Joe Stassi—a mafioso from the Lower East Side of Manhattan who would later become an important man in Havana—remembered his first trip to the city in 1928: “Beautiful young whores everywhere, every street corner, every bar. In one club, there were twenty-five girls. You picked the one you wanted to be in a live sex show.”
Booze, gambling, and sex—what more could a Yankee tourist ask for?
To maximize the island’s potential, capitalists circled the wagons: a “pleasure trust” of North American corporations and investors was established, aligned with certain Cuban political interests. The idea from the beginning was that some of the money earmarked for development would be used to “grease” local officials. In later years, this connection between U.S. corporate interests and corrupt local politicians would help to create the moral rot that would inspire a revolution.
The manner in which the pleasure trust would operate was made abundantly clear in January 1927, when popular New York mayor Jimmy Walker steamed into Havana’s harbor to great fanfare. Among other things, the charismatic Walker was known for his tolerant relationship with the underworld. The mayor was first-generation Irish-American, a product of Tammany Hall, the vaunted political organization that was deeply intertwined with bootleggers and racketeers. Philosophically, the Mob was a product of this political-criminal axis, in which gangsters worked hand-in-hand with government officials, business interests, and law enforcement to stroke the underbelly of American capitalism.
In Havana, Walker was feted at a gala that included bank presidents, real estate developers, the president of the Cuban tourist commission, the city’s mayor, and the chief of police. Beau James, as Walker was known to his admirers, attended Oriental Park Racetrack and later dined at the Jockey Club. At a ceremony the following day, he was awarded a key to the city of Havana.
Walker’s appearance in Cuba was more than just ceremonial. It was intended as a symbol that business in Havana would be run on a par with business in New York City, where elaborate speakeasies, illegal gambling parlors, and swanky cabarets were the engine behind a prosperous nightlife, where the city’s high society and mobster elite intermingled to create a glamorous facade.
Meyer Lansky was the first New York mobster to see the island’s full potential. Sometime in 1928, he mentioned to his partner the idea of establishing Havana as more than just a transshipment point for booze. The plan was not yet fully formulated, but gambling, of course, would be part of it. A number of casinos and hotels could be financed, built, and operated by the Mob. And nightclubs and restaurants. And banks and financial institutions, which were great for laundering gambling proceeds. With a friendly government in Cuba, there was no telling what the Mob could accomplish. Perhaps they could one day establish the island as their own private fiefdom, a country into which they could funnel illegal proceeds from criminal rackets around the world, and no one could touch them.
Luciano liked the idea, but he and Lansky had a problem. The New York underworld—and by extension the underworld in most big cities in the United States—was still under the sway of the “Mustache Petes,” the old-style mafiosi with roots in the Old Country. The two main Mafia bosses in New York—Salvatore Maranzano and Giuseppe “Joe the Boss” Masseria—were old-school Sicilians. They didn’t like doing business with Irish-Americans and Jews, much less investing in operations based in a Spanish-speaking foreign country. There was no way a couple of young upstarts like Luciano and Lansky could go against the unione siciliano, or branch off on their own, without serious repercussions.
There was only one answer: the old-timers would have to be removed from the scene.
From 1928 to 1931, Luciano, Lansky, and a multiethnic amalgam of young bootleggers served as provocateurs in a bloody Mob war dubbed the Castellammarese War, after the town of Castellammare del Golfo where Maranzano and so many other mafiosi had been born. One near victim of the war was Luciano himself. On the night of October 17, 1929, he was “taken for a ride” by loyalists of Maranzano. In a warehouse on Staten Island, he was strung up, tortured, and gashed across his right cheek. Luciano was released, but the cut on his face left a nasty scar and resulted in muscle damage that caused a permanent droop to his right eye. It also provided him with a spiffy moniker. When Meyer Lansky came to visit him during his convalescence, Luciano told his friend the story of his abduction and torture, adding, “I guess I’m lucky to be alive.”
“Yeah,” replied Lansky. “That’s you—Lucky Luciano.” The name stuck.
