Rothstein (29 page)

Solomon knew who did it. And who tipped off the culprits: Samuel Bloom. Solomon even provided Lansky with Bloom’s motive: heavy gambling debts, especially to A. R. Lansky phoned Rothstein and learned the recently impecunious Bloom had just paid Rothstein a $100,000 debt. Bloom ended up in the East River, in the proverbial cement overcoat. His Scottish friend often asked about him,. but received only discreetly vague responses.

Another unsavory character Rothstein met through rumrunning was Jack “Legs” Diamond. Originally from Philadelphia, Diamond had been a member of the West Side’s Hudson Dusters gang, compiling an impressive arrest record before being drafted into the army in World War I. Diamond liked killing people, but evidently not for the government, as he had gone AWOL and spent a year in Leavenworth. On his release, Legs and his tubercular brother Eddie went to work for Rothstein, often, but not exclusively, as bodyguards. The Diamonds, along with Eugene Moran, formed the nucleus of guards protecting A. R.‘s smuggled whiskey from Montauk Point to Manhattan. Guarding booze was lucrative-stealing it even more so. The Diamonds went into business for themselves, relieving independent rumrunners and bootleggers of their merchandise-and selling it to Rothstein, who resold it to other operators.

A noteworthy Lansky associate was a rising young Sicilian-born drug peddler and strong-arm man named Lucky Luciano (ne Salvatore Lucania). Before the Roaring Twenties were very old, Luciano would establish himself as overlord of New York’s still-thriving network of pimps and whores, making a fortune selling them protection, and still more money from the liquor and drug trade.

Luciano was nowhere near as intelligent as Lansky. (Few mobsters, few people, were.) He not only sought guidance from Rothstein on business matters, but solicited advice on such basic etiquette as “how to behave when I meet classy broads.”

“He taught me how to dress,” said Luciano, “how not to wear loud things but to have good taste; he taught me how to use knives and forks, and things like that at the dinner table, about holdin’ a door open for a girl, or helpin’ her sit down by holdin’ the chair. If Arnold had lived a little longer, he could’ve made me pretty elegant; he was the best etiquette teacher a guy could ever have-real smooth.”

On one memorable occasion, Rothstein served as the fast-rising hoodlum’s fashion adviser. In June 1923 Prohibition agents Lyons and Coyle caught Luciano on 14th Street carrying several ounces of pure heroin on his person. It was a stupid move, but Luciano smartly talked his way free by revealing a $75,000 heroin cache and betraying some associates in the process (Luciano later made the unlikely claim that the stash was hurriedly planted by his henchmen for that very purpose). The incident shredded his reputation. Lucky’s high-class Park Avenue customers no longer felt comfortable buying booze from such a cheap drug peddler. His underworld compatriots feared him as a snitch. Meyer Lansky proposed a solution: Luciano could regain face with a single grand gesture. Accordingly, Luciano paid $25,000 for two hundred ringside seats for that September’s Jack Dempsey-Luis Firpo title fight at the Polo Grounds-then gave them away to the most important people he could find: gangsters Al Capone, Johnny Torrio, and Boston’s King Solomon; businessman Ben Gimbel; politicians Jimmy Hines, Al Marinelli, Kansas City’s Democratic Party boss Jim Pendergast, and Pennsylvania’s Republican boss, Congressman (and future United States Senator) William S. Vare; show people Flo Ziegfeld and Ziegfeld’s archrival Earl Carroll; even Mayor Hylan’s Police Commissioner Richard Enright. Suddenly Lucky Luciano was once again someone you wanted to know.

But to cap off fight night-and his comeback-Luciano needed the proper wardrobe. He asked A. R. to accompany him to Gimbel’s Department Store to select the appropriate attire. `No, Charlie,” Arnold corrected him. “John Wanamaker’s men’s department has the stuff you need. I’m going to turn you into another Francis X. Bushman.”

A. R. knew that conservative understatement was the key to proper attire. After all, Luciano didn’t want to look like the drug peddler and pimp that he was, and A. R. advised even more caution by having Lucky buy an off-the-rack suit, rather than risk having a tailor fashion something a tad flashy. He also suggested the necessary accessories. Luciano recalled decades later, “Arnold gimme a dozen French ties made by some guy by the name of Chavet. They was supposed to be the best and Arnold bought a hundred ties whenever he went to Paris. He also used to buy the silk for his shirts by the bolt at a place in France called Sulka, and he always would give me some as a present; that’s how I get the rep for wearin’ silk shirts and underwear and pajamas.

