The Last Testament of Lucky Luciano: The Mafia Story in His Own Words (13 page)

“For a minute, he really started to think about it, and then he realized I was kiddin’ him. Well, he began to laugh until I thought he was gonna choke. Then he looked at me, shook his head and said, ‘Charlie, that’s the greatest idea I’ve ever heard in my whole life — that I’ll never be able to accomplish.’ ”

Stock in Lucania’s outfit during the twenties might, indeed, have been a good investment. “Around 1925, I had a take of at least twelve million dollars from booze alone for the year. Naturally, we didn’t pay no business taxes, like General Motors, but that didn’t mean that our expenses wasn’t pretty heavy. We — by that I mean with Costello, Lansky, Siegel and Adonis — had a payroll of about a hundred guys, lots of ’em muscle men or enforcers and guards. We had good drivers, bookkeepers, lots of messengers; and
we even used to pay off a bunch of finger men who lined up jobs like a hijacking or a robbery. In them days when an honest department store clerk was drawin’ down maybe twenty-five dollars a week at most, my guys was gettin’ paid by us two hundred a week plus what they was makin’ on their own. So we had a yearly payroll of about a million bucks.

“That meant that we had about eleven million left to cover all our expenses. By 1925, all of us guys was payin’ out a ‘grease’ of over a hundred grand a week, which is more than five million a year, for protection. Hell, we shoveled out ten thousand a week every week like clockwork to the top brass of the Police Department, and that was only a small part of it. We hadda take care of the precincts, too, the captains, the lieutenants and the sergeants; they all had their hands out. Takers, all of ’em; and that goes for the cop on the beat.”

When all the expenses of running the business had been written off, there was still about four million dollars a year that went into the individual caches of Lucania and his partners. They kept almost all of it; if they paid taxes at all, and most of them did not until years later, it was on small salaries they reported as receiving from such occupations, maintained as fronts, as chauffeurs, professional gamblers, sales managers and the like. And all this was in 1925, with the peak still in the future; in succeeding years, their business gross and their personal incomes would skyrocket.

In these years of the 1920’s illegal liquor was their main business, the major source of their revenue and their power. Gambling was still secondary, with Lucania, Costello and Siegel drawn to it at first by their passion for games of chance, and Lansky because he saw its business potential, and demonstrated it to his friends. At first, their investments were limited to the casinos, the horse parlors, the slot machines, the bookie joints and the like. Little attention was paid to the poor, to the idea that poor people might want to gamble too, would, if given the chance, do more than put a nickel or a dime in a slot machine or place a small bet on a horse with a bookie, and that such gambling, even for pennies, could yield millions.

That idea struck one night in Covington, Kentucky, at the opening of the famed Beverly Club, just across the Ohio state line.
Lansky and Lucania were there, watched the glittering array of the nation’s rich who had come from all parts of the country to put their money on the tables at the inaugural. As they watched, Lansky took Lucania aside and said, “Charlie, you look around in a place like this, a real plush joint with waiters in white coats, the best booze and a fairly honest wheel, and you watch these suckers drop their dough, it makes you think of somethin’.”

Lucania laughed. “What should we do? Give ’em their money back?”

“I’m tryin’ to make you understand somethin’. What about the little guy who can’t even bet two bucks on a horse, but would like to bet on somethin’? Ain’t he entitled to some of this pleasure, even if he can only bet a couple of pennies?”

“Pennies?” Lucania stared at him.

Lucania was certain Lansky would not have brought this up unless he had already devised a plan, and so he waited. Lansky mentioned the Italian Lottery, the Irish Sweepstakes, the official lotteries of a dozen countries. All were based on numbers. All took place at regular intervals a few times a year. “Suppose,” Lansky said, “a guy could bet on a number every day. If enough people bet only pennies, we could afford to make the odds high enough for the dumb bastards to buy the idea that any day of the week they could hit for a big bundle.”

