Official and Confidential (41 page)

‘Then we went upstairs to the sitting room, and Lansky said, “Can't I have a decent cup of coffee?” He had, you know, just a little demitasse. My husband thought himself quite a pianist, and he said to these men, “Well, boys, what would you like to hear me play?” They said, “Play anything.”
So he did, and when he finished he said to Lansky, “Meyer, what do you think I was playing, what composition?” I think Lansky had only heard of Beethoven, so he said Beethoven. And Rosenstiel laughed, and he said, “You goddamn son of a bitch, I composed that myself.” They all had to applaud.'

Susan Rosenstiel was aware that her husband had business deals with Lansky. ‘He was always having under-the-table transactions, and for that he didn't want to use the banks. Just cash. And Lansky used to put up a lot of money. Once, later, they gave my husband some kind of big payment at the Sands Casino in Las Vegas. There were thousands and thousands and thousands of dollars in bundles of cash.'

Contrary to denials by Edgar's two propaganda chiefs, Lou Nichols and Cartha DeLoach, Rosenstiel was also close to Edgar. ‘They knew each other very well,' said Sidney Stricker, the son of Rosenstiel's longtime attorney, who himself worked for Schenley. Jesse Weiss, owner of Joe's Stone Crabs restaurant in Miami Beach, confirmed the relationship. ‘Rosenstiel and Edgar were social friends. They came to my place together when they were in Miami.' Edgar sometimes flew with Rosenstiel in his private plane.

Recently released FBI documents show that Hoover was aware of Rosenstiel, and extended Bureau assistance to him, as early as 1933. In 1939, Meyer Lansky reportedly used Rosenstiel as a go-between while plotting the surrender to Edgar of the gangster Louis ‘Lepke' Buchalter. In 1946, Edgar and Clyde were guests of honor at a barbecue thrown by leading liquor companies, including Rosenstiel's. The FBI files show that the millionaire's friendship with the Director began in earnest with a meeting at FBI headquarters in 1956.

By the fifties, Rosenstiel was surrounded by familiar figures from Edgar's world. There was George Sokolsky, the Hearst columnist who churned out right-wing propaganda, much of it gleaned from daily calls to the FBI. Sokolsky had long since acted as a mouthpiece for Edgar. Now, in return for regular handouts, he also parroted Rosenstiel's views.

Closest of all was Roy Cohn, now a high-profile New York attorney. His services were at the disposal of Lewis Rosenstiel – not that he had any genuine affection for the man. He would be disbarred, twenty years later, in part for ‘helping' Rosenstiel sign a document naming Cohn as his trustee and executor – when the millionaire was senile and in a terminal coma.

Rosenstiel trusted Cohn ‘as a son,' and Cohn indulged his eccentricities. The pair was once observed on a yacht, cruising past the West Point Military Academy with a recording of General MacArthur's farewell speech blaring forth from a loudspeaker. The Rosenstiel clique liked to address one another as if they were members of some secret army. Cohn, like Lansky, called Rosenstiel ‘Supreme Commander.' The millionaire called Cohn ‘Field Commander,' another crony ‘Sergeant-at-Arms' and so on.

Rosenstiel cultivated Edgar assiduously. He quietly bought up 25,000 copies of
Masters of Deceit
for distribution to schools around the country. In the sixties, he would contribute more than a million dollars to the J. Edgar Hoover Foundation, a fund established to ‘safeguard the heritage and freedom of the United States of America … to perpetuate the ideas and purposes to which the Honorable J. Edgar Hoover has dedicated his life … and to combat Communism.' The foundation still exists today, under the aegis of Cartha DeLoach. It makes grants to those planning careers in law enforcement, to the Scripps Clinic in California, where Edgar had his medical checkups, to Boys' Clubs of America, and the Freedoms Foundation, an ultra-right-wing organization that aims ‘to preserve and improve the Distinctive American System of Freedom.'

According to Susan Rosenstiel, there was nothing innocent about her husband's relations with Edgar. ‘I learned,' she said, ‘how much Hoover liked the races, that he was a big gambler. My husband was friendly with several Lansky bookmakers – Red Ritter and Max Courtney and Charlie “The Brud”
Brudner – and he would call them at the Eden Roc and give them Hoover's bets. And Hoover didn't have to pay off. If he won, he won. My husband would send the money through Cohn. If Hoover didn't win, he didn't pay.'

