narcotics, where Harry Anslinger had given them armloads of dossiers and reports.
^†

The FBI’s official response that this was a local problem and should be handled by the local police hardly satisfied the press, which pointed out that every part of the country, from the East Coast to the West, had been represented at Apalachin.

In reality FBIHQ was stalling, while desperately trying to get more information which it could release. Urgent telexes were sent to the major field offices (Albany and Buffalo each claimed that Apalachin was in the other’s jurisdiction), but most reported back that the query must be in error since the subject was a local businessman, either respectable or retired or both. Joseph Civello of Dallas, for example, was described as “a counselor to the Italian community at large.”
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So desperate was Hoover that he called in his section chiefs and asked if they had any ideas. William Sullivan, who headed Research and Analysis, had one. What if he pulled his best people off their other assignments and had them prepare a study of the Mafia? Hoover gratefully grabbed the suggestion, ordering him to make it top priority.

The result, which wasn’t completed until the fall of 1958, was a two-volume monograph, one volume devoted to the history of the Mafia in Italy, the other dealing with its arrival and evolution in the United States.

Immensely proud of the efforts of his staff—who had found and summarized over two hundred books on an organization that J. Edgar Hoover had long maintained did not exist—Sullivan sent the monograph, plus a five-page synopsis, to the director, via Boardman, who then occupied the number three spot. Noting that he would review the monograph when he had time, Boardman passed on the summary to the director, who immediately responded favorably with the blue-ink notation “The point has been missed. It is not now necessary to read the two volume monograph to know that the Mafia does exist in the United States.”
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Delighted that he had finally convinced Hoover that there was indeed a
Mafia, Sullivan ordered distribution of the monograph. Twenty-five copies were sent out just before noon. As usual, Hoover and Tolson lunched at the Mayflower. On their return, the director started reading the monograph and accompanying paperwork and discovered something very disturbing. The study not only proved that the Mafia existed in the United States; it established that it had been operating during all the decades when he had denied its existence. To make the situation even worse, copies had been sent to other agencies in the Justice Department, including Anslinger’s Federal Bureau of Narcotics.

Ordered to “retrieve them at once,” Sullivan sent agents scurrying through the building, pulling copies out of in-baskets and, in at least one instance, yanking one from the hands of an assistant attorney general. Sullivan’s monumental study was suppressed, and no one outside the FBI ever read it.

But by the time the Sullivan study had been completed, the FBI was already very much involved in the investigation of organized crime, albeit surreptitiously.

In November of 1957, just days after the Apalachin story broke, Hoover had ordered the Top Hoodlum Program inaugurated, each of the field offices being required to identify the ten major hoodlums in their jurisdiction. Although this caused some problems—some field offices had a surfeit to pick and choose from, some had none, and some, such as New Orleans and Dallas, continued to maintain, despite abundant evidence to the contrary, that there was no Mafia in their area—information now began to arrive at FBIHQ in such quantity that subcategories had to be established to file it.

But none was more important than that provided by a group of Young Turks in Chicago.

The single bug they requested, for which no one really expected authorization, would be the progentitor of the most massive electronic intelligence effort in the history of the FBI. Not only would it give J. Edgar Hoover undreamedof power over the political processes of the United States; it would also assure him a lifetime lease on his job.

The Chicago SAC, Marlin Johnson, who was only a little taller than his never mentioned predecessor Little Mel Purvis, happened to have a group of restless young agents who were bored with paperwork and security checks and wanted something, anything, that would take them out on the streets. So when the Top Hoodlum Program was established, Johnson assigned them to it.

They were not only young but also naive. And, oddly enough, it helped. For example, Special Agent Fred Hill was assigned to follow Marshall Caifano, one of the most respected, that is, feared, senior members of the Chicago syndicate.
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With more arrests on his rap sheet than Hill had birthdays, Caifano
quickly spotted his tail and, doubling back, confronted him, discovering, to his relief, that he was only an FBI agent. He was wasting his time following him, Caifano advised Hill. He was mostly into gambling, books, joints, jukeboxes, a little juice, some protection, that kinda stuff, nothing that would interest Mr. Hoover.

What about his associates? Hill ventured; perhaps they’d be of more interest to the FBI.

Caifano, although far from a dummy, rattled off the names of some of the bosses, explained what their territories and activities were, and noted why they, too, were of no interest to the Bureau. The two parted amicably, Hill informing Caifano that he guessed he’d been misinformed.

Pooling the results of their surveillances, the agents realized that their subjects regularly frequented two establishments, the Armory Lounge, in the suburb of Forest Park, where Sam Giancana seemed to conduct most of his business, and a second-floor tailor shop on North Michigan Avenue, where many of the bosses—Murray Humphreys, Paul Ricca, Tony Accardo, Gus Alex, Giancana, and Caifano—congregated in the mornings. If they could plant a listening device in either…

Older and more cynical agents might have planted a “suicide” bug or tap, without authorization, but William F. Roemer, Jr., who headed the squad, went strictly by the book. First they had to prepare a feasibility survey, to determine whether the device could be installed, monitored, and removed “with security,” that is, without risk of embarrassing the Bureau. Then there was the paperwork, coded telexes to FBIHQ requesting authorization, symbol assignments, equipment requisitions, and so on. As their first target, they picked the tailor shop, since the Armory was protected by the Forest Park police.