Rothstein (44 page)

We think your Honor’s opinion, which coincides with ours is sound. It would not throw any light at this time upon the identity of the assassin, so the people rest.

The great ballet continued. James Murray sprang to his feet, striding toward Nott to announce: “Your Honor, please. I move that your Honor direct a verdict of acquittal on the ground that the People failed to make a case.” Nott looked to Brothers, who drew himself up to say:

In a case of this character, if the court please, depending solely upon circumstantial evidence it is necessary for the People to prove such a chain of circumstances that are not only consistent with guilt but exclude all reasonable hypothesis of innocence. I am frank to say that we have not covered the second point.

When we started this prosecution it was based upon evidence which has not been forthcoming. From the beginning of this trial until we rested the People’s case, with very few exceptions, witnesses were hostile. It was apparent that they did not tell the truth. Many of them refrained and refused to state the evidence which they had sworn to before the grand jury, which has left us where we are now.

I do not say this in criticism, but in justification of the conduct of the case from the inception. We have done our best. We fought against odds which we could not overcome.

Nott, alleging sympathy for the prosecution’s plight, nonetheless instructed the jury to acquit. They did as told. “Not guilty,” announced jury foreman Herman T. Sherman. A murmur ran through the courtroom, an odd, loud rumble, indistinct yet clearly approving of the verdict. No one there seemed to care about justice for Arnold Rothstein-or perhaps they’d long ago concluded that Arnold had received justice. After Nott gaveled the farce to its end, McManus blew a kiss to his wife, then turned to his four brothers. “Buddy,” said older brother Stephen. “I wouldn’t go through with this again for a million dollars. You are the idol of my heart and the idol of your mother’s heart. We all know you wouldn’t hurt a hair on the head of any one or shoot anything.”

“That’s right Steve,” George replied. “I never hurt anyone. Now go and tell mama.”

George fought through the crowd in the corridor, pausing to shake hands with Red Martin Bowe. Outside police (and Bowe) escorted Mr. and Mrs. McManus to a limousine, which took them to Hump’s mother up on University Avenue in the Bronx. Reporters followed the car, and when McManus emerged, he handed them a note scrawled on a sheet of yellow paper:

I was innocent of shooting Arnold Rothstein and am naturally happy that it all turned out as it did. Details I cannot give, because I have no personal knowledge of the occurrence. This is all I have to say, outside of wishing everybody a merry Christmas.

How fixed was the case? How orchestrated? How involved was judge Nott? Consider this: On November 22, a Cecelia Kolsky, on trial in an unrelated case, appeared before Nott, who informed her to return on December 6, when the schedule would be clear. Nott dismissed charges against George McManus on December 5.

ARNOLD ROTHSTEIN WAS DEAD. Gambler. Political fixer. World Series manipulator. Bootlegger. Fencer of stolen jewels. Fencer of stolen bonds. Protector of bucket shops. Garment district racketeer. Bookmaker. Racetrack owner. Casino operator. Real estate baron. Bail bondsman. Loan shark.

The public thought it knew everything about the Big Bankroll.

It didn’t. It knew nothing about his biggest operation, which cost millions to fund, netted millions more in profits, was international in scope-and ruined thousands of lives in the process.

Meet Arnold Rothstein: founder and mastermind of the modern American drug trade.

It was nothing to be proud of, nothing to advertise. Gambling was a gentleman’s pastime. One boasted of one’s winnings and losses. Bootlegging? That was nothing to be embarrassed about. Everyone wanted booze. The only people excited about rumrunning were hicks and politicians, who drank anyway. But drugs-and the people who trafficked in them-were dirty. As A. R. took pains to conceal his gambling background from Carolyn Rothstein or Inez Norton on making their acquaintance, he masked any and all hint of sympathy for the drug trade. “I know that Arnold’s personal reaction to the narcotic drug habit was one of repugnance,” his widow would write. “One day he caught one of his closest associates smoking an opium pipe, and he became quite angry. `Come on, get out of here,’ he exclaimed. “If you’re going to do that you’ll have to move.’ “

Carolyn had it all wrong. The Manhattan of Arnold’s youth was rife with drug use. Opium. Cocaine. Morphine. Heroin. Opium dens, many in the narrow streets and back alleys of Chinatown and the Bowery, were commonplace. Stephen Crane observed in rather understated fashion how “splendid `joints’ were not uncommon then in New York,” estimating there were 25,000 opium users in the city. Many of A. R.‘s associates had drug problems. Sidney Stajer was an addict as well as a peddler. Dago Frank Cirofici was high on opium when he was arrested for murdering Beansy Rosenthal. Cirofici’s accomplice, Whitey Lewis, shared his addiction, as did Wilson Mizner. Bridgie Webber operated an opium parlor down on Pell Street. Waxey Gordon sold drugs before-and after-moving into booze, as did Lucky Luciano.

