Rothstein (45 page)

Loewenstein’s visit intrigued Nat Ferber, the New York American reporter who had uncovered Rothstein’s Wall Street machinations. Ferber approached A. R., trying to bait him into divulging his secrets.

“What luck in Canada, Arnold?”

Ferber’s simple question unnerved the normally cold-blooded Rothstein. “You’re crazy! I wasn’t in Canada. I haven’t been out of New York. You’re nuts.”

“When weren’t you out of New York?”

“Some day you’ll get yours,” Rothstein responded menacingly. “What are you up to now?”

Ferber drove in: “What are you and that bird Loewenstein up to? I saw you at Grand Central.”

Mention of Canada increased A. R.‘s unease; word of Loewenstein unhinged him. He shook as he spoke “[New York American editor Victor] Watson should feed you rat poison instead of that dope of his,” he stammered.

“Can’t you answer a civil question without going nuts?” retorted Ferber.

“That’s not a civil question. Canada … Loewenstein-who is Loewenstein?”

“What’s not civil about my questions?”

“You never asked anything but a rat question in your life,” A. R. sneered and stormed away. “Tell Watson to go to hell.”

“The same to you, Arnold,” Ferber shouted, “and remember me to your friend Loewenstein.”

“You’ll get yours.”

End of conversation. But it’s only where the story gets interesting.

At London’s Croydon Airport at 6:00 P.M., July 4, 1928 Captain Loewenstein boarded a Fokker FVII monoplane headed for Brussels. As his luxury private airship crossed the English Channel, Loewenstein arose, placed a bookmark in his reading material, and walked to the plane’s bathroom. Ten minutes later, his valet, Fred Baxter, knocked on the door. No answer. Baxter forced it open. A door leading to the outside was open, and the third-richest man in the world was … gone.

But how? The bathroom door opened outward. Air pressure from outside the plane virtually prevented its opening. The Times described this experiment by officials at Paris’s Le Bourget airport:

Two mechanics who tried to open the outside door of a [similar] plane while the motor was running at full speed only succeeded in doing so by using their combined strength and then succeeded only in pushing it far enough open for one man to squeeze out with difficulty. They concluded that it was practically impossible to open such a door if the plane were flying at ordinary cruising speed.

So, of course, Loewenstein’s death was ruled accidental.

Nat Ferber found the coincidence of Alfred Loewenstein’s promise to return to New York in November 1928 and A. R.‘s murder that same month highly coincidental. Ferber didn’t support his theorizing with much; but, nonetheless, there remained a strong connection between the two deaths. Had Loewenstein been bankrolling a major Rothstein drug deal, and his death cut off that funding, A. R. would have had to dig deeper into already-badly-stretched resources to prevent the deal’s collapse.

A. R. was smart, and most law-enforcement officials were dumbor pretended to be dumb. But by 1927, A. R.‘s drug transactions were too big to ignore. Federal authorities, especially the ambitious newly appointed United States Attorney for the Southern District of New York Charles H. Tuttle, finally became aware that Rothstein was masterminding the nation’s-perhaps much of the global-drug trade. “It became obvious to us in 1927 that the dope traffic in the United States was being directed from one source,” he would say shortly after A. R.‘s death. “More and more, our information convinced us that Arnold Rothstein was that source.”

Tuttle didn’t trust the men already assigned to the Narcotics Division’s New York office. To nail Rothstein, he imported three topflight agents from Washington: chief narcotics agent James R. Kerrigan, Louis Kelly, and Rafael Connolly. Kerrigan trailed A. R., while Kelly and Connolly shadowed fifty-year-old Joseph Unger, a fellow twice convicted of burglary and boasting a criminal record dating back to 1893. Kelly, pretending to be a “Dr. Kelly,” coincidentally kept registering at whatever New York hotel sheltered Unger and-by further happenstance-conversed obsessively with Unger about narcotics. The diminutive Connolly masqueraded as “Jimmy the newsboy” or “Jimmy the bellhop,” two lads who, the more one thought about it, looked remarkably alike.

New York City police, never particularly vigilant or efficient in tracking Arnold Rothstein, were also investigating A. R.‘s drug connections. In July 1928, police were poised to raid a narcotics ring operating out of the Hotel Prisament. They trailed Rothstein as he appeared headed for the establishment-and for certain arrest-but suddenly he began moving suspiciously. Three times his chauffeur circled the block as the cops initiated the raid. Only when the arrests were complete did he order his limousine to stop. But still he did not enter the hotel; he waited outside on the curb. When he saw cops escort three suspects-Samuel Stein, Abe Klein, and Harry Kleindownstairs, he returned to his car. Later that day he’d provide $6,000 bail for all three, not surprisingly since “Samuel Stein” was actually Sidney Stajer.

