Supermob

by Gus Russo

  In 1946, Goldblatt engaged Sidney after labor organizers threatened him with strikes and extortion. It appears that the Outfit had two prongs of attack with regard to business targets: either force one of their unions on the business, or allow the owners to pay a fee to keep the unions out. Korshak was given the role of collector. Investigative reporter Sy Hersh, who would later interview Goldblatt and write the seminal expose of Korshak for the New York Times, recently said, "After World War Two, [Korshak's] new, classier thing was to fix unions. He would get unions to strike, and then he would go to the people, say, 'I can take care of it,' and he would get a lot of money."41 Mrs. Goldblatt remembered, "Goldblatts' had union problems with delivery trucks. Sid had the know-how and the contacts to end any labor problems at the store."42 The FBI looked into Korshak's alleged role with Two on the town: Mrs. Sidney Korshak (1.) and Mrs. Joel Goldblatt, 1955 (Chicago Tribune) Murray Humphreys in the Goldblatt-union affair, but unable to find records of payoffs or testimony from witnesses, the Bureau declined prosecution.43

  Korshak resolved Goldblatts' labor difficulties so smoothly that his name quickly circulated among other entrepreneurs hoping to fend off the unions. These clients were trying to avoid aggressive attempts by honest labor unions to organize their employees. They also wanted to avoid doing business with the mob-dominated unions that would keep wages low but demand heavy extortion payments. Korshak's growing reputation led to a relationship with an established banker, Walter M. Heymann, then a vice president of the First National Bank of Chicago and Joel Goldblatt's personal banker. Initially critical of Goldblatt's association with Korshak, within a year Heymann was recommending his most important clients to do business with Korshak; he continued in this for the next twenty years. One businessman described Sidney as "a consolidation of the payoffs." Within a year Korshak had secured a number of furniture and manufacturing companies as clients.

  Brian Ross, the iconic TV network investigative reporter—and to this day the only member of his profession to produce a televised expose of Korshak (1978)—recently summed up Korshak's delicate position: "A guy like Kor­shak is essential for that bridge between polite society and criminal society. He's the one who can bridge that, one way or the other. Neither side quite knows what he's doing. It's a dangerous game for him, but that's where his place was."44

  In 2003, Sandy Smith, the longtime dean of Chicago crime reporters, spoke at length about Korshak's place in the mob-Supermob hierarchy:

  Actually, Sidney functioned as a gangster. He was their straight man. He would go to the corporations and those places that the gangsters couldn't get into, simply because they were such slobs. For instance, Giancana could not go in on his own. Nobody would want to get anywhere near him. Actually at the time, there were thirty-nine or forty police districts in Chicago—the mob operated in maybe half of them. The mayors knew exactly what was going on because on the street the collections from the mob were made each month. In other words the mob had to pay off people each month. There was a political payoff and a police payoff, separate ones. That's how the system worked. A lot of reporters knew exactly what was going on. In most of those thirty-nine districts I could've identified the cop who was collecting money for the captain from the mob joints and also who was collecting the political payoffs. Sometimes one collector handled both payoffs, but more often than not, given that Chicago was a place where nobody trusted anybody, there were separate collectors. That system existed for an awful long time in every police district in Chicago. The mob was into almost anything that was making money in any of those districts. There were payoffs for that. And every now and then, some cop who was handling the payoffs would disappear, go to Mexico and live there for the rest of his life. But this went on in every district in the city. But that's what made the Korshaks so strong. They played right into that. I'm not sure that there was anything in any other big city that was as tight as the relationships between the Korshaks and the mob and all that in Chicago. They were a force to be reckoned with.45

  Marshall Takes Chicago

  While Sidney grew accustomed to his middleman role, his brother Marshall Korshak was well on his way to becoming Chicago's city treasurer, the second most powerful Democratic Party official in Chicago. The FBI noted, "His control of top city patronage jobs was regarded as absolute." Attorney Timothy Applegate, who was the liaison between Hilton Hotels and its labor consultant Sidney Korshak, recently remembered Marshall's growing hold on the city's finances: "Marshall used to represent Hilton on property tax matters, and he received fifteen percent of whatever he saved us when our taxes were reviewed every four years. I became suspicious when the assessor started reviewing us every year for no reason—and of course Marshall then got his cut four times as often. So I went to see him in Chicago, where he and Sidney shared a big, palatial office. A few minutes later Marshall walked in the front door with his arm around the Cook County tax assessor, and Marshall said to me, 'Tim, I want you to meet my best friend.' It was an education as to how things worked in Chicago."46

