Boardwalk Empire: The Birth, High Times, and Corruption of Atlantic City
Page 14
In the same year in which Nucky had orchestrated the election of a governor and U.S. Senator and turned down his party’s state chairmanship, he became a major player in organized crime. Smith Johnson’s son had come a long way from his days as his father’s undersheriff.
Lucky Luciano wasn’t satisfied with the success of the Seven Group. He wanted to extend his network further. Under Meyer Lansky’s tutelage, Luciano encouraged theories and techniques of doing business never before practiced in the world of crime. Luciano promoted the idea of a national convention of the major racket bosses. It took months to make the necessary contacts and establish an agenda, but the selection of the convention site was never in question. Everyone agreed this first underworld conference would be held in Atlantic City. The reasons were simple. Nucky ran the type of town other mobsters envied; his was a wide-open operation, with the rackets immune from the police and courts because Nucky controlled them. In Atlantic City the delegates could come and go as they pleased without attracting attention, knowing their every need would be catered to by Johnson and his people.
The second week in May 1929 was chosen as the date for Luciano’s meeting. It was a memorable event. Long, black limousines carrying mobsters arrived in town from all over the country. Al Capone arrived from Chicago, bringing with him Jake “Greasy Thumb” Guzik; Max “Boo Boo” Hoff, Waxy Gordon, and Nig Rosen came in from Philadelphia; from Cleveland came Moe Dalitz and his partners, Lou Rothkopf and Charles Polizzi; King Solomon drove down from Boston; and Abe Bernstein, leader of the Purple Gang of Detroit who was unable to attend, sent a delegate in his stead. Boss Tom Pendergast of Kansas City likewise sent a surrogate, John Lazia; Longie Zwillman and Willie Moretti represented Long Island and Northern New Jersey. Aside from Nucky, who had his entire organization in town, the largest delegation was from New York City led by Luciano, Meyer Lansky (who was honeymooning at the time), Costello, Lepke, and Dutch Schultz.
The original plans for the convention called for the delegates to stay at the Breakers Hotel. At the time, it was one of the most exclusive hotels along the Boardwalk, and Nucky had reserved suites for his guests. Much to Nucky’s embarrassment, it was a mistake. Because the Breakers was restricted to WASPs only, the reservations were made in Anglo-Saxon aliases. When the front desk staff took one look at Al Capone and Nig Rosen they refused to admit them. Nucky wasn’t present and the manager of the Breakers didn’t know who his guests were. What happened after that is best related by Luciano himself (no doubt, with the help of his biographers):A hurried call to Nucky Johnson, a quick call by him, and then the fleet of limousines pulled out of the Breakers driveway and headed for the President Hotel. Before they arrived, Nucky Johnson, resplendent as usual with a red carnation in his lapel, joined the cavalcade. When Capone spotted him, he brought the parade to a halt in the middle of the street. Nucky and Al had it out right there in the open. Johnson was about a foot taller than Capone and both of ’em had voices like foghorns. I think you could’ve heard them in Philadelphia, and there wasn’t a decent word passed between ’em. Johnson had a rep for four-letter words that wasn’t even invented, and Capone is screamin’ at him that he had made bad arrangements so Nucky picks Al up under one arm and throws him into his car and yells out, “All you fuckers follow me!”
Once the delegates were settled in their rooms, the first order of business was a lavish party hosted by Nucky. There was liquor, food, and women in abundance. For those delegates who had brought their wives or girlfriends, Nucky had presents of fur capes. The party lasted a full day before they got down to serious business. After breakfast in their rooms, the delegates wandered out onto the Boardwalk where they were taken for a ride in rollingchairs. At the undeveloped end of the Boardwalk, the mobsters abandoned their rollingchairs and headed for the beach. Once they reached the sand, they took off their shoes and socks, rolled their pant legs to their knees, and strolled along the water’s edge discussing their business in complete privacy.
All of the decisions involved in the birth of a national network of crime organizations, operating jointly with decisions made by equals at the top, were made out in the open on the sand during those daily walks along the beach. The main topics of the convention were the need to halt senseless warring of one family with another, nonviolent alliances against over-zealous police and their informers, and peaceful cooperation among gangs in the same business in order to minimize competition and maximize profits. The significance of this convention was later detailed by Al Capone:I told them there was business enough to make us all rich and it was time to stop all the killings and look on our business as other men look on theirs, as something to work at and forget when we go home at night. It wasn’t an easy matter for men who had been fighting for years to agree on a peaceful business program. But we finally decided to forget the past and begin all over again—and we drew up a written agreement and each man signed on the dotted line.
Atlantic City was the birthplace of the first nationwide crime syndicate, and Nucky Johnson was the proud host.
