The Outfit

by Gus Russo

  Anton Cermak was born in 1875 in Kladno, Bohemia. After his family’s immigration to America, Tony, as he was called, worked his way out of poverty, eventually becoming an Illinois state legislator. To facilitate his chief goal in life (becoming rich), Cermak began building political organizations. While in the statehouse, Cermak assumed leadership of the United Societies, a lobby of saloonkeepers, distillers, and brewers. A Chicago historian described the arrangement: “As leader of an organization which assumed the misleading name of United Societies, Cermak aroused and organized the underworld to enforce its demand for a wide-open town. For a quarter of a century, any politician, whatever his party, who dared to support any measure that would curb the license of those antisocial hordes, was immediately confronted by Cermak, snarling and waving the club of the underworld vote.”

  Simultaneously, Ten Percent Cermak maintained sideline real estate and business insurance operations. Using insider information he acquired in the legislature, Cermak’s real estate business quietly purchased land that the state soon coveted for parkland. Meanwhile, Cermak’s insurance company obtained lucrative contracts from businessmen seeking favors in the statehouse. By the time he was elected mayor, the interest-conflicted Tony Cermak, the son of a poor Chicago policeman, was worth over $7 million. But the king of insider information had even greater ambitions: His sources had told him that Volstead was going to be repealed and the time was right to seize control of the soon-to-be-legal booze and gambling rackets.

  Mayor Cermak understood that Al Capone would never relinquish control of his Syndicate’s speakeasies and gambling joints. Even though Capone himself was on a fast track to prison in 1931, Cermak concluded that the same fierce independence had been inherited by the new Outfit. Thus Cermak struck a fateful alliance with a successful independent bootlegger and gambling czar named Roger Touhy.

  At the time of Cermak’s election, thirty-three-year-old Roger Touhy ran a thriving slot machine and hooch operation out of the suburb of Des Plaines, fifteen miles northwest of Chicago. By 1932, Touhy and his brothers had overrun the Chicago Teamsters organization, which preferred the evil of the Touhys over the evil of Capone. Until his alliance with Cermak and the subsequent battles with the Outfit, Touhy was most notable not only for being the last major Irish bootlegger since the fall of O’Banion, but also for his continued refusal to cave in to the Syndicate. The ingenious Touhy once averted a threatened raise in police bribery fees by purchasing a fleet of Esso gasoline delivery trucks with which to secretly make his booze deliveries.

  Capone had first tried to cajole Touhy into a partnership, but to no avail. Soon, Capone began a campaign of terror, kidnapping and assaulting Touhy’s men. The Teamsters bequeathed the Touhy brothers $75,000 to wage war with the Capones. In responding to Capone’s thuggery, Touhy made a monumental miscalculation: He confronted Capone in a show of bravado, threatening Capone in his own headquarters. Showing up one night at the Four Deuces, Touhy played his hand, telling Capone, “Stay out of my business. I tell you that for every man of mine kidnapped, I’ll kill two of yours.” With that Touhy turned and left. Capone may have been briefly amused by Touhy’s act of lunacy, but in time Touhy would learn that Capone had a thin skin. He never forgot Touhy’s insolence.

  One of Capone’s many efforts to ensnare Touhy came in 1930, while the Big Guy was in the Philadelphia lockup. By telephone, Capone instructed Humphreys to pay a call on Roger “the Terrible” Touhy. Previously, Curly had kidnapped Touhy’s partner, Matt Kolb, prompting a $50,000 payout by Touhy. Now, accompanied by his driver, James “Red” Fawcett, Humphreys dropped in on Touhy at his Schiller Park headquarters. In Touhy’s office, Curly made his best effort to convince Touhy of the mutual benefits of an alliance, suggesting Touhy come to Cicero to form a partnership with Nitti and the Outfit. At one point in the discussion, Touhy was called out of the room to take a phone call from a Capone soldier who owed Touhy a favor. “Don’t go to Cicero, they’re going to kill you,” the informant warned.

  On his return to the office, Touhy declared that Nitti should come to him if he wanted to talk. Curly feigned bravado saying, “You know, Touhy, we can take care of you anytime we want to.” Touhy grabbed an ornamental shotgun off the wall, causing Curly to tremble visibly, much to Fawcett’s surprise. Humiliated, Curly offered Touhy his limousine if he spared his life. Touhy declined the offer, but allowed Curly and Fawcett to crawl back to Cicero. Like Capone, the chagrined Humphreys never forgot his encounter with Touhy and kept a watchful eye for the chance to avenge it. Not long after Cermak’s election, the opportunity would present itself.