  Jack Walsh, the former Chicago-based IRS organized crime investigator who oversaw the 1980s prosecution of corrupt Chicago judges (Operation Greylord), knew the setup well. "Whoever holds the money strings in Chicago is the most important person in the city, other than Daley," Walsh has said. "We found people in the treasurer's office connected to the hoods. Marshall had his own connections with organized crime."47 Chicago FBI agent Pete Wacks heard stories that Marshall was even run in on the occasion when suburban gambling spots were rousted. "There were hidden poker games, very typical," said Wacks. "Certain people would be taken aside so their names wouldn't surface."48

  "Marshall always had a police driver with a city car," remembered former Chicago FBI agent Fran Marracco. "He had a lot of control in the Chicago police commission—who was hired, who was fired, promoted. He was very tight with old man [Mayor Richard] Daley. There was no way to delineate between the Korshak brothers—they were both tight with the Outfit. But that is Chicago."49 Lastly, another former Chicago FBI man, the late Bill Roemer, seemed to agree with Marracco when he told Vanity Fair magazine in 1997, "Marshall was an important legislator and politician, and of course we always felt that he was put in there because he was the younger brother of Sidney."50

  In the ensuing years, Marshall Korshak would come to define the classic and articulate liberal politician, as he championed increases in workmen's compensation, increased benefits, aid to dependent children, and training facilities for the mentally handicapped. His popularity saw him voted one of the four best state senators by the Independent Voters of Illinois.

  Although brother Sidney was prospering in his own way, his growing Chicago client base didn't prevent him from continuing his love affair with California. He was now spending so much time on the West Coast that he rented a house in the Coldwater Canyon area just north of the city; he would soon buy property at 17031 Magnolia, in Encino.51 At the same time, thanks to the increased scrutiny brought on by the Hollywood extortion scandal, plans were being made to invest some of the hoods' profits in SoCal real estate, while simultaneously infiltrating both the political and corporate substructure of the state—this time without the burden of a Willie Bioff. This time they'd get it right: they'd use the Supermob.

  In postwar Los Angeles, Korshak was received with open and familiar arms: Al Hart, Jake Factor, Lew Wasserman, Jules Stein, Ronald Reagan, and Walter Annenberg (Moe's son) had all relocated there; Abe Pritzker, Fred Evans, and Paul Ziffren were keeping a presence in Los Angeles, with Ziffren opening a satellite office on Spring Street downtown and renting a house in Coldwater Canyon near Korshak. Everything was in place for a massive reallocation of funds from Chicago to California, and with it, a near-total usurping of the state's political and economic system.

  All of these Chicago emigres were bent on proving F. Scott Fitzgerald wrong when he said, "There are no second acts in American lives." Indeed, California seemed to mandate that its citizens re-create themselves. N
ot only would they adopt new identities, but they would do it in a state that virtually invited the Chicagoans to hijack it. The Supermob had done its homework; there was not a chance of finding a better locale in which to build "Chicago West."

  *"Other associates were Peter Rienzi, Frankie Yale (Uale), Anthony Carfano, Joey Am-berg, and James Plumieri. He had worked for both the Lucchese and Genovese crime families of New York.

  * Jerry Kupcinet directs the television series Judge Judy and Judge Joe Brown.

  *"After being named in a federal extortion case in 1981, Louis Dragna flipped and became a government witness.

  CHAPTER 4

  Kaddish for C a l i f o r n ia

  Watch that fucking Bonanno . . . he wants what'sours—what'salwaysbeen ours, California. He can't have Arizona, and he sure ashell can't have California!