Not all of Nucky’s encounters with the mob were as cordial as his relationship with Lucky Luciano. One winter evening in 1932 Nucky was “doing the town” in Manhattan. He was giving one of his usual princely parties in a speakeasy with a showgirl for every one of his guests. Flanked by beautiful women, glutted on rich food, and submerged in champagne, Nucky was having one of the many times of his life when a stranger entered the room and asked to speak with him in private. Nucky thought it was just another person seeking a favor and agreed to step into the next room. The stranger was Tony “The Stinger” Cugino, a hit man from South Philadelphia. The next thing Nucky knew there was a gun in his ribs and he was being whisked away to a dingy tenement in Brooklyn. His lieutenants were notified that he was being held for ransom. Nig Rosen initiated negotiations with Cugino and a ransom of $100,000 was raised and paid within several days, with Nucky released unharmed. There were those who believed Cugino was hired by Rosen so he could pay a phony ransom and win Nucky’s gratitude. Regardless of the true reason behind the kidnapping, Nucky rewarded Rosen by giving him a portion of the Atlantic City numbers operation and granted him permission to operate a gambling casino on Iowa Avenue.
Nucky’s career as a racketeer and politician sheds light on the complexity of his personality and the town he ruled. Conceived and created as a resort, with the sole purpose of dispensing pleasure, Atlantic City and its residents had no qualms about “ripping off” an out-of-towner. The trick was to keep the visitor smiling as he parted with his money. Johnson was the master of this scheme and local residents loved and admired him. Nucky and his cronies were the idealization of what the resort was all about. During his reign, local racketeers attained a status and prestige they could never find in another city. The easy money from corruption created a perverse sense of community morality. Speakeasy owners, gambling room operators, numbers writers, pimps, whores, policemen on the take, and corrupt politicians who elsewhere would be viewed as lowlifes and crooks were respected members of the community. The more successful ones were heroes and role models. This was the foundation of Nucky’s empire: Atlantic City was corrupt to its core.
Photographs from the set of the HBO® Original Series, Boardwalk Empire
Steve Buscemi as Nucky Thompson, based on the real-life Enoch “Nucky” Johnson
Paz de la Huerta as Lucy Danziger, Nucky's sometime girlfriend
Michael Pitt as Nucky's protégé Jimmy Darmody
Stephen Graham as the young Al Capone
Steve Buscemi as Nucky
Kelly Macdonald as Margaret Schroeder, a local woman whom Nucky befriends
Michael K. Williams as Chalky White, the self-styled mayor of Atlantic City's African-American community
Michael Stuhlbarg as Arnold Rothstein
Vincent Piazza as Lucky Luciano
Gretchen Mol as Gillian, a showgirl who is a longtime acquaintance of Nucky's
Anthony Laciura as Nucky's valet Eddie Kes
sler
Steve Buscemi as Nucky
Shea Whigham as Nucky's brother Sheriff Eli Thompson (L) with Steve Buscemi as Nucky and Michael Pitt as Jimmy Darmody
Stephen Graham as Al Capone
Kelly Macdonald as Margaret Schroeder
Aleksa Palladino as Angela Darmody
Michael Stuhlbarg as Arnold Rothstein (L) with Vincent Piazza as Lucky Luciano
Steve Buscemi as Nucky with Dabney Coleman as his mentor Louis “Commodore” Kaestner, based on the real-life Louis Kuehnle
Michael K. Williams as Chalky White
Michael Pitt as Jimmy Darmody (L) with Stephen Graham as Al Capone
Michael Shannon as Federal Agent Van Alden
Kelly Macdonald as Margaret Schroeder
Paz de la Huerta as Lucy Danziger
A party at Babette's nightclub
Michael Pitt and Aleksa Palladino as Jimmy and Angela Darmody
Steve Buscemi as Nucky addressing a meeting of the Women's Temperance League
Vincent Piazza as Lucky Luciano
Executive Producer, Writer, and Series Creator Terence Winter
Executive Producer Martin Scorsese, directing a scene from the pilot episode
Michael Pitt with Terence Winter
Martin Scorsese with Steve Buscemi
Dabney Coleman as Commodore Kaestner
Michael Shannon as Agent Van Alden
Michael Pitt as Jimmy Darmody with Steve Buscemi as Nucky
6
Hard Times for Nucky and His Town
Ralph Weloff and Nucky Johnson entered the lobby of the Ritz Carlton at the same time; Weloff from the street entrance, Johnson from the elevator. Neither expected to see the other. Weloff was on his way to the ninth floor in search of the boss and Johnson was leaving the hotel for his afternoon stroll after breakfast. Nucky had planned to see Weloff later that evening, but Weloff couldn’t wait and came by earlier than usual. Nucky could see he was agitated but took the envelope Weloff handed him without a word. Johnson shushed him while he counted the money; it was the regular weekly payment of $1,200. Then he asked Weloff what was bothering him. Weloff wanted to go up to Nucky’s suite but Johnson told him that whatever it was, it could be discussed in the lobby.
Weloff was irritated and let Nucky know it. He raised his voice several times and Nucky barked right back at him. Anyone within earshot could hear the conversation. Weloff had been sent to see Johnson by the other members of the local numbers syndicate. An independent numbers writer had opened up without the syndicate’s approval and the vice squad had done nothing. Johnson assured him it had to be a mistake. The vice squad members knew their job and kept a list of who was paid up. Johnson asked if he had spoken to Ralph Gold and Weloff said he hadn’t. Johnson told him to see Detective Gold and he would straighten things out. Weloff was relieved and shook hands with Nucky. As they parted, Nucky told Weloff to get back to him if Gold didn’t take care of the matter.
