by Gus Russo
Lew Wasserman (Cleveland Public Library)
Early Ronald Reagan headshot (Irv Letofsky)
Los Angeles attorney Leo Geffner recalled that Sidney commented years later about Reagan, "Ronnie says he's so pure. He's really phony with this big moralistic platform—he and I used to be with hookers in the same bedroom!" Korshak told Geffner that they had maintained a strong friendship for many years, often mentioning recent phone chats with the future president.77
Wasserman, who has been likened to a rarely smiling funeral director, would come to rule over the Hollywood production machine, all the while in daily contact with his close friend and adviser Sid Korshak; other chums, such as Ronald Reagan, were lodged in political positions high enough to ensure that the Supermob was untouchable. Henry Denker, who worked closely with Stein, Wasserman, and MCA producing television programs for CBS in the earliest days, recently recalled, "Wasserman was a guy in a gentleman's suit with a mob mentality. He was the shrewdest guy in all of show business. He used that shrewdness in many, many ways." Denker added that Mrs. Doris Stein had her own calculating style: "All the antique furniture in Stein's offices was bought by Mrs. Stein in Europe and rented to MCA. She was getting a terrific paycheck every week. They didn't miss a trick."78
While Stein, Greenberg, Arvey, and Korshak for the most part kept their questionable associations in the background, one Supermob associate was so reckless that he barely made the coming gang exodus to California. John Jacob Factor was born lakow Factrowitz in the Polish sector of the Russian Pale in 1889, the tenth child of a Polish rabbi. In 1905, the family relocated to Chicago's Maxwell Street, where Factor's father joined many other breadwinners as a street peddler.
After a teenage job as a barber, his nickname was secure; lakow Factrowitz had become Jake "the Barber" Factor. Not one to resist the allure of the quick buck, the Barber left a trail of lawlessness that even Capone could envy. Among his indictments: in 1919 for stock fraud in Illinois; in Florida twice for land fraud (one elderly Florida woman was relieved of her life savings of $280,000); twice for mail fraud; and for stock swindles in Canada and Rhodesia. Factor returned to Chicago and in 1923 convinced New York's most brilliant criminal mind, Arnold Rothstein, to front $50,000 toward what would be the largest stock swindle in European history. They started off small, selling worthless penny stocks, in London, then graduating up to bilking British investors out of $1.5 million.
Yet even these were mere preludes to the main event, in which Factor and Rothstein sold worthless African land, which they claimed was home to Vulcan Diamond Mines, to tens of thousands of investors, many of them elderly. The pair made off with $8 million, a staggering amount at the time. The U.S. Justice Department called Factor "absolutely ruthless." Tried in absentia in England, Factor was sentenced to eight years at hard labor. But he had made his way to Chicago, where it is believed he cut Murray Humphreys in on the booty for the protection of the Capones. Factor managed to delay the extradition hearing for three years and, thanks to his deep pockets, had his high-powered legal team appeal the case up to the Supreme Court.
Jake Factor after his alleged 1933 kidnapping (Library of Congress)
In 1933, cracks began to appear in the wall of protection built by the Outfit for Factor. That spring, federal authorities made it clear that Factor would have to appear in court in preparation for extradition to England. Since the lawyers had exhausted their legal bag of tricks, it was up to the hoods to show how to delay a court appearance, permanently. According to a source close to both Tom Courtney and Tubbo Gilbert, fair-haired boy Sid Korshak, with Curly Humphreys's approval, was instrumental in devising a strategy to keep Factor out of prison. Consequently, the first show-up was scuttled when Factor's son Jerome was "kidnapped," only to be found healthy eight days later, with no "kidnappers" ever charged. When the feds reset the date to late June, Jake Factor himself disappeared after leaving an Outfit-controlled saloon in the northwest suburbs.