Rosenstiel called in such favors, Susan said, by using Edgar to obtain the release of jailed associates, to ‘help with the judges' when Rosenstiel was involved in litigation – even to ‘put in a word' with the tax authorities.

Susan Rosenstiel met Edgar in the fall of 1957, when he came to the town house on East Eightieth Street. ‘It was supposed to be a bit cloak and dagger,' she recalled. ‘Nobody was to know he was coming. He didn't come with Clyde Tolson; he came alone.

‘I remember thinking he didn't look like the head of the FBI. He was rather short, and he seemed distant, arrogant. You could see he had a grand opinion of himself, and they all went along with it. Everything he said they agreed with. They talked about Lou Nichols coming over from the FBI to work for my husband. After about half an hour, I was given the wink to leave. I went upstairs to my room.' Soon, after twenty-three years as Edgar's closest assistant, Nichols quit the FBI to perform the same function for Lewis Rosenstiel.

Within months, according to Susan Rosenstiel, Edgar was involved in an episode remembered as an outrageous example of congressional corruption. This was the passage in 1958 of the Forand Bill – a piece of legislation incomprehensible to the general public but crucial to Rosenstiel's fortunes. Schenley Liquor was facing serious trouble because of a miscalculation made eight years earlier. At the start of the Korean War, the millionaire had guessed that hostilities would continue for a long time – causing shortages of several of the ingredients needed to make whiskey. On that assumption, Schenley had produced and stored millions of gallons of liquor, far more than usual. When shortages came, Rosenstiel gambled, prices would skyrocket – and he would make a fabulous profit.

It never happened. The war ended in 1953, and there was no shortage. Rosenstiel had no market for his whiskey hoard. In 1958, the liquor would become subject to a crippling government tax – $10.50 on each gallon. The only solution was to get the tax law changed, which meant bringing pressure on Congress.

It was at that time that Nichols, Edgar's influence man on Capitol Hill, came to work for Rosenstiel. He at once began bombarding politicians with phone calls and requests for meetings, and his lobbying succeeded. Congress passed the Forand Bill, named after the Congressman of that name, freeing liquor companies from punitive tax on stored whiskey for a dozen extra years – ample time to dispose of their stocks. For Rosenstiel, it meant bonanza as well as salvation. The bill saved the company between $40 and $50 million, and the value of Schenley stock soared by $33 million in a single day.

A few months before the passage of the bill, according to Susan Rosenstiel, she was present at a meeting in New York attended by her husband, Edgar, Nichols, Cohn and Sokolsky. ‘Hoover,' she said, ‘told them the bill would pass. He said it would cost a great deal of money, but it would be worth it. His involvement was talking to certain congressmen and senators.' Nichols, said the millionaire's wife, was ‘the bagman.' ‘He carried the money to the politicians. The Schenley plane was like a shuttle, taking cash down to Washington.'

According to Mrs Rosenstiel, several politicians accepted money from Rosenstiel. Lyndon Johnson, then Senate Majority Leader, allegedly received half a million dollars. She said she was present, at her husband's Connecticut estate, when Rosenstiel personally handed a large sum of money to Emanuel Celler, the Chairman of the House Judiciary Committee. And, Mrs Rosenstiel claims, the whole corrupt operation was conducted with Edgar's knowledge and approval.

FBI records released in 1991 establish that Rosenstiel twice visited Edgar in his office in 1958, at the time the Forand Bill was going through its most crucial stages.

Susan Rosenstiel's final and most sensational allegations suggest her husband and Roy Cohn involved Edgar in sex orgies – thus laying him more open than ever to pressure from organized crime.

Susan Rosenstiel's previous marriage had collapsed because her first husband was predominantly homosexual. Now, she concluded, she had made a similar mistake. Her husband seemed little interested in having sex with her, but went to great expense to have her dress up in clothes that made her look like a little girl. She discovered, meanwhile, that he enjoyed sex with men.

‘One day,' Susan recalled, ‘I came into my husband's bedroom and found him in bed with Roy Cohn. It was about nine o'clock in the morning. I was shocked, just shocked. He made some sort of joke about it being so he could be alone with his attorney. And I said, “I've never seen Governor Dewey in bed with you,” because Dewey was one of his attorneys, too. And I walked out.'

Roy Cohn flaunted his homosexuality around Susan. He openly caressed one young man, a former congressional associate, in front of her. He seemed to take pleasure in telling her about the sexual proclivities of her husband's friends – including, especially, the homosexuality of Cardinal Spellman.