Nucky’s riotous lifestyle and brazen defiance of the law in running his empire should have made him a target for someone’s criminal investigation; however, after 20 years as a major powerbroker he intimidated New Jersey’s criminal justice system. Not since Woodrow Wilson was there anyone to take him on. As far as state government was concerned, Johnson and the resort’s vice industry were above the law. But things changed for Nucky in the 1930s.
The Great Depression brought hard times to Atlantic City as it did for the rest of the nation. Vacations were one of the first things to go when the American economy collapsed. Atlantic City was no longer a national resort. Philadelphia’s working class continued coming, but most were day-trippers, with many visiting solely to gamble. The Boardwalk merchants had to scrounge to survive and scores of long-established businesses went under. Nearly all of the major hotels along the Boardwalk were operating in the red and 10 of the 14 local banks were forced to close, bringing financial ruin to many local investors. Real estate assessments had shrunk to one-third of their 1930 high of $317 million and the tax rate was one of the highest in the state, causing many residents to lose their homes at tax sale. By the end of the ’30s, Atlantic City’s per capita debt was not only the highest for its class of 30,000 to 100,000, but was higher than that of any other city in the country.
The repeal of Prohibition in 1933 made things worse. What was intended as a boost to portions of the nation’s economy deepened the resort’s financial problems. “Losin’ Prohibition really hurt. We lost a lot of our regular customers from Philly.” The end of Prohibition stripped Atlantic City of its competitive advantage in attracting conventions that it had enjoyed for 14 years. But through it all Nucky and the local vice industry prospered.
The contrast of the sickly condition of the resort’s municipal finances and hotel/recreation industry with the vitality of Atlantic City’s rackets became the focal point of criticism by out-of-town newspapers. It was a favorite target of the Hearst newspaper chain, which enjoyed denouncing Atlantic City’s corruption. Newspaper magnate William Randolph Hearst had been a regular visitor during Prohibition and he was every bit the lady’s man Nucky was. Hearst’s steady date during his visits was a showgirl at the Silver Slipper Saloon, a popular local nightclub. Nucky became a little too friendly with her and when Hearst learned of it he made an ugly scene, threatening to destroy Johnson. “A bartender I knew said that Hearst swore he’d get Nucky if it was the last thing he did. Think of it—all that trouble over a broad.”
As revenge, Hearst’s newspapers ran several exposés of corruption in Atlantic City, which portrayed Nucky as a ruthless dictator. Johnson retaliated by banning Hearst’s newspapers from the resort, making an enemy for life. According to intimates of Johnson, Hearst used his influence with the Roosevelt administration to prod the federal government into investigating Nucky’s empire. “Hearst was tight with FDR, and when the Feds came to town everyone knew he was the one behind it.”
In November 1936, agents of the IRS and FBI led by Special Agent William Frank, who was a lawyer, began undercover operations in Atlantic City. Working out of a furnished apartment, the agents began by locating the gambling casinos, horse race betting rooms, numbers headquarters, and brothels. By making bets in the horse rooms and purchasing numbers slips they determined the odds paid. By observing these activities firsthand and speaking with local residents, the agents learned the names of the key figures in Atlantic City’s vice industry.
William Frank and his men found that the resort’s underworld was part of the community and made no effort to conceal its business. “These rackets were absolutely wide open.” The horse rooms were located on the two busiest streets, Atlantic and Pacific avenues, and their doors were open to whomever walked in off the street. The houses of prostitution were known by everyone and there was no pretense of hiding their activities. The numbers game or lottery, based upon results from several horse races, was played everywhere, similar to the prevalence of today’s state-sponsored lottery. “It was difficult to find a store in which numbers weren’t written.” Finally, the agents confirmed that not only did the police department know about these things, it was involved in regulating and protecting them from outside interference. The results of Agent Frank’s preliminary investigation provided Treasury Secretary Robert Morgenthau with justification to launch a full-scale probe of Johnson and his city. The investigation proved to be anything but routine.
Nucky had experience with tax audits from having been audited by the IRS in the past. He developed a practice of managing his money that left behind few footprints. He kept no books or records, maintained no bank or brokerage accounts, and held no assets in his own name—he did everything in cash. Nucky made it impossible for the agents to make a direct investigation of his tax liability. For each of the years preceding the investigation, Nucky had filed timely tax returns and listed his gross income at approximately $36,000. The County Treasurer’s salary accounted for $6,000 and the remainder was described as “other commissions,” for which neither
Nucky, his secretary, nor his accountant would explain the source when questioned under oath. Nucky had created a situation where the government had to prove unreported income in excess of $30,000 per year. By making the entry “commissions,” which was permitted by the tax laws of the time, Nucky was able, should the agents prove a single graft payment, to argue that it was included in the amount reported under commissions.