The Dark Side of Camelot

by Seymour Hersh

  In late January 1946, Cassara was shot in the head, gangland style, in front of a mob-dominated nightspot known as the Trade Winds on Chicago's trendy Rush Street, an area dominated by nightclubs, bars, and restaurants in the infamous East Chicago Avenue police district, where the hoodlum "outfit" exercised near-total control over illegitimate---and legitimate---business activity. Chicago newspapers identified one of Cassara's business partners as Rocco DeStefano, but did not report that DeStefano was a first cousin of Al Capone and Joey Fusco. Nor did the newspapers report that Cassara was an employee of Joe Kennedy's liquor importing business. Cassara survived the bullet wound, the case remained unsolved, and newspaper attention quickly turned elsewhere. Cassara left the liquor distribution business and moved to Los Angeles, where he once again operated as a front man for organized crime families in New York and Chicago.

  Joe Kennedy began negotiating his exit from the liquor business within months of the Cassara shooting. On July 31, 1946, he formally sold Somerset to a New York firm controlled in part by New Jersey gangster Longy Zwillman and his longtime Prohibition partner, Joseph Reinfeld.

  With that sale, Kennedy cut his last known tie to the liquor business. But few businessmen had his understanding of the intricate relationship between politicians, unions, and organized crime in the major American cities after World War II. Joe Kennedy's knowledge and contacts would play a major role in the 1960 presidential election, an election stolen, with the help of organized crime, from Richard Nixon.

  In 1945 Kennedy bought the Merchandise Mart in Chicago, then the world's largest building, located just north of the Chicago River, in the East Chicago Avenue police district, and joined the long list of businessmen making monthly payoffs to stay in business. The Mart was famed for its block-long speakeasy, which swung into operation shortly after the building opened in 1930, with no interference by the local police. "The free lunch was magnificent," New York Times reporter Harrison E. Salisbury recalled in a memoir. "I never knew whether Old Joe owned the bar, but we thought he did and it made someone a lot of money." One of Kennedy's former employees, in interviews for this book, said he knew nothing of a Kennedy involvement in the Merchandise Mart speakeasy, but he did recall that Kennedy maintained ownership, at least into the late 1950s, of two old-fashioned Chicago saloons near the Mart that also were within the jurisdiction of the East Chicago Avenue police district.

  The district was famed for having what senior police officials called "a solid set-up" of corruption. Organized crime controlled the bars, gambling, and prostitution that dominated the area's economics, just as it did in Boston's Fifth Ward. It was understood that any illicit business could operate without disruption, as long as two payoffs were made at the beginning of each month---one to the East Chicago Avenue police and one to the local ward committeeman, who represented Chicago's Democratic political bosses. Journalist Sandy Smith, who in the 1980s became the chief investigative reporter for Time magazine in Washington, was assigned to East Chicago Avenue as a police reporter for the Chicago Tribune in 1946. "The mob was so strong," Smith recalled in an interview for this book. "They had the police department and they had the politicians. If you paid at the beginning of the month, you had a month of immunity."

  Only one FBI document showed a direct link between organized crime figures and Kennedy's liquor importing business, and it was not among the documents on Kennedy routinely released to journalists by the FBI. In this heavily censored document, part of a 1944 survey of "outstanding mobsters and racketeers" in the Miami area, the FBI reported that a gambler named Charlie Block was "the Southern representative of the Somerset Importers from New York City. He [Block] is known to be a big figure in the liquor industry." The FBI document added that Somerset was owned by Joseph Kennedy. Block later operated one of Miami Beach's most popular restaurants, the Park Avenue, in partnership with a professional gambler named Bert "Wingy" Grober, one of Joseph Kennedy's close friends, who was also heavily involved in Mafia-controlled casinos in Las Vegas. Joe Kennedy's love for Las Vegas, with its high life, beautiful women, and easy access to political cash, would be shared by his son Jack.

