Supermob

by Gus Russo

  Arnold S. Kirkeby (1900-1962)—Chicago real estate speculator who partnered with Conrad Hilton (openly) in numerous hotels and restaurants, and with hoods such as Meyer Lansky and Longy Zwillman (covertly).

  Morris Jerome "Marshall" Korshak (1910-1996)—Sidney's kid brother and another Chicago-born attorney, one of the most successful elected politicians (liberal Democrat) in twentieth-century Chicago, and a lifelong supporter of the state of Israel.

  Sidney Roy Korshak (1907-1996)—aka "The Fixer," "The Myth," "Mr. Silk Stockings," and "The Duke." Chicago-born attorney who was the point man in the Chicago Outfit's power plays in Hollywood and Las Vegas, often conducting business from his table at the Bistro restaurant in Beverly Hills, where he had relocated in the fifties. Middleman between the mob-controlled Teamsters and legit corporations who curried its favor for labor peace. In Vegas, he was in charge of a number of hotel-casinos, most notably The Riviera. Frequent escort of actresses Jill St. John (Oppenheim) and Stella Stevens (Estelle Eggleston), among others.

  Irv Kupcinet (1912-2003)—aka "Kup." Iconic Chicago Sun-Times gossip columnist and Emmy Award-winning television host, Kup was a longtime friend of Sid Korshak's, with whom he shared Table One in the Ambassador East's Pump Room. Korshak came to Kup's aid when Kup's daughter was murdered in Hollywood in 1963.

  Paul Dominque Laxalt (1922-)—Nevada-born U.S. senator (1974-87) and governor of Nevada (1967-71). Ronald Reagan's closest pal, and his presidential campaign chairman, he was also close to his own chief fund-raiser, Ruby Kolod of Cleveland's Mayfield Road Gang, and Chicago's Sid Kor­shak. When Laxalt needed a loan to build his Ormsby House Casino in Carson City (soon to be skimmed by the Chicago Outfit), Korshak allegedly had him write a character reference letter on behalf of imprisoned Jimmy Hoffa to President Nixon; Korshak then set him up with a loan from a friendly Chicago banker. When these associations and allegations were reported in the Sacramento Bee, Laxalt's long-planned presidential bid was torpedoed.

  James Caesar Petrillo (1892-1984)—aka "Little Caesar" and "The Mussolini of Music." Longtime Chicago president of the powerful American Federation of Musicians (AFM). Often linked to the Chicago Outfit, Petrillo gave favored-fee status to Stein's fledgling MCA, enabling it to bury the competition. Target of three congressional investigations and two federal prosecutions for union corruption.

  Abe Pritzker (1896-1986)—Chicago attorney (Pritzker, Pritzker and Clin­ton) and corporate mogul (Hyatt Hotel chain, the massive Marmon Group conglomerate). His firm's Stanford Clinton was a trustee of the mob's bank, aka the Teamsters Pension Fund, from which Hyatt made low-interest loans. Often linked to Chicago's Outfit, and L.A.'s "Capone," Jack Dragna, Pritzker employed lifelong friend Sid Korshak to keep labor unions in line. His company paid penalties of $460 million for a fraudulent bank failure and millions more to the IRS for tax evasion; the Pritzker empire was the largest depositor in the offshore Bahamian Castle Bank, which was developed by Pritzker's tax attorney Burton Kanter as a vehicle for tax dodging. Noted philanthropist.

  Ronald Wilson Reagan (1911-2004)—aka "Dutch," "The Gipper," and "The Great Communicator." Sub-B actor from Iowa, who started out in Outfit-controlled joints before being promoted by his agents, MCA's Stein and Wasserman, into the Screen Actors Guild presidency, the California governorship, and eventually the U.S. presidency. Lifelong hunter of commies, both real and imagined, and an informant on fellow actors for the FBI's J. Edgar Hoover. Told the Soviets, "Tear down this wall."

  Harvey Silbert (1912-2002)—Chicago-born attorney; moved to L.A., where he was a partner in the powerful law firm Wyman, Bautzer, Rothman, Kuchel, Christianson, and Silbert, which represented many A-list celebrities; personal attorney for Frank Sinatra. Silbert was a stockholder in Korshak's heavily skimmed Riviera, which he managed for a time. (FBI sources alleged that Riviera skim was laundered through Silbert's law firm.) Silbert was also a director of the beleaguered Parvin-Dohrmann Corporation. Prolific philanthropist, especially to Jewish causes.