Just before Rothstein’s death, Jim Kerrigan confronted A. R., hoping to bluff him into divulging information. Kerrigan warned Arnold of his involvement in the drug trade, listing numerous dealers he suspected A. R. of bankrolling. “Mr. Kerrigan,” A. R. replied calmly, “you just tell me who is using my money for dope, and I’ll cut them out.”

Kerrigan didn’t swallow the denial. “Some of these days,” he continued, “you’re going to die with your shoes on. You will if you keep this up.”

“None of us knows how we are going to die,” A. R. responded. “But if I’m ever knocked off that way, there’ll be a terrible record left in New York.”

If there was, Tuttle and Kerrigan weren’t sure they would find it. In any case, their investigation had progressed sufficiently, so that when A. R. did meet his reward, they were among his more sincere mourners. Without a live Rothstein, they feared their promising case against the nation’s largest drug ring would only remain promising.

Tuttle’s men rummaged through the deceased A. R.‘s West 57th Street offices, hoping to find something, anything of value. They found it, in the form of several neat bundles of papers. Now, hoping their discovery didn’t leak out, they continued trailing and wiretapping A. R.‘s surviving henchmen.

They were particularly nervous about New York City authorities and their proclivities for corruption. District Attorney Banton was at best an idiot, and, at worst, in league with every Tammany-connected crook in New York. The police weren’t much better. On November 26, 1928, Assistant U. S. Attorney Alvin Sylvester phoned FBI Special Agent in Charge C. D. McKean. Sylvester wouldn’t discuss anything over the phone, but revealed his concerns in person.

McKean wrote FBI Director J. Edgar Hoover:

It appears that the U.S. Attorney has had the opportunity of examining some of the papers taken from the safe deposit vault of the late Arnold Rothstein which, according to the U.S. Attorney indicate Rothstein’s probable activities in the field engaged in the barter and sale of narcotics. The papers in question were taken by the District Attorney for New York County this afternoon and can, from this time on, be examined only upon court order. Assistant U. S. Attorney [John M.] Blake expressed lack of confidence at least, in the probable success of the County authorities’ efforts to unearth the narcotics features of Rothstein’s alleged activities, and for this reason intends to make an independent investigation on his own.

Blake already had four FBI agents directly assigned to his office working full-time on the Rothstein case, but wanted two more. Reluctant to intervene, McKean wrote Hoover:

The question of the inability of this Bureau to engage in investigations of violations of acts not specifically charged to it was called to the attention of Mr. Blake who thereupon stated that Rothstein ‘s activities were so universal in the criminal underworld that he had no doubt there would be unearthed in the proposed investigation evidence of violations of acts coming directly under our jurisdiction. This, however, seems to have been an afterthought when it appeared that there would be difficulty in the assignment of Agents of this office to undertake directly work involving a violation of the Narcotics Act.

Mr. Blake further stated that if Agents of this office were to work on the case he would prefer that they work independently of the New York City Police Department who, as you know from the newspaper publicity, has been devoting unusual efforts since the murder of Rothstein to the untangling of the mystery surrounding his death.

We do not possess J. Edgar Hoover’s reply, but we do know that U. S. Attorney Tuttle persevered. In early December, his agents obtained confirmation of Nat Ferber’s suspicions regarding the Loewenstein-Rothstein connection, unearthing documents linking the two mystery men. “The information cannot be officially released, but we have the facts,” an anonymous federal official told the press. “Loewenstein and Rothstein were connected in the drug ring. Just how closely cannot be revealed now but if necessary we can prove it.”

Assistant United States Attorney Blake wouldn’t deny the leak: “I won’t say a word on the Loewenstein phase of it now. But we have found evidence in the files showing that Rothstein was the financial agent for an international drug smuggling syndicate.”

But nothing further was ever heard regarding Captain Loewenstein. The feds were after live prey Joseph Unger, now registered at East 42nd Street’s Hotel Commodore as Joseph Klein (a.k.a. Joseph Meyers). On December 7, 1928, Unger left for Grand Central Terminal, boarding the Twentieth Century Limited for Chicago and checking two large steamer trunks with redcaps. From Rothstein’s papers, Tuttle’s men knew what they contained, what similar trunks being transported about the country contained, who sent them, and their destinations. They hurriedly hauled Unger’s trunks from the baggage car, finding heroin, opium, and cocaine worth an estimated $2 million.