  Touhy’s operation stood out as one of the few that had successfully resisted assimilation into the Capone organization, while Mayor Cermak’s putsch manifested itself in a precipitous rise in the number of Capone-linked mobsters killed by cops, ambushed by Cermak’s “special squad.” It was not unnoticed by the Outfit that Touhy’s vast enterprise remained curiously untouched. It was soon learned that Touhy was a longtime friend of Cermak’s, for whom he supplied barrels of beer when Cermak hosted the Cook County Board of Commissioners’ annual picnic. One of Cermak’s most trusted insiders told the Illinois parole board in 1959 that he had witnessed the formation of a Touhy-Cermak alliance. Meeting in Cermak’s office, the mayor offered to help Touhy wage a full-scale war on the Outfit. To insure that Touhy would have sufficient manpower, Cermak offered to put his five-hundred-man police force at Touhy’s disposal. “You can have the entire police department,” Cermak said.

  What had to be more infuriating for the Capone gang was the apparent defection of one of their own to Team Cermak. Teddy Newberry was a gambling-club owner and ward boss from the North Side who had sided with Capone’s Syndicate after the Beer Wars against the O’Banion crew. Such was Big Al’s gratitude that he had lavished on Newberry a diamond-encrusted belt buckle. Newberry became so trusted by the Outfit that he had assisted Curly Humphreys in a protection scam as recently as early 1932. Sometime that year, Cermak apparently made Newberry a better offer, and the triumvirate of Cermak-Touhy-Newberry began plotting a serious assault on Nitti and the Outfit. The assault had a personal impact on Curly Humphreys when his trusted labor adviser George “Red” Barker was gunned down by Touhy’s killers. When word reached the Outfit that Touhy and Newberry were Cermak’s approved gangsters, Curly and the Outfit set about plotting their revenge. All the while, events in Washington would force the gang to diversify its interests; the cash cow of booze was soon to disappear.

  Repeal

  The violence associated with Capone’s regime was the last straw in the fast-growing movement to repeal Volstead. The Great Depression and the gangster era exposed the prohibitionists’ hollow promise that banning alcohol would lead to a prosperous nation. Too late, the nation realized that, in addition to rampant alcoholism, the ill-considered legislation had created powerful gangs. Once again taking the lead, America’s women, shepherded by Pauline Sabin’s Women’s Organization for Prohibition Repeal, pushed for repeal. It was a fitting development, given that women had been largely responsible for the birth of the prohibition movement. With pro-repeal sentiment taking off, the “dry unions” were now greatly outnumbered. Newspaper polls estimated the repealers at 80 percent of the populace.

  By 1931, New York governor and presidential aspirant Franklin Roosevelt had joined the campaign against prohibition, asserting that $300 million could be raised in alcohol taxes to fight the depression that had gripped the country since the October 29, 1929, stock market crash. Furthermore, booze at least provided some comfort during the Depression. For the gangsters, Roosevelt’s potential election, and the possibility of an end to bootlegging, foreboded a massive drop-off in revenue.

  On February 20,1933, Congress passed the Twenty-first Amendment, nullifying the Eighteenth. Ten months later, the needed three-fourths of states had ratified the measure. On December 5, 1933, the bootleggers were officially out of business, at least the booze business. The labor rackets were in full
swing, under the guidance of Curly Humphreys, while Joe Accardo concentrated on gambling. But the profits from these activities would pale in comparison to the riches that awaited the boys in a few short years. In the meantime, the Outfit experienced firsthand what Big Al had often told them: “Nobody’s on the legit.”

  The Outfit’s Political Education

  The Outfit-Touhy counterplots took some time to coalesce, and so by June 1932, a stalemate was in place as the Chicago elite held its breath while welcoming the Democratic national delegation. And although both Curly and Joe advised the Outfit to keep violence to a minimum, there were nonetheless more than thirty gangland murders that year.

  The 1932 Democratic nomination was tightly contested by two New York governors: Franklin Delano Roosevelt (the incumbent) and former four-time governor Al Smith. The Outfit had a front-row seat to the internecine backdoor warfare that chose the candidate. The boys would put this education in politicking to good use in many future presidential contests.

