The next person to hear of the secret negotiations in which Capone proposed to plead guilty in exchange for a reduced sentence was Judge James Wilkerson. Johnson expressed his opinion that the proposed sentence was too short; the U.S. attorney’s office had gathered evidence of Capone’s failure to pay income tax each year from 1924 through 1929. Wilkerson was horrified that Johnson was even thinking of agreeing to a deal. No matter how long or short the proposed sentence, Wilkerson would permit no deal, now or ever. As a result, Johnson was finally free to press his case. Meanwhile, Capone’s lawyers labored under the misapprehension that they were was still negotiating a plea bargain.
At this delicate moment, June 5, 1931, the United States finally indicted Al Capone on twenty-two counts of income tax evasion, and the headline in the New York Times briskly summarized the long-delayed breakthrough.
CAPONE IS INDICTED IN INCOME TAX CASE
Gangster Surrenders and Posts Bail
on Charge of Evading
Payment of $215,080.
FACES FIVE-YEAR TERM
Chicago Aides Are Said to Have Revealed
His 1925-29 Revenue
Was $1,038,654.
“Scarface” Alphonse Capone, number one among Chicago’s “public enemies” and reputedly the wealthiest of gangland leaders, surrendered to the government this afternoon and was released on $50,000 bail following an indictment by a Federal grand jury on charges of wilful evasion of income taxes amounting to $215,080.48.
George E. Q. Johnson, United States Attorney, whose assassination Capone was said to have plotted in an effort to forestall the indictment, stated this evening that he was ready for the court battle to send Capone to Leavenworth Penitentiary. Mr. Johnson has not yet failed on a gangster case.
The indictment ran to sixty-five pages, but the heart of it was the government’s record of the amount Capone earned from 1924 to 1929, and the income tax he owed on that amount, according to the 1927 Supreme Court ruling that even profits from illegal business such as gambling and bootlegging were taxable.
Year
Net Income
Tax Owed
1924
$123,101.89
$32,489.24
1925
257,285.98
55,365.25
1926
195,676.00
39,962.75
1927
218,056.04
45,557.76
1928
140,535.93
25,887.72
1929
103,999.00
15,817.76
TOTAL
$1,038,654.84
$215,080.48
Johnson hastened to point out that the amount was by no means Capone’s total income during this period, merely the amount the government’s legion of investigators had been able to prove. No doubt Capone’s actual income was much, much greater.
It is worth noting that, at the time, relatively few people were required to pay federal income tax. In 1920, for instance, only 7 percent of all U.S. citizens earned enough to qualify for filing. There were no withholding taxes; nor did the tax form automatically arrive in the mail. The taxpayer had to apply to an accountant, lawyer, or the local IRS office for it. In Capone’s case, the government planned to emphasize his lack of formal financial records, as if the omission offered evidence of his hiding his income. However, there was less bookkeeping in those days, especially because most people did not have checking accounts. This chaotic situation led Will Rogers to observe, “The Income Tax has made more liars out of the American people than Golf has. Even when you make one out on the level, you don’t know . . . if you are a crook or a martyr.” Capone was both, for the law required that the government demonstrate willful failure to pay income tax, yet Capone had, in the end, offered to pay up. Despite all these flaws in the government case, the fact was that the same strategy had worked against Guzik and Ralph Capone, both of whom had been convicted for income tax evasion.
As soon as the indictments were announced, Clarence Converse, one of the Treasury’s special agents, planned to have the satisfaction of going to the Lexington Hotel and arresting Al Capone for income tax evasion. Meanwhile Capone startled all Chicago by turning himself in within hours of the announcement, posting $50,000 bail, and leaving. Disappointed that he had missed his chance to make a little bit of history, Converse broke down in tears.
