by Gus Russo
Soon thereafter, based on a tip, the Los Angeles Police Department (LAPD) began looking into the people behind the Hayward Hotel at 20 E. Sixth Street, the headquarters of the anti-Bowron movement. At the time, LAPD chief William H. Parker ran the most sophisticated police intelligence division in the country. Writer Frank Donner rightfully called him "probably the most respected public figure in Southern California and, next to J. Edgar Hoover, the most celebrated law-enforcement official in the country."25 Parker's investigation opened a Pandora's box of immense proportions, but one that to this day has been little known outside SoCal environs. And even there, the facts are so obfuscated that only the most determined investigators have grasped the full implications.
Chief Parker first entrusted LAPD Intelligence commander James Hamilton, and his chief investigator, Walter J. Devereux, with the Hayward Hotel inquiry. Hamilton worked closely with FBI agent, and later investigator for the DA's office, Julian Blodgett. When the evidence trail showed its labyrinthine complexity, involving countless shell and holding companies (all recorded in the L.A. county clerk's records warehouse), Hamilton shared the immense workload with top-notch Pacific News reporter and CBS News producer Robert Goe, who amassed hundreds of hours trolling through real estate and corporate filings, both in L.A. and Chicago. "Robert was a workaholic and was meticulous," his widow, Wanda, recently recalled. "Whatever he did at any time would consume him. He was obsessed with the mayor's office. It kept him looking over his shoulder until the day he died—he wras very aware of the truth of California politics."26
Goe in turn passed his findings over to Mirror and Times reporters Art White and Jack Tobin. Ridgeley Cummings also conducted corroborative research in the journal the27Government Employee.27
According to the FBI, the Goe-White research was funded "by certain well-to-do Democrats who became concerned over the emergence in California of forces within the Party who were foreign to the California political scene and were suspected of injecting machine politics of such a nature as to pose a threat to the nominal Party hierarchy here." Both the FBI and the U.S. Congress investigated some aspects of this takeover,28 but the investigations were allowed to whither when neither the White House nor the attorney general showed any interest in pursuing the story.
The daunting private investigation in California would take even more years than the team was able to devote to it—it might never be fully explicated—but their findings painted a clear and consistent picture of a territory engulfed by Chicago money, much of it tainted. What was most disturbing was the degree to which high public officials, some of whom later became icons, appeared to facilitate, and profit from, these investments. Not surprisingly, the key players' trails all seemed to lead back to the Seneca and Sidney Korshak.
Author and former investigative reporter for the Tos Angeles Times William Knoedelseder summarized the style of California crime that never seemed to make the newspapers: "In Los Angeles, organized crime has always operated as a more subtle, almost invisible force, employing more lawyers, bankers, and investment brokers than leg breakers and button men." This climate bears much resemblance to corrupt Chicago, so much so, Knoedelseder writes, that "organized crime is often indistinguishable from legitimate business in Los Angeles."29
The Hayward Hote l Nexus
The first clue as to the scope and tainted pedigree of the massive Chicago investments in SoCal was the name listed as a co-owner of the Hayward, none other than Chicago Jake Arvey's boy Paul Ziffren. By this time, Ziffren was spending most of his year in California, soon to be a full-time resident. At the same time, Paul's younger brother Lester attended school at UCLA, where he romanced Jake Arvey's daughter, Helen Sue, also a student there.30 The two were later married, and Lester established his own legal reputation in L.A., albeit much less controversial than Paul's.
A congressional informant noted that Paul Ziffren even added Arvey's name to his West Coast shingle. However, "Arvey made a special trip to Los Angeles 'to have his name taken off,' he having heard how 'hot' Ziffren was at the time.31" Many astute Californians saw Ziffren as an emissary of Arvey's, dispatched westward to organize the California Democratic Party along Illinois "machine politics" principles. However, even these observers failed to grasp the full scope of Ziffren's business in their state.