  CHICAGO OUTFIT BOSS TONY ACCARDO SPEAKING TO HIS ENFORCER TONY SPILOTRO ABOUT THE ENCROACHMENT OF NEW YORK MAFIA CAPO JOE BONANNO, IN 19781

  THE MOVIE EXTORTION CASE left the Chicago underworld shaken and more resolute than ever to transfer its cash westward, into real estate and other legitimate business. California, with its lax law enforcement and legal double standard for the wealthy, was the most heavily invaded. It had the perfect climate, literally and figuratively, to expand their enterprise. All that the hoods needed was a front. Enter the Supermob, a cabal that had its own sights fixed on the Golden State.

  For numerous reasons, Southern California was the ideal place for transplantation of the mob-Supermob alliance. Los Angeles, in particular, was known as a city receptive to both hoodlums and Jews. And, like Chicago, Los Angeles seemed to encourage corruption on a massive scale.

  Founded in 1781, Los Angeles was incorporated as an American city on April 4, 1850. A census taken that year showed a population of 8,624, among them only eight Jews. However, one of those eight, M. L. Goodman, was elected to L.A.'s very first city council in 1850, and another, Arnold Ja-cobi, was elected in 1853—only eight Jews, yet two served on the city council. Isaias Hellman, who had arrived in 1859, went from a poor immigrant to clothing store owner to banker. In 1871, he partnered with former governor John Downey to found the Farmers and Merchants Bank, Los Angeles' first bank. In 1890, Hellman left Los Angeles to become the president of Wells Fargo in San Francisco.2 So influential was this small minority of Jewish businessmen that fully 40 percent of the housing constructed in Los Angeles since the end of World War II was financed and built by Jewish developers and bankers.

  By 1908, some seven thousand Jews lived in Los Angeles, a city that mirrored Chicago in every way sociologically, while in no way climatically; it was like Chicago for people who preferred short sleeves to winter parkas.

  Like Chicago, Los Angeles' power elite was historically anti-Semitic, with Jews similarly excluded from private clubs, law firms, and boards of institutions. This discrimination remained in place far longer than in most American cities, typified by the policies of the Jonathan and California clubs, which didn't admit their first Jewish members until the 1980s. Early-arriving Jews bent on assimilating lived and worked in downtown L.A., like the German Jews in Chicago living east of the Chicago River. As had happened in Lawndale, L.A.'s Jews became less and less kosher, with only one in five attending synagogue.

  In the early twentieth century, when the Russian Ashkenazic wave hit the West Coast, it merely ignored the downtown status quo and developed its own shtetl ten miles to the west, a sort of West Coast Lawndale. The area was comprised of towns named Hollywood, Santa Monica, Brentwood, Malibu, and Beverly Hills, with countless Jewish-owned law firms and accountant offices springing up on Wilshire Boulevard and its environs. Historian Kevin Starr has written of the assimilated "Mid-Wilshire Judaism" that oversaw the building of the stunning Wilshire B'nai B'rith Temple at Wilshire and Hobart. "Wilshire Boulevard anchored the emergent Jewish Los Angeles," Starr wrote.3 Among the Supermob associates who would also gravitate to Wilshire were Korshak, Hart, Ziffren, and Glaser. From then on, these two L.A.'s—downtown and Westside—would have almost nothing to do with each other.

  Adding to the allure of the Westside for new Jews was the fantastic success of a new industry created by the first Jews to arrive there. With a determination rarely seen in an oppressed class, the Jews had always created their own economy. In Chicago, they had established their own banks, schools, hospitals, country clubs, legal societies, and indeed their own sophisticated version of organized crime. In Los Angeles, they did much the same, with one profound addition: they seized an unwanted commodity originally called flickers; we now call them motion pictures. The only major studio not founded by Jews was RKO, which was primarily a British venture.

  Like Chicago's Supermob, practically all of L.A.'s motion picture sachems had their roots within a hundred-square-mile area in Russia's Pale of Settlement. Their families had all emigrated to the United States within ten years of one another, failed at a first career, then found the flickers, at the time considered an unseemly business by the WASP upper class. Among the titans of the new business were:

  • Louis B. Mayer—He said that he'd forgotten exactly where and when he'd been born in Russia, but arbitrarily made the Fourth of July his birthday. With Samuel Goldwyn, he later headed Metro-Goldwyn-Mayer.