Jake Arvey, a close friend of both Korshak's and Factor's, was seen running in and out of Factor's elegant fortieth-floor suite at the Morrison Hotel, trying to arrange his ransom.79 However, after twelve days, Factor surfaced, like his son, in excellent health. But this time, a kidnapper was named. In rapid succession, Tom Courtney's goons arrested the enemy of Stein, Petrillo, and Capone: Roger Touhy.* Courtney persuaded the Washington authorities to cancel Factor's extradition proceedings now that he was a material witness in a capital case. Touhy was tried twice in the Factor case, the first jury being unable to reach a decision. Although Factor identified Touhy, his admission was suspect given that he had earlier testified that he had been blindfolded the entire time. Two weeks later, the second trial produced a surprise witness, Isaac Costner, or Tennessee Ike, a man who when asked under oath to state his occupation replied, "Thief." Ike stated that he was with Touhy during the kidnapping, but he was against the idea. Factor chimed in that he remembered Ike as the "good man" among the kidnappers. Touhy was found guilty this time around and sentenced to ninety-nine years in prison. Meanwhile, Jake the Barber was allowed to stay in the country as "a friend of the court." (Twenty years later, Ike filed a deposition in which he admitted that he was put up to the false testimony by U.S. assistant attorney general Joseph B. Keenan, who promised to cut Ike a break on a thirty-year sentence for mail robbery if he agreed to testify against Touhy. When Keenan reneged, Ike filed the damning deposition.)
Now free to resume his larceny, Jake the Barber continued scamming until his luck ran out in 1942, when he was found guilty of swindling three hundred individuals in Iowa out of almost $500,000. The scheme, which involved the sales of fraudulent whiskey receipts, finally sent Factor to prison for six years. After his release, he would first relocate to Vegas, where he managed, under Korshak's and Humphreys's close supervision, the Outfit's Stardust Hotel, then go on to self-reinvention in Los Angeles, joining the rest of the Supermob.
Meanwhile, Jake's brother, Max, single-handedly reinvented the look of Hollywood movies with his development of Pan-Cake makeup (pan because of its small, flat, panlike container, and cake because of the form in which it was made). Prior to this, stars were painted with vaudeville-style greasepaint, which tended to crack. Max Factor was also the originator of the pouty-lip look and is widely considered the father of the cosmetics industry. When his cake makeup was mass-produced, Factor revolutionized the way everyday women presented themselves (prior to this invention, women rarely used makeup). Max Factor, who was immortalized in the Johnny Mercer song "Hooray for Hollywood," died in 1938.80 His company is now owned by Procter and Gamble and continues to be one of the worldwide leaders in cosmetics.
As the Supermob continued to coalesce, the unanswerable question was which, if any, of its constituents viewed their association with the underworld as merely a means to an end, and which ones embraced the criminal life without reservation? Much as James Ragen had hinted that Greenberg was trapped by his alliance with the Outfit, there were those who would echo a similar sentiment about Korshak. Among the first to notice some misgivings (if only slight) on Korshak's part was Harry Busch, a fellow attorney who also worked out of 188 W. Randolph. Looking back, Busch commented recently, "However Sidney got his start, I think it was inadvertent. Something that was just too tempting, and then he couldn't get out." It was a theory expounded by any number of Korshak's friends, of which there were many, over the years. But Busch actually heard Korshak voice it.
One day, Busch encountered Korshak at the Randolph entrance. They exchanged pleasantries, and Busch informed Korshak that, with court in recess, he was on his way to pick up his car.
"How I envy you," Korshak said to his friend.
"Why? I know you're making far, far more money than I," replied Busch, to which Korshak said, "I'd rather be making less money and be out of this."
Busch didn't ask what "this" was because he knew. "The thing was," Busch concluded, "by then, he couldn't get out."81
It was a refrain Korshak would repeat
thirty years later.
H o l l y w o o d E s c a p a d es
While Korshak was busy in Chicago learning the ropes as liaison between Courtney's office and the Outfit, events were unfolding in Hollywood that would test his abilities in the art of damage control. The gang Korshak so often represented was about to become embroiled in one of its few missteps, and a potentially fatal one at that.
In the early thirties, the Outfit began making inroads into the exploding movie business. It first became interested in the local variation, specifically in the thriving company founded by Barney Balaban. The oldest of seven sons of Maxwell Street Russian immigrants Goldie Manderbursky and Israel Balaban, Barney had partnered with his brother-in-law, Stan Katz, in 1917 when they opened the Central Park Theatre, Chicago's first picture palace. The pair revolutionized the film exhibition business by indulging in lavish buildings, combined with reasonable ticket prices, which made the movie experience accessible to middle-class filmgoers. In addition, they personally oversaw the design of massive air-conditioning systems that allowed theaters to stay open, for the first time, throughout the hot Midwest summers.