"Ziffren made a big thing of his connection with Arvey when he first came out here," said an old-time California pol. "He just mushroomed."32 Attorney David Leanse, who worked with both Korshak and Ziffren after their moves to the West Coast, said, "Arvey's protege in Chicago was Paul Ziffren. He didn't have the contacts with labor that Korshak had, but Ziffren represented savings and loans and lenders, and that put him in touch with the entertainment business a lot."33 But even that description misses perhaps the most important aspect of Ziffren's impact: his partnership in the reallocation of tainted Chicago money in his new home state. What Leanse and the others failed to see was, however, seen by those investigating the Hayward Hotel.
Connie Carlson, the retired organized crime specialist for the California attorney general's office, closely monitored the world of Ziffren and his When Ziffren came here in the forties, it was like he was dropped out of the sky, and he became one of the top Democratic advisers to the Truman administration. Ziffren usurped all of the top Democrats overnight, and somebody in the White House went along with it. First Chicago exported the mob here, then the machine. The takeover was so quiet that no one ever knew it happened. Paul Ziffren became a social leader, sharing the Chandlers' [owners of the L05 Angeles Times] box at the Hollywood Bowl. He put every bit of his past behind him, whatever it was, good or bad."34
The Hayward Hotel today (author photo) other Chicago transplant pals. She recently spoke of Ziffren's appearance on the California scene: "When I first heard about him, it was negatively.
Elevating the Hayward-Ziffren link beyond the mere suspicious were the unassuming names listed with Ziffren's among the shareholders of the hotel: Mathilda B. Evans and Esther Greenberg. In short order it was determined that Mathilda was merely lending her name in the place of her notorious husband, a genuine Capone Syndicate heavyweight and partner with Murray Humphreys, Fred Evans.35 Fred had learned that the hotel's liquor-license application would require his fingerprints, a vetting he tried to avoid.
Evans, another Jewish brainiac, moved to Chicago as a child from St. Louis, turning into a financial hood with an impressive variety of income sources. He graduated from the University of Chicago as an accounting major and also studied architecture and engineering. He would soon earn the distinction of being Chicago's only college-educated Syndicate functionary. After the Depression, the distinguished-looking Evans sold jewelry, loan-sharked—loaning money to Syndicate bosses, such as Louis Campagna ($20,000), when they ran into tax difficulties—became a Loop banker, and bought and sold distressed merchandise, which he fenced with Capone Syndicate wunderkind (and an early Public Enemy Number One) Murray Humphreys. Their operation was housed in a Twenty-fourth Ward garage at Halsted and Van Buren streets, a few blocks north of the Maxwell Street Market. After his first wife, Donna Levinson, divorced him in 1924 on cruelty charges, he hooked up with Mathilda.
Evans was convicted of a crime only once—storing illegal alcohol—and was known to favor the criminal use of the trained mind over the trained trigger finger. With Humphreys, Evans took over the mob-controlled laundry rackets, cornering the market on sheets and towels dispensed in Chicago's countless hotels and brothels. In November 1940, he was indicted with Humphreys for embezzling the Bartenders Union out of $350,000 (he skated when Humphreys fixed the jury). In 1959, he was implicated in the 1953 kidnapping-murder of six-year-old Bobby Greenlease—Evans was caught purchasing a money order (paid to the Outfit's Lenny Patrick) with marked bills that had been paid out in the botched Greenlease ransom.36
Like Mathilda Evans, Esther Greenberg was performing the same signatory function for her spouse, the notorious Alex Greenberg.37 When he testified under immunity
in Chicago, Greenberg related how he had become enticed into the world of real estate by Manhattan Brewing's former president Arthur C. Lueder, also a former postmaster for the city of Chicago. "Leuder would appraise real estate in bankruptcy proceedings at a low figure," he told a federal grand jury on February 29, 1944. "Several of us would form a pool to buy up these properties, then we took care of him with a share. That was good for one hundred thousand a year for each of us."38
Bit players in the Hayward included Joseph Best, also on the Seneca board with Greenberg, and the president of Hayward Hotel; and Sam Levin, believed by Chicago authorities to have purchased seventy-five jukeboxes from Capone hood Joe Peskin, also known as Sugar Joe Peskin.39 In addition to the Hayward connection, Ziffren and Evans were linked when police found that they were coholders of a liquor license for another hotel owned by the consortium.40