  Joe Kennedy's decision in 1946 to sell Somerset to Longy Zwillman and Joe Reinfeld and get out of the liquor business has been interpreted by some historians as a result of Jack Kennedy's decision---made with his father's strong encouragement---to run for Congress that year. "He had enjoyed thirteen profitable years," wrote Richard J. Whalen, in The Founding Father, a bestselling 1964 biography of Joseph Kennedy, "but the whiskey trade was vaguely embarrassing and not at all in keeping with the public effect of dignity that Kennedy wished to achieve." And yet Joe Kennedy continued to flaunt his liquor connection after his sons moved to Washington, routinely sending gifts of high-priced scotch to the aides and colleagues of his sons. "Even when Bobby was attorney general," recalled Joseph F. Dolan, a top Kennedy deputy in the early 1960s, in a 1995 interview for this book, "every Christmas one of the black clerks would come around the Justice Department handing out bottles of Haig & Haig Pinch. If you got two bottles, the light shone on you."

  Joe Kennedy's secret world also involved gambling. Harold Clancy, who began working for Kennedy in the late 1950s, recalled in an interview that Kennedy briefly considered buying into the mob-dominated company that manufactured the totalizer systems used by racetracks around the country to compute and transmit betting odds and race results. Kennedy decided against it. In 1943 he did buy 17 percent---a controlling interest---of the Hialeah Race Track in Miami, later selling it at a profit. Just how much and how seriously Kennedy gambled is not clear. His wife, Rose, in her memoir, wrote of visiting the track with her husband "a couple of times a week," adding that she "seldom ventured" from the two-dollar window. Kennedy also was a regular at the roulette tables in Miami Beach casinos during and immediately after World War II.

  Joe Kennedy certainly understood that there was big money to be made from racetracks and gambling. In the mid-1940s he made a strenuous, and secret, effort to buy the Suffolk Downs Race Track near Boston at a fraction of its true value. Kennedy didn't get his way, but his hard-line tactics evoked the postwar tactics of organized crime families seeking to expand into legitimate businesses: threats, payoffs, and judicial corruption.

  Suffolk Downs was the major asset of the Aldred Investment Trust (AIT), a nearly bankrupt Massachusetts firm that was registered with the SEC. During World War II the firm's trustees, in what was later determined to be a "gross abuse of trust," sold off many of its investments in order to buy the racetrack; some of the trustees then appointed themselves highly paid officers of the track. The SEC and an investor successfully sued AIT's management in federal court and forced the appointment of two outside receivers, who were instructed to reorganize or liquidate the trust. After the war, a group of independent investors, who included a financier named Richard Rosenthal, of Stamford, Connecticut, bought stock in AIT but found, to their dismay, that the court-appointed receivers were in the process of selling off the firm's control of Suffolk Downs for slightly more than $1 million---one-tenth the racetrack's value. The buyer, as all involved learned later, was Joe Kennedy, operating in his usual manner. The receivers' "idea of competitive bidding," Rosenthal recalled in an interview for this book, "was to get into a telephone booth with Joe Kennedy. They made a deal and brought it to court. We objected." Rosenthal retained his brother-in-law, the New York attorney Milton S. Gould (later of Shea and Gould), and others, and filed suit in federal court in Boston to stop the sale. "We argued that they [AIT management] had not followed common sense in having a private negotiation. The minimum is that you should have taken bids." What he and his lawyers did not know, Rosenthal added, with a laugh, "was that you couldn't beat Joe Kennedy in the Boston area."

  Gould, who in 1997 was still practicing law in New York, recalled in an interview what happened next. The federal judge hearing the case, George C. Sweeney, who was named to the bench by President Roosevelt in 1935, summoned Gould and his cocounse
l to an afternoon meeting in early 1946 in his chambers with the two AIT receivers, their lawyer, and the regional SEC director. Sweeney had a tough message for Gould and his clients: "You're sticking your nose where you don't belong. This is a local thing and we want local people involved." Gould later concluded that the judge was telling him that the AIT receivers did not want to sell the racetrack "to a bunch of Jews." Gould's cocounsel proposed to write a brief for the judge, summarizing the legal issues involved, to which Sweeney replied: "I don't need a brief. I may be wrong, but I'm never in doubt." Judge Sweeney, who died in 1965, then announced that he would deny the Rosenthal motion to intervene, with this sweetener: he would instruct the AIT receivers to buy back the stock held by Rosenthal and his colleagues for $250,000 more than they had initially paid; he also would grant Gould and his legal colleague a fee of $100,000.

