Part 1

Kefauver Committee
Interim Report #3
May 1, 1951

U.S. Senate Special Committee
to Investigate Organized Crime
in Interstate Commerce

1. Organized criminal gangs operating in interstate commerce are firmly entrenched in our large cities in the operation of many different gambling enterprises such as bookmaking, policy, slot machines, as well as in other rackets such as the sale and distribution of narcotics and commercialized prostitution. They are the survivors of the murderous underworld wars of the prohibition era. After the repeal of the prohibition laws, these groups and syndicates shifted their major criminal activities to gambling. However, many of the crime syndicates continued to take an interest in other rackets such as narcotics, prostitution, labor and business racketeering, black marketing, etc.

2. Criminal syndicates in this country make tremendous profits and are due primarily to the ability of such gangs and syndicates to secure monopolies in the illegal operations in which they are engaged. These monopolies are secured by persuasion, intimidation, violence, and murder. The committee found in some cities that law-enforcement officials aided and protected gangsters and racketeers to maintain their monopolistic position in particular rackets. Mobsters who attempted to compete with these entrenched criminal groups found that they and their followers were being subjected to arrest and prosecution while protected gang operations were left untouched.

3. Crime is on a syndicated basis to a substantial extent in many cities. The two major crime syndicates in this country are the Accardo-Guzik-Fischetti syndicate, whose headquarters are Chicago; and the Costello-Adonis-Lansky syndicate based on New York. Evidence of the operations of the Accardo-Guzik-Fischetti syndicate was found by the committee in such places as Chicago, Kansas City, Dallas, Miami, Las Vegas, Nev., and the west coast. Evidence of the Costello-Adonis-Lansky operations was found in New York City, Saratoga, Bergen County, N. J., New Orleans, Miami, Las Vegas, the west coast, and Havana, Cuba. These syndicates, as well as other criminal gangs throughout the country, enter profitable relation-ships with each other. There is also a close personal, financial, and social relationship between top-level mobsters in different areas of the country.

4. There is a sinister criminal organization known as the Mafia operating throughout the country with ties in other nations, in the opinion of the committee. The Mafia is the direct descendant of a criminal organization of the same name originating in the island of Sicily. In this country, the Mafia has also been known as the Black Hand and the Unione Siciliano. The membership of the Mafia today is not confined to persons of Sicilian origin. The Mafia is a loose-knit organization specializing in the sale and distribution of narcotics, the conduct of various gambling enterprises, prostitution, and other rackets based on extortion and violence. The Mafia is the binder which ties together the two major criminal syndicates as well as numerous other criminal groups throughout the country. The power of the Mafia is based on a ruthless enforcement of its edicts and its own law of vengeance, to which have been creditably attributed literally hundreds of murders throughout the country.

5. Despite known arrest records and well-documented criminal reputations, the leading hoodlums in the country remain, for the most part, immune from prosecution and punishment, although underlings of their gangs may, on occasion, be prosecuted and punished. This quasi-immunity of top-level mobsters can be ascribed to what is popularly known as the "fix." The fix is not always the direct payment of money to law-enforcement officials, although the committee has run across considerable evidence of such bribery. The fix may also come about through the acquisition of political power by contributions to political organizations or otherwise, by creating economic ties with apparently respectable and reputable businessmen and lawyers, and by buying public good will through charitable contributions and press relations.

6. Gambling profits are the principal support of big-time racketeering and gangsterism. These profits provide the financial resources whereby ordinary criminals are converted into big-time racketeers, political bosses, pseudo businessmen, and. alleged philanthropists. Thus, the $2 horse bettor and the 5-cent numbers player are not only suckers because they are gambling against hopeless odds, but they also provide the moneys which enable underworld characters to undermine our institutions. The legalization of gambling would not terminate the widespread predatory activities of criminal gangs and syndicates. The history of legalized gambling in Nevada and in other parts of the country gives no assurance that mobsters and racketeers can be converted into responsible businessmen through the simple process of obtaining State and local licenses for their gambling enterprises. Gambling, moreover, historically has been associated with cheating and corruption. The committee has not seen any workable proposal for controlled gambling which would eliminate the gangsters or the corruption.

7. Rapid transmission of racing information and gambling information about other sporting events is indispensable to big-time book-making operations. This information is presently being provided by a monopoly operated by the Continental Press Service. The Continental Press Service, at critical times and in crucial places where monopoly of bookmaking is at stake, yields to the domination and control of the Accardo-Guzik-Fischetti crime syndicate, to which it is beholden for its own monopoly in the wire-service field. The wire service is so vital to large bookmakers that they are compelled to pay what the traffic will bear to the Continental Press Service. This makes it possible for the Accardo-Guzik-Fischetti crime syndicate to participate in the profits of bookmaking-operations throughout the country.

8. The backbone of the wire service which provides gambling information to bookmakers is the leased wires of the Western Union Telegraph Co. This company, in many parts of the country has not been fully cooperative with law-enforcement officials who have been trying to suppress organized criminal rackets which make use of telegraph facilities. By permitting its facilities to be used by book-makers, Western Union has given aid and comfort to those engaged in violation of gambling laws. In some cases, Western Union officials and employees actually participated in bookmaking conspiracies by accepting bets and transmitting them to bookmakers. It should be noted that during the latter months of the committee's investigation, Western Union has taken steps to prevent this practice and has been more cooperative with the committee. In many areas, of which New York is a notable example, the telephone companies have cooperated fully with law-enforcement officials. However, in still other areas, telephone companies have been much less cooperative. Local legislation is apparently necessary in many States to require telephone company officials to refuse facilities and remove existing facilities of suspected bookmakers and to call to the attention of local law-enforcement officials the use of telephone facilities by bookmakers.

9. Crime is largely a local problem. It must be attacked primarily at the local level, with supplementary aid, where appropriate, from State and Federal authorities. The conduct of various forms of gambling enterprises, houses of prostitution, the distribution of narcotics, the use of intimidation, violence, and murder to achieve gang objectives are all violations of State laws. The public must insist upon local and State law-enforcement agencies meeting this challenge, and must not be deceived by the aura of romanticism and respectability, deliberately cultivated by the communities' top mobsters.

10. The Federal Government has the basic responsibility of helping the States and local governments in eliminating the interstate activities and interstate aspects of organized crime, and in facilitating exchange of information with appropriate safeguards between the Federal Government and local and State law-enforcement agencies as well as between law-enforcement agencies in the various States. The task of dealing with organized crime is so great that the public must insist upon the fullest measure of cooperation between law-enforcement agencies at all levels of Government without buck-passing. The committee feels that it has fully demonstrated the need for such cooperation. The time for action has arrived.

11. Wide-open gambling operations and racketeering conditions are supported by out-and-out corruption in many places. The wide-open conditions which were found in these localities can easily be cleaned up by vigorous law enforcement. This has been demonstrated in the past in many different communities and has received added demonstration during the life of our committee. The outstanding example is Saratoga, N. Y., which ran wide-open through the racing season of 1949 but was closed down tight in 1950.

12. Venal public officials have had the effrontery to testify before the committee that they were elected on "liberal" platforms calling for wide-open towns. The committee believes that these officials were put in office by gamblers and with gamblers' money, and that in the few cases where the public was convinced that gambling is good business, this myth was deliberately propagated by the paid publicists of the gambling interests. In many wide-open communities so-called political leaders and law-enforcement officials have staged efforts of civic-minded citizens to combat such wide-open conditions and the crime and corruption that they entailed.

13. The Treasury of the United States has been defrauded of huge sums of money in tax revenues by racketeers and gangsters engaged in organized criminal activities. Huge sums in cash handled by racketeers and gangsters are not reflected in their income tax returns. Income tax returns filed with the Federal Government have been inadequate since, as a rule, they contained no listing of the sources of income nor any itemization of the expenses. Gangsters and racketeers, moreover, do not keep books and records from which it might be possible to check tax returns.

14. Mobsters and racketeers have been assisted by some tax accountants and tax lawyers in defrauding the Government. These accountants and lawyers have prepared and defended income tax returns which they knew to be inadequate. At the very least, those who are guilty of such practices could be convicted of a misdemeanor and sent to jail for a year for every year in which they have failed to comply with the law. The Bureau of Internal Revenue states that it has, to the best of its ability, considering its limited manpower, been investigating these returns. It states further that when it pursues the case of one of these individuals, it prefers to set up against him a case of criminal tax evasion which is a felony, rather than the lesser offense of failing to keep proper books and records, which is a misdemeanor. Despite this, the committee believes that the Bureau of Internal Revenue could, and should, make more frequent use of the sanctions provided for failure to keep proper books and records than it has heretofore. In any event, the Bureau of Internal Revenue should insist on adequate returns and proper books. While the great majority of agents of the Bureau of Internal Revenue are honest and efficient, there have been relatively few instances in different parts of the country of lack of vigorous and effective action to collect income taxes from gangsters and racketeers.

15. A major question of legal ethics has arisen in that there are a number of lawyers in different parts of the country whose relations to organized criminal gangs and individual mobsters pass the line of reasonable representation. Such lawyers become true "mouthpieces" for the mob. In individual cases, they have become integral parts of the criminal conspiracy of their clients.

16. Evidence of the infiltration by organized criminals into legitimate business has been found, particularly in connection with the sale and distribution of liquor, real-estate operations, night clubs, hotels, automobile agencies, restaurants, taverns, cigarette-vending companies, juke-box concerns, laundries, the manufacture of clothing, and the transmission of racing and sport news. In some areas of legitimate activity, the committee has found evidence of the use by gangsters of the same methods of intimidation and violence as are used to secure monopolies in criminal enterprise. Gangster infiltration into business also aggravates the possibility of black markets during a period of national emergency such as we are now experiencing. Racketeers also have used labor unions as fronts to enable them to exploit legitimate businessmen.

17. In some instances legitimate businessmen have aided the interests of the underworld by awarding lucrative contracts to gangsters and mobsters in return for help in handling employees, defeating attempts at organization, and in breaking strikes. And the committee has had testimony showing that unions are used in the aid of racketeers and gangsters, particularly on the New York water front.

The committee has received many recommendations for controlling organized crime and improving the enforcement of the criminal law and the administration of criminal justice. Those recommendations have been received from a variety of sources: from public officials, experts on law enforcement, lawyers, accountants, and interested laymen. They all have been given careful attention.

The committee is convinced that there is no single panacea for the widespread social, economic, and political evils that have been uncovered in the many cities in which it has made investigations and held hearings. The committee feels, nevertheless, that while organized crime cannot be completely eliminated from our society, this is no reason for defeatism, for vigorous law enforcement can control organized crime to the point where it is no longer a menace to our institutions.

Any program for controlling organized crime must take into account the fundamental nature of our governmental system. The enforcement of the criminal law is primarily a State and local responsibility. While channels of interstate communication and interstate commerce may be used by organized criminal gangs and syndicates, their activities are in large measure violations of local criminal statutes. When criminal gangs and syndicates engage in bookmaking operations, operate gambling casinos or slot machines, engage in policy operations, peddle narcotics, operate houses of prostitution, use intimidation or violence to secure monopoly in any area of commercial activity, commit assaults and murder to eliminate competition, they are guilty of violating State laws and it is upon State and local prosecuting agencies, police and courts, that the major responsibility for the detection, apprehension, prosecution, and punishment of offenders rests. The crisis of law enforcement which has been uncovered by the committee is basically a State and a local crisis. The Federal Government does not have responsibility for the widespread gambling and vice conditions it has found in such places as the Miami area; the parishes outside of New Orleans; the Covington-Newport areas of Kentucky; Bergen County, N. J:; several counties in California, Illinois, and Saratoga, N.Y. The responsibility is basically one that must be shared by local and State agencies of law enforcement, as well as by the citizens of the various communities who tolerated such conditions. Nor can a remedy for these conditions be found merely by shrugging off local and State responsibility and declaring that only the Federal Government can do the job of cleaning up wide-open conditions. As J. Edgar Hoover pointed out in his statement to this committee, "The Federal Government can never be a satisfactory substitute for local self-government in the enforcement field." The Federal Government, moreover, can do relatively little to assist local citizens and officials in the removal of local law-enforcement officials who have accepted money from gangsters and racketeers or who have actually participated in criminal operations. The Federal Government can do little about the influence which gangsters and racketeering elements exert upon local political organizations. The Federal Government can do even less about the inefficiency and ineffectiveness of local law-enforcement agencies. Nor can the Federal Government correct the diffusion of responsibility and the "buck passing" which take place between independent law-enforcement agencies operating in the same county or, in the same metropolitan area. Finally, the Federal Government can do nothing to correct the misguided leniency of State and local judges who impose small fines or short jail sentences in racketeering situations. While the Federal police and prosecuting agencies cannot be substituted for State and local law enforcement in dealing with organized crime, the Federal Government still has a major and vital responsibility in this field. The Federal Government must provide leadership and guidance in the struggle against organized crime, for the criminal gangs and syndicates have Nation-wide ramifications. It should establish additional techniques to provide maximum co-ordination in law-enforcement agencies to insure complete efficiency. It must help work out techniques for securing better interstate cooperation in dealing with crime. In addition, the Federal Government is under certain positive obligations to use powers presently available to it against organized criminal gangs. It is the responsibility of the Federal Government to see that the channels of interstate commerce, transportation, communication, and the United States mails are not used to facilitate the operations of organized criminal gangs and syndicates. It is up to the Federal Government to see that gangsters and racketeers are stripped of as much of their ill-gotten gains as possible through vigorous enforcement of the income-tax laws. Only the Federal Government can take affirmative action to rid our shores of alien criminals who have become members of predatory criminal groups. Finally, the Federal Government has the responsibility for revision of existing statutes where legal technicalities are permitting the guilty to escape just punishment. It is with the aforementioned goals in mind that the following recommendations are formulated:

I. The Congress through a continuation of this committee should for a further limited period continue to check on organized crime in inter-state commerce. The basic function of the committee should be to scrutinize the efforts made by the Federal agencies to suppress inter-state criminal operations, and particularly the racket squads described in later recommendations. It will also follow up the legislative recommendations made in this report.

The committee should receive periodic reports from the racket squads recommended to be established in the Justice and Treasury Departments. It should continuously scrutinize the effectiveness of these squads. It should also take steps to facilitate greater cooperation between Federal and State law enforcement agencies. The committee should use its subpena power to hold hearings from time to time concerning crime situations in which there is a great public interest, or which should be called to the attention of the public.

However, it should be clearly understood at the outset that the continued committee should have as its prime function the task of pursuing its legislative inquiries and program and of stimulating law enforcement officials to direct action against criminals rather than the exposition of situations which can only give cumulative support to the now overwhelming evidence that there is a serious organized crime problem which must be met.

II. A racket squad should be organized in the Justice Department.

The function of this racket squad, which might appropriately be placed in the Criminal Division of the Department, must be to clean the country of racketeers, gangsters, and organized criminal gangs by utilizing any lawful means available, including:

(a) Prosecution for Federal crimes;

(b) On-the-spot racket grand jury investigations and inquiries; these, as suggested by the Attorney General, should be held in each judicial district at least once each year;

(c) Gathering and correlating information about gangsters and criminals from all sources, both Federal, State and local;

(d) Stimulating local prosecutions by turning information concerning local criminal situations over to State and local authorities for action. Of course, in such cases proper caution must be exercised to avoid turning information over to corrupt officials or to officials who would use it for political advantages;

(e) Turning information on criminals and gang activities over to specific Federal agencies such as Immigration and Naturalization, Customs and the tax-collecting authorities, for action thereon;

(f) Reporting to this Senate committee and its successor as well as other appropriate committees.

In this connection, it should be observed that the Department of Justice has had such a squad functioning on a limited scale since 1947, under the able direction of Special Assistant Attorney General Max H. Goldschein. The committee urgently recommends that the size of this squad be increased.

III. Appropriate legislation should be enacted to set up an independent Federal Crime Commission in the executive branch of the Government.

This Commission should be appointed by the President with the advice and consent of the Senate. It should be composed of three members, all of whom are prominent citizens and not otherwise members or employees of the Federal Government. It should be organized promptly and be ready to function on September 1, 1951, the date set for the expiration of authority of this committee.

The Commission should hear witnesses and hold hearings from time to time, but should not have the power of subpena. In such cases as the Commission may find it necessary to subpena witnesses, or to hear them under oath, it should apply either to the Senate Committee on Interstate and Foreign Commerce, which by virtue of Senate Resolution 129 succeeds to the functions of this committee, or in the alternative, it may apply to any other appropriate committee of the Congress which has jurisdiction over the subject matter when it deems it desirable to have hearings. The hearings, in such instances, will be held by the appropriate committees.

The functions of the Federal Crime Commission should be--

1. The continuing study and surveillance of operations of interstate criminal organizations throughout the country.

2. Reports on such criminal activities at periodic intervals to the Interstate and Foreign Commerce Committee of the United States Senate.

3. To make recommendations for hearings to the Interstate and Foreign Commerce Committee of the United States Senate or any other appropriate committee in cases in which the Inter-state and Foreign Commerce Committee may not be the most appropriate, for more intensive investigation requiring the testimony of witnesses under oath.

4. The maintenance of liaison between Federal investigative and law-enforcement agencies and crime commissions at the State and local levels with the dissemination to the latter of information respecting criminal operations as may be required in the public interest.

5. Suggestion and encouragement of legislation designed to expedite, facilitate, and encourage better and more intensive law enforcement at all levels of government.

6. The initiation and development of appropriate social study relating to crime, its punishment, and law enforcement.

7. The maintenance of files and records as a national clearing - house of information respecting criminal activities in interstate commerce to be made available, to properly authorized individuals and groups, subject to suitable security measures, but not to conflict with the interests of any presently established Federal, State, or local law enforcement agency.

Recommendation III is concurred in by all members of the committee except Senator Alexander Wiley who, while appreciating some of the advantages which might be achieved under a Federal Crime Commission, believes that the possible abuses of such a new agency require his opposition to the proposal. It is Senator Wiley's contention that the Commission could conceivably result in (a) the basis for a national-type police force which is contrary to America's tradition and which has been vigorously opposed by all outstanding Federal law enforcement agencies; (b) unnecessary harassment and interference with Federal investigative agencies; (c) an unnecessary and costly superstructure imposed upon the present operating agencies; (d) dissipation of the function on the part of the legislative branch. Senator Wiley believes that voluntary cooperation among Federal investigation agencies can achieve most of the objectives which the committee majority believes can only be obtained by a Federal Crime Commission. This is the only point on which Senator Wiley dissents from his agreement with this unanimous report. The committee notes at this point that there has been no previous dissent by any member on any major point of policy.

IV. The establishment of the Special Fraud Squad by the Bureau of Internal Revenue of the Treasury Department is one of the most effective and useful steps taken to collect taxes from the criminal element. The committee applaud the Department for this act and recommends that it be supported with necessary appropriation and that it work in close cooperation with the special racket squad if set up by the Department of Justice as is recommended by the commit-tee. The Bureau of Internal Revenue should maintain on a current and continuing basis a list of known gangsters, racketeers, gambler, and criminals whose income-tax returns should receive special attention by a squad of trained experts. Procedures leading to Prosecution should be streamlined and speeded up.

In our second interim report, we noted that "The Federal Government is being defrauded of many millions of dollars - perhaps running into hundreds of millions - of tax revenues by the mobsters engaged in organized criminal activities" (p. 31); and also that "It is apparent that many, if not all, of the returns submitted for the gamblers and gangsters are fraudulent and that the Government is losing huge sums in tax revenues from the illegal ventures run by them.” (p. 32).

Under these circumstances, it becomes absolutely vital for the Federal Government to enact new legislation and to modify and strengthen existing administrative procedures and regulations so that gangsters, racketeers, gamblers, and other persons engaged in illegitimate enterprises shall be compelled to turn over as much of their ill-gotten gains as possible to the Government in the form of income taxes. Money is the key to power in the underworld. It buys protection for illegitimate enterprises and enables underworld characters to buy up legitimate business and to claim respectability by contributions to worthy causes. The large financial resources at the disposal of criminal gangs and syndicates make such gangs and syndicates a serious menace to our institutions. The Federal Government must make every effort to reach these resources and curb the power of organized crime. Accordingly, we recommend that the Bureau of Internal Revenue should set up and maintain a list of known gamblers, gangsters, racketeers, and other criminals whose income-tax returns must be given special attention. A similar list is already in existence and was submitted to this committee by the Department of Justice. This list should be supplemented by names furnished by all Federal law-enforcement agencies, by the racket squads of the Justice and Treasury Departments, and by names solicited from the leading State and local law enforcement agencies throughout the country. The committee notes with strong approval the notice of the Treasury Department of April 30, that the tax returns of 2,500 leading gangsters are being given special attention by the Bureau of Internal Revenue.

The mere existence of a known criminal list in the Bureau of Internal Revenue is not enough. Special attention must be given to the tax returns submitted by the persons on this list. Thus, their returns cannot be left for examination by routine procedures. The Bureau of Internal Revenue has organized a special racket squad of picked men known as the Special Frauds section whose function would be to subject the tax returns of known criminals to close scrutiny and investigation. These men will be familiar with the accounting methods, techniques, and procedures of the Bureau, and they should also have familiarity with the modus operandi of gangsters, racketeers, gamblers, and other offenders. Since income-tax men are not expected to know the habits and methods of criminals, training for the Bureau of Internal Revenue squad might be arranged with such Federal agencies as the FBI, the Narcotics Bureau, and other law-enforcement agencies of the Government.

It is obvious to anyone familiar with income-tax prosecutions that the procedures presently employed by the Department of Justice and the Bureau of Internal Revenue are entirely too laborious and time consuming. Many complex steps are necessary before an income-tax prosecution is finally decided upon. The committee urges the Bureau of Internal Revenue to make a study with a view to simplifying its procedures in connection with the processing of prosecutions for income-tax frauds. Swift prosecution and punishment are deterrents to crime in the tax field as much as anywhere else.

V. The Bureau of Internal Revenue should enforce the regulations which require taxpayers to keep adequate books and records of income and expenses, against the gamblers, gangsters, and racketeers who are continually flouting them. Violation should be made a felony.

The committee has been continually hampered in the course of its inquiry into the activities of known criminals and their political and official allies, by the failure of these individuals to keep and maintain books and records of their income and expenses. Though they may handle moneys running into hundreds of thousands of dollars, they have not felt it necessary to keep books and records which explain the nature, source, and amount of the moneys they receive, nor the nature and extent of their disbursements. Income-tax returns in most instances merely give gross figures of income and expenses without explanation of the nature of these steps. A typical attitude of gamblers toward the maintenance of records is found in the testimony of one successful gambler who calmly informed the committee that although he kept no records of his gambling activities during the year, he was able to keep a running balance in his head. At the end of the year, he entered the final balance in his return. It is true that the present regulations of the Bureau of Internal Revenue require tax-payers (except wage earners and farmers) to keep such permanent books of account or records as are sufficient to establish the amount of the gross income and the deductions (Regulation 111, see. 2954-1).