Chicago Crime Commission director Virgil Peterson informed both the Kefauver Committee and the LAPD of the implications: "It is quite likely that the Hotel Hayward may be a mob-owned hotel. In any event, it would appear likely that the stock allegedly held by the wife of Fred Evans is probably actually held by Evans himself."41 In fact, Evans admitted to Congress that he owned 14 percent of the Hayward, brought into the investment by Paul Ziffren's brother-in-law, and Hilton Hotel executive, Joseph Drown. He further testified that he put a 10 percent interest of another hotel, the San Padre in Bakersfield, California, in his children's names. Evans explained that he first met Alex Greenberg during the 1933 Chicago World's Fair, when Greenberg asked him to place Manhattan Brewery ads on popcorn boxes sold at Evans's concession (run with Murray Humphreys). He also informed Congress of three other Chicago properties he co-owned with Greenberg.42
The same year as the Hayward purchase, Ziffren divorced his wife, Phyllis, despite, according to the LAPD, Alex Greenberg's intervention to try to save the marriage. Ziffren continued to invest that year, when he became trustee and executor for lawyer (and Greenberg's Seneca partner) Benjamin Cohen. Together, Ziffren and Cohen held stock in the San Diego Hotel and the Morris Hotel in Los Angeles. But the realization of the notorious Evans's partnership with the notorious Greenberg and the supposedly clean Paul Ziffren inspired an investigation of California real estate transactions that would be passed down to two generations of public and private investigators for the next two and a half decades. It turned out that the Hayward investment was just the beginning of a frenzy of tainted California hotel and real estate purchases. What most disturbed investigators was the appearance of assistance coming from Ziffren's closest friend, David Bazelon, by then a high-ranking member of the Truman administration—who just happened to control millions of dollars' worth of recently seized real estate that was in need of new owners.
*The valley was named after Richard Owens, a member of a U.S. platoon that wiped out the local native population.
CHAPTER 5
The Fulure Is in Real Estale
What we call real estate—the solid ground to build a houseon—is thebroad foundation on which nearly all of the guilt of the world rests.
NATHANIEL HAWTHORNE (1804-1864)
BY THE MIDFORTIES, Paul Ziffren was already a California resident, although for the next six years he remained listed in Chicago as working out of Arvey's office at One North LaSalle, and he still had a listing at 134 N. LaSalle. In Los Angeles, Ziffren represented celebrities with tax problems, such as actor Errol Flynn, who the IRS declared owed $333,000 in back taxes and penalties.1
Picking up on Ziffren's drive and intellect, a West Coast friend asked him, "Why don't you go into politics?" To which Ziffren responded, "I want to make money first."2 And Paul Ziffren knew just how he was going to do it: by joining up with his Supermob pals in a glut of property investments with some of Chicago's most notorious Syndicate financiers.
Not long after his friend Paul Ziffren left the Gottlieb firm for California, David Bazelon followed suit, leaving the practice in 1946 for a position as Attorney General Tom Clark's assistant attorney general, promoted a year later to being in charge of the lands division, giving up a $50,000-a-year private practice for the $10,000-a-year post.3 According to a later congressional probe of Bazelon, the word in Chicago was that the firm was happy to see Bazelon depart "because of their fear that Bazelon's client, [Capone's financial whiz] Arthur Green [sic], might get them into serious trouble."4 At the time of the job change, Bazelon supposedly told one intimate that he was worried about the IRS looking into his work for Alex Greenberg's Canadian Ace Brewing Company, and that he "needed a federal judgeship to get himself cleaned up."5
From his lands division vantage point, Bazelon was well aware of recently seized properties, and real estate that was in tax arrears. Perhaps not coincidentally, pals Bazelon and Ziffren went on a property buying-and-selling spree that appeared to be blessed with the Midas touch. But close scrutiny of these investments gives a telling clue as to how the American underworld discreetly, and successfully, laundered its money in the twentieth century, the massive financial shift occurring soon after World War II.