“So the night of the fight I had on a beautiful double-breasted dark oxford gray suit, a plain white shirt, a dark blue silk tie with little tiny horseshoes on it, which was Arnold’s sense of humor. I had a charcoal gray herringbone cashmere topcoat, because it was a little cool, with a Cavanagh gray fedora, very plain. Rothstein gimme a whole new image, and it had a lotta influence on me. After that, I always wore gray suits and coats, and once in a while I’d throw in a blue serge.”

Despite A. R.‘s ongoing relationships with Lansky and Waxey Gordon, he was open to rumrunning with others. In the early 1920s, veteran con artist Dapper Don Collins (ne Robert Arthur Tourbillon, or “Ratsy” for his initials) approached him. Collins had begun as a circus performer who jumped a speeding motorcycle across a ring of snarling lions. He quickly graduated to con games, badger games, white slavery, and pilfering pay phones-and, occasionally, jail-time. Once after swindling an upstate farmer out of $20,000, only Bill Fallon’s efforts rescued him from another stretch in prison. “He’s so decorative,” Fallon explained. “There are so many frightful looking human beings around that I believe in doing all I can to preserve the ones who are easy to look at.”

In 1921 Collins shot and wounded a romantic rival and fled to Philadelphia. There he posed as “Charles A. Cromwell,” a society scion of his own invention. He had access to hundreds of cases of reasonably priced whiskey in the Bahamas and the means to transport them home as he had just purchased a World War I-surplus submarine chaser and refitted it as a luxury yacht, piquantly rechristened the Nomad. He did not, however, have the cash to pay for the booze.

Dapper Don informed Rothstein he could secure 1,200 cases (or 850 cases, 1,600 cases, or 2,000 cases-accounts vary) for just $75 each, and resell it stateside for $250 each. However, Rothstein distrusted Collins immensely, his suspicions aggravated by the $11,000 Dapper Don already owed him. Yet sometimes owing money to A. R. worked in your favor. If you had little chance of repaying your original loan, Arnold might advance you even more cash to recoup his original-now imperiled-investment.

But A. R. had to ensure that he wouldn’t be placing any further investment at risk. Accordingly, he first found a buyer for the hooch. It made little sense for A. R. to purchase the Scotch, and only then hunt for customers, while Prohibition agents, local cops, and greedy gangsters hovered nearby. He found one in Waxey Gordon, who advanced 10 percent of what he would ultimately pay A. R. for the booze. This provided Arnold with a one-third of his purchase price.

Simultaneously, Rothstein dispatched Sid Stajer to the Bahamas to verify Collins’s story. Was the Scotch available as promised? Or would Dapper Don merely pocket A. R.‘s cash and sail off for parts unknown? Stajer learned the whiskey was available, but for only $60 a case. As Arnold had already instructed Sid to cut Collins out of the actual purchasing process, this meant extra profits for Rothstein.

The Nomad, manned by Dapper Don, a gun-toting crew of three, and a very attractive blue-eyed blonde, “Mrs. Cromwell,” now brought the contraband to Philadelphia or, more specifically, to the Mathis Yacht boatyard across the river at Camden. As the Nomad approached shore, a watchman shouted they weren’t allowed to dock there.

“Don’t be an ass, me good fellow,” Collins cheerfully responded, affecting his finest Philadelphia Main Line accent, “We’re putting her on the marines railway for repairs in the morning.”

While the guard pondered this new information, a large truck roared up, increasing his alarm. The nonplussed Collins explained matter-of-factly: “Why we’ve got to get the furniture off, haven’t we?”

Of course.

Collins unloaded half his “furniture” at Camden. He removed the remainder in nearby Chester County, Pennsylvania. Here the story becomes murky. Either police nabbed Dapper Don and he paid a $500 fine for his transgressions (reasonable overhead), or Legs Diamond, whom Rothstein had engaged to transport the booze on land, helped himself to 150 cases of Scotch that Ratsy had purchased for his own use (an unreasonable overhead). Either way Collins fared, the purchase was yet another big score for the Big Bankroll.

Legs Diamond was clearly making a name for himself-and trouble for everyone else. No longer merely Rothstein’s bodyguard and all-around henchman, he branched out for himself, butting heads with New York’s other established bootleggers: Waxey Gordon, Dutch Schultz, Bill Dwyer, Frankie Yale, Frank Costello. Rothstein had bankrolled Diamond’s first efforts, and Diamond’s rivals avoided an open confrontation with him, wary of upsetting A. R. But Rothstein alternately extended and withdrew his protection to the vicious Diamond. When Diamond and Big Bill Dwyer (another bootlegger owing his start to A. R.) battled over territory, Rothstein tacitly supported Dwyer. A few years later, when Diamond and Bronx beer baron Dutch Schultz went head-to-head, A. R. hired a small army of goons to support his onetime bodyguard. The Dutchman backed down.

