Operation Underworld

by Paddy Kelly

  Meyer Lansky, in his memoirs/autobiography, states he had a chat with Anastasia after he was discharged from the Army and had returned to New York. “I told him face to face he mustn’t burn any more ships. He was sorry. Not sorry because he’d burned the Normandie. Sorry because he couldn’t get at the Navy again. He hated them. ”

  Joachim Joesten, author, along with Sid Feder, of The Lucky Story, the only complete biography of Luciano, was granted an interview in 1953 at the Hotel Turistico in Naples. The question was put to Luciano as to whether or not it was Albert Anastasia, of Murder Inc. fame, who set the fire aboard the Normandie, presumably to dupe the Navy into believing there were saboteurs and using the Mob to protect the waterfront and thus return Lucky’s control of the vast territory. Lucky’s retort, accompanied by a shrug, was, “I guess he got a little carried away.”

  Years before this interview, it was well documented that soldiers, sailors and Marines, when in Naples, sought him out or asked about him, often seeking autographs. Curiously, firemen had a special propensity to meet Lucky and get his signature on a menu or whatever was at hand. Some papers did suggest German saboteurs, which would have been all that Anastasia and Luciano would have needed. Whatever happened, it worked like a charm. Lucky was down-state and out of ‘Siberia’ in less than 48 hours. He did regain control, Albert A. disappeared and J. Edgar got a bloody nose. Once again the New York docks were back in the hands of the Unione.

  Prior to the invasion of Sicily, Luciano also helped with information urging the entire Italian-American community to cooperate with Haffenden’s people. Once again, his efforts were rewarded as organised crime members were installed as mayors and officials across the island country in the wake of the successful Allied invasion. The missing link between the Far Eastern poppy farmers and the American drug importers was established as planned. Salvatore Lucasia, (Lucky Luciano), was deported in 1946 after an extensive, essentially unproductive investigation by the New York State Parole Board concerning his involvement in Operation, or Project, Underworld, a title it was unlikely they even knew. It was out of sheer frustration, due to lack of co-operation by the Navy and the NYCDA’s office with the parole board investigation, that the Board gave Lucky his walking papers. The father of organised crime spent the rest of his life attempting to re-enter the US and made it as far Cuba, where he was asked his blessing to eliminate Benny Siegel, the founder of the Las Vegas empire, for skimming Vegas receipts, primarily from the Flamingo.

  He died in Naples airport awaiting a flight to leave Sicily on January 26th, 1962. He was flown back to New York and interned in St. John’s cemetery with one of the largest funeral processions in New York history. For the remainder of his life, Lucky had harboured nothing but disdain for the poverty of his homeland, and sought to escape it and return to the New World.

  He died trying.

  Historical Background

  “Never ever trust what your government tells you.”

  Bruce Springsteen, Born In The U.S.A. tour, 1984

  As a scientist and historian, it’s sometimes hard to reconcile the concept of fate. To be objective and thus well rounded, you try to see history as a simultaneously occurring series of separate events, on countless different planes, all unfolding in different places at various tempos. But when you come across a single event which took minutes to initiate but would inextricably bind the US Navy, the FBI and the Mafia and eventually tens of thousands of lives for the duration of WWII and then some years after, it’s hard not to lay down the pen, close the texts, pour a drink and go down to the beach to watch the sunset.

  Even more captivating is that the plethora of historical ironies peppering this story were brought together by Albert Anastasia, a man who didn’t finish primary school, possessed barely a modicum of intelligence and whose claim to fame was that he murdered over 500 people as CEO of Murder Incorporated.

  By way of setting the stage for the story, it should be understood that the period between the two world wars saw the birth and growth of several organisations in America, the developments of which initiated a dynamic that would spawn a plethora of major historical events, any one of which would not only supply material for a dozen novels and several films, but are still revealing stories today.

  Three of the most significant of these were the establishment of organised crime, the FBI and Naval Intelligence. They all grew up, went to school and came of age in the late 1920s as separate entities; however, like predators prowling an ever shrinking savanna, their collisions were inevitable.