While honest businessmen comply with this regulation, hoodlums, venal officials, some politicians with underworld affiliations, do not. Nevertheless, the Bureau of Internal Revenue has not utilized this regulation to its full potentialities. The committee feels that the obligation to keep adequate books and records of account should bind not only honest businessmen but also those who profit from crime. Willful failure to comply with this obligation should subject the offender to prosecution and punishment. At present, such failure is a misdemeanor. The law should be amended to make it a felony. The regulations should also require that these books and records be kept for a sufficiently long period (e. g., 7 years) and not be destroyed as soon as income-tax returns are submitted.

VI. Gambling casinos should be required to maintain daily records of money won and lost to be filed with the Bureau of Internal Revenue. They also should be required to maintain such additional records as shall be prescribed by the Bureau. Officials of the Bureau of Internal Revenue should have access to the premises of gambling casinos and to their books and records at all times. Where the casino is operating illegally, in addition to the aforementioned obligations, the operators of the casino should be required to keep records of all bets and wagers.

The cash returns from gambling casinos are fantastic in amount. There is also, at the present time, no way in which the tax returns filed with the Bureau of Internal Revenue by the proprietors of these casinos can be adequately checked. The committee feels that one way of placing gambling casinos under control is to require them to keep daily returns to be filed with the Bureau of Internal Revenue and maintain prescribed books and records. These returns and the books and records should be checked frequently by visits from responsible revenue officials. Only through some such means can the Government obtain its proper share of the moneys which pass through the hands of proprietors of gambling casinos. In order to maintain even a closer check upon the operations of. the illegal gambling casinos, the committee recommends that such casinos be compelled to keep a record of all wagering and betting transactions which take place within its walls. They should also be subject to the obligation to maintain daily records for the Bureau of Internal Revenue and the obligation to permit inspection of premises and inspection of books and records at all times.

The committee is well aware that these provisions may well put illegal gambling casinos out of business.

VII. The law and the regulations of the Bureau of Internal Revenue should be amended so that no wagering losses, expenses, or disbursements of any kind, including salaries, rent, protection. money, etc., incurred in or as a result of illegal gambling shall be deductible for income-tax purposes.

Under present income-tax law and regulations, criminals and racketeers in computing their incomes for tax purposes are permitted to deduct from their gross incomes the operating expenses and wagering losses of their illegitimate gambling enterprises.

In the opinion of the committee, this is not only incongruous but highly undesirable.

If organized professional gambling is to be stopped by any Federal enactment, this recommendation is best calculated to do so.

Even under present tax law (title 26, sec. 23h) there is some recognition of this principle. Gambling profits are taxable but gambling losses are not deductible when they exceed the winnings. The present law primarily hits the amateur gambler and the little man. The suggested revision would hit the big professional gambler.

VIII. The transmission of gambling information across State lines by telegraph, telephone, radio, television, or other means of communication or communication facility should be regulated so as to outlaw any service devoted to a substantial extent to providing information used in illegal gambling.

Information is vital to large-scale bookmaking operations. The elimination of wire service to bookmakers is therefore of such importance that a practical law must be devised to effect this end. The need is all he more essential because such wire service to bookmakers is now in the hands of Continental Press Service which enjoys an almost complete monopoly of this activity insofar as it exists on a Nation-wide scale. The committee points out elsewhere in this report that the control over the wire service exercised by the Chicago crime syndicate has made it possible for this crime syndicate and others to organize bookmaking operations throughout the country and to participate in their profits.

The need for such suppressive legislation was pointed out by the Senate Committee on Interstate and legislation Commerce in its excellent and well-considered report on the bill to prohibit the transmission of gambling information (S. 3358, 81st Cong.). This conclusion was also reached by the mayors, State attorneys general, and other State and local law-enforcement officials who attended the Attorney General's conference on organized crime in Washington on February 15, 1950, and who adopted the following resolution:

Be it resolved, That this conference go on record as favoring Federal legislation making interstate use of telephone, telegraph, or radio facilities for dissemination of horse-race results for illegal gambling purposes a Federal crime. Such a law would not be designed to prohibit dissemination of sports information through the generally accepted press associations and newspapers.

The committee is now working on a specific bill for the purpose of accomplishing these ends, and at the same time, minimizing disadvantages which may incidentally accrue to those who are engaged in the wholly lawful dissemination of news. To the extent that they may unavoidably cause incidental inconveniences to such persons engaged in wholly lawful operations, the committee desires to suggest and urge that these disadvantages be accepted as inevitable and necessary in order to accomplish a very important public purpose. It is believed that the specific legislation will hold any such disadvantages to an absolute minimum.

In general, the committee has in mind a proposal which would require all persons engaged in the dissemination of any information concerning horse-racing or dog-racing events or betting information on any other sporting event by means of interstate or foreign communication to receive a license solely for these purposes from the Federal Communications Commission.

It is proposed that such licenses shall be freely granted to any applicant unless the Commission establishes that the granting of such application would not be in the public interest; that the applicant is not of good moral character, or that the information will intentionally be disseminated directly or indirectly to any substantial number of persons who would utilize it primarily to facilitate gambling activities or other activities in violation of the laws of the various States.

No one seeking a license shall be able to evade responsibility for the ultimate use of the information provided by him merely because the ultimate user or any number of intermediate subscribers are independent legal entities. If an applicant seeking a license has failed to obtain available information concerning the use to which the information is put, the burden shall be on him to show proper intent. Licenses may be revoked for the same reasons for which they are denied.

Every common carrier or other supplier of information concerning racing and sporting events should be required to maintain a list of its terminal points and drops, both for receiving and sending. The address of such terminal point shall be noted, together with the name of file person or persons operating such terminal facility. Such lists should be open to inspection by appropriate local, State, and Federal law-enforcement agencies.

The committee has given consideration to the added burden which this proposal would place on the Federal Communications Commission. But it feels that this Commission is well equipped to handle the problem, particularly if it is enabled to employ the necessary but small number of additional personnel, and if it receives full cooperation from this committee, from the successor to this committee, from the various executive departments and from the proposed Federal Crime Commission.

The committee has given consideration to proposals that all dissemination of betting information in interstate commerce be declared illegal, but has rejected this proposal at least for the present in the hope that the elimination of racing-wire service primarily for gambling will effect the desired result, with the minimum disruption of legitimate news dissemination activities. The committee has also considered various proposals relating to delay in furnishing information concerning horse and dog races and other sporting events and believes proposals set forth here will accomplish the result without the inconveniences and difficulties attendant upon such alternative proposals.

The committee intends to propose in the legislation to be submitted that the operation of such a wire service without the requisite license suggested shall be made a felony.

IX. The internal revenue laws and regulations should be amended so as to require any person- who has been engaged in an illegitimate business netting in excess of $,500 a year for any of 5 years previously, to file a net-worth statement of all his assets, along with his income-tax returns.

The necessity for a net-worth statement in. connection with checking upon the income-tax returns of persons engaged in criminal activities was clearly stated by Assistant Attorney General Caudle in his statement to the committee:

Cases involving racketeers are difficult to prove. Gamblers and gangsters do not keep books to show their receipt of income. Therefore, it is usually necessary for the Government to rely on their year-by-year increases in net worth and their known expenditures. To make this type proof stick in court we must establish a beginning point from which to figure annual increases in wealth. And because these characters must hide their activities it is always difficult and sometimes impossible to establish a starting net worth which excludes the possibility of other hidden wealth.

In order to facilitate a check upon the income-tax returns of known criminals and racketeers, the committee recommends that they be required to file net-worth statements so that this essential beginning point for investigation will be available to the Government.

X. The transmission of bets or wagers, or the transmission of moneys in, payment of bets or wagers, across State lines by telegraph, telephone, or any other facilities of interstate communication, or the United States mails, should be prohibited.

Large bookmaking operations cannot be carried on without using facilities of interstate commerce and interstate communication. The Ericksons, Carroll-Mooneys, Rosenbaums, Gizzos, S. & G. Syndicates, and the Mickey Cohens all do a considerable lay-off business with each other as well as with other bookmakers throughout the country. All this business is carried on by telephone and telegraph. In addition bets in large volume are also laid off by telephone or telegraph at the tracks, thus depressing pari-mutuel odds and robbing legitimate bettors of their fair shares of the winnings. We have also seen that in the S. J. Rich Co. situation in St. Louis, the facilities of a telegraph company were actually used to receive bets and money from bettors, as well as to pay off bettors.

The Federal Government should not permit interstate communication facilities or the mails to carry on bookmaking and gambling operations. It may be argued that the prohibition of all use of interstate communication facilities or the mails to place bets or send money for wagers will throw an unreasonable burden on Federal law enforcement agencies. Thousands of small bets are made over the telephone to bookmakers. However, the Federal Government should leave the elimination of these transactions to State and local officials. It should concern itself only with the larger bookmaking operations, where the link to organized crime is more clearly apparent.

XI. The prohibition against the transportation of slot machines in interstate commerce should be extended to include other gambling devices which are susceptible of gangster or racketeer control, such as punchboards, roulette wheels, etc.

The passage of the bill to prohibit the interstate transportation of slot machines was a blow to racketeering interests. The underworld has drawn great profits from slot machines for years. In the past, the manufacture of such machines was concentrated in the Chicago area, and the machines were distributed throughout the country. The recent statute makes a crime the transportation of a slot machine into a State where the operation of such machines is illegal. However, slot machines are not the only gambling devices from which gangsters and racketeers draw substantial profits. The lowly punchboard has attained the proportions of a major racketeering enterprise in many sections of the country. The committee has had before it evidence that the sale and distribution of punchboards are pushed by methods similar to those used in connection with slot machines. Since this is so, then, just as slot machines are barred from interstate commerce, so punchboards should likewise be barred. Other gambling devices, such as roulette wheels, might similarly be barred from interstate commerce because they too are used by racketeering interests in illegitimate gambling operations.

XII. The penalties against the illegal sale, distribution, and smuggling of narcotic drugs should be substantially increased.

We have seen that there has been a serious increase in the narcotics traffic, particularly among teen-agers. One of the ways to curb that traffic is through the imposition of severe penalties. Mr. Harry Anslinger, Commissioner of Narcotics, testified before this committee that-

The average prison sentence meted out in the Federal courts is 18 months. Short sentences do not deter. In districts where we get good sentences the traffic does not flourish. * * * Both the League of Nations and the United Nations have recommended more severe sentences as one of the best methods to suppress the traffic.

In many countries that has been very effective.

There should be a minimum sentence for the second offense. The commercialized transaction, the peddler, the smuggler, those who traffic in narcotics, on the second offense if there were a minimum sentence of 5 years without probation or parole, I think it would just about dry up the traffic.

In the light of this testimony, Congress should pass legislation to provide for increased penalties for drug peddlers and others engaged in the commercialized aspects of the drug traffic. Mandatory penalties of imprisonment of at least 5 years should be provided for second offenders. Such legislation is now pending in the House of Representatives where it is receiving the careful consideration of the Committee on Ways and Means.

XIII. The immigration laws should be amended to facilitate deportation of criminal and other undesirable aliens. To this end, the committee recommends the adoption of the legislative proposal heretofore recommended by the Commissioner r of Immigration and contained in section 241 of S. 716 (82d Cong.), now pending before the Senate Judiciary Committee.

Some of the criminals who occupy key positions in criminal gangs and syndicates are alien-born. Some came into this country illegally. Some have never been naturalized. Others obtained naturalization certificates by concealing their criminal activities.

XIV. The Immigration Act of February 5, 1917, should be amended to provide punishment for smuggling, concealing, or harboring aliens not entitled by law to enter or reside in the United States.

Legislation to this effect has been proposed by the Department of Justice and is endorsed by the committee. This legislation (H. R. 2793) is intended to overcome the decision of the United States Supreme Court in the case of U.S. v. Evans (333 U. S. 483) which is authority for the statement that there is no provision of law under which a person may be punished for committing any of the acts mentioned.

XV. The Attorney General should be authorized to revoke suspensions of deportation and to make such revocation ground for the cancellation of certificates of naturalization - toted aliens who have succeeded in getting their immigration status recognized but who are later found to be ineligible for such relief.

A bill to make this proposal effective is also pending with the House Committee on the Judiciary (H. R. 2258) and is endorsed by the committee and recommended for passage.

XVI. The personnel of Federal law-enforcement agencies should be materially increased. Consideration should be given to eliminating inequities in the salaries of law-enforcement officers, many of whom are woefully underpaid for the duties they perform and the risks they undertake.

In its interim report, the committee drew attention to the fact that Federal law-enforcement agencies were seriously undermanned, and recommended that increased appropriations be granted to such agencies. This action becomes particularly necessary because of the new duties which are thrust upon these agencies in connection with the struggle against organized crime.

One of our most important law-enforcement agencies, the Bureau of Narcotics, operates today with an appropriation which is the same as or even less than appropriations granted it 20 years ago. The Bureau has only about 180 agents to cover the entire country at a time when narcotics violations are on the increase. The Bureau of Internal Revenue, as of May 31, 1950, had a total of 3,416 suspected tax-fraud cases either under or scheduled for investigation, with a total backlog of 9,110 cases under consideration. Many of these cases involve gangsters and racketeers. The size of the staff seriously limits the Bureau in following up and prosecuting these cases. The United States Secret Service, which investigates counterfeiting and forgery cases, is way behind in its case load, with but 18 agents in its New York office to handle a backlog of over 3,000 cases.

Similar circumstances confront the Federal Bureau of Investigation, which is now called upon to perform much of the investigative work associated with the Nation's internal security. This phase of its work, all-important as it is, should not be permitted to impair the crime-investigative aspects of the Bureau's functions through lack of manpower.

Under these circumstances the committee therefore recommends that investigative and enforcement staffs of the Government's law-enforcement should be materially increased. This is particularly vital in connection with the Bureau of Narcotics. Consideration should also be given by the appropriate committees of Congress to increasing the pay of Federal law-enforcement agents to a point which will be commensurate with their responsibilities.

It should be borne in mind that higher salaries for persons engaged in law enforcement will not necessarily result in a drain on the Treasury. Better law enforcement will bring increased revenues to the Government through collection of taxes which are undoubtedly now being avoided by the underworld.

Spending of more money to compensate enforcement employees adequately will mean that reduced tribute will be paid to racketeers and gangsters by persons who unknowingly depend on gangster-infiltrated businesses for the purchase of commodities or services in their own communities. It is indeed a fact, well established by testimony before this committee, that where crime has enabled the gangster to infiltrate into legitimate business the average consumer has to pay increased costs, as witness the water-front rackets, through which millions of dollars in tribute are exacted by the racketeer - all of which ultimately comes out of the pocket of the consumer.

XVII. The existing Federal law with respect to perjury should be tightened; the committee endorses H. R. 2280 (82d Cong.) and recommends its passage.

Under existing Federal law, a person may not be convicted of perjury for making contradictory statements under oath unless the indictment charges and the prosecution proves which of the statements is false. Under the rules of proof in perjury cases, for a conviction to be had, the falsity of the statement made under oath must be established by the testimony of two independent witnesses or by one witness and corroborating circumstances.

The committee favors a revision of the law to provide that perjury shall consist of giving under oath or affirmation, within a period of 3 years, willful contradictory statements on a material matter, either in proceedings before a grand jury or during the trial of a case; and such perjury could be established by proof of the willful giving or making of such contradictory statements without proving which one is false. The Attorney General has vigorously recommended this bill.

XVIII. The Attorney General of the United States should be given authority to grant immunity from prosecution to witnesses whose testimony may be essential to an inquiry conducted by a grand jury, or in the course of a trial or of a congressional investigation.

The fifth amendment to the Constitution provides that no person "shall be compelled in any criminal case to be a witness against himself." The courts have construed this to mean that a person may remain silent if it appears that a criminal charge, however remote, may be made against him on account of any matters concerning which he is questioned.

In the light of the history of the constitutional provision, it is clear that the granting of immunity from prosecution would present a means of obtaining needed testimony from one who might otherwise hide behind the constitutional protection against self-incrimination. If any witness, benefited by immunity, refused to testify, he could then be punished for contempt; or if he committed perjury in his testimony he could be convicted and punished. This power should, of course, be exercised only with the greatest caution, and only upon the written permission of the Attorney General after he has cleared the granting of immunity with other Federal agencies which might have an interest in the matter.

XIX. The committee favors the passage of legislation providing for constructive service by publication or otherwise upon a witness whose testimony is desired who evades personal service upon him.

Because of its experience with recalcitrant witnesses who evaded service of subpenas willfully and with obvious intent to hinder and delay the committee's investigation, the committee believes that legislation is necessary to compel the presence of evasive witnesses; hence the foregoing recommendation.

This would give congressional committees the same right to perfect service of subpenas upon witnesses as is now provided for in the Federal code for the appearance of witnesses required to appear before Federal courts.

Once construction service has been obtained, the witness would be subjected to punishment for contempt as contrasted with the present situation where the witness may be arrested and held for appearance but not punished for contempt.

XX. The committee favors passage of the legislation, recommended by the Alcohol Tax Unit of the Treasury Department to prevent racketeering elements from entering the liquor industry and to eliminate any now in it. The committee also favors passage of legislation which will extend the same Federal protection to local option States as is now extended to the wholly dry States against the illicit transportation of liquor into the dry areas.

With respect to the question of racketeering elements in the distribution of liquor there are now pending in the Congress bills S. 22 and H. R. 137, which were introduced by Senator McCarran and Congressman King and which heretofore have in previous sessions been sponsored by them and other Members of Congress. The bills as they now stand require the annual renewal of basic permits to the liquor industry. The committee is of the opinion that annual renewal may impose too much of a burden upon the industry and the Alcohol Tax Unit, and the committee recommends that the proposed requirement be relaxed to the extent of requiring renewal biennially. The Committee is also well aware of objections to the bill by the whole-sale end of the liquor industry, which has made the point that such a bill would seriously impair the industry's ability to obtain credit. However, the committee believes that the problem of racketeering elements in the liquor industry is sufficiently serious to justify the passage of the basic permit sections of this legislation with the change noted above, and the committee is also of the opinion that the industry is overfearful of the effect it will have upon its ability to obtain credit.

In recommending to the committee the passage of this bill, the Alcohol Tax Unit, through its representatives, has pointed out that .many of the racketeering elements now in the industry are blanketed under the original post-repeal legislation with the result that the only effective means of eliminating them would be such new legislation.

The committee does believe that the licenses of some individuals might be revoked on a positive determination that they are not persons of good moral character who would hold licenses against the public's interest. However, the committee is aware of the practical problem involved and therefore feels that the Alcohol Tax Unit must receive the support of the Congress if it is to perform its functions effectively. The committee takes no position on features of this legislation other than the ones specified above.

The bootlegging of liquor into dry and local option States has become a very serious problem because of the great volume of such illicit traffic. Many racketeers with connections in other illegal activities are engaged in this traffic. It has proven extremely lucrative, and is a substantial source of income to organized criminals. Moreover, it is a very vicious influence in the States affected. To cope with this evil the committee is recommending that the Bureau of Internal Revenue take steps to require better identification of applicants for special tax stamps required of retail and wholesale liquor dealers.

While this will aid local law enforcement officers identifying the traffickers in illicit liquor, it does not provide a complete solution to the problem. Accordingly, the committee recommends the adoption of the bill introduced by Congressman Camp, House bill 1278, which would extend the same Federal protection to local option States as is now extended under Federal law to the wholly dry States.

Under this amendment the local option States would still be able to control the local traffic within their borders and to determine whether or not they want Federal assistance in preventing illicit shipments of liquor into dry areas. Even the Camp bill would not bring a complete solution to the problem. However, with additional enforcement personnel, plus a vigorous effort to identify all applicants for special tax stamps, it is believed that much can be accomplished. It is true that the cost of investigation of applicants for special tax stamps cannot be paid out of the $27.50 fee, but the public policy question involved is so great that this should not be too serious a consideration.

XXI. The committee recommends that the present Federal regulation and application forms which require a listing of individual owners, partners, and holders of Alcohol Tax Unit permits, be amended, so that, in addition to the present requirements, the names of all beneficial owners will be stated: also that the application forms require the disclosure of all previous arrests and convictions. A report should be fled with the Alcohol Tax Unit of every change in such interests or in management as such, occurs.

On November 8, 1950, the committee called an advisory meeting of the liquor and beverage industry, representatives of the Alcohol Tax Unit, and others interested to meet with the committee. An advisory committee was formed of which Carroll E. Mealey, Deputy Commissioner, Alcohol Tax Unit, was named as chairman. This committee made an extended study of the problems of the industry with particular reference to weeding out racketeers and other undesirable elements. The representatives of the industry and the Commissioner did not come to an agreement on all pertinent matters under discussion. However, the industry and the Alcohol Tax Unit agreed that the foregoing recommendation would be one beneficial in preventing infiltration by racketeers into the industry, particularly at the wholesale level. They joined in this recommendation and it is highly recommended by the committee.

XXII. The committee recommends that the Interstate Commerce Commission be required by law to consider the moral fitness of applications for certificates of necessity and convenience as one of the standards in acting upon applications for such certificates or transfers of certificates.

The transportation industry, including interstate transit systems, is especially vital to the economy and security of the Nation. The committee does not by this recommendation imply that there has been a substantial infiltration by racketeers into the industry. There have, however, been some incursions, and in view of the fact that the economy of the country depends upon a competitive and completely gangster-free management of this vital segment of business, the committee feels that every means should be used to weed out the criminals and prevent them from obtaining a further foothold.

In the section of this report dealing with racketeer infiltration of legitimate business, the committee has noted the intrusion of persons into the industry who could not be expected to have the public interest in mind. Situations in New Jersey and Michigan which have been investigated by the committee show the necessity for this recommendation. There are indications that possible competitors are fearful of filing applications for competitive permits where the territory is being served by a gangster-permeated company.

The statute and regulations should require a listing under oath of officers, directors, and principal stockholders of companies and corporations making application for permits. The committee aware of the difficulties in enforcement, but believes that the public interest necessitates such action.

The committee is giving further consideration to and expects in a later report to deal with the problem of revocation of existing permits where it has been shown to the Interstate Commerce Commission that the holders of such permits do not have the requisite moral fitness.

Where the foregoing recommendations call for new legislation, it will be drafted and submitted to the Senate by members of the committee at the earliest possible time.

The Special Senate Committee To Investigate Organized Crime in Interstate Commerce had its genesis in Senate Resolution 202, which was submitted on January 5, 1950, by Senator Estes Kefauver, Democrat, Tennessee, who subsequently became chairman of the committee. The resolution was referred to the Committee on the Judiciary, and upon being reported by the chairman of that committee on February 27, 1950, was referred to the Committee on Rules and Administration.

It was reported out of the Rules Committee on March 23, 1950, and on May 3, 1950, was considered and agreed to by the Senate.

A week later the President of the Senate appointed a committee consisting of the author of the resolution, Senator Kefauver, Senator Herbert R. O'Conor, Democrat, Maryland; Senator Lester C. Hunt, Democrat, Wyoming; Senator Alexander Wiley, Republican, Wisconsin, and Senator Charles W. Tobey, Republican, New Hampshire.