  Michele Eugenio Sindona (1920-1986)—aka "The Shark" and "St. Peter's Banker." Charlie Bluhdorn's Sicilian alter ego, successful industrialist, banker, conglomerate builder; also a reputed made mafioso who laundered Gambino-family heroin profits through the Vatican Bank (one of his clients), and a member of the secret Italian Masonic Lodge, known as P-2. After investing heavily in Bluhdorn's Paramount Pictures, he was convicted of bank fraud in 1980 (sentenced to twenty-five years), then extradited to Italy, where he was convicted in 1986 of ordering the murder of an Italian prosecutor who was investigating Sindona's vast Mafia entanglements. Two days after his murder conviction, Sindona died in an Italian prison, poisoned under mysterious circumstances.

  Dr. Julius Caesar "Jules" Stein (1896-1981)—Chicago ophthalmologist and founder of Music Corporation of America (MCA) and Universal Pictures, arguably the most powerful entertainment conglomerate in American history. Early friend of Al Capone, who helped Stein muscle his way into the business by smoke-bombing competitors. His MCA was continually investigated by the feds for six decades, with minimal repercussions. Noted philanthropist.

  Lester Velie (1908-2003)—Classmate of Sid Korshak's at the University of Wisconsin, preeminent award-winning investigative journalist for Collier's and Reader's Digest; a lifelong organized-crime gadfly and the first to crusade against Korshak, Ziffren, and the Supermob.

  Louis "Lew" Wasserman (ne Weiserman) (1913-2002)—MCA president who, with Jules Stein, became one of the most powerful entertainment moguls in America. Tried hard to stay out of the public eye and was known as a brilliant visionary, tough businessman, and master of corporate tax avoidance through the use of the Dutch Sandwich scheme. Heavily reliant on Sid Korshak's sway over Hollywood unions and guilds. Together with Ziffren and Korshak, known as the Three Redwoods. Wasserman was an important West Coast supporter of many Democratic presidents.

  Paul Ziffren (1913-1991)—Chicago attorney (and possibly the illegitimate son of Jake Arvey), specializing in tax law. Frequent real estate speculator, especially in postwar California, with the likes of Alex Greenberg, David Bazelon, Fred Evans, and Sam Genis. In his twenty-year run as California's Democratic national committeeman, Ziffren became, like his mentor Arvey in Illinois, a kingmaker for the Democratic Party in California in the mid-twentieth century. Brought both the 1960 Democratic convention (which nominated JFK) and the 1984 Olympics to L.A. His prestigious L.A. law firm, Gibson, Dunn and Crutcher, which specialized in tax matters, had a large celebrity clientele.

  Abner Zwillman (1904-1959)—aka "Longy." New Jersey's most notorious gangster, founder of Murder Inc. Among his enterprises were gambling, prostitution running, and control of labor unions. Zwillman was possibly the first big gangster to "wash" his money in so-called legit businesses such as Kirkeby's Hilton Hotels, casinos from Havana to Las Vegas, and in Hollywood movie studios, where his interests (and girlfriends such as actress Jean Harlow) were often watched over by Sid Korshak.

  Preface

  Su-per-mob (soo-per-mahb) n. a group of men from the Midwest, often of Russian Jewish heritage, who made fortunes in the 20th century American West in collusion with notorious members of organized crime.

  TWO TYPES OF POWER dominated the twentieth century: the visible, embodied in politicians, corporate moguls, crime bosses, and law enforcement; and the invisible, concentrated in the hands of a few power brokers generally of Eastern European and Jewish immigrant heritage. Operating safely in the shadows, these men often pulled the strings of the visible power brokers. Although they remained nameless to the public, they were notorious among a smattering of enterprising investigators who, over decades, followed their brilliant, amoral, and frequently criminal careers. The late Senate investigator and author Walter Sheridan dubbed them the Supermob.