  As is the case with most great stories, the story of how and why the US Navy came to hire Lucky Luciano and the Unione Siciliano in what was known as Operation Underworld unfolds in a great place, New York City, and involves several central figures aspiring to greatness but only one of which sought notoriety, J. Edgar Hoover.

  As an added attraction, the New York City District Attorney’s office, headed by the infamous Thomas E. Dewey, unwittingly acted as catalyst.

  In February of 1942, one of the key players was in his sixth year of what was essentially two and a half life sentences, convicted of a crime for which the law allowed ten. To exacerbate the situation Salvatore Lucania, ‘Lucky’ Luciano had, by technical legal guidelines, been framed by the testimony of others obtained under, in some cases, the threat of violence and rather thin circumstantial evidence.

  The real life, dramatic irony extends even further when one considers that the man who engineered his trial and had him convicted and imprisoned was the very man whose life Luciano had saved less than a year before, New York DA Thomas Dewey.

  There’s little doubt that Luciano was guilty of multiple violations under the White Slavery Act, (a dramatic term for prostitution), but the entire United States legal machine was not enough to actually catch him with his hand in the till and so, in order not to look too stupid, they had to ‘bend’ their own laws.

  Lucky Luciano was a classic American rags-to-riches success story. He was not only co-founder of the Unione Siciliano, or National Crime Syndicate, or the Commission, as it was known by its members, but he also organised and established what became the International Drug Cartel, built a casino-based empire in Havana and Las Vegas and then, at a council in Cuba, gave the nod to kill the man who built it for him, Ben ‘Buggsy’ Siegal. All of which, with the exception of organising the Unione, he did while in prison or in exile. Not bad for a kid from the slums of a fourth rate town in a third world country.

  As if to show he had a sense of humour, Dewey made sure Luciano’s indictment came at a time when he truly believed himself sufficiently insulated from the law to have any worries. The multiple count indictment was handed down on April Fool’s Day.

  It also came at a time when the position of New York City District Attorney bore no small legacy. The next step up was Governor, after which, if you had a), an adequate popularity quotation and b), adequate financial backing – which was virtually guaranteed if you had a) – the salutations on your mail thereafter would read: Dear Mr. President. All compliments of the New York City-based Tammany Hall leadership. Such was the Yellow Brick Road of the times.

  There can be little doubt about Thomas Dewey’s politically driven actions against the likes of Waxey Gordon, Louie Lepke and Dutch Schultz. After all, if a man wants to be President of the United States, essentially the head lawyer of the country, starting out as a prosecutor is a good place to be. Starting out in New York in the 1930s is a better place and getting the big name gangsters, whatever it takes, is a shoo-in. Almost. Dewey’s political ambitions were assured if he could convict Schultz and just as he was about to pounce, the Dutchman decided enough was enough and set up a hit on DA Dewey, the ‘Gang Buster’.

  Unfortunately for Shultz, Lucky Luciano and Meyer Lansky, founders of the Siciliano Unione, were adamant about the ‘keeping a low profile’ clause in their corporate agreement.

  So, a day before Dutch gave the okay to kill Dewey, Lucky gave the okay to kill Dutch. Schultz was
hit in a New York chop house, eating a steak, and it is widely held that this is where the myth of a condemned man’s last meal, commonly steak, originated.

  Following this hit, in 1936 New York City DA Dewey decided that Luciano, despite having been arrested about twenty-five times and only jailed twice for short periods, was going down regardless of what was required to do it. Bear in mind that Luciano was a hoodlum, but also bear in mind that his statement, “We never killed no one that didn’t deserve it,” is, so far as anyone can determine, true. This includes not only ordering the death of Dutch Schultz but sanctioning the assassination of one of his most ardently loyal followers and supporters, Albert Anastasia, after he needlessly ordered the death of an innocent bakery apprentice for insulting him.