The two men went back to Cleveland and sat up all night, their sleeves rolled up, a bottle of their favorite Old Overholt bonded rye and plenty of ginger ale nearby, and on scratch paper tried to calculate ways to make the Lansky scheme work. “Once Meyer spelled out the idea, it all sorta fell into place. He had a way of thinkin’ around a corner. When it was all put together, I knew with every bone in my body it would catch on like a grass fire.” And so the policy game came into being. The daily number, of three digits from ooo to 999, would be based on a supposedly unriggable and well-publicized total, the closing sales on a stock market or the betting totals from three races at a track, with the payoff for a winner at 600 to 1 (against the real odds of 1,000 to 1, thereby guaranteeing phenomenal returns to the operators).

Once the structure had been decided, it was agreed that the racket should get its first tryout in Frank Costello’s Harlem
domain, among the blacks and the very poor. (Some fellow gangsters like Dutch Schultz initially expressed scorn; soon they would change their minds.) The numbers racket was an instant success, not only in Harlem (though Harlem remained the most valuable territory, with almost every man, woman and child playing policy every day), but all over the country. It poured millions into the pockets of Costello, Lansky, Lucania and the others, and gained them increased loyalty from their underlings who were granted shares in some of the hundreds of policy banks that sprang up. “So much money was comin’ in from policy that we had to have meetings all the time to figure out what to do with the dough. That’s when I really started to respect the bankers and to be jealous of them. They could take their depositors’ money and invest it so they could pay interest and still have a healthy profit. But we was rakin’ in hot money that we couldn’t declare and couldn’t bank. Then I remembered all them poor suckers who couldn’t get a loan from a bank because they didn’t have no security. That’s when I decided to organize the loan business.”

Usury is an ancient business, one that through the ages has never failed to draw those, often disreputable, with more money than they could use for themselves. It was well known to Maranzano, who would often quote to his disciples from
The Merchant of Venice
, though on such occasions defending Shylock despite his Jewishness. For Maranzano had long been a moneylender in the Italian ghetto, advancing money to new immigrants to help them bring relatives to America, but lending it at such usurious rates that the borrower ever afterwards remained little more than an indentured servant, at Maranzano’s bidding, forever paying out a portion of his small weekly income. And there was no way out. The immigrants were afraid to complain to the police, for their image of the police was one they had brought with them from the old country. And Maranzano had a corps of enforcers to insure that the borrower never escaped, never complained, paid off regularly, and was always available when called upon. There were enough examples around the neighborhood of those who had been beaten or killed, when they resisted, to keep the others in line.

But Maranzano was not alone in practicing the trade. He was emulated by others, including Lucania, who would later say, “I
think it was a rotten thing to do and, if I had it to do over again, that’s one thing I never would’ve done, bleedin’ them poor guys who was tryin’ to bring their families over. Anyway, that’s when I started to take another look at what Lepke was doin’ in the garment district.”

Lucania decided that Lepke, having some difficulty trying to follow the plan laid down for him, could use some help. “I picked out Tommy Lucchese, who they sometimes called ‘Three-Finger Brown’ after the old baseball pitcher, as the right guy that I could depend on. Tommy and I was friends from the old neighborhood, but for a lotta reasons we didn’t play that up; we used to meet in private most of the time and it wasn’t for a long time that a lotta guys knew we was close. Anyway, I tabbed Tommy, and the Lepke-Brown combination for the garment district worked like a charm.”

In the garment center, style changes are one of the facts of life, occurring regularly, sometimes three or four times a year, and with each change, the manufacturers need to cut new patterns, buy new materials, and acquire new machines. The business is a high-risk one, with large amounts of short-term capital constantly needed. The banks, however, were loath to advance this money, and so garment manufacturers were forced to turn to the loan sharks, and it was in this business that Lepke and Lucchese — and Lucania — flourished. “They was gettin’ anywhere from double to a thousand per cent interest for short-term loans, and, of course, if the loans wasn’t repaid, no excuses was accepted.”