By early 1932, the city’s two old-time Mafia bosses had both been murdered in gangland hits engineered by Luciano and Lansky: Masseria was gunned down while eating pasta at a restaurant in Coney Island, having been lured there by Lucky. Maranzano was stabbed and shot to death in his Manhattan office by four Jewish gangsters disguised as New York City policemen. Beyond the Big Apple, a similar purging had taken place, a violent changing of the guard that would go down in history as the Night of the Sicilian Vespers. Across the land, old-style Sicilian mafiosi were replaced by a younger generation of mostly Italian-American, Jewish, and a few Irish-American mobsters. A new kind of Mob was born, based more on the philosophy of robber barons like Cornelius Vanderbilt, J. P. Morgan, Henry Ford, and the Rockefellers than on rural Mafia societies back in Sicily. Luciano, Lansky, and a few others in New York were seen as the masterminds of this dramatic new direction and were therefore established as prominent members of the Commission, a governing body composed of like-minded Mob leaders from Chicago, Cleveland, Kansas City, Philadelphia, Boston, New Orleans, and just about anywhere else where the American underworld enforced its will.
In the spring of 1933, Lansky came to Luciano with an astounding proposition. He was interested in approaching a possible contact in the Cuban government. He wanted to “buy in” with the Cubans so that the Mob could begin to develop its own gambling infrastructure on the island. The person Lansky had set his sights on was a young military man on the rise in Cuba named Fulgencio Batista.
It is not known if Lansky had actually met Batista at this point or merely designated him as a likely entry point into the volatile, complex world of Cuban politics. Either way, Luciano liked what he heard. The proposition made sense. With Prohibition coming to an end through government repeal, the Mob was looking to diversify and Cuba seemed like a smart move.
The Italian Mob boss convened a meeting of mafiosi at his plush suite at the Waldorf Towers, in the Waldorf-Astoria Hotel on Park Avenue in midtown Manhattan. To a handful of carefully selected regional Mob bosses from around the United States, Luciano explained, “We gotta expand someplace and we need a place to send our dough where it’ll keep making money and also get those guys from Washington off our backs. Meyer’s been down to Havana and he’s made some good contacts. Within a couple months, by August or September, he’s goin’ back again and he’ll probably make a deal. It could cost us a bundle up front, so everybody better get ready to put in at least half a million each.”
Years later, Luciano recalled the reaction to this financial overture on his part:
It was like droppin’ a bomb. Five hundred thousand bucks as an ante for a kitty in 1933 wasn’t peanuts. Chuck Polizzi from Cleveland started screamin’ and that kinda made me laugh. I told him that we was makin’ so much money out of his place in Covington [a Mob-owned gambling casino in Kentucky] that plenty of guys were gettin’ rich off it, so how could he complain about takin’ a piece of income that taxes could never grab, to make even more. I laid it on him pretty damn hard and from then on there was no complaints.
Lansky took over from there. Over the next few weeks, the cash was gathered and placed in suitcases. Lansky made arrangements to fly to Havana with an associate, Joseph “Doc” Stacher, a fellow Jew whom he’d known since the early days on the Lower East Side. Stacher was a street-savvy, cigar-chomping loyalist who had been a close confidant of Lansky’s and a trusted gofer, or errand boy, ever since Meyer first ran crap games on Delancey Street. According to Stacher:
Lansky and I flew to Havana with the money in suitcases and spoke to Batista, who hadn’t quite believed we could raise that kind of money…Lansky took Batista straight back to our hotel, opened the suitcases and pointed at the cash. Batista just stared at the money without saying a word. Then he and Meyer shook hands and Batista left. We had several meetings with him over the next week and I saw that Meyer and Batista understood each other very well. We gave Batista a guarantee of between $3 and $5 million a year, as long as we had a monopoly on the casinos at the Hotel Nacional and everywhere else on the island where we thought tourists would come. On top of that he was promised a cut of our profits.