  Like the Unione, Naval Intelligence had recently been dealt its worse blow since its inception, namely Pearl Harbor. It had been only two months since the bombing and, in a long laundry list of parallels with the Twin Towers attack, politicians were asking, “How did we not know this was coming?”, and flinging such helpful suggestions as, “Somebody has to swing!”

  Interestingly, in 2004 documents were released to the news agencies by some historians in Britain showing that as a result of efforts by the British intelligence agencies, code breakers who had cracked the JN code were able to inform Churchill about plans for the attack as early as November of ’41, over a month before it happened. In turn, it was reported Churchill waited two weeks before informing FDR who, American historical documents adequately testify to, never informed the two commanders of the full extent of the probability of the attack. In all likelihood, some speculate, this was motivated by America’s failed economy being mired down for over a decade in the Great Depression.

  The second central player, Lieutenant Commander Haffenden, (coincidentally carrying the same first name as Luciano), appears to have fallen into the Operation Underworld scenario by being in the right place at the right time. As the officer in charge of the ports of New York, he wasn’t really privy to Washington DC’s decisions but by all accounts was certainly the right man for the job. With an outstanding record of past intelligence exploits, a good sense of command and a ‘can do’ attitude, he threw himself into an operation which had little chance of any real success from the start, that is catching German spies. To his credit, he so impressed and maintained the respect of Meyer Lansky, that Lansky not only kept his son away from racketeering but sent him to West Point. Although we are not sure of the extent of Haffenden’s influence, Lansky himself went straight not long after the war.

  Rather than the serious game of spy, counter spy originally envisioned with the inception of Operation Underworld, it turned into more of an expensive game of cops and robbers, mostly without the robbers.

  German war records clearly indicate that generals had no intention of launching any serious attempts at espionage or sabotage in the Continental US and pretty much viewed it as a waste of resources. Records also indicate that the group of twelve German operatives sent over and landed by submarine on the shores of Long Island, were a write-off and seen to be an experiment, forgive the pun, to test the waters.

  In contrast, it wasn’t as bad a time for J. Edgar Hoover’s FBI. Finally, they would be given a chance to show what they could do, as long as it wasn’t going toe to toe with the Commission, which according to them didn’t exist. Their resource allocation was drastically increased, as were their jurisdictional guidelines, and they were going to be allowed to catch spies. Problem was, they had a lot of catching up to do themselves and Hoover fantasised that it fell to him alone to see it done.

  Much like Luciano, Hoover was able to exploit the emergency situation the war created to his advantage; however, he did it by greatly increasing his public persona, while Lucky did it by further receding into the shadows of secrecy. Commander Haffenden saw it strictly as a matter of duty. Interestingly, all three utilised government agencies, large amounts of cash and lots and lots of unwitting civilians.

  Keep in mind that this is only one small part of the historical picture of the time, but it’s a damned interesting one by any standard. There were other organisations with other spheres of influence, and Luciano’s direct influence in America was only from 1931 to 1946. Although he was imprisoned in 1936, this merely caused him to restructure the way he did business. Lt. Cmdr. Haffenden was directly involved for less than a year and Hoover was never really allowed to be involved at all.

  These are but a few of the primary elements contributing to the atmosphere in early February of 1942. After the Armistice, each player left the table, cashed in his chips and went looking for the next game. It’s another story as to who won, who lost or who drew, but for that brief period in the Spring of ’42, the paths of all concerned were unexpectedly and inextricably interwoven into a unified operation: Operation Underworld.

  If you lived through these times, I apologise if the details are not related the way you remember them. If you were not around in 1942, then I apologise for all the characters not wearing trench coats, Fedoras, living in black and white and leaning at Dutch angles. The characters in this story are representative of the Government, Organised Crime, and The People of the times, the three corners of our narrative triangle.