Soon the B&K theater chain was prospering. That's when the Chicago Outfit enlisted the business manager of the stagehands union, George E. Browne, and a Russian-born pimp named Willie Bioff, to extort B&K out of $20,000 or else have stink bombs tossed into their theaters. Pressure was also applied to John Smith, president of Local 110, the Motion Picture Operators Union. Smith later testified that Korshak showed up, for no fee, and asked if his union wanted protection. "I said no," Smith said. "He thought I was going to hire him as an attorney, and since there is trouble here, I don't want no part of Korshak."82
Of course, Smith was unable to forestall the gang's momentum, and before long everybody was paying the boys for protection. When the local putsch proved successful, the mob began coveting the movie business itself, then the fourth-largest industry in America. Later testimony revealed that the plot was devised at a series of meetings at the mob's Colony Club. "I think we can expect a permanent yield of a million dollars a year," Capone's heir Frank Nitti, who had to authorize the proposal, was heard to say. According to an unnamed source of the Chicago Crime Commission, Sidney Korshak was present at the Colony meetings every night.83 In later testimony, George Browne confirmed Korshak's attendance.84
The Outfit was hopeful of success in large part because it already had a good man in place: Johnny "the Hollywood Kid" Rosselli had been dispatched from Chicago by Capone's Syndicate in the twenties to oversee the Outfit's race wire, which, thanks to the massive gambling habits of the movie crowd and corrupted L.A. mayor Frank Shaw, was turning a big profit. Rosselli simultaneously become the personal bookie for studio honchos like Joe Schenck (United Artists), Harry Cohn (Columbia), and Joseph Kennedy (RKO and Film Booking Office).
Rosselli and friends were also engaged to break a few legs when the industry's labor unions made demands. Columbia's Harry Cohn became one of Rosselli's best employers and friends. In return, the Chicago gang was allowed to begin their infiltration of the business—first through silent partnerships in actors' careers, and later in the various craft unions.*
The Hollywood Kid flew back to Chicago and explained how the studio bosses had him emasculate the leading trade union, the already corrupt International Alliance of Theatrical and Stage Employees (IATSE), making it ripe for a takeover by the mob. It shouldn't have surprised anyone. As director Orson Welles put it, "A group of industrialists finance a group of mobsters to break trade unionism, to check the threat of Socialism, the menace of Communism, or the possibility of democracy . . . When the gangsters succeed at what they were paid to do, they turn on the men who paid them . . . [The] puppet masters find their creatures taking on a terrible life of their own."85
Rosselli's wish and Welles's analysis came to fruition on June 24, 1934, at lATSE's annual convention in Louisville, Kentucky. With the mob's gunmen ringing the perimeter of the convention hall, George Browne ran for the IATSE presidency unopposed. Once Browne was installed, Alex Greenberg assigned his factotum Frank Korte to be vice president, and his brother-in-law, Izzy Zevlin, to manage the crooked books.86 Then it was Bioff's turn. The convicted panderer and whore-beater went door-to-door in Hollywood, letting the studio heads know that unless they ponied up large quantities of untraceable cash, IATSE would shut down production. The moguls had no choice, and the "majors" (Fox, MGM, Warner, and Paramount) as well as the "minors" (RKO and Columbia) each began paying $50,000 a year to Bioff and the mob-run IATSE to keep the cameras rolling. Only Rosselli's pal Harry Cohn at Columbia was spared.