The Havana operation was now in place, though the timing could not have been worse. By the early 1930s, the effects of the Great Depression had set in and Cuba’s tourism industry was hit hard. The number of visitors going to the island dropped precipitously. During the peak tourism years of 1928–29, foreigners visiting Cuba spent almost twenty-six million dollars. By 1933–34, revenues from tourism had slipped under five million. But more than that, political turmoil was sweeping across the island. Cuba’s brutal strongman dictator, Gerardo Machado—who had ruled the country for eleven years—fled into exile. Violent reprisals against the remaining Machadistas gripped the country. People were kidnapped, tortured, and burned to death in town squares. Bodies were hung from lampposts and dumped on the side of the road. As had sometimes been the case in the past, the island became a tropical netherworld of revenge killings and political repression—not exactly the ideal climate for capitalist expansion.
As if all this weren’t bad enough, the Mob had an even more pressing problem on its home turf. In New York City, an ambitious, aggressive district attorney named Thomas Dewey had designated organized crime as America’s number one social ill. Using methods that had succeeded in bringing down Al Capone in Chicago, Dewey nailed a number of Mob bosses on federal income tax charges. In 1935 Dewey became special prosecutor for the state of New York; it was then that he went after Luciano, indicting him not on a tax charge but on ninety counts of compulsory prostitution.
Luciano made money from a wide assortment of rackets, some of which he ran directly and some from which he merely collected tribute for allowing others to operate. Few people beyond Tom Dewey and others in his office felt that Luciano was directly involved in prostitution. It didn’t really matter. In the years since he had removed the old-time Mustache Petes, Luciano had become a celebrity in the press. He wore expensive suits, hung out on Broadway, and basically rubbed his notoriety in the noses of God-fearing, law-abiding citizens everywhere. He was a mobster boss, and everyone knew it. All Dewey had to do was show that organized prostitution in New York did, in fact, exist and then tie Luciano to it in some cursory way and he would have a guilty verdict.
The trial was a circus, with some sixty prostitutes and madams taking the stand. Luciano smirked and chatted with reporters through much of the trial. When he took the stand to testify in his own defense, Lucky came off as crude, with a surly disregard for the truth. He was shocked when the verdict of guilty on all counts was announced, and even more shocked when, on June 7, 1936, the judge socked him with a sentence of thirty to fifty years, the longest sentence ever given in the United States for compulsory prostitution.
Forever after, Luciano maintained that he was framed on a cooked-up charge. Many observers who knew him—even those who would willingly concede that he was a professional racketeer with vast criminal holdings—swore he was not guilty on the charges for which he was convicted.
Meyer Lansky stayed away from his friend’s trial. The Little Man abhorred publicity. He and Luciano shared an attorney, Moses Polakoff. Through Polakoff, Lansky passed the word to his friend that, from this day forward, he would do everything in his power to get the sentence reduced or the conviction overturned. But Lansky was a professional gambling man; he knew the odds. Getting Luciano’s conviction overturned was the proverbial million-to-one shot.
Luciano was an essential cog in the machine. With Lucky away in jail, Lansky’s dreams of an empire in Havana appeared to be little more than a passing flirtation.
FOR THE AMERICAN UNDERWORLD— and, in particular, members of the New York Syndicate—the incarceration of Charlie Luciano was an inconvenience but not a decisive blow. For the most part, business continued as usual. Even though he was in prison, Lucky was still considered a high-ranking decision-maker and he still received his cut of various rackets. No one was supposed to slack off just because one of the bosses was “away at college.” The person who stepped into Luciano’s role as chairman of the board was Francesco Castiglia, alias Frank Costello, a close boyhood friend of both Luciano and Lansky. It was Costello’s job to oversee the day-to-day operations of the Syndicate and to serve as Luciano’s eyes and ears on the multicity governing body known as the Commission.
In the wake of major Mob prosecutions that had culminated in the stunning conviction of his longtime associate and pal, Meyer Lansky became scarce in and around New York City. He moved upstate and opened a lavish casino in Saratoga Springs, a horse-racing town with a long underworld history. He opened the Colonial Inn and other carpet joints in South Florida. As a partner with Costello, he made a small fortune by monopolizing the jukebox business, especially in the state of Louisiana. At the same time, he partnered with a group of mostly Jewish mobsters from Cleveland known as the Mayfield Road Gang. Together with this group and with his old friend Doc Stacher, Lansky established the Molaska Corporation, a company that ostensibly manufactured powdered molasses for distilling rum. Proving that old habits die hard, the company distilled its own booze to be sold—cheap and untaxed—to Lansky’s old bootlegging outlets around the United States.