The following week, Capone was indicted again, this time for Prohibition violations resulting from the evidence gathered by Eliot Ness and the Untouchables. The indictment was, in the words of Ness, “a sensation.” However, “sideshow” or “distraction” was a more accurate description of this legal maneuver, for the truth was that the evidence collected by Eliot Ness wound up in the newspapers, but the evidence collected by Frank Wilson of the IRS would be used in court against Capone. Yet the sheer amount of evidence against Capone that Ness and his Untouchables had amassed was undeniably impressive, alleging over 5,000 offenses, 4,000 of which stemmed from the transportation of beer in delivery trucks. However, Johnson, who was Ness’s boss, realized it would be futile to attempt to convict Capone for bootlegging. Instead, the U.S. attorney gave this fine young man, Eliot Ness, a public pat on the back and immediately returned to the important business of Capone’s taxes.
Ness actually received more coverage in the New York Times than he did in the Chicago newspapers, which still misspelled his name, when they even mentioned it. On the morning of June 18, for instance, New Yorkers read a lengthy account of the Untouchables’ numerous raids. “FACED MANY PERILS IN CAPONE ROUND-UP,” the headline declared. “Squad of Seven Young Dry Agents Credited with Successful Drive on Chicago Gangster. LEADER ONLY 28 YEARS OLD. Impervious to Threats of Death and Bribes, They Have Been Styled ‘Untouchables.’ ” The Times portrayed Ness as a rarity among law enforcement agents, for he was young, possessed a sense of humor, college-educated, and becomingly modest (“What of the offers of bribes and the threats of death that came the way of Eliot Ness and his youthful assistants? Ness is reluctant to talk about them. He calls them side incidents in the larger task of doing a job and doing it well.”).
That was New York. In Chicago, journalists were neither charmed by his sense of humor nor impressed by his degree from the University of Chicago. “Ness was considered not quite a phony but strictly small time,” recalls Tony Berardi, the veteran newspaper photographer. Indeed, when Ness later tried to recruit a Chicago journalist to help him write his version of the effort to get Capone in The Untouchables, he found no takers. The reporters he approached had lived through the Prohibition era in Chicago, they had known and covered Capone, and the idea of writing a book about how Eliot Ness, of all people, destroyed Al Capone struck them as ludicrous. If they recognized the name at all—and many of the journalists could not—they knew that Ness had played only a minor role in the multifaceted effort to bring Capone to justice.
Indeed, there many who came forward to assert their claim to the title “The Man Who Got Capone,” some with more reason than others. There was J. Edgar Hoover, for one, although he had done all he could to keep the FBI from becoming involved; his claim was, if anything, even more exaggerated than Ness’s boasting. Then there was President Herbert Hoover, who also believed he deserved some credit, and indeed he did. But most of the credit belonged to two lesser-known men, Frank Wilson of the IRS, who actually did the investigative work, and George E. Q. Johnson, the U.S. attorney who devoted five years of his life to the quest and who coordinated the contributions and balanced the conflicting claims of all the parties involved. Of them all, Johnson was most deserving of the title “The Man Who Got Capone,” for without him Capone would have remained at large indefinitely. Yet of all those who claimed responsibility for bringing Al Capone to justice, Johnson was among the least boastful, the only one to resist the temptation to write books or articles recounting his exploits and singing his own praises. It is one of the ironies of the entire history of the effort to get Capone t
hat Eliot Ness, whose role was rather small, ultimately received more credit than any of the others because he gave himself the opportunity to play between the covers of a book the heroic role that real life denied him.
• • •
Now that Capone had finally been indicted, the Chicago press gleefully predicted his defeat and humiliation. On June 15, a front-page cartoon in the Tribune depicted a roly-poly Capone sitting on the shoulders of a stooped, beleaguered Chicago. Meanwhile, a large hand labeled “U.S. District Attorney Johnson” reached from behind to yank Capone from his perch. As a crown fell from his head and a gun dropped from his hand, a startled Capone heard a voice of doom warn: “King Alphonse, you are about to lose your throne.”