Sometime in 1958, probably in the spring, Rosenstiel asked his wife whether, while living in Paris with her previous husband, she had ever witnessed an orgy. ‘A few weeks later, when Cohn was there, he commented that I was a “regular” and knew what life was, that my first husband had been gay and I must have understood because I'd stayed with him for nine years. And they said how would I like to go to a party at the Hotel Plaza? But if it ever got out, it would be the most
terrible thing in the world. I told them, “If you want to go, I'll go.” Cohn said, “You're in for a big surprise …”'

A few days later Rosenstiel took his wife to the Plaza, the venerable hotel overlooking New York's Central Park. They entered through a side entrance and took an elevator to a suite on the second or third floor. She had the impression her husband had been there before. ‘He knocked,' Susan recalled, ‘and Roy Cohn opened the door. It was a beautiful suite, one of their biggest, all done in light blue. Hoover was there already, and I couldn't believe what I saw.'

According to Mrs Rosenstiel, Edgar was dressed up as a woman, in full drag. ‘He was wearing a fluffy black dress, very fluffy, with flounces, and lace stockings and high heels, and a black curly wig. He had makeup on, and false eyelashes. It was a very short skirt, and he was sitting there in the living room of the suite with his legs crossed. Roy introduced him to me as “Mary” and he replied, “Good evening,” brusque, like the first time I'd met him. It was obvious he wasn't a woman, you could see where he shaved. It was Hoover. You've never seen anything like it. I couldn't believe it, that I should see the head of the FBI dressed as a woman.

‘There was a bar set up with drinks, and we had drinks. Not too much. I think it was about then that Roy muttered to me that Hoover didn't know that I knew who he was, that I'd think he was someone else. I certainly didn't address him the way I had at other times, as Mr Hoover. I was afraid of my life by then.

‘The next thing, a couple of boys come in, young blond boys. I'd say about eighteen or nineteen. And then Roy makes the signal we should go into the bedroom. It was a tremendous bedroom, with a bed like in Caesar's time, with a damask spread, blue, I think, like the suite. And they go into the bedroom, and Hoover takes off his lace dress and pants, and under the dress he was wearing a little, short garter belt. He lies on the double bed, and the two boys work on him with their hands. One of them wore rubber gloves.'

After a while, said Susan Rosenstiel, the group returned to the living room. ‘Cohn had brought up some food. Cold stuff, so as not to have room service. So we had a little something to eat.

‘Then Rosenstiel got into the act with the boys. I thought, “You disgusting old man …” Hoover and Cohn were watching, enjoying it. Then Cohn runs to get himself satisfied – full sex – with the two boys. Those poor boys. He couldn't get enough. But Hoover only had them, you know, playing with him. I didn't see him take part in any anal sex. Rosenstiel wanted me to get involved, but I wouldn't do it.'

Later the Rosenstiels went home in their limousine, leaving Cohn and Edgar, with the boys, in the suite. Rosenstiel would not discuss Edgar's part in the evening's events, but Cohn later laughed about it. ‘He said, “That was really something, wasn't it, with Mary Hoover?” He told me, as if it had happened before, “I arrive at the Plaza first with his clothes in a suitcase.” Cohn said Hoover came in through the side entrance on Fifty-eighth Street, so he didn't have to go through the lobby. I guess he made it his business not to be followed …'

A year later, according to Susan, Rosenstiel asked her to accompany him to the Plaza again. She agreed, in return for an expensive pair of earrings from Harry Winston's, and the procedure was the same as on the previous occasion. Cohn ushered them into a suite to find Edgar, again attired in female finery. His clothing this time was even more outlandish. ‘He had a red dress on,' Susan recalled, ‘and a black feather boa around his neck. He was dressed like an old flapper, like you see on old tintypes.

‘After about half an hour some boys came, like before. This time they're dressed in leather. And Hoover had a Bible. He wanted one of the boys to read from the Bible. And he read, I forget which passage, and the other boy played with him, wearing the rubber gloves. And then Hoover grabbed the Bible, threw it down and told the second boy to join in the sex.'

When they got home that night, the Rosenstiels quarreled. Lewis rebuffed his wife's questions and never again asked her to go to the suite at the Plaza. She saw Edgar only once more, in 1961, when he and Cardinal Spellman visited the Connecticut estate.