  Accompanying the nation’s party hacks to Chicago were members of the Torrio-Luciano Commission. In his authorized biography, The Last Testament of Lucky Luciano, New York gang chief Charles “Lucky” Luciano recalled how he arrived in town with other mob luminaries, including Meyer Lansky, Longy Zwillman, Moe Dalitz, Phil Kastel, and Frank Costello. The group also included Kansas City machine boss Tom Pendergast, who was sponsoring the ascendancy of future president Harry S Truman. The mobsters were ensconced in six-room suites at the posh Drake Hotel overlooking Lake Michigan. Whereas the delegates were hosted by the local Democratic elite (headed by Mayor Anton Cermak), the gangsters were squired by Ricca, Accardo, Guzik, and the rest of the Outfit. “They supplied all the booze we needed for free,” Lucky remembered. Luciano said that the scene at the convention was similar to that at the Drake: “Liquor was for sale openly to any delegates at stands run by the heirs of Al Capone. In the hospitality suites run by the Outfit, liquor was free to all comers, and it was poured steadily and unstintingly all hours of the day and night. The bar was never closed and the buffet tables were constantly replenished.”

  The nomination proved a dogfight, with a bitter Al Smith leading a vigorous “Stop Roosevelt” faction that succeeded in denying FDR the needed support for the first three ballot votes. Then, as they would in many future presidential contests, the upperworld turned to the underworld for assistance. The candidates’ aides and their sought-after delegates swarmed to the Chicago Stockyards and proceeded to maneuver the powerful ganglords. As Luciano recalled, “We waited until the very last second, and we had Roosevelt and Smith guys comin’ out our ears. They all knew we controlled most of the city’s delegates.”

  While the mobsters procrastinated, Frank Costello held a meeting with Roosevelt’s advisers. Costello’s faction required a concession of their own: As governor, Roosevelt had recently unleashed Judge Samuel Sea-bury on a civic corruption investigation, and the New York “mob delegation” wanted the dogs called off. As Luciano recalled, “When Frank got the word that Roosevelt would live up to his promise to kill the Seabury investigation - I mean like tapering off so he could save face - it was in the bag for him.” The gangsters instructed their delegates to support Roosevelt.

  Luciano was saddled with the task of breaking the news to Al Smith. According to Luciano, Smith, who had long coveted the White House, broke down in tears on hearing the news. When told the details of the deal, Smith warned, “Frank, Roosevelt’ll break his word to you. This is the biggest mistake you ever made in your entire life by trustin’ him. He’ll kill you.” Ignoring the warning, the mob threw their considerable weight behind Roosevelt, who won on the fourth ballot. In the subsequent general election, Roosevelt handily defeated the incumbent Herbert Hoover. Joe Accardo’s wheelman at the time, the young Salvatore “Mooney” Giancana, allegedly told his brother years later that the Outfit financially supported the Roosevelt effort in Chicago, support that would greatly escalate in Roosevelt’s subsequent reelections. “Shit, he got to the White House thanks to Syndicate money,” Giancana supposedly told his brother (in Chuck Giancana’s Double Cross). Luciano was a bit more restrained in his summary, adding, “I don’t say we elected Roosevelt, but we gave him a pretty good push.” Although unproven, Lucky’s and Mooney’s allegations, if true, would help make sense of Outfit-related controversies a decade later.

  Regretfully for the New York mob, the trap predicted by Smith proved accurate: After his inauguration the following year, Roosevelt turned Judge Seabury loose on his investigation. In The Last Testament of Lucky Luciano, Lucky talked of the hard-learned lesson:

  Roosevelt had been a prick all along, but I gotta give him credit for one thing - he was really smooth . . . I always knew that politicians was crooked; that you could buy ’em anytime you wanted and you couldn’t trust ’em around the corner. But I didn’t think it was the same with a guy who was gonna be President. I never knew that muscle could buy its way into the White House. I never knew that a guy who was gonna be President would stick a knife in your back when you wasn’t looking. I never knew his word was no better than lots of racket guys’. But I guess nobody should become President of the United States on the back of a gangster.

  Despite Roosevelt’s alleged betrayal, the Outfit would continue to dabble in presidential politics. Only Luciano’s close Outfit chum, Curly Humphreys, remained the voice of reason in these dealings. Three decades later, he alone would caution against the Outfit’s coddling of bootlegger/robber baron Joe Kennedy and his son Jack. Curly had not forgotten the Roosevelt double cross.