Rafael Connolly stayed aboard the Twentieth Century Limited, trailing Unger, but didn’t dare attempt to seize his prey singlehandedly. At 11:00 P.M., as the train neared Buffalo, four heavily overcoated federal agents jumped on. Rendezvousing with Connolly, they rousted Unger from his lower berth and arrested him, seizing his notebooks and more drugs. In Chicago, federal agents raided the Hotel North Sheridan quarters of Unger’s accomplice, thirty-year-old divorcee and former actress, Mrs. June Boyd, and seized another $500,000 in narcotics. From Unger’s papers, feds learned of two more of A. R.‘s former operatives, drug addict and dealer Samuel “Crying Sammy” Lowe and a Mrs. Esther Meyers, described by the New York Times as a twenty-year-old “lingerie manufacturer.” They arrested both.

“This,” pronounced Tuttle, perhaps forgetting the Webber-Vachula haul, “is the single biggest raid on a narcotic ring in the history of the country.”

There was more to come. On the Jersey City docks, the feds seized $4 million in narcotics, packed in boxes labeled “scrubbing brushes.”

“This seizure,” said Tuttle, “is the second development in the plans which this office, in conjunction with the narcotics bureau, has made to destroy the traffic in illegal drugs in this city at the source.

“This seizure is a very large fraction of the drug supply of the biggest drug ring in the United States, and the papers we have seized, and the evidence we have in our possession indicate that Arnold Rothstein had to do with arranging the financing of this ring.”

But suddenly the case lost steam-and defendants seemed to know it would. June Boyd appeared strangely unimpressed by her imprisonment. Transported from Chicago to New York’s Tombs prison, she had other things on her mind. “Wait a minute, please,” Mrs. Boyd implored her captors. “Where’s the Woolworth Building? As long as I’m here, I might as well have something to tell the folks about.”

Tuttle indicted Unger on four counts of drug trafficking and rushed the case to trial on December 21, a mere two weeks after his arrest. Had his trial proceeded, much would have been revealed about A. R.‘s drug-running operations. It didn’t. Joe Unger pled guilty the first day. Prosecutors thought he’d cooperate in their investigations. They were naive. “My life wouldn’t be worth a nickel if I told,” Unger admitted.

Then something even more puzzling happened. On December 27, 1928, chief narcotics agent Jim Kerrigan died at New York’s Miseri-cordia Hospital. Official cause of death was an injury sustained raiding a Newark opium den back on September 28. Yet, the fortyone-year-old Kerrigan continued on the job until a week before his death. Surgery designed to relieve his pain revealed a condition “as if he had been kicked in the abdomen.” Some said Kerrigan had been poisoned by drug dealers.

Why had the Rothstein case, once so incredibly promising, suddenly evaporated? The answer lies in the identity of a visitor from whom Washington U.S. Attorney Tuttle received just after arresting Joseph Unger: Colonel Levi G. Nutt, Chief of the entire Federal Narcotics Bureau.

If truth be told, Colonel Nutt didn’t really want his men-or anyone else-rooting around in Rothstein’s private papers. They contained too many embarrassing details, especially concerning Nutt’s family and the Narcotics Division. A. R. had on his payroll Rolland Nutt, Colonel Nutt’s son, as well as Nutt’s son-in-law, L. P. Mattingly, and George W. Cunningham, federal narcotics agent in charge of the metropolitan New York district. In 1926 Rothstein had engaged both Mattingly and Rolland Nutt, each one an attorney, to represent him in tax matters involving his returns for 1919, 1920, and 1921, the last return being particularly troublesome-as it had caused an indictment for tax evasion. A. R. went so far as to provide both with power of attorney in these matters, and in 1927 the Treasury Department let Rothstein off the hook. Rothstein also lent Mattingly sums totaling $6,200. In Rothstein’s practice any “loan” to a public official-or to anyone influencing public officials-meant “bribe.”

That is what we know about A. R.‘s relationship with Colonel Nutt and the Narcotics Bureau. We do not know what else Colonel Nutt didn’t want anyone to see. But we may not be the first to pose such suspicions. In February 1930 a New York grand jury investigating local drug trafficking, publicly reported all the above informa tion about the Nutt family-as well as irregularities in the New York office of the Narcotics Division. The grand jury concluded that even though Mattingly and Rolland Nutt’s actions “may have been indiscreet,” it found “no evidence that the enforcement of the narcotic law was affected thereby.” In Washington, others reached less sanguine conclusions. The following month, Colonel Nutt’s superiors relieved him of his duties, demoting him to the Prohibition Division’s Syracuse field office.