Witsec (5 page)

Early the next morning, Shur walked downstairs to the hotel lobby for a cup of coffee and spotted a fresh copy of a New York tabloid. He turned to Lee
Mortimer’s gossip column and read, “The IRS has an informant (initials R.B.) stashed in a Manhattan hotel room.” Shur was flabbergasted. Mortimer knew nearly everything that had been said in the hotel room. Clearly, one of the IRS officials had leaked the story. “Someone in the IRS wanted to get credit for R.B. before I turned him over to the FBI,” Shur recalled. “This was the sort of petty politics I was dealing with. The only thing that some agents cared about was getting credit in the paper.”

Because much of the mattress war was being fought in Brooklyn, Shur was responsible for briefing Kennedy. “It was unusual for an attorney general to meet with line attorneys like us,” Shur remembered, “yet periodically we’d be called into his office and some of these briefings would go on for hours. Kennedy was really interested in what we were doing, and you couldn’t fool him. Once I didn’t have anything new to report, so I started repeating information, and Kennedy snapped: ‘You’ve already told me that. Don’t waste my time if you don’t have anything new!’ ”

In August 1961, Shur offered Kennedy an especially juicy report. “Joe Profaci tried to have Larry Gallo killed and he almost got away with it,” he told Kennedy. The crime boss had secretly contacted Carmine Persico, one of the Gallo brothers’ most trusted friends and allies, and had offered him a piece of his criminal empire if he would double-cross the Gallos. “Persico agreed to betray them,” said Shur. “He asked Larry Gallo to meet him on August twelfth in a Brooklyn bar on the pretense of strategizing about the war.” As soon as Gallo stepped inside the bar, he was overpowered and Persico slung a garrote around his neck. He was being strangled when a policeman happened to walk into the bar. Persico and his men fled
out a back door, leaving Gallo gasping for breath on the floor. “The Gallos are now calling Persico ‘The Snake,’ ” Shur reported.

Shur’s account intrigued OCRS chief Edwyn Silberling, and in November he gave Shur a special assignment. U.S. attorney Hoey had just convicted Persico of extortion, and he’d been sentenced to prison for fifteen years. “I want you to go see Persico and offer him a deal,” Silberling said. “See if you can get him to become an informant in return for us reducing his sentence, but first clear it with Hoey.”

As ordered, Shur went to see Hoey. “Do you guys know who Persico is?” the prosecutor asked incredulously. “Persico
is
Profaci. He’s not some small-time hood! He’s a boss, for God’s sake! He’s not going to squeal! What’s wrong with you guys?” Hoey threatened to call Robert Kennedy personally and complain if Shur tried to talk to Persico. “I’ll have your job, Shur!” he yelled.

Silberling told Shur to back off. “Everyone automatically assumed a gangster like Persico would never talk,” Shur said. “Everyone decided it would be a waste of time to even approach him. I disagreed but was overruled.”

Robert Kennedy sent a glowing progress report to his brother at the White House near the end of 1961, noting that OCRS attorneys had spent nearly two thousand days in the field, four times more than they had under the Eisenhower administration. Working together, the IRS and FBI under OCRS guidance had cleaned up Newport, Kentucky, a town directly across the Ohio River from Cincinnati that was infamous for its bordellos and gambling dens. “For the first time, federal agencies are cooperating,” Kennedy bragged.
Shur was not nearly as optimistic. Despite his best efforts, bickering between agents was still rampant, and even though Brooklyn was a hotbed of organized crime, Shur’s hard work hadn’t led to any major convictions. He decided to step up his efforts, and he chose Larry Gallo as his target.

By this point, Joe Profaci had died of cancer in Florida, but his brother-in-law, Joseph Magliocco, had taken charge of the Profaci crime family, and the mattress war had turned even more violent. Magliocco had increased the killing because he was afraid the other four crime families in New York might try to muscle in on his turf now that Profaci was gone. By mid-1962, five Gallo soldiers had been murdered and three others kidnapped and never seen again. In the midst of all this, an IRS agent casually mentioned to Shur that Larry Gallo had been seen entering a Brooklyn bank.

“Let’s find out what he was doing there,” Shur suggested.