The function of the committee was to make a full and complete study and investigation to determine whether organized crime utilizes the facilities of interstate commerce or whether it operates otherwise through the avenues of interstate commerce to promote any transactions which violate Federal law or the law of the State in which such transactions might occur.

The committee was also charged with an investigation of the manner and extent of such criminal operations if it found these actually to be taking place and with the identification of the persons, firms, or corporations involved.

A third responsibility which was charged to the committee was the determination as to whether such interstate criminal operations were developing corrupting influences in violation of the Federal law or the laws of any State. For purposes of the resolution there was included in the area to be covered the District of Columbia, the respective Territories, and all possessions of the United States.

The committee was originally intended by resolution to submit a report to the Senate not later than February 28, 1951, as to its findings with such recommendations as might be deemed advisable. The authority conferred by the resolution was to have terminated on March 31, 1951, but both dates were extended, the date for the report to May 1, 1951, and the date for the committee's expiration to September 1, 1951.

The committee held hearings in pursuance of its charge in 14 cities. They included Washington, D.C.; Tampa, Fla.; Miami, Fla.; New York City; Cleveland, Ohio; St. Louis, Mo.; Kansas City, Mo.; New Orleans, La.; Chicago, Ill.; Detroit, Mich.; Philadelphia, Pa.; Las Vegas, Nev.; Los Angeles, Calif., and San Francisco, Calif.

In all, it heard testimony from more than 600 witnesses. Many of these were high officials of the Federal, State, and city governments in various areas visited by the committee. The record of testimony covers thousands of pages of printed matter and constitutes one of the most valuable documents of its kind ever assembled. This record has for the most part been put into print and has been made available to law enforcement officials and public authorities all over the country for their guidance and information. The balance of the record is being printed for publication, and with the extension of the life of the committee, will also be sent to parties in interest upon completion.

At the outset of its report, the committee desires to acknowledge with its deepest appreciation the immense cooperation it has received from countless sources in the execution of its commission.

The vast record it has compiled from testimony taken in 14 cities, which presented facts relative to conditions in most of the States of the Union, amply bespeaks the immensity and complexity of the task. The task has been performed within a short space of time, with a limited personnel which, although small in number, was able and zealous. The committee operated under a modest budget, considering the enormity of the assignment.

Not only was this cooperation most helpful but it was stimulating and encouraging because it indicated unquestionably to the committee and its staff that the people of the Nation, and particularly in those cities visited by the committee, were awakening to the menace of organized crime and were looking to this committee for guidance in an effort to cope with the problem.

From the very first day of its organization the committee received communications from individuals and organizations throughout the Nation offering information for investigation and, where this was not available, tendering moral support for the committee's undertaking.

This tide of communications, which started as a modest flow, swelled into a veritable flood as the committee's activities approached a crescendo in its New York hearings. The thousands of letters and telegrams directed to the committee were augmented by similar thou-sands addressed to individual Senators and Representatives.

Again, the tenor of these communications was most heartening to the committee and its staff and although an attempt has been made by the committee to acknowledge receipt of these letters and telegrams, a word of thanks to the senders is herewith expressed.

To catalog the individuals, organizations; local, State and Federal agencies to which the committee is indebted for valuable assistance is virtually impossible.

Many public-spirited citizens gave liberally of their time and knowledge of local and national criminal operations to provide information to the committee and in numerous cases to appear as witnesses before it. It is significant of the high civic-mindedness that prompted the appearance of many individuals before this committee that a great many waived their rights to witness fees and reimbursement for travel expense. The committee also commends the numerous witnesses who, at personal risk of gangland retribution, testified in open or executive sessions.

One of the greatest aids in ferreting out the activities of the underworld was provided to the committee by the President of the United States, in his Executive order making available not only pertinent income-tax returns of individuals under investigation as interstate criminals or having associations with such individuals, but calling on the respective Government departments and bureaus to make available to this committee their files and knowledge. It must be apparent that the President's order was most effective and was probably the greatest single weapon at the committee's disposal. Particularly, because of the trust in the committee implied by the President in his order, the committee has attempted to use its power impartially and judicially and has tried scrupulously at all times to protect and guard the rights of all persons involved.

The vast files and limitless experience of the various Federal enforcement and investigative agencies proved fertile sources for many phases of this committee's inquiry. Among the agencies in this group whose cooperation was of great help should be named the Department of Justice, including the Federal Bureau of Investigation, the Immigration and Naturalization Service; the Attorney General, his assistants and United States attorneys; the Treasury Department, including the Bureau of Internal Revenue, the Customs Bureau, the Alcohol Tax Unit, the Secret Service, and particularly the Bureau of Narcotics, the Post Office Department and such other agencies the committee called on for assistance.

In naming the various Government agencies mention should also be made of the contribution to the committee's investigation by Hon. James V. Bennett, Director of United States Prisons.

Most encouraging and helpful to the work of the committee in its travels around the country was the volunteered cooperation of countless numbers of individuals who offered to make themselves available for any service the committee desired.

To these public-spirited citizens, the committee acknowledges their assistance with deep appreciation.

Outstanding in the ranks of those whose volunteer efforts added inestimably to the committee's successful operation was Mr. Julius N. Cahn, executive assistant to Senator Alexander Wiley of Wisconsin, a member of the committee. Mr. Cahn's innumerable helpful suggestions were always welcome. Through the kind cooperation of Senator Wiley, his assistant attended many sessions of the committee both in Washington and in the field and thus became very familiar with the background and detailed activities of the group. Mr. Cahn was, therefore, in an excellent position to help with sound advice in formulating decisions in the public interest as situations arose. The committee therefore takes this occasion to voice its thanks to him.

Also of great assistance in many varied ways during this inquiry were Mr. A. J. Bourbon, administrative assistant to Senator Herbert R. O'Conor, of Maryland, and Mr. Charles Neese, administrative assistant to Senator Kefauver, the Chairman. To both these gentlemen go the committee's thanks.

The staffs of other members of the committee were also called upon in many instances and always responded eagerly. George Green, of the Senate Judiciary Committee, and Mrs. Vivian Lynn, formerly of the Senate District of Columbia Committee, have materially aided the committee.

An expression of appreciation should be recorded for the cooperation and assistance of the Commission on Organized Crime of the American Bar Association, of which former Secretary of War Robert P. Patterson is chairman.

All members of the Commission actively participated in the program. Through them, the American Bar has rendered a tremendous service to the committee. The Commission members included: Walter P. Armstrong, Jr., Memphis, Tenn.; Howard L. Barkdull, Cleveland, Ohio; Arthur J. Freund, St: Louis, Mo.; Phillip S. Habermann, Madison, Wis.; Laurance M. Hyde, Jefferson City, Mo.; and Chief Judge Bolitha J. Laws, Washington, D.C.

On several occasions it has made available the talent and wide experience of Judge Morris Ploscowe, of New York City, executive director of the Commission, who has been of outstanding service in the preparation of the committee's reports, as noted elsewhere herein.

Throughout the country where hearings were held by the committee facilities were made available for holding these sessions by the judges of the United States district courts, to whom gratitude is freely acknowledged, as well as to the various Federal district attorneys and members of their staffs who also facilitated the holding of hearings by providing office space and in many cases stenographic assistance.

Service of subpenas was expedited by United States marshals and their assistants, to whom thanks are due. Building custodians and their staffs frequently had to work overtime by reason of the protracted sessions of the committee that sometimes continued into the night. These are only a few of the many in Federal service who helped in facilitating these hearings. State and local officials, from governors of States and mayors of cities, down to policemen on their beats went out of their ordinary paths to be of assistance to the committee. Crime commissions composed of citizens, like those in Greater Miami, Chicago, St. Louis, and the State of California, provided dossiers on local crime conditions which advanced the starting point of committee investigators. Special thanks are expressed to Daniel Sullivan of the Greater Miami Crime Commission and Virgil Peterson of the Chicago Crime Commission and their officers and staffs. The work of these two crime committees through their courageous officers and most able directors is outstanding and serves as a splendid example for other voluntary crime commissions.

Another source from which the committee received splendid cooperation in its investigative activities was the American Telephone & Telegraph Co., and its affiliates whose help is herewith gratefully acknowledged.

One of the most effective means of establishing whether a hoodlum in one State had affiliations or associations with a fellow-gangster in another State was by tracing telephone calls. This called for the expenditure of much manpower and time by the American Telephone & Telegraph Co., and it should here be recorded that all this tremendous research was conducted at the sole expense of the telephone companies.

The committee regards as invaluably helpful the splendid direct and indirect aid and support given by the mass media of public information of the United States in the committee's work.

It is doubtful indeed if the activities of any similar governmental group has received such widespread coverage as was given to the hearings and reports of this committee.

Newspapers were particularly helpful because in their own particular locales they have, over the years, amassed archives of information about crime, all of which were freely made available to the committee. The crime reporters of many great newspapers have been of invaluable assistance to the committee. The willingness and courage of the press in printing full information on the activities of gangsters, criminals, ad their political protectors have achieved many notable results in improved law enforcement. At times, the committee was helped by the constructive criticism of some of the local press. It is noteworthy that many of the country's foremost journalistic specialists in crime news were assigned by their respective publications to travel the length and breadth of the Nation with the committee to cover its hearings. The committee regrets that some inconvenience has been caused the press because of the difficult circumstances under which the committee has had to operate.

Magazines, too, should be credited with independently researching the subject of interstate crime operations and with furnishing committee investigators many fruitful leads that helped to round out the picture of organized crime in the United States.

The committee subscribes most heartily to the statement of J. Edgar Hoover, Director of the Federal Bureau of Investigation, that if there were in every town in the United States a crusading newspaper which, without fear or favor, would turn the spotlight of pitiless publicity on corruption, gambling, and vice in its area, major progress would have been made toward cleaning up that particular community.

Testimony before this committee was carried into millions of American homes by wireless, first by radio and toward the closing stages via the newest electronic communications device - television.

The committee recognizes that a major part of the credit for the vital impact of this committee's most recent hearings on the public was due to the televising of the sessions. Never, prior to that time, had a congressional hearing received such a public airing or viewing, nor before such a huge audience. It has been estimated that the hearings in New York were watched by upward of 30,000,000 persons.

These telecasts, in the opinion of the committee, have had a most salutary effect in awakening the public to the menace of organized racketeering that now confronts our national life. For the first time the public was able to see and hear the notorious hoodlums to whom it was, in one form or another, paying tribute, to determine for itself whether or not these men are wholesome influences in public affairs, and whether they should be permitted to wax even more powerful than they are now.

Television can undoubtedly be a tremendous power for good; as a means of public education it is superb. But its employment involves serious consideration of many new factors. One of these is the possible invasion of the rights of privacy - a claim which was raised by several witnesses who refused to have their faces screened although they did not object to the broadcast of their voices over wireless radio. This broad legal question has already been the subject of considerable learned debate; there will undoubtedly be more before a final adjudication is made by the courts.

It should be noted that two of the committee's witnesses, Morris Kleinman and Louis Rothkopf, raised this issue of privacy and the alleged onerousness of the conditions under which they were asked to testify - conditions which included the presence of microphones, news-reel cameras, television cameras and still photographers - to all of which they objected. These individuals were cited for contempt for refusing to reply to pertinent questions at a properly constituted hearing of the committee. It was strongly felt by the committee that their stated ground for refusal to testify was actually a subterfuge for a more cogent reason.

In addition to the legal implications, our committee sees in television a medium which raises whole new or intensified issues of public policy insofar as the screening of congressional activities is concerned. It is for that reason that the committee feels that a code of congressional procedure should be worked out so as, among other things, to insure the continuing dignity and maximum effectiveness of legislative proceedings which might be televised as well as to preserve the constitutional rights of citizens. Nevertheless, our committee commends the television industry which devoted so much time at considerable cost to our committee's proceedings.

The dignified and restrained handling of the television broadcasts of the hearings by the respective stations and networks involved and their personnel, speaks most highly for the public spirit of this relatively new medium and for its judicious approach to a new problem.

Through the motion-picture newsreels, millions of American theater-goers were able to follow the committee's activities in all parts of the country. The newsreels were particularly cooperative in New York City where limited space in the hearing room necessitated a pooling arrangement under which two or three cameramen made the pictures which were then made available to all film companies on an equal basis.

One innovation that marked the newsreel coverage of this committee's hearings was the release of a film nearly an hour long that graphically depicted the highlights of the entire series of hearings and was seen by an audience estimated in the millions.

Finally, the committee, speaking for the Senate and the American people whose servant and representative it is, acknowledges with deep gratitude and respect the contribution of every member of the committee staff to this most notable result.

Seldom, if ever before, has a congressional committee been favored with such a splendid group, working as a team with but one objective in mind. Dispassionately and intelligently this group attacked one of the most complex and widespread fronts and drove wedges of information into it that enabled the committee to throw light on it not only from the front but from the rear, and even from underground whence more than a few witnesses came to testify to the evil prevalence of Nation-wide crime.

The sparking genius behind this excellent staff deserves the commendation not only of the Senate but the entire Nation - the committee's chief counsel, Rudolph Halley, of New York. From the very inception of our committee, Mr. Halley displayed the keenest of insight into the nature of the problem, and an indefatigable energy that overcame the limitation of time imposed on the committee prior to its extension of authority. In a spirit of sacrifice of his own personal comfort and aggrandizement, Mr. Halley relentlessly and tirelessly pursued his course against the most feared under-world gangs in America.

How well he earned the plaudits of the Senate and the public is now, through television, a familiar story. This record would be incomplete, however, without a final accolade bestowed on him, and this expression of merit: "Well done!"

The enactment of the aforementioned recommendations will do a great deal to break up criminal gangs and syndicates and make considerably more difficult the use by organized crime of the facilities of interstate commerce and interstate communication. The committee, however, has stressed above that if organized crime is to be brought under control, State and local law-enforcement agencies must do their part.

The violations of criminal statutes committed by the members of criminal gangs and syndicates are, for the most part, violations of State laws. In order that State and local law-enforcement machinery and procedures be strengthened and become more effective in dealing with organized crime, the committee makes the following suggestions of a broad nature, believing they may be helpful and in the public interest and in conformity with the letter and spirit of Senate Resolution 202.

I. A committee might well be appointed in each State to make a thorough-going investigation of the problem of organized crime

The fact that so many of the conditions which breed organized crime are beyond the reach of Federal authority makes it absolutely vital that the various States institute sweeping inquiries into organized criminal conditions within their borders. The able reports and recommendations of the special crime study commissions appointed by Governor Warren in California indicate how effective such inquiries can be in formulating State and local policies in dealing with organized crime. Noteworthy State action has been taken in Ohio and Illinois by Governors Lausche and Stevenson. It should be noted that the disclosures resulting from our hearings in New York prompted the appointment by Governor Dewey of a five-man crime commission to investigate and act against racketeers and "the links between organized crime and units of State government in New York State." The action of these and of other Governors should be emulated in other States.

II. Grand jury investigations could well be instituted in every community in which wide-open gambling and racketeering conditions exist, so that local responsibility for such conditions can be fixed and determined.

The grand jury is the traditional organ of law enforcement charged with the responsibility of uncovering corruption in Government and misfeasance and nonfeasance in office of public officials. Under adequate leadership grand juries can do a great deal to help local communities clean house. Steps should be taken in each State so that grand jury attention can be focused upon local conditions that contribute to organized crime. In order for grand jury inquiries to be effective, they must be freed from such hampering restrictions as are found in the Illinois laws, which limit the terms of grand juries to 30 days.

III. It might be advantageous for each State to institute a survey of its law-enforcement agencies with a view toward bringing about greater cooperation between agencies, greater centralization of responsibility for lax enforcement of the criminal law, and greater efficiency.

The committee has been impressed by the failure of independent local units of law enforcement to work together harmoniously to eliminate gambling and racketeering conditions from their communities. In metropolitan areas, there usually are large numbers of independent city, town, and village police forces which work together or refuse to cooperate, as they please. The sheriff of the county operates independently of other law-enforcement agencies and frequently pursues law-enforcement policies which are diametrically opposed to theirs. The district attorney, or the State's attorney, sometimes works with and sometimes against both the police and the sheriff. Exactly who is responsible for what in the law-enforcement field is frequently a matter of conjecture and dispute. The very organization of law-enforcement agencies in local communities makes it difficult to fix responsibility for widespread violations of the criminal law. This necessarily leads to "buck passing" and evasion of responsibility.

The committee cannot find the answers to the problems which local organization of law enforcement presents with the data presently available. The patterns of local law enforcement are deeply embedded in the constitutions and laws of the several States. They were evolved at a time when conditions of life were much simpler and when crime conditions were not as complex as they are today. They require thorough overhauling, and a thorough re-examination in the light of what is required to combat present-day syndicated and organized crime. The several States cannot hope to control jet-plane criminality by the horse-and-buggy methods evolved in the early nineteenth century.

Any survey of State and local law-enforcement agencies must consider such problems as:

1. The combination of small independent local police forces into larger regional units which will be adequately staffed and equipped to make criminal investigations and to deal with organized crime.

2. The elimination of the law-enforcement responsibilities of the sheriff's office.

3. The more adequate policing of rural areas by State police units.

4. The closer integration of local police forces and local police activities with the work and efforts of State police units.

5. The provision of better methods of recruiting and training local and state police officials.

6. The provision of higher standards of pay for persons engaged in local law-enforcement work.

7. The elimination of the traditional coroner's office and substitution of adequately staffed and equipped medical examiner's offices.

8. A clearer definition of the function and the responsibilities of the local prosecutor in connection with the investigation of criminal cases.

9. The steps necessary to secure greater stability of tenure and greater professionalization in the local prosecutor's office.

10. The provision of a greater degree of centralized control of the work of local prosecutors, either through the Attorney General or the Governor's office.

11. The tightening of legal provisions concerning the removal of lax and faithless law-enforcement officials, who fail to carry out their sworn duties.

12. More law enforcement officials should be brought under civil service regulations; in some places these regulations should be revised in order to facilitate the separation from the service of corrupt and/or inefficient e enforcement officials.

Surveys of State law-enforcement agencies which come up with answers to such problems will make vital contributions to the improvement of methods of dealing with organized crime.

IV. Organization of rackets and special purpose squads in each State with sufficient manpower and authority to make investigations and arrests in connection with organized criminal activities would be helpful. Such squads are particularly desirable on both the State and local levels, in connection with the suppression of narcotics traffic.

State surveys which would provide data for fundamental changes in law-enforcement organizations, will take a long time. In the meantime, the State governments must take the initiative in dealing with the immediate problems presented by organized crime.

The need for State law-enforcement activity is particularly acute in the suppression of the illicit sale and distribution of narcotics. In narcotics there has been, as we have seen, a tremendous upsurge in activity. A great deal of narcotics drugs are presently being sold to our "teen-age" youth, resulting in their consequent demoralization. Energetic methods are necessary to combat the drug traffic. A well-trained squad of men operating throughout the State who are thoroughly familiar with the methods of narcotics peddlers and who will cooperate closely with the Federal Narcotics Bureau, could do a great deal to stem this vicious traffic which lives from the slow murder of its customers. Similar squads might also be organized in the larger cities to cooperate with State officials and with the Federal Government.

Racket squads would also be very valuable in other fields of criminal activity in which organized criminal gangs are presently engaged. Where local enforcement breaks down in connection with gambling operations, for example, conditions can be materially improved by State police squads acting under the direct authority of a vigorous governor.

V. Each State would do well to analyze the provisions of its criminal law and its sentencing practices so as to make certain that deterrent sentences are imposed upon offenders engaged in criminal activities connected with organized crime.

Organized criminal activities cannot be controlled by the imposition of small fines. Yet this is the normal technique for dealing with such racketeering activities as bookmaking and the numbers, or policy game. Persons convicted of taking bets and engaging in bookmaking operations and persons who collect policy numbers arc usually punished only by small fines. This has absolutely no deterrent effect upon key individuals who control the rackets or upon the small fry who are normally brought before our courts. The fine is looked upon merely as an expense of doing business and is usually paid by the banker of the policy game or the backer of the bookmaker. A fine may be called for in connection with a conviction for the first time of a violation of the gambling laws. But certainly second and subsequent convictions should be more severely dealt with. Such severity is vital if mobsters who run the bookmaking and policy rackets are to be controlled. When subordinates in the racket understand that they are exposing themselves to prison sentences and that their employers cannot absorb penalties imposed upon them, they will be less likely to engage in illegal activities. Similarly, more drastic penalties appear to be indicated in connection with the violation of State narcotics laws. It is the considered opinion of the Federal Bureau of Narcotics that drug peddlers can only be controlled by drastic penalties. Surely the harm that these individuals do to others clearly warrants such action.

Here again, the committee can make only the general recommendation that each State review its criminal penalties and the sentencing procedures used by its judges. If these follow the pattern which has been indicated above, then a revision so as to provide more deterrent penalties would appear to be indicated.

VI. Each State should consider legislation making it possible to deprive any establishment of its license which permits gambling games or gambling operations on its premises.

Local and State licenses are required from many different types of establishments, hotels, night clubs, taverns, restaurants, candy stores, etc. Racketeers frequently use such establishments as locations for slot machines, punchboards, and other gambling games or conduct other types of gambling operations, such as bookmaking or the collection of policy numbers on these premises. In Minnesota, Wisconsin, and Iowa, statutes have been enacted which make it possible to strip such establishments of their license to do business if they are permitting gambling operations to be conducted on their premises. The committee commends such statutes to the attention of other States. If a businessman knows that he may lose his license if he permits a violation of the gambling laws to take place in an establishment that he operates, he is less likely to listen to the racketeer who is seeking to use his establishment as a base for enterprises that violate the law.

VII. A citizen crime commission charged with the duty of observing the activities of local law-enforcement agencies and with the duty of observing and reporting on local crime conditions would be helpful in each large community

Public apathy has in large measure been responsible for many of the conditions disclosed by the committee. This apathy is due in large part to a lack of knowledge of crime conditions on the part of the citizens living in the cities visited by the committee. Even where some knowledge was present, the leadership to do something about malodorous crime conditions was frequently lacking. The function of a local crime commission is to provide both knowledge and guidance. Its task is to expose pitilessly the racketeers who grow fat on crime and their allies in law enforcement and in political organizations. Local crime commissions have contributed considerably to more effective methods dealing with crime in such cities as Chicago and Miami and have pointed the way to the kind of public service that such organizations can render. The committee notes with approval the organization of the Greater New York Crime Committee in New York City. Similar organizations should be set up in every metropolitan area.

The principal activity of organized criminal groups in the Miami area at the time of the committee hearings was gambling. Card games, dice games, numbers games, roulette and other gambling wheels operated in establishments varying from the well-appointed air-conditioned casinos set up for the purpose, to night clubs and restaurants and private rooms in various hotels. Bookmaking operated out of newsstands, cigar stands or elaborate horse rooms, in most hotels, and even from specially fitted cabanas on the beach.