  For all their power, this covert cadre of men had a surprisingly monolithic pedigree. They shared an ancestral lineage traceable from the former Russian-mandated Jewish ghetto knowm as the Pale of Settlement, emigrating first to the Ma
xwell Street-Lawndale sections of Chicago, and ultimately to what could be termed the Third Settlement, Beverly Hills, California. While they were nomadic to the degree that they followed the money, from Lake Shore Drive to the Vegas Strip to Beverly Hills, the Super­mob largely succeeded in creating better, and more legitimate, lives for their offspring. In the process, they became quintessential capitalists, exerting such far-flung influence that the repercussions were felt by practically every American of their era, with an economic impact that could only be measured in the trillions of dollars. Through deniable, often arm's-length associations with the roughneck Italian and Irish mobsters imprinted in the popular imagination, the Supermob and the hoods shared a sense of entitlement regarding tax-free income. This "Kosher Nostra" stressed brains over brawn and evolved into a real estate powerhouse, an organized-labor autocracy, and a media empire. If power does, indeed, corrupt, then the Super­mob corrupted absolutely. Through methodically nurtured political ties, the Supermob effectively insulated itself from prosecution. They were above the law.

  They had names like Korshak, Arvey, Greenberg, Pritzker, and Ziffren.

  Within this Supermob, Jake Arvey was the visionary kingmaker, the patriarchal Chicago ward boss who inspired his own young wards—prodigies like Sid Korshak, the sphinxlike operator who quietly kept the wheels of the enterprise greased, or Alex Louis Greenberg, Paul Ziffren, and the others who plunged into stealthy entrepreneurships that made up the engine of this hidden economy. Although they propelled the making of the movies we watched, the music we listened to, the politicians we voted for, and the hotels and resorts we frequented, it is a testament to their genius that most Americans never heard of any of them.

  CHAPTER 1

  The Lawyer from Lawndale

  FADE IN

  Beverly Hills. Present day.

  INT STARBUCKS on BEVERLY DRIVE

  At separate tables, a gaggle of aspiring screenwriters sip on their Frappucci-nos as they ponder the next line to tap into their Mac iBooks. They all have a friend who has a friend whose sister works at Universal, or DreamWorks. They've all heard who is looking for new product and they aim to deliver. So here they sit, day after day, until they type the words FADE OUT on page 120 of the third draft of the mother of all screenplays. With any luck, they might soon actually live in Beverly Hills.

  OVER THE LAST DECADE, a supposedly new type of office has emerged, wherein young entrepreneurs park themselves in a public coffee shop or restaurant for the better part of the day, as they work their cell phones and iBooks. With their Wi-Fi Internet connections, these "Laptopias" offer up-and-comers, whom the Baltimore Sun recently labeled the New Professionals, a more pleasant, and relatively low-cost, headquarters from which to launch their careers.1 Little do they realize, the restaurant/office is nothing new—it was perfected, if not invented, by a shadowy man who plied his trade just two blocks from the Beverly Hills Starbucks, in The Bistro on Canon Drive. But this trailblazer never wrote a movie, and he never had to worry about someone's sister who used to work for a studio. He was on a first-name basis with the moguls themselves and could start up or kill movie productions with a quick call from one of two phones installed at his personal table at the restaurant.

  In Hollywood, he was known as The Myth; his birth name was Sidney Roy Korshak, and his incredible reach said as much about his heritage as it did about the man, for Sid Korshak merely had to call one of a dozen men with whom he'd grown up on Chicago's West Side (and whose parents all hailed from a small parcel in the Russian West). In their lives, they accomplished the impossible, overcoming fierce anti-Semitism, making complex alliances with notorious underworld bosses, and emerging victorious, reinvented, and relatively unscathed in America's Garden of Eden, Beverly Hills, California.

  Their common story began in Russia.

  In 1791, Russian empress Catherine the Great established the Pale of Settlement. Meant as a territory for Russian Jews to live in impoverished sequestration from the rest of their countrymen, the encampment comprised the territories of present-day Latvia, Lithuania, Ukraine, Belarus, and parts of Poland. Jews living in the villages, or shtetls, of the Pale paid double taxes and were forbidden to lease land or receive higher education. After a brief period of liberalization in the 1860s, the restrictions were revisited with an even more vulgar ferocity, introducing a vile new word into the lexicon: pogrom.