Arnold and Gordon pioneered the rumrunning trade, earning big, quick profits. But almost immediately Rothstein abandoned the direct end of the business. The alcohol trade was just too complicatedeven for the Great Brain. The problem wasn’t that it required tying up huge amounts of capital-A. R. was used to that. But bootlegging required warehouses and tankers and speedboats and convoys of trucks and bribes paid out-not just to cops but to custom agents, coastguardsmen, state police. Arnold was used to making or losing fortunes with nothing larger than a deck of cards, a pair of dice, or a wad of bills. How much easier to leave bootlegging’s dirty work to the Lanskys and Schultzes. How much easier to profit from men’s vices-not by importing a shipload of Scotch but a mere steamer trunk packed with opium, cocaine, or heroin, worth literally one million dollars on the street.

National prohibition of drugs preceded national prohibition of alcohol. In 1914 the Harrison Narcotics Act (named for its sponsor, Tammany-backed Congressman Francis Burton Harrison), banned the domestic drug trade, but obtaining narcotics abroad remained as easy as obtaining British Scotch or Canadian whiskey. Merely contact the big drug manufacturers in France, Germany, or Belgium, and you could obtain all the heroin or morphine you wanted. Stateside, particularly in New York, plenty of customers remained from when the stuff was legal-supplemented by new addicts accidentally hooked on prescription painkillers, primarily morphine.

And-oh yes-there was too much competition in selling booze, too much fighting over territory, too many killings. No one paid much attention to drug dealing-and that’s how A. R. wanted it.

Rumrunning provided Rothstein with experience in importing lucrative illicit substances, and thus A. R.‘s first agent in bootlegging, exiled bucketeer Harry Mather, became his first agent in importing drugs. Soon, others-Dapper Don Collins, an old bootlegging associate, and Legs Diamond among them-traveled Europe in search of narcotics for their boss. But the primary source of drugs was China. There, A. R. dispatched henchmen Sidney Stajer; Jacob “Yasha” Katzenberg (like Mather, originally a booze buyer in Europe); and George Uffner, a veteran drug dealer and Rothstein flunky (who would be arrested with Fats Walsh and Lucky Luciano on trumpedup robbery charges, but in actuality for questioning regarding their boss’s murder, just following A. R.‘s death).

There was, of course, some infrastructure involved in the drug trade, the occasional front business. But that was the sort of operation A. R. relished, providing multiple opportunities for profits. Take, for example, Vantine’s, an established and legitimate antiques firm. Rothstein used Vantine’s primarily for narcotics smuggling, but also to actually sell a fair amount of antiques. When Fanny Brice purchased an elegant West 70s town house, A. R. displayed avid interest in her furnishings, insisting on selecting them personally-and charging her $50,000 for the service. An appraisal revealed they were actually worth between $10,000 and $13,000. Arnold was clearly still collecting interest on Nicky Arnstein’s bail. Fanny paid without a whimper.

Sometimes Rothstein’s drug connections were tenuous, but nonetheless intriguing. A still-unsolved murder case reveals how ubiquitous A. R.‘s ties to everything crooked in the city could be. In March 1923, Ziegfeld chorus girl Dot King, known on Broadway for being regally bedecked and bejeweled by wealthy admirers, was discovered dead, chloroformed in her fifth-floor studio apartment at 144 West 57th Street. Some $30,000 in jewelry was missing, including a $15,000 ruby necklace and a diamond-and emeraldstudded wristwatch.

A. R. was her landlord. He controlled a string of upscale properties on West 57th Street, among them 144 West 57th Street. He also corresponded with the doomed Miss King and lent her money. It is not unreasonable to assume that she, a known drug courier, paid her debts by peddling narcotics for A. R.

Dot King’s wealthy, married, and male friends included Philadelphia socialite John Kearsley Mitchell, son-in-law of the head of the prestigious Drexel Bank, and Draper M. Daugherty, only son of United States Attorney General Harry M. Daugherty. Mitchell was fabulously rich and the interplay between him and his embarrassedand even wealthier-in-laws fascinated the press, particularly since police found his yellow silk pajamas in the deceased’s apartment.