  • Joe and Nick Schenck—The brothers were born in Rybinsk, Russia (Joe in 1878, and Nick in 1881), and emigrated to the United States in 1893. Joe founded United Artists (with Mary Pickford, Charles Chaplin, Douglas Fairbanks, and D. W. Griffith) and was CEO of Twentieth Century-Fox, while Nick lorded over Loew's Theaters and MGM. Joe sponsored the creation of Todd-AO recording and Cinemascope.

  • Jack and Harry Cohn—Sons of Joseph Cohen, a German Jew who ran a tailor's shop in New York's Upper East Side, and Bella Joseph Cohn, a Russian Jewess from the Pale of Settlement on the Polish border. Harry became president of Columbia Pictures.

  • David O. Selznick—The son of Lewis J. Selznick, a Ukrainian Jew who'd immigrated to Pittsburgh and entered the jewelry business, a partner in the founding of Universal Pictures.

  • Harry, Sam, Albert, and Jack Warner—Decided to buy a movie projector together and eventually started Warner Brothers. Their father, Benjamin Warner, had left his wife and daughter in Poland and gone to Baltimore as a cobbler until he settled in Youngstown, Ohio, and brought his family over.

  Among the motion picture elite, expatriate Chicago Ashkenazim were everywhere:

  • Barney and A. J. Balaban—The sons of a Russian immigrant grocer, they owned a string of large movie palaces before Barney became the chairman of Paramount Pictures.

  • Adolph Zukor—Born in a small Hungarian village in the Tokay grape district. Orphaned early in life, he left for America and later founded Paramount Pictures. Zukor remained in Chicago and impressed another fur trader, Morris Kohn, and they became partners, and Zukor married Kohn's niece, Lottie Kaufman. By 1899 they moved the company to New York.

  • Carl Laemmle—Born in 1867 in Laupheim in southwest Germany, he founded Universal Pictures with Selznick. Laemmle came to America in 1883 after his mother's death and ended up off and on throughout the beginning of his career in Chicago, where he owned the White Front Theater (1906) on Milwaukee Avenue.

  • Irving Thalberg—Born in a middle-class section of Brooklyn in 1899. His father was a lace importer who had emigrated from a small town near Coblenz, Germany. Laemmle was impressed by Thalberg and offered him a job at Universal, where he quickly rose to the top of the studio's writer pool.

  And there were more Chicagoans, such as Leo Spitz (RKO) and Sam Katz (VP of MGM). Chicago-born (or -bred) actors included Wallace Beery, Tom Mix, Gloria Swanson, Jean Harlow, and Paul Muni, many of whom started out at Chicago's Essanay Studios.

  Screenwriter Michael Blankfort, who worked for many of the Jewish movie moguls, described their demeanor: "They were accidental Jews who rejected their immigrant background to become super-Americans. They were interested in power and profit. They would hardly ever touch a story
with a Jewish character, and if they did, they cast a gentile for the part." Harry Cohn added, "Around this studio, the only Jews we put into pictures play Indians."4

  The Land of Milk and Honey — and Sun

  California was virtually exploding, its population growing from 1.48 million in 1900 to 3.4 million by 1920, and 2 million more by 1930. But no city epitomized the spurt more than Los Angeles. Between 1920 and 1940, L.A. grew from 577,000 citizens to over 1.5 million. In just one four-year period in the 1920s, the self-proclaimed City of Destiny saw real estate transfers that amounted to $2.7 billion; building permits totaled an astounding $500 million between 1923 and 1927.5

  Within this maelstrom, the Jewish film moguls sought to carve out their own territories. All that the thriving film sachems needed was a paradise in which to live unfettered and raise their children. Many of the most successful chose the Westside tract known as Beverly Hills. Originally the abode of the peaceful Gabrielino tribe, the region's native population was decimated in 1844 when European invaders introduced them to smallpox, wiping out two thirds of the Gabrielinos. Those who survived the epidemic soon succumbed to mistreatment by the European settlers.