  Although the Democratic convention came and went without incident, Mayor Anton Cermak remained obsessed with ridding the city of the Italian gang element before the spring 1933 opening of the World’s Fair. Local banker Rufus Dawes, brother of former U.S. vice president Charles Dawes, was directing the Chicago-hosted Fair, slated for a May 27,1933, grand opening. Given the Great Depression setting, the Fair’s name, “A Century of Progress,” seemed a contradiction. But the title was meant to illustrate the great strides made by the Windy City since its incorporation one hundred years earlier and had been in the planning stage a year before the stock market’s 1929 Black Tuesday.

  Dawes and Cermak allegedly had nightmare visions of millions of Fair patrons witnessing the sideshow to which Chicagoans had become accustomed: gangland drive-by shootings. Such a spectacle could hardly be expected to lure investment capital - the real purpose of the Fair - into the city. Of course, Cermak’s actual agenda remained the same: to establish his own criminal organization. Thus the anti-Syndicate crackdown continued.

  The Cermak-Outfit war finally entered its climactic phase on December 19, 1932, five months before the Fair’s opening. As the Outfit later learned from its spies, Teddy Newberry met with Cermak “special squad” detective sergeant Harry Lang, paying him the then astronomical sum of $15,000 to dispose of Nitti once and for all. Joined by Patrolmen Harry Miller and Chris Callahan, Lang drove to Nitti’s fifth-floor office at 221 North LaSalle Street, an address provided them by Cermak. The officers encountered six men, including the typically unarmed Frank Nitti. In later testimony, Callahan described what happened next: “We took the six men from the little anteroom into a larger office. We searched them. Nitti had no gun. While I held Nitti by the wrists, Detective Sergeant Lang walked up to Nitti from behind and shot him three times.” He had been hit twice in the back and once in the neck. While falling, a shocked Nitti gasped to Lang, “What’s this for?” Callahan recalled that Lang then returned alone to the anteroom and shot himself in the hand, the better to claim that he had shot Nitti in self-defense.

  With Nitti’s injuries seemingly fatal, a police physician arrived and tended to Lang’s trivial hand wound while the bleeding Nitti lay unconscious. Later, at Jefferson Park Hospital, the gangster regained consciousness long enough to tell his treating surgeon (his son-in-law), Dr. Gaetano Rango, “I didn’t shoot Lang. I didn’t have a gun.” He then slipped back into unconscious
ness. While Nitti appeared to be at death’s door, Lang and Miller were lauded by the City Council, given bonus pay and meritorious service awards. But back at Jefferson Park Hospital, unbeknownst to the self-congratulatory officials, Nitti was making a miraculous recovery.

  When word of Nitti’s condition reached City Hall, Cermak, Lang, Newberry, and Miller were gripped with fear. They knew the Outfit’s retribution would be swift and bloody. Cermak changed addresses, doubled his personal security, and placed guards at the homes of his daughters. According to newsman Jack Lait, the Outfit placed a bomb under Cermak’s car when it was parked in the Loop, but the device malfunctioned. On December 21, Cermak, Lang, and Miller suddenly left town for an extended stay in Florida. The official explanation for the trip was Cermak’s need to recuperate from a bout of dysentery. Many, however, believed that the timing of his illness was far too convenient to be coincidental. Before his departure, a clearly shaken Cermak told a reporter that the Outfit had threatened his life, and so he had bought a bulletproof vest. His parting charge to his troops was “Wage bitter war on the gangsters until they are driven from our city.” Two weeks later, Teddy Newberry’s body was found in a ditch in suburban Indiana. He was still wearing the diamond-studded belt buckle given him by Al Capone years earlier.

  Word of Newberry’s passing terrified the trio of tourists visiting the Sunshine State. Five weeks later, on February 13, 1933, Mayor Cermak attempted to mend fences with now President-elect Roosevelt, who was visiting Florida, and whom Cermak had not supported at the previous summer’s Democratic National Convention. It has been also said that Cermak hoped to persuade Roosevelt to attend opening day of the upcoming World’s Fair. What happened next eerily presaged the assassination of President John F. Kennedy thirty years later: A lone nut fires three shots at a political leader on a Southern-state tour, with rumors spreading of organized crime involvement.