  The Rosenthal-Gould team rejected Judge Sweeney's offer and filed suit in the U.S. Court of Appeals. Competitive bidding for the racetrack was eventually ordered, and Suffolk Downs was sold at auction to a Boston businessman for roughly $10 million. That businessman was not Joe Kennedy or even a proxy. Kennedy lost out, but not before one last, and typical, maneuver. Richard Rosenthal, while struggling unsuccessfully to put together a syndicate to bid on the track, received a telephone call and a visit from Joseph Timilty, the former police commissioner of Boston, who---as Rosenthal did not know at the time---was one of Joe Kennedy's most trusted operatives. "His entrée," recalled Rosenthal, "was that he'd been police commissioner and he could be helpful to me." Rosenthal also did not know that in March 1943, Timilty, then police commissioner, and six of his aides had been indicted by a grand jury in Boston and forced out of office for conspiring "to permit the operation of gaming houses and the registration of bets." The charges against Timilty never came to trial.*

  At their meeting, Rosenthal told me, Timilty raised a disturbing issue: "He said you have to be careful how you handle this. This track is supported by people who drive out to it, and the roads are not in great shape. Suppose somebody decides to start repairing them during the [racetrack] meet. You'd be out of business." Rosenthal responded, simply, that "they wouldn't do that." "I wouldn't be too sure," answered Timilty. It was an obvious threat.

  Rosenthal had few illusions, even then, about Joe Kennedy. In the years immediately before the war, as a young stock analyst in New York, he was assigned the shipbuilding industry. He wrote Kennedy, then chairman of the Maritime Commission, to arrange a face-to-face meeting. The airplane flight from New York to Washington was unforgettable---it was Rosenthal's first. He and Kennedy had "an informative conversation," recalled Rosenthal. "I was two years out of school and brash and young. I had a conviction that we were going to get into war." Kennedy asked whether Rosenthal had looked into a certain company, Todd Shipyards, and volunteered his view: "I think it's one of the best shipyards in the United States." Duly impressed, Rosenthal recommended Todd as a buy in his report. Years later, Rosenthal said, he learned that Kennedy, while chairman of the Maritime Commission, had maintained a large, and secret, personal investment in Todd. The stock was registered in the name of Edward E. Moore, Kennedy's longtime personal secretary.*

  Ironically, Rosenthal maintained his financial interest in AIT and eventually became its sole owner. The firm is still being operated as a private investment company by Rosenthal, now an investor and philanthropist in Stamford. "When I was young," he said, "I thought intellect would win over everything. I honestly didn't believe that things got fixed, or that you could buy judges." He still does not understand, Rosenthal said, why Kennedy wanted the track and was willing to spend "a lot of political currency to get it." The financier shrugged and then offered an answer: "The track was a big cash handle business and he may have wanted it for other business."

  Jack Kennedy once explained to Arthur Schlesinger, as Schlesinger recorded in A Thousand Days, that his father "held up standards for us, and he was very tough when we failed to meet those standards. The toughness was important." Kennedy brought his father's toughness and his history into the presidency, and with them he brought a sense that he, like his father, understood how the world really worked. It was an understanding that the earnest young businessmen, government officials, and academics in the Kennedy administration could never have---and it increased their awe and reverence for the president. Joe Kennedy's street-hardened past became, ironically, further proof of Jack Kennedy's qualifications for the Oval Office.

  * * *

  * Kennedy was accompanied on the high-profile London trip by James Roosevelt, the son of the newly elected president, who had star quality abroad. Kennedy, then forty-five years old, and Roosevelt, just twenty-seven, had become close friends during the 1932 presidential campaign. It was a friendship based on Roosevelt's weaknesses for liquor and women and Kennedy's ability to exploit weakness.

  * Kennedy's recklessness in these years extended, not surprisingly, to his womanizing. Shortly after Prohibition ended in 1933, he began an affair with a Broadway showgirl named Evelyn Crowell, who was the widow of Larry Fay, a notorious and fashionable New York gangster who, at his height of power in the 1920s, maintained a lavish mansion and gave lavish parties in Great Neck, New York. The dapper Fay, who began his career as a bootlegger but soon moved into extortion, became the model for the gangster in the F. Scott Fitzgerald classic The Great Gatsby. Fay was shot to death in 1932. Three years later, Kennedy's affair with Fay's widow made it as a blind item into Walter Winchell's widely read New York Journal-American gossip column: "A top New Dealer's mistress is a mobster's widow." Winchell's longtime assistant, Herman Klurfeld, who wrote most of Winchell's columns for thirty years, said in an interview for this book that Kennedy, who was an expert at dealing with the press, arranged a meeting with Winchell after publication of the item. The two men quickly became friends, Klurfeld said, and Kennedy eventually became one of Winchell's key sources. Although no such evidence exists in the case of Winchell, Kennedy's "friendship" with many journalists---such as Arthur Krock, the revered Washington bureau chief of the New York Times---was predicated on the fact that Kennedy provided them with the equivalent of money: lavish gifts and prepaid vacations and, in the case of Krock, women.

