December 20, 2023

The Business of Al Capone

12 minutes

Retired Intelligence Detective Gary Jenkins brings you the best in mob history with his unique perception of the mafia. In this episode, we take a deep dive into the book “The Outfit” by Gus Russo, which explores the life of Al Capone and sheds light on the hypocrisy of the American justice system and the robber barons of the era. Capone ran his bootleg empire like a corporation, complete with divisions, managers, and a division of labor. He even had a political lobbying arm and a succession plan in place. Frank Nitti, who came from the Brooklyn to Chicago gangster pipeline, played a significant role in Capone’s organization. Starting as a barber, Nitti eventually became a top-shelf whiskey smuggler and took over as boss when Capone went to prison. However, the pressure of being the boss took its toll on Nitti, and he tragically committed suicide after taking the fall for a Hollywood extortion scam.

Capone often compared his organization to supposedly legitimate companies and robber barons of the time, highlighting their mistreatment of employees and battles against labor unions. It was an era with few federal regulations, allowing businesses to operate as they pleased. Capone even influenced dairy companies to put expiration dates on milk bottles after his niece fell ill from rancid milk. These parallels between so-called legitimate companies and mobsters are fascinating, as they both operated with little concern for the well-being of others.

In another part of our conversation, we delve into corruption involving banks and robber barons. During the time of the failing banks, certain individuals encouraged people to put their money into another bank that would also fail, yet no legal consequences were faced. We also discuss Joseph P. Kennedy, who engaged in unethical practices to acquire a chain of film theaters and was involved in bootlegging. Although he was initially convicted on false charges, his conviction was later reversed.

Regarding Joe Kennedy’s involvement in bootlegging, there is limited concrete evidence, but we do know that his father had a bar and a wholesale liquor business. Kennedy seized the opportunity to capitalize on liquor sales during Prohibition until it was lifted. He then made a significant profit through exclusive contracts with British distillers. In comparison, Al Capone had a different approach to illegal activities.

We want to give special thanks to Ben Ellickson for providing us with valuable reading material on this subject. Ben has also proven a great friend through his thoughtful gift of a Prohibition-era glass whiskey bottle and his expertise in operating a backhoe.

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Transcript

[0:01] Well, hey, all you wiretappers out there back here in studio gangland wire, I got a little different studio look, a little different camera placement.

Anyhow, I was messing around trying to clean some stuff up and put some books in the thing in the bookcase and throw some stuff away.

So it’s still a mess in here, but it’s a little better of a mess.

I want to talk a little more about that great book, The Outfit by Gus Russo.

And thanks to Ben Ellickson for getting me that book. about Al Capone, and he talked about the hypocrisy of the American justice system and the robber barons at the time and kind of compared himself to some of them.

Al Capone’s Organizational Structure and Divisions

[0:38] Al Capone ran a bootleg empire like a corporation. He had divisions and he had managers, he had general managers, he had unit leaders, he had workers, he had a division of labor, you know, you might be a driver, you might work in the brewery, you might be responsible for sales to go out and make sure that all the speakeasies were using his booze.

You had enforcement when somebody wasn’t paying their bills.

You had to have protection, you had to have security because other bootleggers would maybe hijack one of your trucks.

But you had to have all those different divisions, and then you had to have managers over them. And he also had a political arm, a political lobbying arm, ran by Curly Humphreys, a welshman.

He had Jake Guzik, who handled a lot of the numbers in the business.

[1:28] His enforcement arm was ran by Tony Accardo. Back in the day, Accardo, of course, starred out as his bodyguard and supposedly would sit out in front of the Lexington Hotel with a Chicago typewriter in his hand.

I don’t know, that sounds a little too movie-style, movies to me.

He also had a succession plan. He had Frank Nitti all ready to step up and go.

Now, he wasn’t born and bred in the mafia. He was from Naples, but he used all that mafia kind of organization to make all this work.

Nitti, he came out of the Brooklyn to Chicago gangster pipeline.