  This story, the story of how the most critical arm of the US Government at the time, Naval Intelligence (whose New York branch curiously seemed to be comprised largely of lawyers), during wartime gave the highest priority to, and actively recruited, the man who established organised crime, (a fact they were likely not sure of but at least strongly suspected), to work for them.

  A man who the left hand of the government, Politics, had, just a few years earlier, enthusiastically touted as their Number One poster child on crime and incarcerated on questionable testimony for a period five times in excess of what the law proscribed.

  Anyone familiar with the upper echelons of US Government shouldn’t have been too surprised by this, I suppose, as any relationship with them is comparable to a bad marriage. What’s mine is mine and what’s yours is mine.

  The waterfront is essentially a fifth character in the story and was the most interesting perspective from which to tell it. It was where I got my first real job in 1967 and the first place I actually watched, (from a safe distance), two men out to kill each other. Thus the incident on the loading dock is true, although reset in ’42.

  The true parts are essentially everything to do with the government characters.

  The incidents concerning the naval officers are all taken from newspaper accounts, such as Admiral Adolphus Andrews’ comments when meeting with the press, and incidents in the briefing room office, and interaction with the New York City District Attorney’s office, which is taken from period documents as well as post-war interviews.

  The business between the New York City DA’s office, the Navy and the prison system is all factual, although, especially in ’45 and ’46, the events surrounding Lucky’s release from prison would make an interesting study in American politics on their own.

  All of the dialogue in the White House is historically accurate, taken from Oval Office transcripts, although the ‘shocking’ discovery of Italian frogmen and mini-submarines, (a notion like jumping out of airplanes with silk sheets strapped to your back was one that the US military leaders initially rejected out of hand and then had to play catch-up with when the Nazis jumped into Crete), did not reach FDR at the same time as Enrico Fermi’s telegram announcing that he had cracked the code of atomic power in Soldier’s Field, Chicago. The incidents were more than a year apart but nevertheless are accurate.

  I could find no documented evidence that FDR knew about Operation Underworld; however, it is hard to imagine that an operation that high up the naval chain of command occurred without his knowledge or consent, particularly when he kept a Navy captain as his official Adjutant, personal advisor and confidant.

  Additionally, much to his credit, FDR was quick to pick up on unconventional approaches to operations suc
h as tactics from the departments of ‘dirty tricks’ of other nations, as evidenced by the response telegram he dictates in Chapter Thirteen, taken from his personal collection at the National Archives.

  The initial contact with Socks Lanza by the DA is accurate, save the actual wording of the conversation that night in the park along the Hudson, and is documented by individuals who had later contact with parties on both sides.

  Although based on real people, Doc, Louie, Nikki and Treasury Agent Johnson, (who, along with the ‘the little black book’, connect the reality of the story with the fictional elements), are fictional. The ‘Little Black Book’, containing the most intimate details of the operation, actually existed but vanished sometime just near the end of, or just after the war, when everybody from Truman to a Department of Corrections’ secretary wanted to know who exactly was involved. It was never traced or found.

  Hoover was never fully briefed about what went on and did chase his tail trying to find out. However, he had already established himself as a collector of information to be used to blackmail or exert leverage on people and so, despite what was said in public, he was never fully trusted in political circles, particularly by those not given to maniacal paranoias based on race, colour, creed or national origin.

  The incident concerning a young JFK being secretly taped in a hotel room making love to Inge Arvad, the Danish journalist, is all true and leaves little doubt about the bad blood that existed between the Kennedys and J. Edgar. One can only wonder how the little cop felt when FDR ordered JFK to be transferred to PT boats in the Pacific, and Kennedy returned home a highly decorated war hero thanks to the PT109 incident.

  This, in conjunction with a second unforeseen event, the death of JFK’s older brother Joseph while on a secret mission to bomb a Nazi U2 base, would put him as the front runner of the Kennedys to move into 1600 Pennsylvania Avenue. Thus the significance of Hoover’s vindictiveness can possibly be seen as helping Kennedy get elected. Speculation will probably linger for generations as to whether or not he helped him out of office.