However, it would not be quite that easy to depose “King” Capone. At the time of the indictment, the racketeer had abandoned his throne in Chicago and retreated to Benton Harbor, Michigan, the quiet lakeside community where so many of his principal lieutenants had built large, secluded homes. Capone spent his days at a nearby golf course and his nights at the Vincent Hotel, where he and his men occupied an entire floor. “Every time Al’s fleet of big sedans, carrying his ‘gorillas’ and guests, draws up in front of the hotel,” an observer noted, “Manager Dan O’Connor greets him from the front door, bowing and rubbing his hands, while Al marches down a nodding file of unctuous bellhops to the clerk’s desk.” The reason for the bowing and scraping was that the honored guest distributed the largest tips ever seen in Benton Harbor: $10 for the manicurist, $5 for the bellhop. Impressed by this bounty, the mayor, Merwin Strouk, pronounced Capone a “perfect gentleman,” and, he added, “I know our citizens have no objections to his presence.”
Meanwhile, his lawyers were wheeling and dealing on his behalf in Chicago. Ahern and Nash believed—or said they believed—that they had previously reached an agreement with Johnson whereby their client would plead guilty and receive a reduced sentence. With this understanding Capone formally pleaded guilty as charged, immediately thereafter declaring that he had made a deal with the government to serve two and a half years in jail. Although the government would later deny his claim, the fact was that Capone had struck a bargain. On July 24, the attorney general of the United States wrote to Johnson,
Your proposal to make a recommendation to the Court as to the sentence to be imposed on Alphonse Capone has my approval. I understand the recommendation will be that on his pleas of guilty to the several counts in the indictments charging violations of the income tax laws he be sentenced to a term of two and one-half years in the aggregate, to run concurrently with the sentence that is imposed upon him under the indictment charging conspiracy to violate the National prohibition act. The maximum sentence which could be imposed under the latter indictment, as I understand, is two years.
In other words, the deal covered both the tax evasion and bootlegging indictments. All things considered, it was, for Capone, an attractive proposition. He was only thirty-two at the time, and he would be out of jail before his thirty-fifth birthday, able to look forward to decades of racketeering.
While the sentence recommended seems a moderate one [the Attorney General continued], the Treasury Department informs me that it would be more severe than any other that has been imposed on an income tax case on a plea of guilty. . . . I believe we are all agreed that the public interests would best be served by the immediate imprisonment of Capone for a substantial term in the penitentiary, rather than by incurring all the risks and delays of a contested trial in the hope that after a year or two a more severe punishment would be inflicted.
That the federal government was willing at this late a date to forgo a trial and make a deal with Capone should have cast a pall over Chicago. It did come as a disappointment for those who had dedicated themselves to getting rid of Capone permanently. “There is a very distinct undertone of dissatisfaction,” wrote Frank Loesch to President Hoover of the proposed deal. “I have had many expressions to the effect that ‘Well, you got your man, you got him by law; that is better than his being murdered by gangsters.’ ” That was a minority opinion. In contrast, the press and public interpreted Capone’s guilty plea as an indication that he was so overwhelmed by the indictments that he was finished. “The abject refusal of Capone to fight against the mountain of evidence piled up by the government was regarded as his farewell to power and perhaps the actual breaking up of the entire criminal business organization he and his predecessors had built up in ten years of ruthless effort,” the Tribune commented. Premature valedictories appeared, bidding adieu to the “Last of the great gang monarchs,” and sounding the “Knell of super crime.” Newspapers confidently predicted that he would enter Leavenworth before the month was out. George E. Q. Johnson traveled to Springfield, Illinois, where Herbert Hoover was attending a ceremony rededicating Lincoln’s tomb, to receive the congratulations from the president himself on a job well done, and when Johnson returned to Chicago he paused for a picture with his wife and son in front of their home. J. Edgar Hoover’s reaction to the lionizing of the U.S. attorney can only be imagined.