Intriguing-but the Daugherty connection is more significant. Shortly after Dot’s murder, someone (a someone young Daugherty knew but never identified) attempted to blackmail him regarding his relationship with the twenty-seven-yearold blonde. District Attorney Joab Banton and his chief assistant Ferdinand Pecora cleared Draper of any suspicion (they were good at that), and Daugherty fled to Mexico. When he returned a few weeks later, his wife had him declared an “inebriate” and committed to a Connecticut sanitarium. In June 1923, Daugherty escaped, climbed into a waiting car, and eventually found his way to Chicago.

By strange coincidence, Draper M. Daugherty, son of the Attorney General of the United States, worked for Arnold Rothstein’s insurance company.

Yet another connection remained. The first name surfacing as a suspect in the case belonged not to Mitchell or Daugherty, but rather to shady former stockbroker Alberto Santos Guimares. Police wanted to question Guimares about a New Year’s Eve party he and Dot attended at the West 52nd Street apartment of professional dancer and former vaudevillian Frank Barrett Carman. Also present was Mrs. Hugo A. C. Schoellkopf, wife of a wealthy Buffalo industrialist. That night Mrs. Schoellkopf would be robbed of $300,000 in jewelry, including one 201-pearl necklace, a 99-pearl necklace, and, not one-but two eight-carat diamond rings. To keep her silent, her robbers chloroformed her.

Mrs. Schoellkopf’s three assailants included a former Arrow shirt model named Eugene Moran. Moran had worked with Legs and Eddie Diamond, riding shotgun on Long Island protecting A. R.‘s Scotch shipments. Eventually, he became A. R.‘s $1,000-a-week bodyguard. Moran and his associates disposed of the Schoellkopf loot through Broadway jeweler John W. Mahan-receiving just $35,000 for their haul. Mahan, in turn, fenced it through A. R. Eventually Moran’s gang, as well as Mahan, were caught. Mahan returned much of the jewelry and no one dared implicate Arnold. Hapless authorities never connected Dot King’s murder with the Schoellkopf robbery.

In July 1926, A. R.‘s narcotics network suffered a major setback when federal agents raided a sixth-floor Walker Street toy-company loft and arrested two of his henchmen, longtime drug peddler Charles Webber and ex-police officer William Vachuda. Police seized $600,000 ($4 million street value) worth of heroin, morphine, and cocaine-1,220 pounds of the stuff, packaged in five crates labeled “bowling balls and pins.” The drugs originated in Germany and reached New York’s Pier 57 aboard the White Star liner, Arabic. Officially they were to be transshipped to Kobe, Japan. Their real destination: the streets of New York. Rothstein quickly provided Webber and Vachuda with $25,000 bail each. When the duo stood trial in February 1927, he attended each session, and heard prosecutors allege that “from Feb. to Aug. 1, 1926, more than two tons of narcotics were introduced by this ring into the traffic of this country,” figures that represented the bulk of the national drug trade.

The jury deliberated seventeen hours, while A. R. paced courtroom halls furiously. He had more at stake than bail money. The jury found Webber and Vachuda guilty. Federal Judge Isaac Meekins, a North Carolina Republican imported for the trial, threw the book at the defendants, sentencing Webber to fourteen years and Vachuda to eight, hoping to force them to implicate Rothstein. They didn’t talk. Nobody ever talked.

In the drug trade, as elsewhere, Rothstein wasn’t averse to betraying others to save himself. In July 1927, he dispatched Legs Diamond to suburban Mount Vernon, New York to sell a shipment of drugs. To curry favor with federal authorities on his own trail, he informed narcotics agent William Mellin of Diamond’s activities. Then, to cover his tracks, A. R. provided Legs’ $15,000 bail. Diamond discovered the double cross, but didn’t seek revenge. Rothstein had something in mind to make Legs forget this unfortunate little incident.

In spring 1928, Rothstein obtained an unlikely but extremely valuable partner in the narcotics business, one as far removed from the Legs Diamonds and Sidney Stajers as possible. Belgian national Captain Alfred Loewenstein, “the mystery man of Europe,” was the world’s third-richest person, worth hundreds of millions of dollars. He owned eight villas in Biarritz alone. During the First World War, he reputedly offered to ransom Belgium from the Germans. He was rich enough to do it.

That spring Loewenstein, accompanied by a retinue of twenty, including his private pilot, a chauffeur, four secretaries, two typists, and a masseur, arrived in America. At an East 42nd Street hotel, surrounded by their respective entourages, Loewenstein, Rothstein, and Diamond hammered out what has been called “probably the biggest drug transaction in the country up to that time.” Negotiations dragged on for hours, often disintegrating into heated arguments, with Diamond storming from the room and Rothstein acting as peacemaker. When Loewenstein flew to Montreal, Rothstein followed him by train. They returned together, and soon Loewenstein sailed for home aboard the Ile de France, promising a return that November.