Bookmaking was largely in the hands of local residents with long experience in the field. The gambling casinos and games, on the other hand, were almost wholly owned and operated by the racketeers and criminals from all over the country who had made the area their gathering place, and several Miami hotels, their headquarters.

At one time 52 more or less elaborate gambling casinos operated in Broward County alone. At the time of the hearings, the principal casinos operated by the out-of-town gangsters and racketeers were the Greenacres, the Club Boheme, the Island Club, and the Club Collins. The Greenacres and the Club Boheme were operated by a group including Frank Erickson of New York, Joe Adonis and the Lansky brothers of New York, and Mert Wertheimer of Detroit. In Greenacres, William Bischoff (Lefty Clark) and Joseph Massei operated a crap game.

Erickson, his agents and associates, made the Wofford Hotel their headquarters. The hotel was operated by a former New York lawyer, Abe Allenberg, brought to Florida to represent Erickson in his race-track interests, and set up in the hotel business with money provided by Erickson. Allenberg's partners in this venture included the notorious gangsters Anthony Carfano from New York and John Angersola from Cleveland.

Allenberg testified that crap and card games for high stakes were conducted in upstairs rooms by racketeering associates of his partners. Erickson's agents lived in the hotel, while they conducted his large-scale illegal lay-off and come-back betting operations and used the banking facilities of the hotel for cashing checks tendered in payment of lost wagers on horse races.

Two other nearby hotels, the Grand and the Sands Hotel, served as headquarters for the Detroit, Philadelphia, and Cleveland mobs.

The operations of the gambling casinos showed tremendous profits. The net reported income from the Greenacres-Club Boheme combination, totaled $348,821.48 in 1948, and $599,073.44 in 1949. In addition, the cash operation of the single crap table yielded $222,050.47 in reported income for the 1949 season.

Testimony disclosed that the largest organized bookmaking operation in the Miami area was conducted by the S. and G. Syndicate, a group of five local bookmakers who, until 1944 had operated independently. In 1944, they agreed to eliminate competition among themselves and make the financing of other bookmakers their business. By 1948, this business, according to its own books, controlled concessions at 200 hotels and grossed over $26,500,000 in bets. The Federal Government, investigating the individual returns of the partners, has contended that even on the basis of the reported gross, the net reported income of $466,504 is substantially below the true income.

On the basis of the reported gross bets, and the mathematically established minimum net return used at the pari-mutuel tracks, the committee calculated that the net profit for the members of the syndicate must have been over $2,000,000. Other observers of the Florida bookmaking scene put the S. and G. gross income at between $30,000,000 and $40,000,000 and its net income at between $4,000,000 and $8,000,000 a year.

The S. and G. Syndicate maintained an executive office, with Edward Rosenbaum as the active manager, where the daily collections from bookmakers were received, their records kept and the periodic accountings made. At an elaborate penthouse office atop a midtown hotel, telephone connections to all parts of the country from California to New Jersey and from New Orleans to New York, made it possible to keep a constant check on bets at the Nation's important race tracks. Here, the up-to-the-minute racing news coming in over the wire service was received. At branch offices throughout Miami Beach, S. and G. received information from their bookies and the bookies in turn could receive information from the wire service.

200 BOOKIES DEALT WITH S. AND G.

Just under 200 bookies dealt with the S. and G. Every bookie made his own arrangements with a hotel for permission to take bets on its premises, and paid for the concession and necessary employees out of his own pocket. As bets were placed, the bookie would telephone them in to an S. and G. branch office, and at the end of each day he either deposited his winnings with the S. and G. office, or had them picked up by a collector. On the rare occasions when his losses exceeded his winnings, he picked up cash from the S. and G. to make his payoffs. At the end of the month or the season, depending on individual arrangements, the bookie and the S. and G. made a 50-50 division of the profits from the operation. However, certain expenses of operation - an agreed-upon portion of the rent for the concession, which might range from $3,000 to $50,000 a year, salaries of employees hired by the bookie, and fines levied on the bookie - were deducted from the profit before the division of profit was made. But after the division, from his own half of the profits, the bookie paid the syndicate upward of $75 a week for the racing news service, and another $50 to $75 a week for operating expenses. The partners denied the contention of one bookie, that the money for operating expenses was "ice" or protection money, that independent bookies understood that they would be raided, while bookies belonging to the S. and G. were not. But the committee established that the S. and G. suffered little from police interference. The attorney for the syndicate admitted that from 1944 to 1950 the syndicate bookies had suffered no greater indignity than fines; that they never received a jail sentence, and that as soon as their fines were paid, they went back into business. Two members of the syndicate, Levitt and Salvey, admitted to a record of arrests years back. The former, despite several convictions, had never been to jail. The latter had never even gone to trial. Both admitted to the offenses of bookmaking, with which they had been charged.

It was also apparent that the S. and G. syndicate members enjoyed cordial relationships with members of the city government and law-enforcement agencies. Their attorney admitted he had been influential in getting a former law associate selected as a judge. In their numerous and extremely profitable real estate transactions, members of the S. and G. were represented by the city attorney, who was later expected to oppose for the city a change in the rezoning law which would have more than tripled the profits of the S. and G. members on their holdings in one of the most valuable sections of the beach. One partner, Salvey, inactive in the actual syndicate operation almost from the time of its formation in 1944, admitted to business relationships with William Burbridge, an influential city councilman, which had been extremely profitable to Burbridge.[1] A former police chief and a sheriff gave testimony indicating that the syndicate attorney was friendly enough with someone in the department so that he could be present at any raid of a syndicate book or a horse room or casino in which its members had an interest, or could appear on the scene almost immediately thereafter. There was evidence, too, that the syndicate made an effort to present a fair face to the community; records of donations to religious charities, to Boy Scout and Red Cross chapters, to hospitals, to firemen's and policemen's associations were shown.

Until 1949, the syndicate members with their local contacts had been able relatively well to protect themselves from outside incursions. Erickson, and a local independent gambler named John O'Rourke, had managed to get the gambling concession at the Boca Raton, and at the Roney Plaza, at the seasonal rentals of $22,000 and $45,000, respectively. Both had previously been operated by S. and G. concessionnaires. But Erickson was soon forced to give up his concession. Meyer Schine, owner of the hotel, testified that Pat Perdue, the Miami Beach one-man vice squad, urged him to give the concession to the S. and G. When he refused, the Roney Plaza was raided by Perdue with great attendant publicity, and forced to discontinue gambling, in contrast to the usual discreet raids which ended in a fine and the resumption of gambling.

The following season, the Roney Plaza gambling concession was operated by an S. and G. member bookie.

In 1949, the S. and G. suddenly acquired a sixth partner, a Chicago resident, Harry Russell, whose connections with the Capone group are clearly established. The original members of the syndicate, questioned about Russell, stuck to a consistent story: they had heard he was attempting to take over concessions in Miami hotels owned by Chicago men, and further, they understood that he knew a great deal about baseball pools, into which they intended to expand. But they had made no similar approaches to any other competitors, nor could they show any baseball operations in their records after Russell became a partner. They claimed that they knew nothing of Russell's Chicago connections. One of the members insisted that he had first approached Russell about the partnership.

Just prior to Russell's entry into the partnership, the S. and G. had been subject to pressure from two sides. In January of 1949, shortly after the election of Gov. Fuller Warren, a special investigator named W. O. Crosby appointed by the Governor presented himself to the sheriff of Dade County and asked for help in raiding gambling establishments. In their testimony, neither Sheriff Sullivan nor Crosby could recall raids on any but S. and G. bookies. Crosby admitted that he knew Russell and had seen and become friendly with him in Miami during the period of the raids. Crosby had also seen and talked to William H. Johnston, a Chicago and Florida race track owner, a. long-time associate of the Capone gang, and a friend of Russell. There is more than a casual connection between the fact that Johnston contributed $100,000 to Governor Warren's campaign fund and the fact that Crosby raided only S. and G. locations with the knowledge of Russell.

At about the same time, the Continental Press Service, which is controlled by the Capone gang, cut S. and G. off from the wire service, without which no large-scale bookmaking enterprise can dare to do business. When S. and G. attempted to get the news service from other bookmakers in Florida, service was cut off throughout the State. For some unexplained reason, though the syndicate found it could get the news from its bookie contacts in New Orleans, it did not do so. The lack of wire service compelled the syndicate to shut down operations for about 2 weeks. Service was resumed and the raids from Crosby miraculously ceased when Russell was taken in as a full partner of the S. and G. syndicate. He was said to have paid $20,000 for his share in the $26,000,000-a-year business. But a few months later, the S. and G. partners bought a boat owned by Tony Accardo, an associate of Russell and the alleged leader of the Capone gang, for just exactly $20,000. Further evidence that the Capone mob merely muscled into the lucrative S. and G. syndicate using Russell as a pawn is had from the fact that the 1949 tax returns for the partnership of Accardo and Guzik show a loss of $7,240 attributed to the operations of S. and G.

No business on the scale of the S. and G. Syndicate and the various gambling casinos, operated by notorious gamblers, could be run under cover. In fact, the business was run openly in violation of Florida laws, with the full knowledge of the community. Grand juries in 1944 and 1947 had no trouble in finding evidence of operations. A 1949 jury reported:

We could not see any purpose in repeating the work of our predecessor juries to discover officially and at great length that crime and corruption do exist here (p.736). Conditions have apparently not changed since the writing of the 1944 grand jury report (p. 737). There is present in our community a large number of individuals of unsavory reputation. These persons are criminals of national stature (p. 736). All forms of gambling are flourishing, the 1949 jury found, and there appeared to be little effort to curb them, although they were being carried on right under the eyes of the police (p. 737).

Daniel P. Sullivan, director of the Greater Miami Crime Commission, set before the committee a detailed statement as to the gambling and bookmaking operations, the criminal records and backgrounds, the infiltration of these criminals into legitimate businesses in Florida, and their out-of-State connections. The crime commission and the Law Enforcement League of Dade County, had both called the attention of the sheriff of the county to the open and notorious gambling operations. These activities went on, not only with public knowledge,, but with a considerable amount of public acquiescence. In the words of the director of the crime commission:

There is quite a large group of people that think that gambling is an asset in placing a dollar bet, and the average person does not realize the ramifications of what happens when it becomes highly organized and operated by syndicates.

Attorney General Ervin also called attention to the segment of public opinion which believes it is impossible to stop gambling, and that in any event it is good for business. Certain public officials with a demonstrated antipathy to law enforcement supported this viewpoint; the sheriff of Broward County flatly stated that he had been. elected because he was known to have a liberal point of view, that he favored a wide-open town; the sheriff of Dade County observed that $20,000,000 legal gambling at the tracks creates an atmosphere so favorable to gambling that the illegal off-track gambling is hard to stop.

The laxity of public officials in the face of this situation was described by the officials themselves. Sheriff Walter Clark of Broward County admitted that he knew the gambling places operating in his area. He had eaten in some of them at charity affairs, though he had never seen gambling there except when he went on raids. Raids were conducted only on complaint. He never checked up to see whether operations were resumed. Former Police Chief Short admitted that he had said he would have nothing to do with gambling. He left the job entirely to one detective, Pat Perdue. Sheriff Sullivan admitted that although Florida has a statute compelling visitors with a felony record to register upon entering the State, he had no idea whether the notorious criminals in his area, of whose background and presence he was completely aware, had complied with the law. Nor had he ever made any attempt to prosecute them for conspiracy to violate the laws of Florida.

The attempts of public-spirited citizens to remedy conditions were blocked by obstructive tactics of law-enforcement officials who took advantage of every technicality to avoid action within the State. When the Greater Miami Crime Commission offered the full facilities of its organization to Sheriff Sullivan in closing down the gambling casinos, Sullivan countered with a long brief to show that sheriffs had no responsibility for the repression of gambling, and with another describing the rigid restrictions of the law of search and seizure which would hamper him in obtaining evidence of gambling operations.

Honest law-enforcement officials ran into the same obstructive tactics. Since it was felt that the elected officials would not undertake to get evidence of gambling that would stand up in court, Judge Stanley Milledge acted under the statutory provision and appointed an "elisor" to get such evidence. The efforts of the elisors so appointed were hampered by the local police who appeared on the premises while a raid was in progress, and interfered with the work of the elisors. After arrests were made, an action was brought with the approval of the sheriff, contending that the elisor warrant was illegal. .

Where law-enforcement agencies took any action, it was apt to be for the protection of racketeers or the elimination of their rivals. The efforts of Pat Perdue to drive competitors of the S. and G. Syndicate out of business, and of Crosby to use the local sheriff's office for raids on the S. and G. but on no other bookies or gambling joints has already been mentioned. The prompt appearance of the mouthpiece of the S. and G. Syndicate during the Crosby raids leads to the suspicion that someone from the sheriff's office was tipping him off. Sheriff Clark admitted deputizing the guards who ran the armored trucks in which Broward County gamblers kept their bank rolls overnight. Three former deputy sheriffs in Sullivan's office stated that they were instructed to refrain from making arrests for bookmaking. One of them was discharged, after making inquiries about a bookmaking establishment which happened to be run by a relative of the deputy.

In the opinion of many witnesses, criminals from all over the Nation were able to act freely in the Miami area because the concentration of economic power they brought in from outside, enabled them to control local government and corrupt substantial portions of the community. "The profit motive in this thing is tremendous," said Attorney General Ervin, "and they naturally have to protect their investment; and, if they can bribe or buy anybody, they naturally will do it." Book-making and gambling, he stated, were dominated by syndicates including men so big that they can bribe and influence public officials.

Considerable evidence of direct bribes to law-enforcement officials was presented to the committee. Where no direct bribes could be traced, there was the unmistakable evidence of wealth of public officials acquired during their terms of office. Sheriff Sullivan's assets increased during his 5-year term from $2,500, which, was his net worth as given in a bank loan, to well over $70,000. This apparently does not include $26,000 which Sullivan and his wife sent to members of Mrs. Sullivan's family in Maryland. His deputy, whose purchase of a new Cadillac in 1949 caused Sullivan a certain amount of uneasiness, retired after 4 years to a farm for which he paid $26,000, although his salary was never more than $4,200 a year. Both Sullivan and his deputy distrusted banks, and testified to keeping large amounts of cash in their homes in a tin box, an old fishing box, or in a blanket. Melvin Richard, a young councilman who had kept up an effective opposition to the machinations of the S. and G. Syndicate, and who was largely responsible for revealing their members' close connections with the city government, testified that immediately after his election he was offered a share in the profits of the punchboard games in the area, if he would refrain from interfering with their operations.

Sheriff Clark, of Broward County, made a very large fortune by participating in the profits of gambling ventures, and as a partner in the Broward Novelty Co., which operated an illegal bolita and slot-machine business. The gross income of this company from 1945 to 1947 was more than $1,000,000.

In Florida, illegal gains from gambling and bookmaking, including funds rightfully due the Federal Government in taxes, were largely invested in homes, hotels, and other real estate. Like the local members of the S. and G., the visiting gamblers and bookmakers from Detroit and Chicago, and Cleveland and New York owned large expanses of property in Miami Beach and nearby sections of Florida. For years, Capone maintained a vast estate, and his successors and associates from other areas followed his example in buying elaborate homes for themselves and their families in the area. It has already been pointed out that the hotels which operated as headquarters for these gangsters and as locations for their gambling games, were owned and operated by the gangsters or their associates. There was also testimony that the racket element had an interest in a wired-music organizations whose chief stockholder was the operator of the Club Collins, one of the gambling casinos.

But the director of the Greater Miami Crime Commission, under questioning by Senator Hunt, estimated that a large proportion of the money made in gambling and bookmaking in Broward County and elsewhere was not invested or spent in Miami, but siphoned out of Florida by the visiting racketeers. It therefore represented not a boon to business, but a net loss to the Florida community.

The committee cannot understand and strongly condemns the reinstatement by Gov. Fuller Warren, of Florida, of Sheriff James Sullivan without a full and public investigation of all the facts brought out by this committee and by the Dade County grand jury

The committee held hearings in Washington and in Kansas City, Mo., to study the extent and interstate implications of organized crime in Kansas City. In the conduct of its hearings, the committee was greatly aided by the Federal law enforcement agents in Kansas City, and by the Kansas City Crime Commission. In addition, the committee had the benefit of the findings of the Federal grand jury which held extensive hearings in Kansas City in 1949 and 1950. In the course of its executive and public hearings, the committee heard a total of 48 witnesses, including Gov. Forrest Smith, and representatives of the law enforcement agencies of Kansas City as well as a number of the city's known gamblers and racketeers.

The committee's investigations indicated that while bootlegging and narcotics peddling still exist on a small scale in Kansas City, the vigilance of the Federal alcohol tax investigators and the investigators for the Federal Bureau of Narcotics has greatly reduced such violations from previously bad conditions. The committee found that there were a number of gambling houses operating in and around Kansas City and that, with the end of prohibition and the dissolution a decade later of the organized narcotics racket in Kansas City, the majority of the city's racketeers had concentrated their energies on gambling or activities relating to gambling.

As in other cities, a number of Kansas City racketeers have entered into legitimate business, sometimes as a front for gambling activities, but in, other cases, purely for the revenue that can be secured from combining otherwise legitimate enterprises with hoodlum methods to make sales and maintain monopolies. The committee found evidence of criminal infiltration and hoodlum tactics in the wholesale and retail liquor business, in the distribution of juke boxes and pinball machines, in the operation of a Kansas City bakery, and the operation of the horse race wire service. The problem of infiltration of legitimate business by criminals and racketeers is discussed at length elsewhere

The Federal grand jury investigating crime in Kansas City, Mo., found that the gambling business had, in years past, grossed more than $34,000,000 a year.

Until his violent death in April 1950, Charles Binaggio was generally conceded to be one of the central figures in Kansas City gambling circles. Binaggio occupied a dual position in Kansas City. In addition to his extensive gambling activities, he was the leader of the First Ward Democratic Club, and it was generally conceded that he could control an important segment of the Democratic vote in the city. Binaggio and Charles Garrotte (who was murdered with Binaggio), Anthony Gizzo, and Thomas Lococo were among the racketeers who dominated Kansas City gambling. The testimony before the committee indicated that these men and their close associates, most of whom had criminal records, had an interest in most of the gambling carried on in the city. Binaggio held a one-fourth interest in Coates House, a bookmaking establishment which in the year 1948 made a net profit of $100,000. He was associated with Gizzo and several others in this enterprise, and also had an interest at various times in other gambling operations, including the Last Chance Tavern where he ran a dice game in partnership with Gargotta and Lococo and Morris "Snag" Klein and Phillip E. Osadchey (alias Eddie Spitz) who generally worked with or for Binaggio. From the point of view of the committee, one of the most interesting aspects of the gambling operations in and around Kansas City was the existence of a sort of interlocking directorate of all gambling operations: Binaggio, Gizzo, Lococo, Gargotta, Osadchey, Klein, or one or more of their known associates, were almost invariably named among those participating in any given gambling operation.

Testimony before the committee indicated that several bombings and a killing had preceded the taking over of the Last Chance Tavern and that a number of bombings and a robbery took place before Osadchey and Klein, without putting up any money, became partners in the Stork Club, a gambling casino in Council Bluffs, Iowa. In a number of cases, members of the group had moved into existing gambling operations after bombings or other evidences of violence had persuaded the previous operators to share profitable operations.

The extent to which Kansas City operations are integrated with rackets in other cities is difficult to determine from the testimony before the committee. In past years, Kansas City was known as a center for the activities of the Mafia, or Unione Siciliano, which is said to be a secret organization operating throughout the country and internationally. The narcotics ring which was broken up in Kansas City in 1942 was made up entirely of men believed to be members of the Mafia, operating through alleged Mafia members in other cities. Lococo and Gizzo are believed to be members of the Mafia, as were Binaggio and Gargotta. Gizzo, who testified before the committee, admitted to familiarity with a large number of men believed to be members of the Mafia in Chicago, and in other parts of the country.

The two men believed to be the leaders of the Kansas City Mafia at the present time, James Balestrere and Joseph Di Giovanni, are not on record as being presently engaged in gambling, although Balestrere, who is an older man, was active in the 1930's. Di Giovanni and his family are engaged in lucrative liquor operations described elsewhere in this report. Information about the operations of the Mafia is difficult to secure, and is generally hearsay, due largely to the record of violence toward persons testifying against alleged Mafia members. Carl Carramusa, who testified for the Government in the Kansas City narcotics trial, was shot to death 3 years later in Chicago where he had gone to escape retribution by the Mafia. Thomas Buffa, who testified for the Government in a collateral matter affecting the narcotics trial, fled to California after an attempt had been made on his life, but was shot to death in California in 1946. Kansas City now has a record of 16 unsolved murders believed to have been committed by or at the direction of Mafia members. Among these is the shooting of Wolf Riman, who was shot shortly after he secured a liquor distributing franchise in competition with one of the Di Giovannis.

Witnesses before the committee, believed to be Mafia members, claimed to be completely ignorant of the organization, and its operations. Joseph Di Giovanni refused even to admit to having heard of the Mafia, which is patently incredible since almost all persons of Sicilian extraction are at least familiar with the existence of the Mafia but when confronted with his criminal record he admitted that he had been involved in a black hand (Mafia) charge.

As in other cities investigated by the committee, the race horse wire service played a vital part in the gambling operations of Kansas City. In 1946, Kansas City was a distribution center for the race wire service furnished by the Continental Press Service, then operated from Chicago by James Ragen, Sr. The up-to-the-minute racing information distributed by Continental was received in Kansas City by the Harmony Publishing Co. and from there, was redistributed by leased wires and/or by telephone to various bookmakers in Missouri, Kansas, Nebraska, Iowa, and Oklahoma, where it was used as the basis for their illegal bookmaking operations. It may be noted in passing that the Coates House was one of the subscribers to the Harmon Co. service. From 1939, the Harmony Co. was run by one Simon Partnoy who was responsible for distributing information, securing customers, collecting fees, and remitting the collections to Continental.

In 1946, a rival wire service was set up in Chicago, known as Trans-American News Service. The nominal head of the Trans-American Service in Chicago was Pat Burns, but the forces behind Burns were the members of the old Capone gang. When Trans-American was set up, Burns visited Kansas City and made a deal with Osadchey to serve as Kansas City distributor for the news service. Osadchey agreed to pay Burns $1,000 a week and put up a $5,000 deposit. He then went into partnership with Klein, Gargotta, and Lococo but these four never set up a distributing office of their own. Instead, Osadchey approached Partnoy and he and his partners took over the facilities of the Harmony Publishing Co. which thereafter subscribed to the Trans-American Service. Osadchey and his partners paid Partnoy $7,500 for his equipment and contacts, plus a 15-percent interest in the business. The $7,500 was paid out of the operations of the business and not out of the pockets of Osadchey and company. It is interesting to review the criminal records of the four new owners of the Kansas City distributorship. Osadchey and Klein have been convicted of violations of Federal statutes; Klein is now in a Federal penitentiary serving a sentence for vote fraud violation. Gargotta was in a Federal penitentiary for stealing arms from an armory, and was convicted of assault with intent to kill. Lococo has been arrested on numerous occasions and is now confined to Federal prison for income tax evasions in connection with his gambling enterprises in Missouri.