  The 1881 assassination of Czar Alexander II by radicals gave the Russian government, and the anti-Semitic factions within it, the excuse to crack down. The Encyclopaedia Judaica defines pogrom thus: "A Russian word designating an attack, accompanied by destruction, the looting of property, murder, and rape." After the assassination, and instigated by the government's resultant "May Laws," the Russian military carried out a wave of such pogroms, spreading throughout the southwestern regions. Two hundred state-sanctioned terror attacks took place in 1881 alone. In Kiev, home of the Korshak family, dozens of Jewish men were murdered, their houses looted, daughters raped, and almost a thousand families ruined financially. It is not surprising that such villainy left a powerful imprint in the collective memory of all who survived it. It would manifest itself in the West as a hunger for real estate, financial success, and higher education. The emphasis was on mind over muscle. Indeed, no other people valued education more than the Russian Ashkenazic Jews. To learn was a religious duty, and nothing was lower than ignorance, a belief that inspired a popular ghetto slogan: "Better injustice than folly." As Rabbi Edgar F. Magnin, founder of L.A.'s predominantly Jewish Hillcrest Country Club, was quoted: "We are Jews. We are a minority and a lot of people don't like us. We don't have to kowtow to anybody. We don't have to be weak . . . but we must use our heads. We are a very, very tiny minority in a tremendous majority."2

  In the years 1882-93, Tevye and Bella Korshak, whose surname meant "kite," began sending their six sons to the western land of opportunity known as the United States, where they joined the wave of immigrants that hit American shores within months of the pogroms. After the requisite first landing at Ellis Island in New York, many proceeded farther westward, establishing their second settlement in America's Second City, Chicago. These arrivals were overwhelmingly young, but included a larger percentage of family groups, urban dwellers, people of skills and education, and permanent settlers than any other European group.

  The first Jew, of the German sect, had actually arrived in Chicago five decades earlier. In 1838, a merchant named J. Gottlieb settled there briefly, then prophetically moved on to California in search of gold, unwittingly initiating a paradigm for Korshak and company. Before the immigration surge of the 1880s, the total Jewish population in Chicago was 10,000 out of 500,000. By 1920 that number had swelled to over 225,000, and by 1950 Chicago would have the second-largest Jewish count in America, numbering some 350,000.

  The newest Americans quickly learned that German Jews like J. Gottlieb had arrived in Chicago at a more opportune time. On first arrival, the Russian Jews were met with a prejudice emanating, surprisingly, from their own religious kin, the origins of which were in internecine rivalries between Eastern and Western European Jews, and exacerbated by competition between new arrivals and settled, assimilated German Jews. These competing cliques even had their own discrete cemeteries. Perhaps worst of all, the Russian Jews were perceived as being unrelated to the original twelve tribes of the Torah.

  The attitude of both the German Jews and the Spanish (Sephardic) Jews toward the Russian and Polish Jews was one of superiority and pity. German Jews thought themselves more intellectual and aristocratic. Many were professional businessmen, while the more orthodox, Yiddish-speaking, nomadic Russians were seen as only good enough to employ in the Germans' sweatshops. German Jews, hinting at their own Jewish self-hatred, regarded the Russians as inferior and illiterate, referring to them as schnorrers (beggars, or bums).

  A manuscript entitled Autobiography of an Immigrant, written by an anonymous Ashkenazi, paints a dour picture: "When I first put my feet on the
soil of Chicago, I was so disgusted that I wished I had stayed at home in Russia. I left the Old Country because you couldn't be a Jew over there and still live, but I would rather be dead than be the kind of German Jew that brings the Jewish name into disgrace by being a goy. That's what hurts: They parade around as Jews, and deep down in their hearts they are worse than goyim."3

  The Germans' upper hand was temporary as they became outnumbered, within a brief but tumultuous ten years, by the Eastern European Jews (fifty thousand to twenty thousand), a change that forever altered the character of the Chicago Jewish community. On a macro level, Chicago's population grew from four thousand in 1840 to 1.7 million in 1900.

  Invariably, the wanderers found Maxwell Street on the west side of the city.

  Maxwell S t r e et

  Bereft of education, money, and property, these Russian Ashkenazic Jews packed into the poorest parts of Chicago to the west of the Chicago River—symbolic of the rift between themselves and the East Side-dwelling German Jews. In short time, they coalesced in an area that stretched from south of Taylor Street to the railroad tracks at about Sixteenth Street, and from Canal Street westward to Damen Avenue. This community, only minimally refurbished after the great Chicago fire of 1871, was centered around the intersection of Halsted and Maxwell streets, where the population was 90 percent Jewish. Over the next twenty years, an estimated fifty-five thousand Eastern European Jewish immigrants crowded into this tiny locus. So dense had this ghetto become that one social scientist determined that if the rest of the city were similarly clotted, Chicago would boast, instead of two million residents, over thirty-two million people, half the population of the entire country.4