It turned out Gallo had applied for a Veterans Administration mortgage, and when Shur got a copy of the loan application, he found a letter attached to it written by Gallo’s sixty-two-year-old father, Albert. The elder Gallo claimed his son earned $10,000 per year in salary working at the family’s Brooklyn restaurant. Shur suspected the old man was lying to help his son qualify for the loan. To be certain, he asked the IRS to pull Larry Gallo’s federal income tax returns. “We discovered Gallo had not filed a federal tax return in five years,” Shur said. “I knew at that moment we had him cold.” Gallo had either lied on the VA application when he wrote that he earned a regular salary or lied to the IRS when he claimed he had not earned enough income to pay federal income taxes. “This was exactly the sort of thing that Bobby Kennedy wanted us to do,”
Shur said. “We were to look for any and all possible violations, no matter how small, to harass these gangsters.”

The IRS wanted to prosecute Gallo for tax fraud, but Shur thought the FBI would have a better chance of sending him to prison if it charged Gallo with “knowingly making a false statement to a federal agency” when he lied to the VA about his income. “The IRS was upset because its agents had done the investigation,” said Shur, “and I was tangled up in another interagency squabble, but I got the IRS to go along with me after I assured officials there that I’d make sure they were credited with helping catch Gallo.”

Gallo and his father both agreed to plead guilty when they saw the evidence against them. Reporters and photographers swarmed around Larry Gallo when he arrived at the courthouse, surrounded by five bodyguards, for sentencing. The law required that both men be sentenced to a minimum of eighteen months in prison, but the judge suspended all of the elder Gallo’s sentence. “I’m not sending you to prison because you were simply trying to help your son,” he explained. The judge then suspended all but four months of Larry Gallo’s prison sentence. The New York
Daily News
speculated that the four-month prison term “may have saved Gallo’s life by giving him sanctuary in a federal prison, away from crime boss Joseph Magliocco’s guns.”

“Everyone at the Justice Department was thrilled we’d convicted Larry Gallo,” Shur recalled, “and then J. Edgar Hoover blew it. He was on Capitol Hill testifying before an appropriations committee, and out of the blue, he brings up the Larry Gallo tax case and cites it as an example of how thorough the FBI is when it investigates mobsters. He tells Congress that it was his
FBI agents who had caught Gallo lying on his VA application. I never knew for sure if Hoover was aware he was lying or if some aide had given him false information, but I always suspected he knew exactly what he was doing. Of course, the IRS agents, who had actually done all the work, were livid. They called me and said they would never, ever work again with the FBI. They were furious at me for taking the Gallo case away from them. All I could do was promise that I would set the record straight in my report to Robert Kennedy.”

By now, Shur had spent two years traveling back and forth to Brooklyn, and in a memo to his bosses he suggested it was time for the OCRS to change its approach. The problem, he explained, was that the Justice Department was aiming too high. It was trying to bring down New York’s top crime bosses. “These figures are simply too well insulated,” he wrote. The government needed to lower its sights. “If we could get just one midlevel crime family member convicted of a serious charge that would send him away to prison for life or earn him a death sentence, then we might be able to get him to testify against his master. We have to work from the bottom up, rather than trying to go from the top down.”

Shur already had a midlevel gangster in mind. Christopher Furnari had been spotted meeting with one of Magliocco’s top lieutenants. Shur knew Furnari was on parole from prison, where he’d been serving a ten-year sentence for rape. Meeting with a known criminal, in this case Magliocco’s lieutenant, was a violation of Furnari’s parole. “I called the state parole authorities, and they agreed to revoke Furnari’s parole and put him back in prison. I told them I wanted to be there when they arrested him. I thought he might be willing to cut a deal.” Instead, the gangster pelted Shur
with profanities. “The fear of being sent back to prison was simply not enough to make Furnari crack,” Shur said. “It was going to take something more.”

During a routine search of Furnari’s house, agents found photographs of several Gallo gang members hidden in a family Bible. Shur guessed Furnari had been given the pictures because Magliocco wanted the men murdered, a hunch the gangster indirectly confirmed when Shur quizzed him about the photographs.

“I sell life insurance, and my boss gave them pictures to me,” he replied sarcastically. “He told me to avoid selling insurance policies to these guys. They might not be living too much longer.”

Shur recognized the photographs. They had been taken by the New York City Police Department. “It was obvious to me that a crooked cop had given the photographs to Magliocco’s men, who in turn had given them to Furnari.”