Occasionally, A. R. functioned as peacemaker. In the late 1920s Waxey Gordon and Owney “The Killer” Madden fought over turf in Manhattan. Tiring of the carnage, they asked Rothstein to arbitrate. He settled their differences in twenty minutes, parceling out neighborhoods, maximizing their profitability, and minimize their irritability. Gordon and Madden each paid Arnold $250,000 for his services. In A. R.‘s world, blessed indeed were the peacemakers.

There were myriad ways to profit from the Eighteenth Amendment. Selling supplies for home brew was one, and on May 16, 1920, Sidney Stajer was charged with selling such ingredients-in the name of Arnold’s “Redstone Material and Supply Company.” Providing bailing for incarcerated bootleggers was another. (The first time was for a Harry Koppel, on January 18, 1920, just seventeen days after Prohibition began.) Financing speakeasies would also prove lucrative. A. R. had no desire to operate such joints, he just wanted lucrative interest rates from those who did: His most famous such client was horse-faced racketeer Larry Fay. Beginning as a lowly cabdriver, Fay combined three unlikely occupations-speakeasies, taxicabs, and milk distribution. In 1920 he took a fare to Montreal and discovered just how cheaply Canadian booze could be purchased, easily smuggled across the border, and profitably sold in Manhattan. Fay used his rumrunning profits-plus cash advanced by A. R.-to purchase a fleet of nickel-plated cabs, vehicles distinguished by their horns (playing a distinctive musical tune) and their doors (sporting huge swastikas, Fay’s personal good-luck symbol). And if riders still weren’t interested, Fay hired thugs to shoo them away from the competition.

When Fay entered the speakeasy racket, A. R. again provided capital. Fay’s first establishment, the El Fay Club, boasted two noticeable attractions: multiple swastikas on its facade and brash hostess Mary Louise Cecilia “Texas” Guinan. Guinan had recently been employed as the rough-riding cowgirl star of a series of low-grade silent westerns. “We never changed plots-only the horses,” she quipped. In Manhattan the rough-hewn Guinan fleeced sophisticated customers with overpriced food, liquor, and cover charges (greeting them with a hearty “Hello, sucker!”) and made them feel good about it. But Fay’s clubs were too high profile and kept getting padlocked. He moved into yet another racket, working with West Harlem Tammany chieftain Jimmy Hines to cartelize the city’s milk supply. Their New York Milk Chain Association rented office space from … Arnold Rothstein.

Prohibition agents had few effective weapons against the liquor trade, but padlocking properties (as they did with Texas Guinan’s clubs) was among the most valuable. Sites could be shuttered for a year, a powerful disincentive to landlords renting to speakeasies and bootleggers, or to operating illegally on your own property. In Chicago authorities once shuttered an entire 125-room hotel. In Northern California they padlocked a hollowed-out, twenty-fourfoot-diameter redwood housing a fifty-gallon still. Even in wide-open New York, during one particularly energetic thirteen-month period, 500 speakeasies were padlocked.

But there was a flip side to the law: Any property raided unjustly could become off-limits to police and Prohibition agents for a year. Bill Fallon’s law partner, Gene McGee, brought that statute and its implications to A. R.‘s attention, and Rothstein profited from it, using his connections to have the NYPD “raid” evidence-free properties, securing raid-preventing injunctions, and then renting these sites at premium rates-as much as $50,000 extra per property by 1924.

The same principle held for gambling. In the early summer of 1925, police raided four gaming locations, including West 44th Street’s Teepee Democratic Club and West 48th Street’s Park View Athletic Club. Owners petitioned Supreme Court Justice (and former fixer in the Rosenthal case) Aaron J. Levy for injunctive relief against further raids. This infuriated Corporation Counsel Nicholson, who charged the raids were designed to trigger these injunctions-and further that it was hardly coincidental that the plaintiffs had not filed any motions until Aaron Levy was the one Supreme Court justice left on duty in the city.

Levy ordered attorney and former New York University philosophy professor Joseph Kahn to referee the matter. Police Officer Arthur Stearne testified how departmental “higher-ups” ordered the conveniently evidence-free Park View raided in an obvious attempt to trigger an injunction. Stearne reported how officers not sufficiently cooperating in this farce found themselves demoted and transferred to remote outer-borough precincts. It also transpired that the firm of Arnold Rothstein & Co. had obtained the surety bond necessary for the Park View Athletic Club’s suit. The news only amused Professor Kahn. “Mr. Rothstein,” he observed, “appears to have an amazing pertinency in many of these injunction proceedings.”