In 1947, Abe Pritzker and Paul Ziffren (whose college tuition was financed by the Pritzker Foundation) partnered with Assistant Attorney General Bazelon to form the Franklin Investment Company in Ohio. With Ziffren as VP of Franklin Investment, the intent was to invest in debt-ridden hotel properties such as the 650-room Neil House and the 1,000-room Deshler-Wallach Hotel in Columbus. During this period, Franklin controlled virtually all of the first-class hotel rooms in Columbus. One participant in the Franklin deal told the Bureau that Pritzker was a silent partner, through Ziffren, and that "his participation came as a surprise to the other parties in interest."6
David Bazelon owned 25 percent of Franklin, which Abe Pritzker apparently gave him. At a meeting six years later, Pritzker claimed he gave Bazelon the stock because he "was just feeling good and generous and was grateful to Bazelon for things he had done for his son, Jay Pritzker."7 The favors also likely included the original tip that the Deshler and Neil hotels were in deep tax troubles with the federal government, information to which both Bazelon and Ziffren would have been privy. Conflicting records had shown that Bazelon paid $6,200 for the stock, but Pritzker denied this. "Bazelon hadn't paid a penny for his stock in the Franklin Hotel Company," Pritzker insisted. "That stock was given to him."8
The Deshler-Wallach Hotel (from a postcard)
Franklin's taint went beyond the previously noted Pritzker connections; it more importantly swirled around the fourth partner in the enterprise, a close friend of Pritzker's named Arthur Greene, the man who lent Ziffren $11,500 to purchase his shares of Franklin and caused so much concern about Bazelon at Gottlieb and Schwartz.
Investigative author Ovid Demaris referred to "Abe &c Art" as "the most mysterious financiers in Chicago."9 Another Jewish emigre like his pal Abe Pritzker, Arthur Greene was described by the Chicago Crime Commission as "the financier for Jake Guzik of the Capone organization." The CCC went so far as to refer to Greene as "the brains of all the Chicago rackets." Greene headed up a dozen companies, most notably the Domestic Finance Corporation, a small loan corporation. Well-placed informants told the CCC that Greene's Domestic was instrumental in setting up Charlie Gioe's Reddi-Whip underworld partnerships. Greene was also the investment agent for Charles and Rocco Fischetti, and East Coast bosses Meyer Lansky and Abner "Longy" Zwillman. Interestingly, Greene was close to the Roosevelt White House, via FDR's businessman son James Roosevelt.
According to LAPD information, Greene somehow figured in the California expansion of Jules Stein's MCA, through a relative named Edwin Greene, who was an MCA VP. "Abe and Art" were also on the deed of trust of the Ronan Investment Company property at 5050 Pacific Boulevard in Vernon, California, having loaned hundreds of thousands of dollars to the purchase of Ronan, which had at least seven subsidiaries. Ronan had been formed by William Ronan of Chicago, who had been fired from the Civil Service Commission (a post he attained through the offices of Arvey) in 1942
when it was found that he had whitewashed the investigation of four police captains accused of being on the dole of the Syndicate's gambling bosses.10 On July 15, 1957, Greene supplied $173,000 to his Ronan Investment Company to purchase the Davis Warehouse, a property that the county tax assessor's records show to have had an actual value of $2 million.
Greene's stock in Franklin was, per underworld custom, placed in his wife Shirley's name, although the Ohio secretary of state's records show Arthur Greene as secretary of the company. Simultaneously, Pritzker, Ziffren, and Greene formed Lakeshore Management Company, one of whose officers named M. Woolen also held stock in the Seneca Hotel with Alex Louis Greenberg.