Frank Nitti’s Role and Succession Plan

[2:03] There’s really no evidence that he knew Capone when he was in Brooklyn, where he first landed when he was a young kid, and then came to Chicago.

He trained as a barber. After he got to Chicago, he first became a fence.

So that takes a lot of organization.

You have to have outlets, you have to have contacts with businesses that will take your swag or storefronts or vendors, somebody to sell your swag that you get from professional criminals who steal it all the time.

And you’ll have to have those guys all lined up too.

So that takes a certain amount of organization. He moved into the Capone Torrio bootlegging organization pretty quick as a top-shelf Canadian whiskey smuggler.

When Capone went away, Nitti was his right hand at the time, and he took over as boss.

Pressure on Nitti and His Tragic End

[2:52] The boss always bears the brunt of the press and law enforcement attention.

[2:56] And he listened to Capone’s board of directors, and that was Paul LaWitterica and Anthony Accardo, Cherry Nose Gioi, and a few others.

Matter of fact, in the end, Nitti, they told him that he had to take the load for this Hollywood scam, the extortion out in Hollywood, and they wanted him to go to prison behind it.

And he went out and committed suicide the next day, and a whole bunch of the rest of those guys went. They were all going down anyhow.

I don’t know what was in their minds. I think maybe they probably agreed that we’re all going down that day, and Nitti just, he couldn’t take it.

Comparison of Capone’s Organization to Robber Barons

[3:26] He couldn’t do another bit in penitentiary.

Now, Capone liked to compare this organization that he’s built with these other people to supposedly legitimate companies and other robber barons like Andrew Carnegie, Cornelius Vanderbilt, Railroad, John D. Rockefeller Oil.

The robber baron, railroad man, Cornelius Vanderbilt once said, you don’t think I could run a railroad in accordance to the statutes, do you? This was a long time before the FDA, the FTC, the Fair Labor Standards Act.

[3:55] There were no other federal regulatory agencies and no other really federal regulations.

States might have a little bit, but these were all interstate companies, so it was tough.

Exploitation of Workers and Anti-Union Tactics

[4:05] It was also a time when people, you know, they were victimizing their employees as much as they could.

And as men tried to form labor unions to establish themselves and make management listen to them and pay them a fair wage, not just robbing them of their labor and sticking it in their pocket.

Guys like Henry Ford would hire Pinkerton thugs, and these other guys would do that too.

[4:27] Would hire Pinkerton thugs to beat up strikers and to try to use friendly police to try to get information on labor union people, and they called them all communists and tried to hamper any union efforts by any means necessary.

So they were just like mobsters.

Many mislabeled and dangerous goods were put in the marketplace, And, you know, that’s one of the more famous stories about the goods in the marketplace.

You know, the Deirdre Capone, Al Capone’s niece, claims that it was her uncle.

Al Capone and her dad, Ralph Capone, that forced the milk people, the dairy people, to put an expiration date on each bottle of milk because one of their children got really sick from some rancid milk.

So, you know, once again, that’s a pretty famous story that Al Capone forced the dairies to put an expiration date, you know, kind of the first FDA was Al Capone.

You know, he once gave an interview to a magazine, a legitimate magazine called Liberty Magazine, and he was talking about when he was down in Florida.

Capone’s Impact on Food Safety and Regulations

[5:31] He said, down in Florida, when I lived there, there’s a shady newspaper publisher, and he had a friend that was running a bank, and the bank was about to fail.

So this guy unloaded worthless securities onto unsuspecting people.

[5:44] And as people were drawing their money out of that bank, these people that now had stock in that bank, it it was going down the tubes.

People were drawing their money out of the bank at maybe 30 cents on the dollar.

Well, another guy who was a friend of the banker and a friend of the newspaper man, and the newspaper man, they all encouraged all these people drawing money out of the bank to put it in this other bank, and that other bank would fail shortly after. So, and nobody went to jail.

And he said, you know, they didn’t go to jail and they’re among Florida’s most respected citizens today.

Comparison to Joseph P. Kennedy and his Controversial Tactics

[6:17] So, you know, it frustrated him. You know, he was just selling a product that everybody wanted, except a few people who got this Volstead Act passed.