The extraordinary excitement signified that more than a legal proceeding was at stake. The effort to bring Capone to justice represented the collective catharsis of Chicago and, by extension, the entire nation as it emerged from its Prohibition-era stupor into the austere reality of the Depression. Chicago had never witnessed anything like this outbreak of reformist zeal, nor had the country, and certainly no racketeer had ever seen anything like it before. As recently as 1929, Capone’s flouting of federal tax regulations was condoned and tacitly approved by many. During the reckless twenties, everyone from President Calvin Coolidge to Mayor “Big Bill” Thompson was looking the other way, but the thirties were another matter; the shattering of the economy introduced a sober, conscience-stricken tone in public life, and now Al Capone, who had thrived on laissez-faire and corruption, appeared to be a genuine criminal, a menace to society, the Public Enemy the Chicago Crime Commission had long insisted he was. Public tolerance and sympathy for him vanished; almost overnight he went from being a colorful emblem of the era, part fixer and part Robin Hood, to a pariah. He had built an empire based on social hypocrisy surrounding the consumption of alcohol and, by extension, sensual indulgence and pleasure; now a new social order was set to destroy him.
At the end of July, Capone returned to Chicago, where the populace suffered under 100-degree temperatures, and held one last press conference at the Lexington Hotel. It was a bizarre scene. Capone, perspiring profusely, attired in black satin pajamas, rambled on about his impending stretch in Leavenworth and declared his intention to go absolutely straight upon his release. He switched to the subject of gangster movies, a genre gaining sudden popularity. “Why, they ought to take all of them and throw them in the lake,” he insisted. “They’re doing nothing but harm to the younger element. . . . You remember reading dime novels, maybe, when you were a kid. Well, you know how it made you want to get out and kill pirates and look for buried treasure—you know. Well, these gang movies are making a lot of kids want to be tough guys, and they don’t serve any useful purpose”—certainly not when the gangsters slumped over dead, as they did at the end of nearly every motion picture.
The next day, July 30, Capone, having exchanged his black pajamas for a green suit, appeared before Judge Wilkerson to enter his guilty plea in expectation of a reduced sentence. Spectators were waiting to catch a glimpse of Capone as he swiftly left his car and walked into the Federal Building under police escort. Waiting for him in the courtroom were, among others, George E. Q. Johnson and Eliot Ness. Capone refused to acknowledge the presence of either man. The day’s drama began as his lawyer, Michael Ahern, raised the subject of a reduced sentence, and Judge Wilkerson became infuriated. “The parties to a criminal case may not stipulate as to the judgment to be entered,” he told Ahern. “It is time for somebody to impress upon this defendant that it is utterly impossible to bargain with a Federal court.” As the judge spoke those words, i
t seemed to reporters that Capone wilted; suddenly he looked defeated, shabby, his hair in disarray, his brow damp, his complexion ashen. So there would be no deal, no plea bargain. Capone changed his plea to “not guilty.”
For the next several days all of Chicago reverberated with Judge Wilkerson’s eloquently stated principle. “I cannot put upon paper . . . the thrill that went over the city of Chicago when Judge Wilkerson said he would not be bound by any such bargain as that,” said Frank Loesch, who had considered the idea of sending Capone to jail for only two and a half years “abominable.” Once Wilkerson ruled, everything changed. The government joined the battle, potential jurors were summoned, and preparations for what the newspapers were already calling “the trial of the century” went forward with a new sense of purpose and urgency. The trial date was set for October 6.
• • •
During the languid, late summer weeks Al Capone once again dropped from public view to visit his summer hideout in Lansing, Michigan. It was his last opportunity to stroll down to the little cottage by Round Lake, where Virginia, his golden-haired mistress, or her equivalent, waited for him. For the last time he was free to picnic with McGurn and the boys and to walk along a dusty country lane with them, laughing and talking. In the ways that mattered most, this was the last summer of his life, even though he had sixteen years left to him. As the days shortened, the weather turned cooler, and the leaves flared up into brilliant colors and began to carpet the unmarked country roads, Al continued to pretend that once he got the unpleasantness of the tax trial behind him, he would return to Lansing the following summer, and the summer after that, and everything would be the same as it had been.
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