Shur felt stymied. “The mob had better sources than we did. It wasn’t just dirty cops giving the mob police photographs. It was crooked judges, too. The mob was even paying off people in the telephone company. If we learned a telephone number was being used by a bookie, we’d ask the phone company for the address at that number. A few minutes later, our contact at the phone company would call us and tell us the address. But it turned out our contact was being paid by the mob to call them first whenever we asked for an address!”

It wasn’t bribes, however, that were keeping mob members’ lips sealed. “
Omertà
was very, very real,” said Shur, “and we had plenty of photographs of dead bodies in our files to prove it. It didn’t take me long, working in Brooklyn, to realize that the only way we would ever be able to cause the mob serious damage
was by getting someone from inside its own ranks to testify for us, but
omertà
was simply too strong. Despite all of our best efforts, we rarely learned anything from informants that we could use in court. For instance, an informant would tell us about a mob bookie operation and we’d rush in and bust it, only to discover later that the informant had been using us. He’d send in his own bookies as soon as we locked up his competition. What we needed was a stick and a carrot. We had to find a way to make a midlevel gangster vulnerable, and then we had to offer him a way out. That’s what I explained in my memo. But there was another piece to the puzzle. We had to be able to offer a gangster protection. We had to prove we could keep a mobster alive if he testified for us. We had to create some sort of protection program. But how? If we couldn’t get federal agencies to share trivial information with each other, how were we ever going to get them to cooperate when it came to protecting a witness? The IRS was not going to trust the FBI to protect an IRS witness, and the FBI wasn’t going to trust the IRS to protect an FBI witness, and neither of them was going to trust the Bureau of Narcotics.”

G
erald Shur was called into a deputy chief’s office in the Organized Crime and Racketeering Section at the Justice Department in March 1963 and given a stunning assignment. A member of the Vito Genovese crime family had been secretly talking to the FBI for nearly a year about his life inside the Mafia, Shur was told. Robert Kennedy wanted to give the president a summary of those private interviews, and Shur had been chosen to write it. “Stop whatever you’re doing,” he was ordered. “Read the FBI interviews and have a report ready by nine
A.M
. tomorrow for the attorney general and President Kennedy.”

“What’s the informant’s name?” Shur asked.

“Valachi—Joe Valachi.”

Shur had never heard of him. “Because of all the books written about organized crime and the popularity of movies like
The Godfather
and television shows like
The Sopranos
, most people today know how the Mafia operates,” Shur recalled. “But Valachi was the first real mafioso to break
omertà
, and before him organized crime in America was very secretive and mysterious. There were still people who didn’t believe there really was an American Mafia, and none of us in law enforcement knew how it was structured or understood its rules and rituals. I was handed this huge stack
of FBI interviews—more than two feet high—and for the next five hours, I sat at a desk reading what Valachi had said. It was incredible stuff! He was giving up everything he knew.”

The fifty-four-year-old Valachi had been a criminal for thirty years, having joined the New York mob in 1930. He’d served as a hit man, robber, numbers operator, enforcer, and drug pusher. Although he was a low-ranking “soldier” or, in mob parlance, a “button man,” Valachi was well versed in Mafia gossip. Best of all, he loved to talk. But his interviews with the FBI were difficult to follow because he jumped back and forth between people and events. Valachi would be talking about mobsters in Las Vegas at one moment and the mob’s Chicago operations the next. There was no index, no directory that would have helped Shur understand the relationship between the 317 mob members identified by Valachi or why they were important. As he waded through the reams of FBI reports, he realized he’d been given an arduous task. When he read the final interview, he grabbed a blank legal pad and hustled across the street to a pub popular with Justice Department lawyers. He ordered a Jack Daniel’s on the rocks and a roast beef sandwich. “My mind was spinning. How was I going to digest all of this information and turn it into a cohesive summary—for the president of the United States, no less?” Shur would later joke that it was the shot of Jack Daniel’s that cleared his mind. As soon as he drank it, he began scribbling furiously on the legal pad. Back in his office, he typed nonstop, finishing his summary shortly before dawn. Nearly four decades later, Shur would take a fresh look at the yellowed, thirteen-page, single-spaced memorandum that he prepared that night for President Kennedy and be struck by how rudimentary much of the information in it now
seemed. Yet at the time, Valachi’s disclosures were considered to be staggering revelations.