He also compared himself to another robber baron named Joseph P. Kennedy.

Supposedly, they had some kind of bootlegging thing going. I don’t know.

I’m going to talk about that in just a minute.

One example of Joe Kennedy’s gangsterism was when he wanted to buy up a chain of film theaters.

The owner, a man named Alexander Pantanges, refused.

Kennedy paid a 17-year-old girl to accuse him of rape. This is a pretty well-documented story.

[6:51] Kennedy got friendly cops and a court to arrest him and charge him.

And he got 50 years in prison.

This conviction was later reversed when the girl was confronted and with her part in it, and she committed suicide before she could ever give her testimony.

During this trouble, Kennedy was able to purchase this theater chain for pennies on the dollar.

Limited Information on Kennedy’s Involvement in Bootlegging

[7:10] You know, this Kennedy dude, in regards to that bootlegging business of Joseph Kennedy and Al Capone, to find real solid information on that other than just a blanket statement.

I couldn’t really find it. Best I could find was Joe Kennedy’s dad was a long time.

He had started out with a bar. Patrick Joseph Kennedy was his name.

Pretty original in our names, aren’t they? He had a bar, but he’d also gotten a wholesale liquor business. And so when the Volstack…

Act was passed, Prohibition passed. If you already had stores of liquor, you could continue selling it until it was gone because it, Prohibition law banned the manufacture, sale and transportation of intoxicating liquors.

It wasn’t really illegal to drink alcohol in the 1920s. The real money that Kennedy made from alcohol really was later on in 1933 when Prohibition was going to be overturned. He already had his grid connections.

He had made a lot of money in the stock market and other kind of finky stock market deals.

And he got exclusive contracts to start importing high-end Scots and gin from England.

Lucrative Deals and Comparing Al Capone

[8:17] These deals with these top-shelf British distillers like Dewar’s and Gordon’s were really lucrative.

When prohibition was lifted, he was ready to go. And this liquor distributorship for these exclusive distributorship for these top shelf bottles of booze really netted him a lot of money.

He was able to walk away when he sold it.

Two years later, 10 years later, he made more than $100 million in today’s dollars.

He didn’t have that much investment in it either when he first just get that distributorship.

So that’s a little compare and contrast with Al Capone and other robber barons of the day. Thanks again to Chicago’s best backhoe operator, Ben Ellickson.

He got me this book by Gus Russo called The Outfit. It’s a great book.

Shout-out to Ben Ellickson and Chicago’s Famous Dishes

[9:03] Got a lot of details, a lot of good stories like this. Now, Ben Ellickson, let me tell you a little bit about him.

He’s the guy that can pick up a small Prohibition-era glass whiskey bottle with a huge backhoe and deposit it gently on the side of the trench he’s digging. And then he sent it to me.

So once again, Ben, you’re my friend, and I really appreciate everything you’ve done for the podcast over the years. I want to get back up to Chicago and we’ll have some more barbeque.

I can’t remember the name of that joint we ate at before. Or maybe we should try some other kind of food up there. They got the deep dish pizza.

What other Chicago famous dishes are there that I need to try next time I go up guys?

Comment back on my Gangland Wire podcast page, Facebook page, if you do Facebook.

Support for Veterans and Drug/Alcohol Counseling Recommendation

[9:46] Anyhow, thanks a lot guys. Don’t forget that I like to ride motorcycles, so watch out for motorcycles when you’re out there. And if you have a problem with PTSD and you’ve been in the service, get to that VA website, get that hotline number.

Problem with drugs or alcohol, which goes hand in hand with PTSD.

[10:02] Find Anthony Ruggiano, former Gambino man.

He’s a drug and alcohol counselor. He has a website.

Let me know if you use him as your drug and alcohol counselor.

I won’t give up your name. I just want to know about it. He’s a good guy.

So thanks a lot, guys. Like and subscribe. Tell your friends about it and keep coming back as we say. Thanks, guys.

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