Of course, the studio heads were far from lily-white victims: they watched their profits soar when lATSE's mob bosses slashed worker salaries by up to 40 percent; the Schenck brothers utilized their new underworld partners to divert theater profits away from their stockholders; Fox had Bioff make insane union demands of rival independent theater owners to drive them out of business. Harry Warner admitted under oath that "it was just good business" to have a relationship with Bioff. Writer Stephen Fox concluded, "Bioff did not have to 'corrupt' Hollywood any more than he needed to corrupt the stagehands union. In both instances he merely folded smoothly into the environment."87
When Bioff made an attempt to go independent and seize the actors' union for himself, he was promptly summoned back to Nitti's Bismarck Hotel headquarters, where he was informed that Charlie Gioe, Sid Korshak's pal from the Seneca, was now in charge of that union.*
In 1936, at the suggestion of adviser Joseph Kennedy, the presidency of Paramount (the Balaban & Katz parent company) was offered to Barney Balaban. He moved to New York City to take over the corporation and remained there for thirty years, while his brother John Balaban ran the studio in Hollywood and Stan Katz became a VP at MGM. In 1958, Balaban raised additional capital by selling the company's backlog of pre-1948 films to Jules Stein's Music Corporation of America for $50 million.88 In 1966, Balaban was eased out as Paramount came under control of Gulf & Western.
Meanwhile, Sidney Korshak was engaged in his own private showbiz enchantments. In the midthirties, Korshak balanced his intense "mob lawyer" duties with the occasional representation of a helpless young babe, such as twenty-one-year-old model Dorothy Zink, who was immersed in a property dispute with her estranged husband.89 This is one of the earliest examples of Korshak's mixing of business and pleasure—the young barrister was seen squiring Zink around the Windy City. A more lasting enchantment began when, during his association with attorney Phil Davis, Korshak was brought in to handle the nuisance lawsuit of Hollywood starlet Dorothy Appleby. A native of Portland, Maine, Appleby was a beauty queen (not to mention a drama queen), crowned Miss Maine in 1923 by matinee idol Rudolph Valentino. The brush with Hollywood royalty inspired Appleby to become an actress, so she packed her bags and hit the road as a greasepaint gypsy, appearing in stage plays around the country before landing work in Tinseltown. In a fit of retribution against a former lover, she hastily married a fellow actor in 1931, then one week later attempted suicide in New York's Central Park Lake. "He called me a lousy actress in front of my friends," a distraught Appleby said of her husband to the divorce court not long after.
The brunette heartbreaker next fixed her sights on Chicago furniture-empire scion Sidney M. Spiegel Jr., formerly married to Fay Lamphier, Miss America 1925. When he broke off his 1935 engagement to Appleby at the last minute, she sued under a soon-to-expire "breach of promise" statute, and Korshak was hired to represent her in the specious $250,000 claim, unaware that he would soon join the long list of men to succumb to Appleby's charms. The suit was settled out of court (for $1,000 in expenses, according to Spiegel's attorney; $5,000, according to Korshak). One week later it was announced that twenty-eight-year-old Korshak and twenty-nine-year-old Appleby were engaged.
Dorothy Appleby circa 1929 (Corbis/Bettmann)
CHICAGO LAWYER TO WED ACTRESS DOROTHY APPLEBY ran the September 22, 1935, Chicago Tribune headlin
e. The article noted that Sid had just taken the train back to Chicago from L.A., where he had spent two weeks. According to Korshak, the romance developed during this, his first visit to California. Plans were announced for a December wedding in Harrison, New York, but for reasons unknown the marriage was postponed and, after three more years of dating, canceled outright. "Something about Hollywood makes love fade away," Appleby had once said.*'90
But the relationship gave Korshak the opportunity to experience his future West Coast home, and also likely to get to know one of Appleby's costars in Riffraff, white-hot actress Jean Harlow, the stepdaughter of Chicago mobster Marino Bello, and lover of New Jersey gangster Abner "Longy" Zwillman. Two decades later, Korshak would provide counsel to Mrs. Zwillman after Longy's passing. Pulitzer Prize-winning journalist Wendell Rawls, who researched Jules Stein for years, recently opined, "Korshak was like Zwillman. The entertainment world is very appealing to guys who grew up poor. There was great access to women."91
In 1938, Korshak's partner Ed King moved to New York, but before doing so transferred one hundred shares in the Industrial Trading Corporation to Korshak's Chicago bank account.92 In New York, King worked with fellow attorney Moses Polakoff for Meyer Lansky and was said to have tried to convince Korshak to move to New York and join Team Lansky, but Sidney was already smitten with California girls.