Partnoy continued the actual operations for a percentage of the company's take, and Osadchey appears to have traveled through the neighboring States to "induce" customers to subscribe to the new Trans-American Service. Among his customers were two bookmakers who took both the Continental and Trans-American Service. Klein, Gargotta, and Lococo had no duties in connection with their partnership in the service.

Shortly after Trans-American went into business, Ragen was killed, and early in 1947, about 6 months after it came into being Trans-American ceased operations. The Kansas City distributor of Trans-American, which was now known as the Standard News Service, switched back to the Continental wire service without difficulty and continued to operate with Gargotta, Klein, Lococo, and Osadchey as partners in the enterprise which netted an average of $45,000 a year. After the death of Binaggio and Gargotta, the Kansas City wire service closed down and the bookmakers who continued to operate had to get their information by telephone from St. Joseph or St. Louis.

The committee heard considerable testimony relating to attempts by Binaggio to exert political influence to open up for gambling and other illegal operations, the State of Missouri, and particularly St. Louis and Kansas City. Prior to 1948, Binaggio's political influence was rather limited, but it seems clear that at the time of the Democratic primary for Governor in 1948, Binaggio had gained considerable influence at the expense of the Pendergast element which opposed Smith in the primary. Estimates of the number of votes that Binaggio could control in Kansas City ranged up to 35,000, but these estimates seem to be highly inflated in the light of the fact that Forrest Smith, whose candidacy for governor was supported by Binaggio and by a number of other factions more or less independent of Binaggio, realized only 27,000 votes in Kansas City. However, it seems undisputed that Binaggio was the dominant member of the pro-Smith coalition and that after the election, he was considered by many to be the leading pro-Smith politician in the city.

During and after the gubernatorial elections, rumors were prevalent that Binaggio had contributed sums as large as $150,000 to the Smith for Governor campaign, but the most diligent efforts of the committee's investigators failed to disclose any large-scale contributions by Binaggio or his associates. Certain irregularities in bookkeeping on the part of B. E. Ragland, assistant treasurer of the Missouri State Democratic Committee, were disclosed but these irregularities had no real relevance to Binaggio's attempt to exert political influence to open up Kansas City.

It is abundantly clear that Binaggio did support Forrest Smith and that his organization was active in the Governor's campaign. Osadchey testified that he and Binaggio had campaigned for Smith, and some of Binaggio's supporters contributed sums to finance the activities of John K. Noonan who was campaigning on behalf of the Governor. But whatever Binaggio's expectations may have been as a result of his efforts in the campaign for Governor Smith, there is no substantial evidence that Governor Smith made any kind of commitment to Binaggio, or that Binaggio was successful in opening up the town.

On the other hand, it is inconceivable that Governor Smith, being an experienced politician, could have failed to know of Binaggio's background, or that Binaggio expected a quid pro quo for his support. Smith's assertions under oath that he did not discuss politics with Binaggio, or discuss Binaggio's expectations, are simply not credible.

Smith did appoint two police commissioners who were at least acceptable to Binaggio and who appeared willing to go along with him. The two hold-over appointees showed a determination to remain on the board. Smith did not take aggressive action to remove them, or to influence them. He did call one of them to the State capitol, after Binaggio had predicted that this would occur. But in the ensuing conference, he neither put any pressure on the commissioner, nor did he act on the commission's statements to him that Binaggio was trying to influence and even to buy the board. Much of the conjecture about Binaggio's death lays it to his inability to satisfy the organized gambling element which had expected him to open Kansas City up for gambling. It was, of course, extremely desirable for the gambling element to be able to control the police department. As pointed out by Osadchey before the committee, gambling is a lucrative business if you can operate. Without police cooperation, operations must necessarily be conducted on a sneak basis and suspended whenever pressure is exerted by the police.

Under Missouri law, police commissioners are appointed by the Governor and the police department is under the jurisdiction of the State government. One commissioner, Mr. Robert Cohn, was a Republican; another, Mr. Hampton Chambers, was a Pendergast man and had not supported Governor Smith in the primary campaign. Mr. J. M. Milligan, a Governor Smith appointee, testified that he tried to give Binaggio some patronage but it seems clear that he did not go along with Binaggio's sponsorship of an ex-police captain called Joseph Braun for the position of police chief. Braun bad previously been dismissed from the police force because he had permitted gambling to go on in his own station house. Sheridan Farrell, the remaining commissioner appointed by Governor Smith, testified that he believed that a little gambling was a good thing. In the final analysis Police Chief Johnston, whom Binaggio was most anxious to replace, remained in office.

Mr. Chambers and Mr. Cohn both testified that Binaggio had to go along with his plans for transferring police officials who would not cooperate with him and his associates in refusing to enforce the gambling laws. Mr. Cohn testified that at his last meeting with Binaggio in June 1949, Binaggio appeared to be most disturbed by his inability to open up the town and stated that "The boys were behind in their schedule and making it hot for him."

On April 6, 1950, Binaggio and Gargotta were murdered. On April 21, the Kansas City Chamber of Commerce directed a letter to Governor Smith indicating its lack of confidence in the police board, particularly in Milligan and Farrell, because of their associations with Binaggio. Farrell resigned shortly thereafter and after repeated requests by the chamber of commerce, Milligan also resigned. Chambers and Cohn later resigned at the request of the Governor. The present board is made up of four men of undoubted integrity.

An analogous situation seems to have arisen in St. Louis during the same, period that the board of police commissioners in Kansas City was causing so much difficulty. In St. Louis, William Molasky, a large stockholder in the Pioneer News Service, a local racing wire distribution agency, made a $2,000 campaign contribution to Forrest Smith. He attempted to obtain appointment of his nominee to the board of police commissioners in St. Louis. There was testimony that he was interested in getting Morris Shenker named to the commission. Mr. Shenker was attorney for him and for many St. Louis witnesses who appeared before our committee. Although the contribution was accepted and handled as an anonymous contribution under the fixed name of J. J. Price, no such commitment was made. The appointment to the board of police commissioners was Col. William L. Holzhausen. Apparently the gamblers erroneously thought he would permit them to operate. When Holzhausen set out to enforce the law, vigorous efforts were made by Binaggio to have him removed. The story of the conversations in negotiations surrounding these efforts is complicated and the fact is that Holzhausen was not removed and has done an excellent job as chairman of the St. Louis Board of Police Commissioners.

Another interesting facet of the link between crime and politics is to be found in the testimony of Roy McKittrick, former attorney general of the State of Missouri, who had sought the nomination for Governor in 1948, on which McKittrick contends that Binaggio swung his support from McKittrick to Smith, and that after this occurred, Binaggio offered McKittrick a largo sum of money to refrain from running against Smith. McKittrick also charged that Smith asked McKittrick to obtain for him the support of Gully Owen, one of the partners in the Pioneer News Service in St. Louis.

Governor Smith has categorically denied all these charges. Whether they are true or not, it stands out at least that the former attorney general of the State of Missouri and the prominent aspirant for the post of Governor, admitted to having intimate dealings with Binaggio and the operators of the Pioneer News Service in connection with political matters.

While the committee did not find any evidence that the board of police commissioners responded to Binaggio's efforts, this is not to say that individual police officers were not guilty of cooperating with known gamblers in the city. Handbooks and gambling casinos were operating in the city both before and after the gubernatorial elections. Although police officers were forbidden by law from becoming members of political clubs, a number of the members of the police force were known to frequent Binaggio's clubhouse.

While the committee feels justified in saying that on the whole, the racketeering elements did not succeed in their efforts to control the Kansas City police force, a different situation prevailed in that portion of Jackson County which lies outside of Kansas City.

Mike Manzello, a county tavernkeeper, testified that he had been arrested for selling drinks over the counter after he had refused to join a tavernkeeper's association. He had no further trouble with arrests after he began paying a weekly stipend to two of Purdome's deputies.

There was also testimony that Purdome overlooked gambling activities by Walter Rainey, a gambler who could control a large number of votes in the county, and that Rainey moved his gambling activities, so as to remain under Purdome's jurisdiction when the Kansas City police force interfered with his operations at his original location. In general, as a result of poorer law enforcement, gambling and liquor law violations are more widespread in the county than in Kansas City proper

Since the death of Binaggio, there has been a diminution of gambling activities in Kansas City. The formation of the Kansas City Crime Commission and the appointment of a new board of police commissioners has led to improved morale in the police department and increased efficiency in law enforcement. The closing down of the race wire service has hampered bookmaking operations, although the information is still available to bookies through phone connections to near-by wire services. The work of the Federal and State grand juries, the indictments issued by those grand juries and the publicity attendant on this committee's investigations have contributed to the closing up of many of Kansas City's gambling houses and the general decrease in criminal activity. However, these recent improvements in law enforcement can be sustained and extended only through the continued support of the local citizenry and continued cooperation between local and Federal law-enforcement agents.

Col. William L. Holzhausen, chairman of the St. Louis Board of Police Commissioners, stated that the principal law-enforcement problem in St. Louis is organized gambling, which was facilitated by the dissemination of interstate racing information. Colonel Holzhausen testified that the national wire services give impetus to the creation of gambling joints and sneak books and that no police department, no matter how efficient, could fully cope with the situation unless Federal legislation outlaws the dissemination of "hot" racing information by interstate wires.

Attorney General J. E. Taylor, of Missouri, told the committee in detail of his legal efforts to put an end to the dissemination of gambling news within the State. In 1938 the St. Louis Police Board endeavored to cut off the race wire telephone service furnished by Pioneer News, which for approximately 25 years has had a monopoly of the dissemination of racing news to bookmakers in St. Louis. This attempt was defeated by legal action. A long and complicated legal struggle then followed to compel the Southwestern Bell Telephone Co and the Western Union Telegraph Co. to discontinue furnishing service to Pioneer News Co. The effort by the attorney general to cut off Pioneer's telephone and telegraph facilities was only partially successful. Even when orders were obtained compelling the telephone company to cut off Pioneer's phones, Pioneer continued to supply racing information to bookies by illegal stratagems. When the attorney general testified, telephone service had legally been cut off from Pioneer. Nevertheless, the committee discovered that the Pioneer was still furnishing service to bookmakers, for its customers were paying for service as late as February 1951.

Although Attorney General Taylor was much opposed to Federal intervention in State affairs, he felt that it was proper for the Federal Government to stop interstate transactions carried on for the sole purpose of fostering violations of State law.

Continental Press Service (of which Pioneer is a subsidiary)—stated the attorney general-- is a giant monopoly whose slimy tentacles reach into every metropolitan area in the country. It serves no useful purpose; its sole business is supplying information to bookmakers which enables them to carry on their illegal enterprises. It has brought about and financed gangsterism; it has caused bloodshed and led to the corruption of public officials. That it not only knows the kind of business its customers are engaged in, but also the volume of business they, do is evident from the fact that they charge some customers a few hundred dollars a week and others as much as $6,000 a week for the same service.

He further stated:

If the transmission of this racing information by Continental or any other similar agency in interstate commerce could be stopped it would, in my opinion, eliminate racing news distributing agencies, take the profit out of bookmaking and prevent a great deal of gangsterism which results from fights over the control of such illegal enterprises:

The largest bookmaking operation in the St. Louis area was the Carroll-Mooney enterprise operated from 318 Missouri Avenue, East St. Louis, Ill. Its annual volume of bets might reasonably be approximated at $20,000,000. To enable the enterprise to carry on its business, wire service was obtained from Continental Press, through Pioneer News. Most of the business done by the partnership was in the nature of lay-off betting, i.e., betting by professional bookies to insure themselves against excessive loss. The partnership employed men to represent it at various race tracks whose function was to bet what is known as comeback money at the pari-mutuel machines. This type of betting had two basic purposes: (a) to provide a second round of reinsurance for Carroll and Mooney, and (b) to distort the track odds by the sudden placing of heavy bets about a minute before post time. Since track odds determine pay-offs to successful bettors, it is obvious how important the come-back operation is in holding down the losses of bookmakers. The committee received detailed testimony about this operation from men employed by Carroll-Mooney, as well as from men employed by Rosenbaum, a bookmaker in the Cincinnati area.

Carroll has long described himself and been accepted by the public under the glorified term "Betting Commissioner." This term was intended to signify some sort of respectability. The committee found him to be an ordinary bookie operating clandestinely behind locked doors which had to be broken down, in order to gain entry to the premises in broad daylight, when many employees cringed behind the locked barrier.

C. J. Rich & Co., which has also operated under the name of Rich & Wyman, was one of the most unusual bookmaking operations studied by the committee. This enterprise did a gross business of between 4 and 5 million dollars a year and used Western Union telegrams, money orders, and Western Union agents to carry on operations. Most of the business of C. J. Rich Co. came from more than a hundred miles away from St. Louis through Western Union. Telegrams placing bets would be sent to C. J. Rich & Co. at an address in East St. Louis, Ill. Bets were covered by Western Union money orders. During every operating day the Western Union Telegraph Co. would accumulate the incoming money orders and would issue a single check for all the moneys bet. The fact that bets could be placed through Western Union with C. J. Rich & Co. was made abundantly clear in the advertising literature, which this company distributed. Western Union agents were used as runners and solicitors for bets and were paid a percentage of winnings for their services or commissions. Cash or presents were also given by the C. J. Rich Co. to various Western Union representatives. The Western Union company itself profited from the bookmaking business, for C. J. Rich Co. would receive between 500 to 1,000 telegrams a day. In the month of May 1950, the telegraph bill of C. J. Rich Co. was $26,700.

It is quite clear that in the C. J. Rich Co. operation, the Western Union aided and abetted the violation of the gambling laws of the State, because it was profitable to do so. Only when the C. J. Rich Co. was raided on June 26, 1950, did the Western Union do anything to stop its participation in the bookmaking conspiracy. All charge accounts with Western Union of this company were canceled after the raid. One wonders whether the Western Union's obliviousness to its public responsibility not to permit its facilities to be used in violation of State law, was in part due to the fact William Molasky, of St. Louis, a well-known gambler, is one of its outstanding stockholders.

Pioneer News Service is a local racing wire outlet. One of its chief stockholders, William Molasky, is also a very substantial stock-holder in Western Union Telegraph Co., and although he claims that there is no particular reason for this coincidence, the fact remains that he does not own any other large stockholdings and that he has made his substantial interest in Western Union known to the local Western Union management.

Molasky and the Pioneer News Service, together with Annenberg, Ragen, and Kruse, were all associates of the Chicago Annenberg news service. Their local partners were Gully Owen and Bev Brown. Annenberg and Ragen gave up their interest at the time of their income-tax indictments, and Annenberg sold his to Molasky for $1. When the Capone Syndicate organized the Trans-American Service, hoodlums from East St. Louis attempted to gain control of the Pioneer News Service. When this failed, Bev Brown, without relinquishing his interest in Pioneer, moved across the river and opened the Reliable News Service in East St. Louis. It is significant that during this period. Brown's son worked for Buster Wortman, the local East St. Louis hoodlum, in a coin machine operation.

When peace was made, Reliable News went out of business, and Bev Brown and his son, William, moved back into Pioneer. After about that time, William Brown bought out the interest of Kruse and of Gully Owen. He accomplished this by declaring a dividend in Pioneer, but not advising the Chicago trustees of Kruse's estate that his dividend had been declared. After he purchased Kruse's interest, he was able to reimburse himself in effect out of the dividends which had been declared. After this time, Brown and his mother each received $25,000 a year from the news service, his mother being considered honorary. The relation between Pioneer News Service, William Brown, and Buster Wortman's gang of racketeers, is very close and indicates to the committee's satisfaction that the Pioneer News Service today like the Harmony Publishing Co. in Kansas City is now under the domination and control of the Capone Syndicate.

The Philadelphia story differs only slightly from the pattern of organized crime that the committee has found to exist in a number of other cities. The principal organized crime is the numbers game. To be sure, there is a volume of horse betting but there does not appear to be any open activity along these lines nor is the existence of any big gambling houses apparent.

The numbers game in Philadelphia has achieved the size of a big industry and, like big industry, it appears to be organized on a highly efficient scale. It operates through tight control, manipulated by a politico-gambler-police tie-up that makes it impossible for any intruder to edge his way in from the outside. The city is organized into a number of geographical territories, each with its own bank, in turn affiliated apparently with sufficient political connections to be able to operate without too much fear of molestation.

This geographical allocation of territory with lines of area definitely fixed, beyond which the operators in one area do not overstep, was confirmed by the director of public safety of Philadelphia, Samuel H. Rosenberg, but in the absence of definite knowledge, he did not believe that this territorial allocation was reached through any alliance or agreement. He would not say that there were no police in the pay of the numbers racketeers, he limited his commitment to the statement that he had never been able to prove such payments.

Nevertheless, he admitted that he lacked confidence in four of the highest police officials under his direction, not because he had any proof of their violation of trust but because he believed that under the circumstances as they existed, they had failed to pursue the circumstances with what he considered adequate aggressiveness. That these men in whom he lacked confidence were still able to hold high positions in the Philadelphia Police Department, he ascribed to the shackles imposed on him as director by civil-service regulations.

It is notable that one of the four officials named in the "no confidence" category by Director Rosenberg has since been suspended by the director from his duties and has made the action the subject of a court review, not yet heard.

Another aspect of the situation in Philadelphia was the attitude taken until comparatively recently by the judges before whom violators of the gambling laws had been brought. This chapter of the Philadelphia story is a repetition of the same situation that was turned up in other cities canvassed by the committee. It was described as a "casual and cavalier outlook" by one of the very judges before whom these miscreants were brought for trial and sentence. Judge Joseph Sloane, who was a witness before the committee, said that many of his colleagues on the bench were content to impose only fines upon guilty offenders, that only the little people came before them and that no serious attempt was made by the judges to get beyond the lower echelons in the sizable gambling industry in Philadelphia. He pointed out that although defendants came before judges with records of numerous previous arrests and discharges without trial, and although the maximum fine possible was $500 with an accompanying year in jail, the usual first offense brought a fine of only $25 or $50 and no jail sentence. In many years on the bench, he said he had seldom seen a fine imposed in excess of $250.

Judge Sloane testified that in many cases pressure was brought by politicians for reduction in sentence, reduction in fines, and reconsideration of punishment previously imposed. It is to be noted that in 5 years prior to 1950, out of thousands of arrests that were made for gambling in connection with the numbers game and horse booking in Philadelphia, only two defendants had gone to jail.

There has been a change in this attitude on the part of the judges since the committee held its hearings in Philadelphia. More and more jail sentences are beginning to be imposed and it is a fact, reported by municipal authorities, that the numbers game is no longer as easy to carry on in Philadelphia as it was prior to the committee's advent.

The principal police witness was the assistant superintendent of police, George F. Richardson, one of the four officials in whom Director Rosenberg said that he reposed less than full confidence. Richardson testified with some vehemence with respect to Harry Stromberg, alias Nig Rosen, and his henchman, William Weisberg, who, he had previously informed the committee, he believed to be the kingpin of the numbers game in Philadelphia. His oral testimony seemed to be in variance with the information he had previously given the committee in a letter, as well as information he had given the Crime Commission of Greater Miami in a previous communication. He stated that Rosen was persona non grata in Philadelphia as long as he had anything to do with the police department, even to the point of physical violence if he should meet him on the street.

Subsequently, Rosen, who was a witness before the committee, testified that he had been engaged in the numbers game in Philadelphia but was no longer active in it. However, during the period when he was active, Rosen testified, he had made numerous gifts to Richardson and, on occasion, had entertained him at various public functions and in public places in the city of New York. The committee considered the testimony of these two witnesses as being so diametrically at variance the entire record was referred to the United States attorney for the District of Columbia for his review and any further action that might seem to be justified by the testimony.

Indicative of the tie-up of gamblers, politicians, and police heretofore referred to, was a case of Michael McDonald, a Philadelphia policeman, who, while on duty, arrested a numbers writer named Jack Rogers. While Rogers was being booked in the station house, McDonald said, there came into the station one Mike Caserta who had been named by Rogers as his backer. McDonald said that Caserta had offered him a bribe if he would change the charge from gambling to disorderly conduct. Upon McDonald's refusal, he said, Caserta threatened to frame him and he thereupon arrested Caserta for disorderly conduct. At that point, a police captain, Vincent Elwell, entered the picture and when he learned that McDonald had arrested both Rogers and Caserta, he reprimanded the policeman. Rogers was then brought in and accused McDonald of reporting less than the money found on Rogers' person which, under police regulation, had to be turned in. On the basis of Rogers' statement, which McDonald said he believed had been written out and signed under Elwell's direction, Elwell suspended McDonald.

It is interesting to note that after McDonald's story had been brought out, he was given a retrial on these charges by the civil service board and was reinstated to his position on the police force. He thereupon resigned and entered the United States Army in which he had served during World War II with distinction.

McDonald gave a picture of the operations of the politico-gambler-police triumvirate. He named a policeman who he said was known as the collector for Captain Elwell. He named a political leader who was the boss of one of the wards in Philadelphia and who, he said, he had often seen in the stationhouse and conferring with the captain in the latter's office. He calculated that the payment of protection money to police in Philadelphia in the lower echelon totaled more than $150,000 a month, and he said that his own captain, Elwell, was reported to be getting $1,000 a month. McDonald said that the police were discouraged from making arrests of the numbers writers and if they persisted in doing so, they would be moved to beats where there were none. The general picture in this respect, given by McDonald, indicated that there is a tie-up between the three elements in Philadelphia, which permits these operations to continue with the token "convenience arrests" that are characteristic of the same kind of operations in other cities.

Captain Elwell was given a chance to tell his side of the story and did. He denied, of course, that any of McDonald's charges were true. He said that he had heard that there was a regular system of payoffs to police but that he had no. personal knowledge of it and that he had not taken any money from racketeers.

One of the most significant statements given to the committee in Philadelphia was that of William A. Gray, for 53 years a member of the bar of that city, one of Philadelphia's most distinguished lawyers and the undisputed leader of its criminal bar. Gray told the committee that several years ago Weisberg had come to him and had told him that Assistant Superintendent Richardson had warned him to keep out of the central part of Philadelphia on pain of personal treatment by Richardson if he found him there. Incensed by this, Gray had gone to see Richardson, whom he knew personally, had protested this treatment of Weisberg and suggested that if Richardson knew of any offense committed by Weisberg he should have him arrested on a warrant. Richardson truculently said that he would not have a warrant issued, but that the next time he saw Weisberg in Philadelphia he would wreak such personal injury upon him that Weisberg would have to go to a hospital.

Gray then went over Richardson's head, but instead of going to Richardson's superior, he went to see a judge, the late Harry S. McDevitt, who, he said, had some measure of control over Richardson to exercise his control. If this were not done, Gray said, he told McDevitt, "I am going to take some steps in this matter which won't be very pleasant for a lot of people in the city of Philadelphia."