  * Clancy said his job at first was to investigate various real estate properties and businesses for Kennedy, beginning with a Chicago company that was for sale. "I spent a week," Clancy said, before returning to report to Kennedy at his summer home in Hyannis. Kennedy began the meeting by telling his new employee what he was about to report: "For ten minutes he sat there and told me what I was going to tell him. He even had the sequence right. I thought this is the smartest son of a bitch I've ever met."

  * During Prohibition, Zwillman and Reinfeld operated out of Newark what the federal government later determined was the nation's largest bootlegging operation, responsible at its height for as much as 40 percent of illicit liquor sales. Reinfeld, who later changed his name to Renfield, went on after Prohibition to become a successful and legitimate liquor importer; Zwillman committed suicide in 1959, while facing a subpoena from the Senate Permanent Investigations Subcommittee, whose chief counsel was Bobby Kennedy. It was, as we will see, Zwillman and Reinfeld who bought Joseph Kennedy's Somerset Importers in 1946.

  * Kefauver certainly understood the importance of Fusco's testimony. Kefauver's handwritten notes for the day of Fusco's testimony include references to Cassara and his ties to Somerset Importers. The senator, who took notes only on the testimony of key witnesses, filled six pages of his notebook with remarks and comments on Fusco. Kefauver's papers are on file at the University of Tennessee at Knoxville.

  * Timilty and his senior aides in the police department were specifically accused of protecting in the early 1940s the vast gambling syndicate of Harry J. "Doc" Sagansky, the boss of New England's largest numbers racket. At his height, Sagansky, who lived in the Boston suburb of Brookline, employed an estimated three thousand people in his illicit rackets. He also owned numerous ni
ghtclubs and three racetracks, leading the Kefauver Committee to describe him as "perhaps the principal gambling racketeer in the New England area prior to ... his conviction ... in 1943." The committee also reported that Sagansky worked closely with Frank Costello and was in daily telephone communication with him through 1942, when Timilty's alleged protection of the racketeer was at its height. The initial indictment of Timilty was quashed in June 1943, but Timilty was reindicted. The second charge was dropped after a judge in Boston somehow ruled that Timilty only "administered" the police department and did not "enforce the law" or participate in arrests, as specified in the indictment. Timilty's term as police commissioner ended in November 1943.

  * Edward K. Linen of Rye, New York, who retired in 1979 as secretary of Todd Shipyards, confirmed in an interview for this book that Kennedy did hold a "sizable" amount of stock in the firm while serving as chairman of the Maritime Commission. "It was in Eddie Moore's name," Linen said. "I was assistant secretary of Todd at the time and Moore was a trustee for Joe Kennedy. Kennedy's name did not appear" on any document. Asked how he learned about the Moore-Kennedy connection, Linen recalled only that John D. Reilly, who was president of the shipyard in the 1930s, "was a friend of Joe Kennedy's and, at some point, I found out that Eddie Moore was Joe Kennedy." Kennedy's use of Moore to mask his stock purchases was made more insidious by the fact that he seemed to be completely aboveboard in disclosing his stock holdings to the White House and to Congress prior to his Senate confirmation to the Maritime Commission. In a series of March 1937 letters on file at the Roosevelt Library, Kennedy acknowledged that one of the family trusts, over which he had no control, owned 3,300 shares of stock in Todd. He also acknowledged personal ownership of an additional 1,100 shares in Todd, and proposed turning those shares over to his broker for sale within sixty days. In a letter to the Senate, Kennedy forthrightly promised to put the stock "beyond my control ... before taking the oath of office. I think an understanding of these facts will clear my position much more satisfactorily, at least in my own mind." There is no evidence in the Roosevelt documents that Kennedy disclosed the stock he held in the name of Eddie Moore.