Lucania’s ideas for organizing the loansharking on a big scale turned it into a huge business, particularly when it involved working both sides of the district, with the unions and the manufacturers. Assistance was offered to the unions in their organizing drives, to get them the members and the dues; in return, the underworld was given control of a number of locals. Knowing that manufacturers were afraid of the unions, afraid that higher wages and strikes would drive them out of business, they guaranteed manufacturers who came to terms with them that there would be no strikes and that wages in union contracts would be held to a reasonable level. “And we give the companies that worked with us the money to help them with buyin’ goods and all the stuff they
needed to operate with. Then, if one of our manufacturers got into us for dough that he couldn’t pay back, and the guy had what looked like a good business, then we would become his partner.

“If it wasn’t for me, them guys like Samuel Gompers and Jacob Potofsky and Sidney Hillman and David Dubinsky, and I knew ’em all, would’ve been bums. Me and Tommy and Lepke, we actually kept a whole bunch of them garment manufacturers alive, and we helped all them unions, the Ladies’ Garment Workers and the Amalgamated, organize the places. If it wasn’t for us, none of ’em, the manufacturers or the unions, would’ve gotten noplace. Our dough made it possible for maybe fifty manufacturers, maybe more, to cut more dresses and coats and suits than anybody else. And petticoats. We backed a guy by the name of Korn — maybe it was Cohen — and a dozen more like him. For chrissake, in the 1920’s, every broad in the United States was wearin’ a petticoat I was responsible for puttin’ on her.”

That all these goods cost the public considerably more than they would have cost if Lucania and his friends had not been involved bothered him not at all. “The public is a bunch of crumbs askin’ to be taken. And as for doin’ good, the garment center and the stock market was the heart of New York City; they couldn’t live without each other. If my outfit helped keep the clothin’ manufacturers goin’, for which we got a healthy commission, then, what the hell, I was just as big a broker as my friend Hutton. So what if I used to muscle some guy because he didn’t pay up? What does the stockbroker do when his customers can’t meet an overcall? He just sells the guy out, and then the poor bastard goes up to the top of some buildin’ and jumps off, which is what happened a couple years later.”

But none of these activities of Lucania — bootlegging, gambling, loansharking, garment center invasions — could have succeeded without the protection of the city’s political and police structure. The price was high, but to him and his partners, it was worth the cost. “I grew up with that whole system of money buyin’ protection. I used to see it all around me. But by the mid-twenties, the payoffs wasn’t just free turkeys at Christmas. This was big stuff.” As they flourished, they came to realize that it was not enough merely to have the precincts in their pockets. Even if they
were paying off every cop in an area, somebody higher up, at police headquarters, could always call for action without consulting the local precinct, could decide to bring them in for questioning, decide to call a quick raid on their operations. Such roustings were, at the very least, an inconvenience, and they endangered the image they were attempting to foster. “I didn’t like the idea of gettin’ smeared all the time when the newspapers would print our pictures. It always seemed to be the same picture; we was surrounded by a bunch of cops when we got hauled in.”

“Look,” Lucania told his partners at one of their high-level meetings, “what good is it if we buy one precinct or ten precincts? I don’t want one or ten; I want all the precincts.”

“Charlie, you’re askin’ the impossible,” Costello objected. “You’re talkin’ about buyin’ the real top big shots.”

But Lucania was determined and he told Costello, “You’re the best fixer in the whole fuckin’ country; you don’t realize that these ‘big shots’ are the same guys we got in our pockets already. They’re in our speaks every night, drinkin’ our best booze. It’s just a matter of handlin’, and how much.”

“When I think about that particular meetin’, it was really the turnin’ point of our move to the top. None of the guys who was with me was cheap, and every one of ’em could add. We started with nothin’ and when we got up into seven figures, what difference would it make if it cost us a million? We knew it’d bring in more than that.”

So the decision was made to go to the very top with an unlimited Buy-Bank. “I remember Joe Adonis standin’ across the room, lookin’ in the mirror and combing his hair like he always did. It was his way of stallin’. Everybody else — Anastasia, Scalise, Moretti, Dutch Schultz, who came to the meet even though he had the flu and his doc told him to stay in bed; he sat over in a corner so he wouldn’t spread his germs around — they all said yes. We all sat there lookin’ at Joe’s back while he kept runnin’ the comb through his hair like a movie actor. Finally, he turned around with a big smile and said, ‘The star says yes,’ referrin’ to himself, of course.