Lansky had a lot on his plate. Still, Cuba beckoned. As he said years later, “I couldn’t get that little island out of my mind.”
Sometime in the mid-1930s, Meyer cofounded a new corporation called Cuba National, which extended his partial ownership of the Hotel Nacional in Havana. Lansky, Frank Costello, and a notorious New Jersey Mob boss named Abner “Longy” Zwillman were on the company’s board. Soon after being formed, Cuba National merged with the National Cuba Hotel Corporation, a larger company that would eventually become part of the Hilton Hotel chain. Lansky’s new version of Cuba National was based in Miami, with offices on Flagler Street.
By establishing a business affiliation with Hilton Hotels, Lansky was paving the way for future developments in Cuba. It was the type of long-range thinking for which he would eventually become famous.
In late 1937, during a break in the racing season at Saratoga, Lansky was summoned to the Caribbean by Batista. The man he had singled out as his best bet in Cuba was now firmly in power as head of the Cuban military. Various puppet presidents came and went. With the tourist business on the island in remission during the years of the Depression, both the Gran Casino Nacional and Oriental Park Racetrack had fallen into disrepair. An old gambling contact of Lansky’s named Lou Smith had been contracted to clean up and operate the racing at Oriental Park. At Colonel Batista’s behest, Smith bequeathed the job of managing the track’s two casinos to his friend and benefactor Meyer Lansky.
Lansky had by now become something of an expert on the running of casino operations. He had established a large network of gambling employees—dealers, croupiers, pit bosses, and floor managers—whom he could trust. He imported some of these people to Havana for the tourist season of 1938–39 and again in 1939–40.
Lansky also instituted some reforms and innovations. In 1939, to mark the opening of the renovated racetrack casino, he came up with the idea of presenting gamblers with a “Golden Ticket” to be handed out at a ceremony. Welcomed at a special reception was Colonel Batista, who was bestowed with his own complimentary key to the casino.
For the first time, Lansky stayed and got to know Cuba a bit. He brought his wife, Anne, and two young sons on one trip. He appreciated the country’s old-world Spanish formality and
languid atmosphere, but what he was most impressed by was the degree to which Cuba was ripe for development and open to political corruption. The entire island was there for the taking.
It must have been frustrating: although Lansky was now a gambling operator in Havana, it was not at the level he had once anticipated. He would have liked to initiate the visionary plan that he and Luciano originally discussed, but he was in a tight spot. As a Jew operating within a criminal universe that was highly Mafia-centric, he could not undertake such a grandiose scheme on his own. It required the financial backing and approval of the Commission. Given Lansky’s attachments to the Mob, if he had tried to make an independent move there would most certainly have been violent consequences. Many people would have been shot, stabbed, or clubbed to death. Bodies would have been found in car trunks, sealed in 10-gallon drums, or rolled up in carpets and dumped along the New Jersey Turnpike. Lansky didn’t like violence; in fact, his entire reputation was built on his ability to avoid unnecessary gangland upheavals. Lansky was known to organize and negotiate in such a way that everyone felt they were getting their fair piece of the pie.
His biggest single impediment was having Luciano locked away in upstate New York. Even if Lansky were to get the approval of the Commission, he could not go forward without his friend: the whole idea for the Cuba operation had been hatched by Lansky and Luciano together. And Charlie would never have allowed the plan to go forward without him. He had given in to an affliction common to many incarcerated mobsters: he believed he could somehow manipulate the system and get himself released.
Lansky thought Charlie was delusional. For a time, he had aided an effort to gather evidence that might get Luciano’s conviction overturned, but it had gone nowhere. Privately, Lansky had given up hope and come to believe that Lucky was doomed.
Havana Nocturne Page 3