After this conversation with the judge, Gray related, Richardson withheld further harassment of Weisberg for a while; later it was resumed.

The committee has no doubt that the numbers game in Philadelphia is a big operation. It is, however, operated in the main by local characters, obviously under protection. It lacks the interstate connections of similar operations in other cities; it is reasonable to infer that outsiders find it too difficult to come into the picture from out of State. As it happened, shortly before the committee hearings were held in Philadelphia on October 13 and 14, 1950, a Federal grand jury was convened to delve into the operations of organized crime in the eastern district of Pennsylvania and it was decided by the committee that further committee investigations and hearings would be postponed pending the outcome of the grand jury investigation so that there would be no conflict or hindrance in the activities of the latter body. This grand jury is still in session. Its investigation has been augmented by a local grand jury inquiry which has just gotten under way and to which this committee has offered, as it has to the Federal grand jury, such information as has been disclosed by this committee's inquiries in the Philadelphia area.

Chicago, by virtue of its size and its location as a center of communications, transportation, and distribution of goods, has been and remains a focal point for the activities of organized criminals in the United States. This does not mean that the law-enforcement officials of the city have been uniformly lax in the performance of their duties, although the committee has found evidence of deplorable laxity on the part of individual officials. It does mean that because of the history of the city, its physical location and its great size, the job of law enforcement in Chicago remains a tremendous responsibility and challenge to the law-enforcement agencies and to the citizens of Chicago and its surrounding areas.

The roots of the criminal group operating in Chicago today go back to the operations of the Torrio-Capone gang which terrorized Chicago in the 1920's. Records seized by the police during that period indicated that John Torrio, Al Capone, Jacob Guzik, Tony Accardo, Joseph Fusco, Frank Nitti, John Patton, Murray Humphries, Paul (Ricca) DeLucia, Alexander Greenberg, and others had built up an illegal empire netting millions of dollars a year. In the late 1920's, Torrio abdicated his leadership and Al Capone took over. The activities of the Capone gang at this time consisted largely of illegal liquor rackets, prostitution, gambling, and the control of horse-racing and dog-racing tracks. During this period the gang was particularly powerful in Burnham, Ill., a suburb of Chicago, whose mayor, John Patton, was closely associated with Torrio and Capone.

In 1924, the Torrio-Capone gang manned the polls during the mayoralty election in Cicero, another Chicago suburb, as part of a plan to take over the local government in Cicero. Following the 1924 election, Cicero became the headquarters for gang operations, and gang influence is still strong there today. In 1931, Al Capone was brought to trial and sentenced for Federal income-tax evasion after all attempts to establish his bootlegging operations had failed to put him in prison. Capone's place as leader of the gang was then taken by Frank Nitti, who, like Capone, was believed to have an interest in the Manhattan Brewery Co., and was an old-time member of the Torrio-Capone gang. At the time of Capone's conviction, the men who were believed to be important members of his underworld empire were, among others, Nitti, Louis Campagna, Paul Ricca, Jacob Guzik, Tony Accardo, Charles Fischetti, Edward Vogel, Hymie Levin, and Ralph Capone. Nitti committed suicide in 1943, while under indictment with a number of other Capone henchmen who were tried and convicted for a conspiracy to extort millions of dollars from the movie industry through their domination of the Motion Picture Operators Union. In 1943, Campagna, Ricca, Charles Gioe, Phil d'Andrea, Nick Circella, and John Rosselli, all of whom had been close to Capone, went to prison in connection with the movie extortion case. They have since been released from the Federal penitentiary.

Until the repeal of the eighteenth amendment in 1933, the manufacture and distribution of bootleg liquor constituted an important source of revenue for the Capone syndicate. After repeal, the Chicago underworld, like racketeers all over the country, concentrated its attention on the revenue possibilities of illegal gambling, extortion rackets, and infiltration of legitimate enterprises.

In Chicago, in many of the service industries, in the liquor industry, and in the unions, there has been a long history of activity by former Capone mobsters. Violence and bombings still occur. There is little doubt that members of the Capone syndicate use proceeds from their illegitimate activities to buy their way into hotels, restaurants, laundry services, dry-cleaning establishments, breweries, and wholesale and retail liquor businesses. In all such businesses their "contacts" give them a substantial advantage.

The extortion cases in the moving-picture industry, successfully prosecuted in New York, marked a milestone in governmental ability to cope with union infiltration by gangsters and the use of the powers of unions by gangsters in order to shake down business enterprises. The astonishing aftermath of the prosecution deserves detailed discussion. Paul Ricca, also known as Paul the Waiter and Paul DeLucia, undoubtedly one of the two or three leading figures in the Capone mob; Louis "Little New York" Campagna and Charlie "Cherry Nose" Gioe, who had been in partnership with Tony Accardo, were prominent in the mulcting of the movie industry. After their conviction and sentence, these three mobsters were visited in prison by Tony Accardo and Eugene Bernstein, the mouthpiece and tax lawyer for the mob. Bernstein and Accardo were indicted as a result of these visits because Accardo used the assumed name of another lawyer, Joseph Bulger. The trips to the prison from Kansas City to Fort Leavenworth were made in the automobile of Tony Gizzo, a prominent Kansas City mobster who has a history of close connections with the Capone syndicate.

The three mobsters were released on parole after serving a minimum period of imprisonment although they were known to be vicious gangsters. A prominent member of the Missouri bar presented their parole applications to the parole board, which granted the parole against the recommendations of the prosecuting attorney and of the judge who had presided at their trial. In the opinion of this committee, this early release from imprisonment of three dangerous mobsters is a shocking abuse of parole powers.

Another example of the efficiency of the underworld in releasing its leaders from the toils of the law is the story of the raising of funds for a tax settlement effected by the three above-mentioned mobsters, which they had to complete before they would be eligible for parole. Eugene Bernstein testified that he arranged this settlement. The Government's original claim against Campagna and DeLucia was about $470,000, including penalties. This liability was settled for $120,000 plus penalties of $70,000. Bernstein testified that $190,000 was delivered to his office in cash at various periods over a month by persons unknown to him. He had the almost inconceivable effrontery, as a member of the bar, to assert to the committee under oath that although he saw some of the persons who delivered the money he never asked them their names and that his office had no record whatsoever to indicate their identities. "You don't ask those fellows any questions," said Mr. Bernstein. He testified that he told Campagna and DeLucia that the money would have to be raised and that he also told this to Accardo. He testified that he visited Mrs. Campagna's home but did not remember what he told her. Neither DeLucia, Campagna, nor Mrs. Campagna had any idea of who might have been interested in providing funds or in how the funds were raised. Each had several hundred thousand dollars in cash hidden away in safety boxes h their homes. "It was a friend of mine," said DeLucia. "I would put up $190,000 for a friend of mine who needed it." The combined testimony of these witnesses represents a graphic demonstration of the willful, sullen, vicious contempt for the law still dominant in their hearts and minds. The connivance in this plot of a lawyer who obviously could provide the essential clues, if not the actual answers, brands the entire matter as even more shocking.

The most recent evidence of the intricacy of gangland's financial operations was provided in 1948 and 1949 when Ricca received loans totaling $80,000 from one Hugo Bennett, a salaried underling in the Sportsmen's Park Race Track and Florida dog tracks, formerly controlled by Edward O'Hare, John Patton, and the Capone syndicate. Bennett and his present boss, William H. Johnston, who figures prominently in our discussion of the Miami area, both worked at Sportsmen's Park under O'Hare. Patton, through his son, still has an important interest in the dog tracks. Several prominent Capone mobsters worked at the dog tracks when this committee began its investigation.

Ricca did not need the $80,000. By his own testimony, he had $300,000 in cash "stashed away." He owned a very valuable and pretentious farm of 700 acres and an elaborate home in a Chicago suburb. Bennett, on the other hand, had very meager assets and in order to make the loan to Ricca, borrowed $20,000 from Johnston and $15,000 from Max Silverberg, Johnston's restaurant concessionaire at the race tracks. Most of the remainder of the $80,000 was made available to Bennett by a highly questionable real-estate deal through which Johnston and a group of is own friends sold some land to the Miami Beach Kennel Club and made a huge profit. Bennett was cut in on this deal and the proceeds to him enabled him to complete the loan to Ricca.

Although Bennett went through the motions of obtaining mortgages, it was apparent to the lawyer who drew up these instruments that Bennett was determined to make the loans whether or not they could be properly secured. The evidence of the attorney and of Bennett, conflicting as it is on many points, clearly demonstrates that the mortgages were simply for the record. There is also ample reason to suspect that the $80,000 may have been a payoff for Ricca's approval of the wire service deal in which Accardo, Guzik, and Russell obtained an interest in the lucrative Miami Beach S. and G. gambling syndicate.

Several unions which were racketeer-infested and whose treasuries were raided by racketeers, had their headquarters in the same building where Tony Accardo operated his gambling enterprises and where he was in partnership with both Charlie Gioe and Harry Russell, whose Silver Bar tavern was also located there. The entire gang of union extortionists appear to be living in luxury in Florida, California, or Chicago and many of them have already acquired a thick veneer of respectability.

As the committee pointed out in its second interim report, the form of gambling which depends most on interstate commerce and interstate communications is off-track betting on horse racing and dog racing. The backbone of illegal bookmaking operations throughout the country is the up-to-the-minute information furnished by the Continental Press Service through its Nation-wide network of telephone and telegraph wires, and the intricate organization of distributors and subdistributors that gather and disseminate the news for Continental.

The heart of the racing news service centers in Chicago, where Continental has its main operating office, and from which most of its wires fan out to the rest of the country. While in Chicago, committee focused its attention to a considerable degree on the operations of the Continental Press, its relations with the distributors through whom racing news flows, and the increasing domination of the wire service by the same racketeering elements who control the large-scale and lucrative handbook operations.

The headquarters of the race wire service have been established in Chicago since before John Torrio became the underworld king of the city in 1920. Interestingly enough, the building which was occupied by Monte Tennes and his General News Bureau racing service now houses the offices of the Continental Press Service, some 30 years later. But the story of the race wire service, while inextricably linked with Chicago’s past and present, is not only a story of Chicago but of every city and town in the country into which the tentacles of the wire service reach. For this reason, the committee discusses the history and operations of the wire service in a separate section of this report.

The committee has described the workings of the Continental Press Service and exposed its facade of respectability and attempted insulation from the handbook operators who depend on it for information and on whom it depends for revenue. Just as the race wire service is essential to the success of large-scale betting operations, the substantial income which channels into Chicago from the wire service depends on the continuous operation of a flourishing handbook business. United Press and Associated Press pay a nominal fee of from $70 to $80 a month for the information that Continental distributes; the Illinois News Service, a single distributor, pays about $250,000 annually for the same service. The difference in these rates is the profit of the handbook operators which is passed on, in part to the subdistributor and distributor for Continental, and ultimately to Continental.

Since the last reorganization of the wire service in the Chicago area, the city of Chicago has been serviced by the R. and H. wire service, owned by the Capone mobsters, Ray Jones, Phil Katz, and Hymie Levin, and by Midwest News, now owned by John Scanlon, who participated in the Guzik-Accardo-Russell maneuver to take over the S. and G. wire service in Florida. The list of wire service drops compiled by the Senate Committee on Interstate and Foreign Commerce indicates that R. and H. services over 100 individual drops in Chicago. The Midwest Service sends racing news to over 200 drops in Chicago, as well as to about 50 drops in the surrounding area in Illinois. The list does not designate the occupation of the subscribers or drops, but in the case of R. and H. and Midwest, both of which are themselves subdistributors, it is safe to assume that the listed drops are, almost without exception, handbook or lay-off establishments. Some idea of the magnitude of the operations involved can be obtained from a review of the income of a number of the members of the Capone syndicate who have been actively engaged in gambling. Louis Campagna told the committee that his bookmaking operations in Cicero netted about $80,000 to $90,000 a year before his conviction in the movie extortion case. Harry Russell, who operated as a lay-off man for bookies in Kansas City, Omaha, and locations in Indiana and Michigan, was a partner with Accardo in the Owl Club, a bookie operation in Calumet City. In 1946, Russell reported an income of $26,000 from the club, and Accardo's share in the take has been as high as $45,000 in 1 year. In 1948, Joseph Corngold and Willie Heeney, members of the Cicero contingent of the Capone mob, grossed $51,000 on the handbook operation of the El Patio Club in Cicero.

The committee also heard testimony as to the extent of large bookie operations outside the immediate environs of Chicago. The income tax return of Charles Fischetti, who with his brother Rocco ran the lavish Vernon Country Club, showed a total net income of over $22,000 believed to be attributable to the gambling operations of the club. The Big House, a gambling palace place operated in nearby Indiana by William Gardner, Sonny Sheets, and Harry Hyams, who have close connections with the Chicago syndicate, took in $9,000,000 in 1948. William Spellisy, who operates on the Midwest wire service in Morris, Ill., testified that his handbook operations grossed $200,000 per annum, and Thomas Cawley, who operates on the Midwest wire service in La Salle County, showed a net profit of $68,000 from a half-interest in handbook and other large-scale gambling operations in La Salle and Streator.

Jack Doyle, gambling king of Gary, Ind., another subscriber to the wire service, conducts a large-scale handbook operation in that city along with other forms of gambling. Because of his political connections he is unmolested by law-enforcement officials. The profits from his illegal operations are enormous. Doyle told the committee nothing, but his detailed records on horse-race betting, poker roulette, craps, and slot-machine operations told much. From a mere $8,000 in 1943, his profits jumped to $120,000 in 1948.

Most of the coin machines in use throughout the country are manufactured in and around Chicago, and a large number of the machines have been purchased and operated inside the State of Illinois. The manufacture and distribution of slot machines has been a lucrative field of operation for a number of Capone mobsters. The Taylor Manufacturing Co. in Cicero, one of the largest manufacturers of gaming equipment in the country, is partially owned by Claude Maddox, a Capone mobster with a long criminal record, and Joseph Aiuppa, a close friend of Accardo and one of the leading members of the Capone syndicate. Over the past 3 years, the gross income of this operation has averaged between $200,000 and $300,000 a year.

Listed in its record of customers are some of the largest gambling establishments in the country. Total sales of gambling equipment by this company to one plush gambling establishment alone, the Hyde Park Club, were $75,000 for a period of 3 years.

The merchandising of coin machines and particularly slot machines is a business peculiarly adapted to the sales technique of the underworld, and a number of Chicago mobsters have been active in this field. Ed Vogel, old-time Capone henchman who evaded service of subpena by the committee, is believed to control the distribution of slot machines in the North Side of Chicago and in the northwest suburbs. Vogel has a partnership interest in lucrative cigarette vending and juke box distributing business. Through arrangement with the owner of a privately operated golf club, Vogel has been collecting for years from the operation of the slot machines at the club on the basis of 60 percent for the club and 40 percent for Vogel. It is conservatively estimated that from this one source alone the revenue received by Vogel is $50,000 annually. Each week Vogel's representative and an employee of the club lock themselves in a room at the club and divide the take. The club was reimbursed by Vogel for the expense of new machines purchased by it. In the past year, the State police, on direction of Governor Stevenson and the state’s attorney of Cook County, have made a concentrated effort to break up slot-machine operations in the State. State's Attorney Boyle testified that since November 1, 1949, his office had confiscated and destroyed 564 slot machines. Boyle testified that it was clear to him that a syndicate was behind the operations of the slot machines found in small taverns and gambling joints throughout the country because of the regularity with which slot machines reappeared in clubs that had been raided. During the period when the raids on slot machines were most intense, a number of hold-ups took place in private clubs that owned their own slot machines and the machines were removed from the premises. It seems apparent that the seizure of these slots was an effort by the syndicate to recoup their losses of machines seized by the law-enforcement agents.

The take on some of the slot machines operating in large gambling establishments, while not comparable to the sums taken in by some of the larger bookies, are tempting bait to the organized vultures operating in this field. Jack Doyle of Gary, Ind., reported ownership of 129 slot machines which brought in $60,000. Indicative of the size of Doyle's slot machine operation is the fact that in one year his expense for machines and parts totaled $24,000. The El Patio Club in Cicero grossed $23,000 on its slot-machine operations, and the Seven Gables, referred to before in connection with handbook operations, took in about $15,000 annually in the operation of its six slot machines. The 40-percent cut which Vogel, Francis Curry, and other members of the Capone syndicate are believed to take on the machines that they control constitutes a large-scale gambling racket, operating in the southern part of Illinois and across State lines into neighboring territories.

The large sums of money which annually pass into the hands of the Chicago bookmakers are the accumulations of large and small bets placed by occasional bettors and professional gamblers alike. The committee's investigations revealed that the city of Chicago harbors another huge gambling operation whose income in the millions is built upon a foundation of nickels, dimes, and quarters. It is estimated that the play on the policy wheels in Chicago's south side totaled for the past 5 years $150,000,000.

The densely populated South Side area of Chicago has for years been a fertile territory for the operation of policy wheels. Theodore Roe, a long-time policy operator estimated before the committee that 60 to 70 percent of the population of this area bet on the numbers to be drawn in the so-called policy wheel. There are approximately 15 to 20 wheels in operation in Chicago, 7 or 8 of which have a total play approximating 3 to 5 million dollars annually. The payoff on the wheels rarely goes above $50 to a bettor. In some instances when combinations are hit, the payoff may be 100 to 1. The placing of bets is handled by hundreds of low-paid employees and so-called commission writers who take and report the thousands of small wagers made each day. Bets are either made with a writer who goes from door to door with a book on which numbers can be paid, or a would-be bettor or can go to an established betting station and place a bet on the number to be drawn. In 1942 a number of the important policy racketeers, including Peter Tremont and Pat Manno (alias Manning), long-time associates of the Capone syndicate, were indicted by a Cook County grand jury for a conspiracy to operate a lottery. The subsequent trial resulted in a verdict of not guilty because of failure of the principal grand jury witness to testify. With the exception of this unsuccessful grand-jury action no major efforts have been made to break up Chicago's huge policy operation.

Theodore Roe could recall only one of his employees who had ever received a jail sentence in connection with his policy operations. Fines average from $25 up, and are absorbed by the wheel operator. Judging from sums taken out of the policy operations by the men who control them, these fines amount to no more than a reasonable expense of doing business.

Although for the most part the policy racket has operated in predominantly Negro sections of the city, the Capone syndicate has found the territory a fertile source of revenue. Peter Tremont and Pat Manno control the operations of the Rome-Silver Wheel and the Standard Golden Gate. From their gaudily named operations Tremont and Marino have averaged an annual take of from $80,000 to $100,000. The lesser partners in these two wheels, Fred, Tom, Jeff, and Sam Manno, brothers of Pat, have netted $50,000. The play on the wheels runs over $5,000,000 annually. In 1946, Pat Manno was linked with others in an effort by Chicago racketeers to take over a $14,000,000 annual gambling policy and other racket activities in Dallas County, Tex. The committee heard testimony to the effect that a hoodlum known as Paul Jones came to Dallas in 1946 in an attempt to make arrangements with the Dallas police and sheriff-elect of Dallas County on behalf of the Chicago syndicate for undisturbed racket operations in Dallas. Lt. George Butler, one of the police officials approached, testified that Pat Manno had appeared in Dallas to convince the Dallas officials and local racketeers of the authenticity of Jones' scheme. A recording was made of Manno's conversation during this visit. On the record, Manno stated that he had been in the policy business for 17 years in the city of Chicago.

Jones and others involved in the scheme to take over Dallas County were indicted and convicted of attempted bribery, but the Texas police never took any action against Manno in this connection.

The frankness of the recorded statement in the files of the committee is an interesting contrast to Manno's testimony, or lack thereof before this committee. He refused to answer most of the committee's questions on the grounds that he might incriminate himself, questions relating to his visit to Dallas, his acquaintance with Jones, his business associations with Peter Tremont or any aspects of his policy operations.

Sure. Once you get organized, you don’t have to worry about money. Everything will roll in a nice quiet manner, in a business-like way. You don't, he don't have to worry about it personally. Everybody will be happy I'm sure. * * *

We're not going to come from Chicago down here * * * all local fellows. We're leaving that to him. He's representing us * * * and keep the, like calls, the muscle men, these petty * * *. These people can be called in too, you know * * *.

One thing I'm against, always was against. I don't like, like I was telling you last night, five or six joints in the radius of six blocks, a joint every block. That's one thing I've always talked against. I like one big spot and that's all. Out in the country, out of the city entirely. * * *

I don't run any of those places up there, gambling or anything like that. I got my own territory. I got certain business that I take care of for the last 16 or 17 years. I do very well, living comfortably, worry about nothing. As far as the set-up, these places like dice rooms or horse rooms and things like that, that's like another department I would call it. If I had a fellow sitting here with me that runs a certain game, he could give it to you in a minute. He could tell you what to expect and all that sort of stuff you see. But I have my own little concession, and that's the end. * * * Well, that's my business, policy. Policy is my business. That I could run. * * * I've been at it for 17 years.

The oldest, and probably the largest wheel now operating in Chicago is the Maine-Idaho-Ohio wheel, originally known as the Jones brothers wheel. Theodore Roe and the Jones brothers are partners in this wheel. The play on this wheel amounts to about $6,000,000 per year; the net income for 1949 was close to $700,000 and for 1948 it came to over $997,000. It is interesting to note that the gross for 1949 was about $1,000,000, and the gross for 1948 was about $1,300,000. In 1946, Edward Jones, one of the partners in the Jones brothers wheel, was kidnapped and held for ransom. The ransom demanded was $250,000. George Jones, a brother of the kidnapped Edward, negotiated with the unknown persons who were holding Edward. One hundred thousand dollars in ransom was paid, and Edward Jones was released. He left Chicago about a week later and has since resided in Mexico, although he continues to draw sums approximating $200,000 a year from the operations of the wheel. In his testimony before the committee, Jones stated that he had no idea who his kidnapers were, and that they had made no mention of the proceeds of the policy wheel. It may be noted, however, that Jacob Guzik recorded, simply as "from various sources," without explanation a single item of income in the amount of $100,000 for the year 1946.

The only large policy wheel operated by white persons other than the Rome-Silver and Standard-Golden Gate, which are owned by the Capone mobsters, Peter Tremont and Patrick Manno, is the Erie-Buffalo. This wheel, the gross play of which runs to $5,000,000 annually, was for years operated by the Benvenuti brothers. Because of favors done for Al Capone by the elder brother Julius, the mob laid off this wheel.

After the death of Capone and Julius, conditions changed rapidly. In 1947, Caesar and Leo owned the Erie-Buffalo wheel which netted them approximately $105,000 each from its operation. As a lucrative side line, the Benvenutis operated a paper company which supplied policy slips to wheels within and outside of the State of Illinois. This same year, Sam Pardy received as income $1,500 from the Benvenutis. His total income had never exceeded $5,000. In the same year, the homes of both Caesar and Leo were bombed. The muscle started.

In the year 1948, drastic changes took place in the internal organization of the Erie-Buffalo wheel. Suddenly Sam Pardy and Tom Manno, a brother of Pat and a junior partner in the Rome-Silver and Standard-Golden Gate wheels, appear as partners in Erie-Buffalo, each netting for 1948 from the operation of Erie-Buffalo $305,000 each. Tom Manno's income from the two Capone wheels in past years had been a mere $40,000. His vacancy was filled by his brother Sam Manno. Caesar and Leo Benvenuti contented themselves with receiving payments of $50,000 each from the wheel they previously owned

In 1949, the new partners, Pardy and Manno, received $135,000 each from the Erie-Buffalo. Their "associates" Leo and Caesar Benvenuti were paid the same $50,000 each.

In the Erie-Buffalo records, a single significant item appeared in 1949 under the heading of "Special services." The amount covered under this item was $278,000, which was paid to the partnership of Anthony Accardo and Jacob Guzik. What the special services were bore no explanation. The result is self-evident. Three of the largest policy wheels in operation were under the dominance and control of the mob. In the middle of 1950, the Benvenutis left for an extended visit to Europe.

Substantial testimony was adduced before the committee that certain members of the State legislature, particularly those living in districts most heavily infested by racketeers, vote against legislation designed to curb gangster activities and urged for passage by the vigorous Chicago Crime Commission and associate freely with their gangster constituents. Roland Libonati, Democratic State senator from the West Side, and a close associate of Capone's, spearheaded the opposition to the reform legislation proposed by the Chicago Crime Commission and Governor Stevenson and backed by the bar. Representative James J. Adducci, Republican member of the bipartisan coalition against reform, has represented Chicago's West Side for 17 years. Adducci has been arrested a number of tunes in company with Capone mobsters and admitted to accepting campaign contributions from Lawrence Mangano, a well-known figure in the Capone hierarchy, explaining that in his district it was necessary to "accept finances from any kind of a business." Adducci has recently been indicted on the basis of his testimony before the committee that he received commissions amounting to $6,000 a year for securing orders from the State for printing and supplies.

It was perfectly obvious, as must be the case wherever large-scale law violations exist, that many of the law enforcement officials have been corrupted, although in the time available to the committee, only a few cases could be found where direct payments to police could be established. On the other hand, the committee heard and saw shocking evidence of inefficient or nonexistent law enforcement, of unexplained wealth enjoyed by low-salaried police officials; of brazen neglect of duty on the part of local officials, and in some localities, of apathy amounting to approval on the part of the public.

Evidence of individual police payoffs is difficult to uncover, and it was neither possible nor desirable for this committee to engage in a prolonged search for specific instances of corruption. As John Rosselli, onetime Capone henchman, frankly stated before the committee, the wire service, the handbooks, the slot machines, and the other rackets which have thrived in the city of Chicago cannot operate without local corruption; if the handbooks are open, the conclusion is inescapable that the police are being paid off

There are 30 to 40 punchboard manufacturers in the United States. The boards are shipped in interstate commerce. Their use in most of the States is contrary to local law. The Sax interests in Chicago are probably the largest makers of punchboards. There are about six or seven other leading producers. Total sales by all manufacturers is about $10,000,000 annually.

Of the total number of boards produced, 95 percent are so-called straight money or gambling boards. The remaining 5 percent are used for the merchandising of candy, cigars, cigarettes, etc. But even this type of board is often used for gambling.

Punchboards vary in price from $2 up, depending on the type and elaborateness of the board. A common type of board which sells for $2 will pay out $80 in prize money on a $120 total play, a $38 profit on a $2 investment. If, as sometimes happens, the board is destroyed before the large money prizes are punched, the profit may be greater.

Some distributors and jobbers place the boards in locations on a commission basis, splitting the profits with the proprietor on a 50-50 basis.

Testimony was given to the committee that some concerns, for an additional cost over and above that of the board, will furnish a key to the board. In such circumstances, the probable profits to the proprietor and the chance of winning by the gullible gambler are obvious. The victimizing of the proprietor by a confederate of the jobber who has the key to the winning numbers is another method of operation.

The use of punchboards for gambling is on the increase. They provide a great incentive to gambling. A variation of the punchboard is the penny pushcards which have great attraction for children. Cease and desist orders of the Federal Trade Commission against the use of these boards have been upheld by the courts.

It is, of course, not possible to estimate with any great degree of exactitude the annual sum played on punchboards. In view of the number of boards manufactured, the committee believes that to estimate this figure to be $100,000,000 would be conservative.

Cook County.

Law enforcement in the city of Chicago is primarily the responsibility of the mayor and the commissioner of police. Outside the city, but within the boundaries of Cook County, lie a number of incorporated villages each with its own mayor and its own chief of police. These areas are also under the jurisdiction of the State's attorney and the county sheriff, but the testimony before the committee revealed a pattern of continuing attempts to shift responsibility from one law enforcement agency to another.

As in other cities, the committee found that gambling operations were even more extensive and wide open just outside the city limits. The committee found evidence of lush gambling operations in Cicero, Burnham, Melrose Park, and other of the incorporated villages just outside Chicago.

Law enforcement in the areas outside the city has been particularly lax because of the ineffectiveness of the sheriff's office under former Sheriff Elmer M. Walsh, who did not stand for re-election, and his predecessors, and the indifference or outright dishonesty of the local chiefs of police. Sheriff Walsh's excuse for this laxity was lack of adequate personnel and lack of jurisdiction. The ward sponsorship system, which results in a complete turn-over of personnel in the sheriff's office with the election of each new sheriff, cannot possibly yield an effective enforcement agency.

In 1949, gambling conditions in the area outside Chicago had reached proportions which made it necessary for the State's attorney for the county to undertake gambling raids. Anthony A. Gherscovich, administrative assistant to the State's attorney, told the committee that prior to that time, the State's attorney's office had notified the sheriff and the chiefs of police of gambling operations within their jurisdiction but that nothing had been done to stop them. As a result of the raids conducted by the State's attorney, a number of chiefs of police were indicted. Henry Wlekinski, the chief of police of Calumet City, indicted for malfeasance in office, admitted to the jury that gambling was rampant in the city. He defended. his action on the grounds that the license fees from illegal taverns were supporting the town and were responsible for the low tax rate enjoyed by its citizens. On the basis of this defense, he was acquitted of the charges and re-mains in office as chief of police. Gambling operations appeared to be unimpeded when this committee visited Calumet City.

A similar situation existed in Melrose Park where Rocco de Grazia, Capone mobster, has operated the famous Lumber Gardens and other wide-open establishments for years. The chief of police was notified of these operations by the State's attorney's office, but took no action to stop or curtail this wide-open gambling operation. He was indicted for nonfeasance but acquitted, and is still in office. The pattern is repeated in Cicero, which has had three chiefs of police in recent years, but which is still the seat of lucrative gambling operations by a number of members of the Capone syndicate. The records of the chiefs of police in these towns, where gambling joints could be identified merely by walking down the street, are records of neglect of official duty and shocking indifference to violations of law. Equally shocking is the acquiescence of the people of the towns, as evidenced by the acquittal of these men and their continuation in office.

A reason for lack of conscientious enforcement of gambling laws was disclosed by the testimony of Police Capt. Dan Gilbert, known as the world's richest cop and for many years chief investigator for the office of the State's attorney for Cook County. Gilbert, democratic candidate for sheriff of Cook County, testified before the committee that he placed bets himself with a well-known Chicago betting commissioner. He admitted this was not legal betting. In explanation, he testified, "I have been a gambler at heart." Although agreeing that raids could be initiated by his office on bookies in the city, Gilbert admitted it had not been done since 1939, despite the fact that practically every bookmaking establishment in the city of Chicago was listed in the recently published hearings before the McFarland subcommittee of the Senate Interstate and Foreign Commerce Committee.

Grundy and La Salle Counties.-

The story of local corruption and indifference which was repeated many times in testimony before the committee, is not confined to the locality of Cook County. In 1950, at the direction of Governor Stevenson, the State police made a number of raids on known gambling joints. Among the places raided was the Seven Gables Tavern in Grundy County, which contained a bookie operation with a play of about $200,000 a year, a crap table, a roulette wheel, and slot machines which were repaired by the father of the State's attorney for Grundy County. The gambling operations were apparently wide open, but William Spellisy, proprietor of the tavern, testified that he had never been bothered by the police before the 1950 raid.

The committee also heard testimony regarding large-scale bookie and slot machine operations in neighboring La Salle County.

Thomas Cawley admitted in his testimony that he had operated two books, roulette and a crap table for about 15 years in the towns of La Salle and Streator. Cawley testified that his large gambling operations were generally known, but that he had never been disturbed by the sheriff or the chief of police. Cawley denied that he had paid money for protection, but admitted making political contributions, and a close friendship with Mike Welter, ex-sheriff of La Salle County who was frequently visited by Francis Currie and Claude Maddox, old-time members of the Capone syndicate. Cawley testified before this committee that he received occasional orders to close operations, but that such orders were overlooked in a short time and operations resumed. When Mr. Cawley first testified before the committee in October 1950, he stated that operations in the county had been slowed down in the preceding 3 months, but by the time of his second appearance in December, gambling was proceeding as usual in La Salle County. Cawley told the committee that his operations were possible because 90 percent of the people in the county wanted it that way, and his point was proved by the election as sheriff of a man who openly supported gambling in La Salle County.

Madison and St. Clair Counties.-

The committee heard from a number of citizens who stated that slot machines could be found "in such places as drug stores, confectioneries and even grocery stores" at all times since 1927 to the present. A notorious vice district known as the Valley ran without interference until closed by Federal military authorities. A grand jury in 1946, although plagued by lack of cooperation from prosecuting officials, found appalling vice and gambling conditions in St. Clair County. The committee heard testimony about similar wide-open conditions in Madison County.

Most shocking in Madison and St. Clair Counties was the utter blindness of law-enforcement officials and the evidence of their unexplained income. The testimony of John English, commissioner of public safety of East St. Louis, that he knew of no major law violations in his city seemed to the committee to verge on the incredible. He testified that he had never done anything to disturb the operations of Carroll and Mooney and did not know that they were among the biggest bookmakers in the country although this has been notorious on a Nation-wide basis for a long time. He stated that the first time he knew anything about Mooney's operations was when he read it in the papers. He also told the committee that it was his understanding that Carroll was violating no Federal or Illinois law. The committee asked him about a number of other well-known bookmakers whose operations were common knowledge in his area, but the commissioner asserted he knew nothing about them. He admitted having stated publicly that in his opinion "it was all right to bet any place else if they wanted to make a bet." With this kind of an attitude, it is no wonder that law was flagrantly disregarded in East St. Louis.

The committee had no better impression of the law-enforcement activities of Adolph Fisher who testified that he had been sheriff of St. Clair County from 1946 until 1950. Although the operations of C. J. Rich & Co. and of the Carroll-Mooney partnership were notorious throughout the United States, Sheriff Fisher, in whose county they were operating, told the committee he knew nothing about them. In fact, he testified that he first learned about Mooney and Carroll when this committee's investigation started. When it was pointed out to him that it had been a matter of public record a result of Carroll's own testimony before the Senate Committee on Interstate and Foreign Commerce some months earlier, Sheriff Fisher corrected his testimony to say that at that time he sent a deputy clown to the establishment but found nothing going on. He could not recall whether he sent the deputy in the daytime or nighttime or whether any efforts were made to follow up the investigation. This committee's investigators, however, had no difficulty whatever discovering the Carroll-Mooney operation going at full steam.

A similar picture was presented through the testimony of Mr. Dallas Harrell who had been sheriff of Madison County from 1946 to 1950. His very frank answer to a question of why he took no action in putting out of business large gambling establishments such as the 200 Club was that he left that up to the cities and "if the mayor and the chief of police and the citizens of Madison, the city of Madison, were satisfied with it, it suited me."

Although Sheriff Harrell testified that there were no commercial slot machines in Madison County while he was sheriff, the committee learned that the Bureau of Internal Revenue's list of persons who had paid the $100-per-annum tax on establishments in which slot machines were maintained had been published in the newspapers of St. Louis. Sheriff Harrell stated that he knew this; nevertheless no action was taken against slot machines.

There can be little doubt in the minds of the committee that "wide open" conditions flourish in Madison and St. Clair Counties because of protection and "payoffs." Commissioner English, for example, never gave a satisfactory explanation of his large accumulation of assets since he became commissioner of public safety, nor the nature of the so-called "political contributions" which he reported as income. Chief of Police John Vickery, of Fairmont City, Ill., who had previously been a coal miner, first began to sport a Cadillac car and a $1,200 diamond ring when he became police chief. Perhaps his attitude toward bookmaking explains his sudden wealth. When asked why he permitted a bookmaking establishment to operate within a block of his police station, his answer was "I just never had had no complaint about it."

The committee hearings in Tampa were conducted against a back-drop of gangland violence and vengeance pointed up by a sordid record of more than a dozen racket killings and six attempted assassinations in less than two decades.

Through this bloody history runs the obscure but sinister shadow of Mafia operations, with its accompanying links between the criminal overlords of Tampa and their counterparts in other sections of the country. The committee could not make an adequate investigation of the Mafia background of these murders because all suspected Mafia adherents vanished from their homes and usual haunts when it became known that the committee intended to investigate their activities. Months have passed since the committee's visit to Tampa, but these men have continued to evade process. It is freely stated in the particular circles in which they operate that they intend to remain in secret refuges until the life of this committee expires.

In Tampa, as in other cities visited by the committee, there was found the same dismal pattern of corruption of public officials by entrenched gambling interests which the committee has found in other cities. There is testimony in the committee's record showing that these interests have resorted to the customary policy of outright bribery and have channeled substantial amounts of money into political campaigns, manifestly for the control they can exercise over law-enforcement officers. The committee's findings in Tampa led to the inescapable conclusion that the gambling element over a long period of years has throttled any and all efforts to secure an adequate degree of law enforcement in this community.

The principal source of revenue for the gambling fraternity in Tampa is a variation of the numbers racket known as bolita. The pattern of operations is similar to the numbers racket in other parts of the country but with some variation in the systems of drawing the numbers. The committee has also established that the system of distributing the bolita business among the existing bolita bankers is different from the methods employed in other cities in arriving at an equitable division of the spoils.

The committee found elsewhere that those engaged in the numbers racket were inclined to establish territorial limitations within which numbers banks could operate. In Tampa the bolita operators were free to operate anywhere within the territory. However, each banker received an assignment of men who were charged with the obligation of picking up the day's play and these men in turn were furnished with the names of specific places where bolita was sold. Thus the operations of any particular bank were limited to a specific number of selling points and an adequate number of pick-up men to cover these points, regardless of geographical location.

Apparently bolita operations do not run smoothly in Tampa. The last two gangland killings involved leading principals in the operation of the bolita racket. Jimmy Velasco was killed on December 12, 1948, and Jimmy Lumia on June 5, 1950. No one was convicted of the other Tampa gangland slayings, with one exception in 1932.

Admittedly, the participation of the Mafia in Tampa's series of murders and attempted assassinations is predicated on inferences. As is well known, intimidation and threats of retaliation operate to silence witnesses of homicides traceable to this organization. However, an analysis of the existing information produces some enlightening facts which are susceptible of being woven into an easily recognizable pattern. Connections with other cities are clearly shown by the record. One of the fugitives from the committee's process was Santo Trafficante, Sr., reputed Mafia leader in Tampa for more than 20 years. It is an undisputed fact that a search of the effects of Jack Dragna, one of the alleged Mafia leaders on the Pacific coast, yielded the telephone number of Trafficante and also that of the late Jimmy Lumia.

The lamentable state of the files of Tampa killings, kept by the Tampa Police Department, was emphasized lay the testimony of Chief of Police M. C. Beasley. In fairness to Chief Beasley, it must be pointed out that he had occupied his position only 5 months prior to the time he was called to testify before the committee and the responsibility for the condition of the department's records was not attributable to him.

Requested to produce the files concerning the gangland killings in which the committee was interested, Chief Beasley was forced to admit that in many of the cases there were no files at all, and that in most of the remainder the information was extremely sparse. Whether the disappearance of the records was a matter of accident, carelessness, or design was not readily discernible.

One of the missing files dealt with a character known as George "Saturday" Zonate, twice made a target of gangland vengeance. On November 10, 1936, he was shot at Eighth Avenue and Fourteenth Street in Tampa by two gunmen in a car, firing sawed-off shotguns. He was also attacked by gunfire on another occasion at his home in the 2100 block of Nebraska Avenue. Zerrate's career was marked by an arrest in New York as a suspect in dope trafficking with Charles "Lucky" Luciano. The only murder conviction in Tampa during the past two decades was that involving Zerrate's brother, Mario, who was given a life sentence for the killing of Armando Valdez, a wholesale produce dealer, in 1932. Oddly enough, the records in the Valdez slaying also were missing from the police department files.

Another significant tie-up with the Mafia appeared in the murder of Joe Vaglichi, alias Joe Vaglichio. He died in a hail of shots poured from shotguns wielded by assassins in a passing car outside his sandwich stand early on the morning of July 29, 1937. There were no arrests and Vaglichi's past history caused police at the time to credit his death to Mafia internal conflict. Vaglichi was one of 23 Italian gangsters rounded up by the Cleveland Police Department in a hotel in that city in December 1928 after the Cleveland police had been tipped off that Mafia leaders were congregating there for a meeting. Thirteen revolvers were found among the 23 prisoners, who also included Ignazio Italiano of Tampa. Vaglichi also had been tabbed by authorities in subsequent years as a killer in the pay of the Mafia for jobs in New York, Chicago, Detroit, and New York, although never convicted. He also was reported to have had a brother in the Chicago rackets who had been a bodyguard for Al Capone. The Tampa police file on the Vaglichi slaying was limited to a newspaper report of the murder, Vaglichi's criminal record, and a statement about the killing. There were no investigative reports of any kind.

Indications of a New Orleans connection with the Tampa killings were found in the circumstances surrounding the murder of Ignacio Antinori, slain by a masked gunman in a suburban tavern in October of 1940. Information in the hands of the committee was to the effect that the murder weapon was traced to a New Orleans store where it had been purchased by a man who gave the obviously false name of John Adams. The date of the purchase was October 7, 1939, which was only 5 days before the murder of Mario Perla. Whether the same gun figured in both murders was not made clear. Antinori had been at odds with the syndicate controlling Tampa gambling for 3 years before he was slain. He was the father of Paul and Joe Antinori who have been involved in narcotics activities.

Chief Beasley, with nearly a quarter of a century of police experience in Tampa except for the period between 1942 and 1946 when he, served in the Armed Forces, gave the committee his views on the existence of the Mafia in the following testimony:

Question. 'Do you believe there is a Mafia or syndicate?

Answer. I absolutely do; yes.

Question. Do you believe - you do?

Answer. I believe it does exist.

Question. Would you like to tell us what your concept of the Mafia is and its effect on these murders and witnesses?

Answer. My concept of the Mafia is that - well, I believe it consists of Italian people who have come from the southern part of Italy, Sicily - I believe they are known as Sicilians - that have immigrated into this country through the immigration channels in the early part of Mussolini's regime. There were criminal bands, as I have read the history of it, running wild and rampant over Italy and Sicily especially, that came over here and, as a result, we have the Al Capones and other different people that organize into a crime syndicate. I believe that those people got themselves into this crime syndicate through a lot of political influence, higher than I am and higher than - I think I would be small fry to the contacts that they have.

Question. From your investigation of these various murders, do you feel that any of those were perpetrated as a direct result of a Mafia order?

Answer. I can only assume that it was, because of the circumstances that surrounded each one of them. I have not had the direct testimony that we could convict in court on.

Question. We appreciate that. We did not ask, would not ask you for an opinion on something like that. As to the actual triggerman, the gunman, in some of these killings, do you feel that they are local members of the. Mafia, or that they are imported gunmen?

Answer. I always judged that they were imported, because they had far-reaching activities, just like you show in your chart there, and they have - it would be foolish for one of them who is well known in the city of Tampa to go out on the street, even in the day or night, and perpetrate a shooting there. Then there has been evidence that you will find in these records that will trace some of the actual implements of death, trace it back to different cities out of Tampa.

Law-enforcement officials in Tampa have been unable to cope with violence stemming from organized crime. They have also been unable to enforce the gambling laws of the State. In the city of Tampa and Hillsborough County for the period of January 1 to September 1, 1950, only 96 arrests for gambling violations were made and not one of those apprehended landed in jail. Forty-five of those arrested forfeited bonds and the charges against 43 others were dismissed. Only six defendants were fined and there were two cases pending as of September 1, 1950.

It should be noted that much of the violence in Tampa arises out of the failure on the part of the police department to enforce the gambling laws. Antinori, Lumia, and Velasco, three victims of gangland killings, all had at one time or another before their deaths held the tenuous title of king of Tampa gambling.

The close alliance between gambling and violence in Tampa is also illustrated by the testimony of Charles M. Wall, a recognized power in gambling activities in the Tampa area for nearly a half century. Over a 14-year period, Wall was the target of three attempts on his life. Wall, who managed to escape on all three occasions, blandly insisted that he knew of no reason why anyone would try to murder him and admitted that no one had ever been arrested for these abortive attempts to kill him.

A large portion of the testimony in Tampa dealt with the impact of unchecked gambling on the community. The committee's investigations have conclusively demonstrated that illegal gambling cannot thrive without protection from law-enforcement officials. The Tampa testimony bristles with allegations of bribes to law-enforcement officials and categorical denials from such officials.

The central figures in this welter of confusing testimony are Sheriff Hugh L. Culbreath, State attorney J. Rex Farrior, and retired Chief of Police J. L. Eddings. Sheriff Culbreath had his opportunity to refute the accusations of graft and official misconduct at the Tampa hearing and again in Washington. Farrior appeared in Washington and denied that he was the recipient of graft payments. The committee has no way to establish the truth or falsity of these denials. Nevertheless, when Farrior was questioned about the lax enforcement of the gambling laws in the Tampa area., he took refuge in double talk and attempted to evade responsibility by blaming others for his failures. Eddings was invited by the committee to appear in Washington but declined the opportunity to answer the allegations of misconduct voiced by several witnesses at the Tampa hearings.

It should be noted that after his appearance before this committee, Sheriff Culbreath was indicted by the grand jury of Hillsborough County, Fla., for taking bribes and for acts of nonfeasance and misconduct in office.

The committee does not wish to usurp the function of a trial jury and pass judgment on Culbreath. However, it should be noted that Culbreath has never satisfactorily explained to this committee how his net worth grew from approximately $30,000 to more than $100,000 during his years as sheriff of Hillsborough County. Nor did Sheriff Culbreath satisfactorily explain his association and business relationships with Salvatore "Red" Italiano, a notorious gang leader in the Tampa area, who has consistently evaded the subpena of this committee.

Difficult to understand also is the real estate deal between Culbreath and John Torrio, Capone's predecessor in Chicago. Finally, the committee must continue to wonder at how a sheriff sworn to uphold the law could permit his brother and one of his employees to carry on bookmaking operations, right in the county jail.

Organized crime in the Cleveland area presents the familiar pattern of a mob that had grown rich and powerful during prohibition days in the illicit liquor business and which transferred its activities after repeal to the even more lucrative field of gambling. The Cleveland gambling syndicate consists primarily of the following individuals: Morris Kleinman, Samuel "Gameboy" Miller, Moe Dalitz (alias Davis), Louis Rothkopf (alias Rhody and Zarumba), Samuel Tucker, and Thomas J. McGinty. Affiliated with the syndicate is an accountant, Alvin Giesey, who also functioned as secretary for certain corporations owned by the syndicate. The attorney for many of the operations of the syndicate is Samuel T. Haas. Haas was sought by the committee for questioning but has until recently evaded service of a subpena by going to Jamaica, British West Indies. This group has enjoyed close relationships and associations with certain gangsters and musclemen, who also participated in enterprises conducted by the gambling syndicate. Included in this latter group are the two Polizzis, Alfred and Albert ("Chuck"), John and George Angersola (alias King, James Licavoli, Jerry Milano, Joseph DiCarlo, and others.

The syndicate's major field of operations has been the conduct of gambling casinos at which all forms of gambling were provided from roulette to craps, from chuckaluck to horse bets and slot machines. However, in the many different communities in which the syndicate penetrated, it never had the monopoly which one has come to associate with syndicate operations. Thus local mobs ran competing gambling enterprises. It should be noted, however, that in certain instances competing local enterprises were eventually absorbed by the syndicate and, in other cases, arrangements were entered into by which the plushier enterprises were operated by the syndicate in conjunction with local partners, while the less expensively appointed places catering to the average citizens were run by local characters.

The story of the Cleveland syndicate's gambling operations begins in the city of Cleveland itself. For many years gambling casinos like the Harvard Club, the Ohio Villa, and the Thomas Club ran wide open in the city of Cleveland. Governor Lausche, then a judge; Safety Director Eliot Ness, and Prosecutor F. T. Cullitan, acting in concert, closed these places in the early 1940's and they stayed closed. Prior to this time, however, the Cleveland syndicate bad begun to expand into the counties outside of Cleveland itself. Apparently the heads of the Cleveland syndicate knew that their days in Cleveland itself were numbered and they had previously decided upon various hedging operations which took them and their illicit businesses into the outlying counties of Geauga, Lake, Trumbull, and Lawrence, where local sheriffs, prosecutors, and other persons charged with law enforcement were more susceptible to gangland influences. The Pettibone Club in Geauga County, the Mounds Club in Lake County, the Jungle Inn in Trumbull County, the Colony Club and the Continental Club in Lawrence County, and the Colonial Inn in Green County were among the most notorious establishments conducted by the Cleveland syndicate. These gambling clubs operated in open defiance of the law. Transportation was arranged for out-of-town and out-of-State participants in the gambling games. Players were brought to these cubs from West Virginia, Michigan, Illinois, Indiana, Kentucky, and other States. These gambling operations were finally shut down by the vigorous action of Gov. Frank J. Lausche, who used powers available to him under the State liquor and fire laws to enforce compliance with the State's gambling statutes.

The Cleveland syndicate, however, is resourceful, and is ever alert for opportunities to stay in business. Even prior to the shut-down of the various clubs in Ohio, plans were laid for an extension of syndicate operations into the wide-open communities of Campbell and Kenton Counties of northern Kentucky. Again the syndicate ran into local competition. In this area, the syndicate and the local talent operated such gambling enterprises as the Look-Out Club, the Beverly Hills Club, the Yorkshire Club, the Merchants Club, the Flamingo Club, the Latin Quarter, and the Kentucky Club.

So rich did the Cleveland syndicate become from its operations that when Wilbur Clark needed over a million dollars to complete the plush Desert Inn at Las Vegas, he applied to the syndicate and obtained the money in return for which the syndicate acquired over 59 percent of this gambling enterprise. In addition, syndicate members also obtained interests in some of the gambling casinos in the Miami area, such as the Island Club, in which Samuel "Gameboy" Miller is a principal partner.

In the Ohio-Kentucky communities in which wide-open gambling has been carried on by the syndicate and by local hoodlums, officials are strangely afflicted with the inability to see the obvious, a disease which seems to afflict law-enforcement officials in wide-open communities everywhere. The police chief of Newport, Ky., was probably the only adult in the city who did not know that there were wide-open gambling houses in his community. Any taxi driver could have taken him to them. The casinos were so unconcerned with the possibility of interference with their operations that they advertised openly in the Cincinnati papers. In addition, streamers advertising the attractions at these places were placed on the windshields of automobiles. It should be noted that the gambling rooms of the establishments run by the syndicate in Campbell and Kenton Counties, Ky., shut down just before the committee hearings in Cleveland on January 17, 1951. It is significant that an advertising card has been circulated stating that Beverly Hills Country Club in Southgate, Ky., one of the syndicate establishments, advertised that it would reopen on April 1, 1951, which by a strange coincidence was 1 day after the anticipated expiration of the committee.

The failure of law-enforcement officials to enforce the gambling laws is the primary reason for the existence of the gambling casinos in Campbell and Kenton Counties. The failure is not accidental nor is it due to the mere inefficiency of local law-enforcement officials. As in other areas, the committee found a close financial and personal relationship between law-enforcement officials and the gambling interests. For example, the sheriff of Lawrence County, guaranteed the water and gas bills of the Continental Club, a notorious gambling casino which was run by a convicted killer. The sheriff of Lucas County explained his sudden acquisition of wealth by stating that he had won considerable money in betting, although he had never made such sums prior to attaining the sheriff's office. A proprietor of electrical appliance stores, who also ran gambling casinos, supplied the sheriff of Trumbull County with various electrical appliances, including an $850 television set.

Of particular interest in the Cleveland hearings are the relationships of Alvin Giesey to his racketeering employers. Alvin Giesey presents the familiar pattern of an accountant who had numerous gangster and racketeering clients. The cream of the Cleveland underworld had their tax returns prepared by Giesey. Giesey actually had a share in the illegal enterprises of his clients. He was an officer of two corporations which owned the land upon which gambling operations were conducted and he was also an officer in a corporation that operated the gambling casino itself. In addition, he had a share of certain jukebox companies which did a considerable business in slot machines.

It was Giesey who gave the committee one of the clearest demonstrations of how the Federal Government may be defrauded of hundreds of thousands of dollars in taxes from the operations of gambling enterprises. There was absolutely no way of guaranteeing the accuracy for tax purposes of the figures submitted to Giesey by the gambling enterprises. Adequate books and records were not kept. Before the figures of income and outlay were submitted to Giesey, hundreds of thousands of dollars were probably taken off the top of the bank roll. Giesey, like so many of the other accountants who serve gangsters, merely used the figures submitted and prepared the tax returns. Although he was an experienced public accountant, he made no effort to verify any of the figures submitted to him. Since the major portion of a gambling casino's business is in cash, no adequate check can be made to determine the accuracy of reported figures of income and outlay.

Two other matters brought out at the Cleveland hearings are significant. The first relates to the typical muscling in operation which took place in Youngstown, Ohio, and which was described in detail to the committee by Police Chief Allen.

Through the testimony of Chief Allen, and evidence before the committee in the case of Joseph Di Carlo, a typical enforcement operation was described. Di Carlo was a criminal with a long and unsavory record in Buffalo, N.Y. For reasons unknown, he decided to transfer his operations to Ohio, coming first to Cleveland and finally settling in Youngstown. Shortly after his arrival in Youngstown, Di Carlo and his partners, Aiello and Caputo, made their rounds of the local bookies and advised them that as of a certain time, the partnership was going to take 50 percent of the gross receipts of the local bookies. Statements to this effect given to Chief Allen in 1948 by Manley, Alpern, Cavallaro, and Melik revealed two basic means of intimidation used by the Di Carlo partnership to effectuate its orders to the bookies. First the .partnership threatened to use political influence to drive the bookies out if they did not succumb to the enforced arrangement and, second, they threatened physical violence. These familiar muscling-in-tactics resulted in a complete surrender on the part of the bookies. This was the same Di Carlo who openly and contemptuously defied the committee when he was asked questions concerning his business operations and the sources of his livelihood.

The other situation relates to the wire service. Arthur B. McBride, whose son is the nominal owner of Continental Press, described in some detail at the Cleveland hearing his key position in the distribution of gambling information to bookmakers for over a score of years through the wire service. His testimony will be considered in the section of this report dealing with the wire service. It should be noted here, however, that one of McBride's "tough boys" upon whom he depended during the days when he was involved in newspaper circulation and taxicab wars, was Morris "Mushy" Wexler. Mushy, like so many of McBride's former musclemen, now holds a key position in the distribution of wire service for Continental Press in the Ohio area through his ownership of the Empire News Service. Wexler could not be questioned as he evaded the service of a subpena, but in Ohio as elsewhere; although there is an attempted facade of respectability, the Empire News Service is primarily engaged in the distribution of gambling information to bookmakers.

The committee chose the Ford Motor Co.'s River Rouge plant as a laboratory in which to investigate the problem of large-scale, organized in-plant gambling, which disturbs the operations of many industrial centers throughout the country. The sole reason for focusing attention on the River Rouge plant was that it is believed to be the largest single manufacturing establishment in the world, and no other significance should be attached to the choice of this plant. A Ford Motor Co. official stated that 69,000 persons were employed in an area which covers 1,212 acres. For this reason it was believed that there was probably a larger amount of in-plant gambling going on within the perimeter fence of this plant than anywhere else. The committee, however, did not find that there was more gambling going on per capita in this plant than in any other.

The Ford management, the union, the chief of police and an individual worker were in agreement that the practice of gambling was very widespread and that the principal problem was the numbers game or policy racket, but no one was able to give the committee exact figures. Gordon L. Walker, chief of the security department of the Ford Motor Co., stated that estimates of the annual amount gambled within the plant ran all the way from one to one hundred million dollars. He told the committee that he could not give any more informed estimate. It seems clear, however, that the figure is much in excess of the lower of the two figures suggested above. Saul A. Glazer testified that he had worked in the foundry at the River Rouge plant and that gambling was going on virtually everywhere. He stated that he knew of particular closets or rooms which were regularly used for gambling purposes, that many suppliers of parts or equipment who had counters would openly take bets or make numbers wagers over their counters and that it went so far that operators of overhead cranes would roll their cranes up and down buildings lowering buckets with their cranes into which wagers and money would be put.

One of the most interesting, although discouraging, aspects of this problem is that there appears to be a determined effort on the part of both management and labor to pass the responsibility from one to the other. The committee heard that on some occasions organized gamblers would throw very large funds into union elections in major locals in the Detroit area in the hopes of securing the election of officials who would tolerate in-plant gambling. Their use of money by gangsters to influence the outcome of union elections is unquestionably a perversion of the labor-union movement.

It is the committee's belief that the numbers racket in Detroit plants is very highly organized. The bets are picked up by one group. The actual numbers are carried out of the plant by a second group. If this second group is arrested, they have no money in their possession and prosecution is difficult. A third group takes the money out and if these men are arrested they have nothing on them but currency which makes prosecution difficult. The money and the bets go to collectors and then on up to bankers. The committee was told by the police officials of the city that it was extremely difficult to press a case on anyone in the upper levels of the hierarchy of numbers. The committee notes with satisfaction, however, that one entire numbers system or "Snoozy House," as it is called in Detroit, was recently successfully prosecuted.

In this connection the committee finds that not only in Detroit, but throughout the country, the members of the lower echelons in the numbers racket, who are not major criminals, are arrested, plead guilty, and receive fines. These fines are not paid by the persons convicted but are paid as a part of the cost of doing business by the big-scale numbers racket. These fines are purely a business expense to the major operators. They have no deterrent effect on the latter, nor on the minor characters in the racket, since they do not pay the fines. Jail for the minor operators appears to be the only way to effectively curb their operations.

As noted above, both labor and management shifted to each other the responsibility for plant gambling. It is the committee's opinion that neither management nor labor can be charged with the entire burden of suppressing plant gambling and that both should redouble their efforts to cooperate with law-enforcement officers. An agreement between labor and management that any person should be discharged after a fair hearing who is caught in gambling activities by either his shop steward, his foreman, the plant police or the city police, would go a long way toward terminating the evil.

The committee, in its New York investigation, learned that the sole motor carrier hauling away Ford motorcars from the Edgewater, N. J., plant (under license of the Interstate Commerce Commission) was Automotive Conveying Co., of New Jersey, Inc., of which Joe Adonis was a very important stockholder as well as an officer. The committee therefore looked with especial interest into the relationship between the Ford Motor Co.'s Detroit area plants and their haul-away operators. It appeared that the sole haul-away operator was the E. & L. Transport Co. One Anthony D'Anna appeared to be a 50-percent stockholder of this corporation and it further appeared that he received a salary of $27,000 a year for which he did nothing so far as the committee was able to discover. The history of D'Anna's relation to the Ford Motor Co. is most obscure. D'Anna was of Sicilian birth. His father and two uncles died in what appeared to the committee to be Mafia-type murders. His father's slayer had in turn been murdered in a similar killing. D'Anna himself had been sentenced to prison for the attempted bribing of witnesses in connection with another Mafia-type rub-out. D'Anna testified that he was in the sugar business from 1925 until around 1930 and that he was selling sugar to persons whom he knew to be bootleggers. He also engaged in bootlegging with Joseph Massei, said to be chief emeritus of the Detroit underworld.

The relationship between D'Anna and the Ford Motor Co. began in 1931. According to the testimony of the chief of police, whom the committee believed, Harry Bennett, then a very high official of the Ford Motor Co., telephoned to the chief and asked him to get hold of D'Anna and stated that he, Bennett, would meet him any place D'Anna chose. The chief of police then did find D'Anna, who agreed to go to Bennett's office. The chief drove D'Anna to Bennett's office at the Rouge plant. The committee heard privately but was unable to prove that Bennett said that he had sent for D'Anna to instruct him not to murder Joseph Tocco, who had a food concession at a Ford plant. The story which the committee heard but was unable to prove was that Bennett entered into an agreement that D'Anna would refrain from murdering Tocco for 5 years in return for the Ford agency at Wyandotte. As a matter of record, Joseph Tocco was not murdered until 7 years after this meeting. Also as a matter of record, D'Anna did become a 50-percent owner in the Ford agency at Wyandotte within a matter of weeks after the meeting. He remained in that position, although he put up only $6,000 and did substantially nothing in connection with the agency, until 1939 when it was transferred to his brother.

The story of Harry Bennett has been so thoroughly explored in the hearings of the National Labor Relations Board, in the press, and in published books that the committee will not once again go over the extraordinary and sordid story of a man who was certainly chief of staff to Henry Ford (although he described himself before this committee as his valet), who employed virtually a private army recruited from ex-convicts and criminals to engage in battles against labor and in other antisocial activities. The committee, however, called Bennett for the special purpose of asking him how it happened that a company in which Doto, alias Adonis, of New York, was an officer and large stockholder had received the Edgewater, N. J., haul-away contact and that D'Anna had received first the Ford agency at Wyandotte, Mich., and had then been allowed to act as a 50-percent stockholder and an officer in the carrier having the Detroit haul-away contract. Bennett testified, and the committee disbelieved him, that he had no knowledge of the Edgewater negotiations and that some official in New York must have attended to it. Bennett also could give the committee no satisfactory explanation of Ford's relationship to D'Anna. Bennett's testimony is also extraordinary from another point of view. He states that he made it a practice, although he was obviously in command of one of the largest corporations in the United States, not to keep files or records or memoranda of any kind. How D'Anna and Joe Adonis obtained such profitable relationships to Ford must therefore remain shrouded in mystery. The question which remains unanswered, however, is why, nearly 6 years after Bennett was removed from command of the Ford Motor Co., these two mobsters remain in lucrative relationships with this organization.

In fairness to Ford Motor Co., it should be noted that it is taking vigorous steps to disassociate itself from these racketeer-held contracts.

The most important fact uncovered in the Detroit hearings of this committee was that some manufacturers have entered into and are today continuing intimate business relationships with racketeers for the purpose of affecting their labor relationships. The sad story uncovered by the committee is somewhat complicated because it operates in two stages. The first stage is that in which the Detroit, Mich., Stove Works, the president of which is John A. Fry, whose social respectability in the city of Detroit is beyond any question, entered into a relationship with one Santo Perrone, the obvious effect of which was to enlist the assistance of Perrone's gangster friends in Fry's labor problems. Perrone is an Italian-born naturalized citizen who has a criminal record including a 6-year sentence for violation of the prohibition laws. The second stage is that in which Fry's close friend, William Dean Robinson, likewise socially impeccable and a high official and now president of the Briggs Manufacturing Co., concocted a legal fiction whereby Perrone's son-in-law, Carl Renda, obtained a contract for doing nothing which has given him since 1946 an income ranging between fifty and one hundred thousand dollars a year, the real purpose of which was to have Perrone exert his and gangdom's influence in the Briggs Manufacturing Co.'s labor problems.

The Detroit, Mich., Stove Works is one of the largest of the non-automotive manufacturing plants in the Detroit area, and perhaps the largest nonunion plant in the Detroit area. Santo Perrone testified that he had worked for more than 40 years for the Detroit, Mich., Stove Works. It appeared that his education was such that he could barely read and write English and that he had difficulty in reading street signs. He could read simple names but could not read difficult street names. Although Perrone testified that he had never heard of any labor difficulty, a serious strike had occurred some years previously which required 75 or 80 policemen to guard the plant. Mr. Fry testified that approximately 25 percent of his employees observed the picket line during this strike. Fry, upon being pressed by the counsel of this committee, admitted that Perrone must have committed perjury when he stated that he had worked for 40 years at the plant and had never seen any labor trouble. He further admitted that he had asked various persons, including Perrone and his brothers, to bring in a lot of strikebreakers and that they had done so.

Shortly after this violent strike at the Detroit, Mich., Stove Works, Santo Perrone was given a contract to purchase and haul away scrap from the Detroit, Mich., Stove Works. Insofar as the committee was able to ascertain, this contract remains in effect today. Santo Perrone, also known as Sam Perrone, an illiterate manual laborer, thus acquired an income sufficient to permit him to live in a luxurious mansion in the Grosse Pointe area and to enjoy an income which in recent years has run between forty and sixty-five thousand dollars a year.

Shortly after the scrap contract was awarded to Perrone, he and his brother Gaspar engaged in the illegal manufacture of whisky, which caused them to be sentenced to 6 years in the Federal penitentiary.

Gaspar, meanwhile, had also been taken care of by the stove works. He was by occupation a sand-core maker. At approximately he same time that his brother Santo received a lucrative contract to buy and haul away scrap, the stove works so arranged its operations that the coremaking department of the stove works was changed from an ordinary department of a manufacturing establishment to a subcontractor-ship, so that Gaspar employed his fellow core makers. Using the same equipment that he had been using for over 25 years and using company materials, he theoretically was the contractor who supplied the stove works with sand cores. Thus, a manual laborer in one of the departments of the stove works became, through some legal machinations, a contractor which in turn resulted in his receiving a very much higher income.

Shortly after the Perrone brothers went to prison, the United Auto Workers were able temporarily to organize the Detroit, Mich., stove workers. After the Perrones were released from prison, the organization disintegrated. It is not the function of this committee to inquire into labor disputes, but the committee must point out the sinister relationship between the lucrative contracts granted to the gangster Perrones and the ability of the Detroit, Mich., Stove Works to keep labor unions out of its plant.

All of this is prefatory to the more striking story of the Briggs Manufacturing Co. John A. Fry and William Dean Robinson are close friends. They are the presidents, respectively, of the Detroit, Mich., Stove Works and the Briggs Manufacturing Co. Santo Peronne, who has the scrap contract with the stove company, is the father-in-law of Carl Renda; the latter acquired the scrap contract at the Briggs Manufacturing Co. The inference is permissible from the evidence before the committee that the officials of the Briggs Manufacturing Co. deliberately intended to follow the pattern of the Detroit, Mich., Stove Works in connection with labor relations.

The purchase, removal, and resale of scrap from a company as large as Briggs requires the following: Loading equipment with which to pick up scrap at the plant; trucks with which to haul the scrap out of the plant into a yard; a yard sufficiently large to unload, sort, and process scrap; equipment with which to bale, shear, or otherwise process scrap into usable units; a railroad siding at the yard; and further equipment with which to reload the scrap onto railroad cars or, in some cases, trucks.

Their testimony further was that the scrap-metal business was an intricate one which could not be quickly learned but which required very extensive experience. For approximately 18 years prior to the advent of Renda, the Woodmere Scrap Iron & Metal Co. had been engaged in the business of removing ferrous scrap from the Briggs plant in Detroit, using assets of about $500,000 in this operation. The contract to haul scrap was taken away from Woodmere and awarded to Renda despite the following facts:

1. Renda had left college within less than 1 year before he applied for the scrap contract.

2. He had no knowledge whatever of the scrap business.

3. He had no loading machinery with which to load the scrap.

4. He had no trucks with which to haul the scrap after it was loaded.

5. He had no yard in which to deposit the scrap upon delivery by trucks.

6. He had no machinery whatever to process the scrap.

7. He had no knowledge or skill whatever as to how the scrap should be processed or sorted.

8. He had no railroad siding where the scrap could be loaded.

9. He had no capital whatever to employ in the business.

10. He had no telephone at which be could be called to do business.

11. He had no office other than his hat in which business could be conducted.

Nevertheless, Renda in April 1946 received a contract to haul ferrous scrap out of Briggs. This, however, did not disturb the operations of Woodmere. Since Renda, who had the contract to remove ferrous scrap from the largest independent auto body manufacturer in the world, had no equipment, know-how, or capital whatsoever or any other qualification for this arrangement, it quickly became apparent to Briggs and to Renda himself that something had to be done to carry on the physical removal of scrap from Briggs to some appropriate yard. The upshot was that Renda contracted with Woodmere and other contractors who for many years had been removing the scrap. Renda had no economic function whatsoever in the operation. He did nothing. He was paid for doing nothing in connection with scrap. He was merely inserted in this operation so that he could receive an income which has ranged as high as $100,000 a year.

The committee regards it as obvious that Renda was being paid for something. While it was not proved by judicially admissible evidence, the inference is inescapable that what Renda, the entirely unequipped college student, was being paid for, was the service of his father-in-law, the “muscle man,” Sam Perrone.

The granting of the Renda scrap contract preceded the first of the notorious Briggs beatings by a little more than a week. The committee's records indicated that approximately six prominent labor officers of the Briggs Manufacturing Co. were beaten in a most inhuman fashion by unknown persons in the year that followed the granting of the otherwise inexplicable Renda contract.

The committee heard both Fry, the president of the Detroit, Mich., Stove Works, and William Dean Robinson, the present president of the Briggs Manufacturing Co. It is the opinion of the committee that neither Fry nor Robinson testified frankly concerning their relationships to gangsters. This committee believes that these two presidents knew of the underworld relationships which their companies had entered into in connection with their labor relations; that they had been questioned about this before a grand jury of State of Michigan, in the course of which they did not speak frankly and that they also failed to speak frankly before this committee.