American organized crime of the 1940s
American organized crime in the 1940s was marked by significant growth and adaptation, particularly in response to the socio-economic conditions of World War II. Under the leadership of figures like Lucky Luciano and Frank Costello, organized crime evolved into a more structured and business-oriented operation, establishing a national syndicate that divided the United States into regions of influence. During the war, criminal organizations capitalized on the government's rationing efforts, engaging in black-market activities that allowed them to thrive while legitimate businesses struggled. They employed bribery extensively to maintain their operations and gain political protection, which proved effective against law enforcement challenges exacerbated by military call-ups.
The post-war years saw organized crime shift back to traditional activities such as gambling, extortion, and drug trafficking while also entering the burgeoning Las Vegas gambling scene. Despite their successes, the late 1940s began to witness growing scrutiny from law enforcement and investigative journalists, leading to increased pressure on organized crime figures. Efforts to expose and dismantle these operations culminated in national attention from congressional investigations, signaling the beginning of a slow decline in the power of organized crime by the decade's end. The legacy of this period was a complex interplay of illicit enterprise that provided both economic opportunities and negative impacts on American society.
American organized crime of the 1940s
Definition Organizations set up to operate illegal enterprises, or extort money from legal businesses by means of criminal tactics, with profits often being reinvested into legitimate operations
Organized crime, known variously as the Mafia, the Mob, or the Syndicate, had become a fixture in several American cities after the turn of the twentieth century. During the 1940’s, organized crime elements operated with virtual impunity in many areas. Leaders managed to increase revenues, consolidate gains made in formalizing and expanding operations, and establish ties with local and state-level politicians that allowed them to obtain protection from criminal investigation and prosecution for their illegal activities.
After surviving two bloody decades of infighting, the rival gangs in New York were brought together in 1931 by Charles “Lucky” Luciano, who guided leaders toward a more businesslike approach to running their operations. Three years later, Luciano formed a syndicate with mob leaders in twenty-four major cities, and these in turn divided the country into spheres of influence where they exercised some control over operations in smaller municipalities. Although Luciano was sent to prison in 1936, he continued to direct his own group’s operations from behind bars, while his deputy, Frank Costello, exercised daily control in New York and provided leadership for the national organization. Costello believed that bribery was better than confrontation as a strategy for advancing the interests of organized crime, and under his direction Mafia organizations began systematically courting politicians at all levels to buy protection for their enterprises. The strategy worked surprisingly well throughout the decade. By 1940, organized crime had become a thriving enterprise throughout America.
Organized Crime During World War II
In some ways, organized crime was better positioned to convert to the wartime economy than the nation at large. Almost as soon as the United States began gearing up for war with the Axis forces, organized crime mounted highly lucrative black-market operations across the country, offering goods that the government had decided to ration. Bribing legitimate businesses to obtain scarce goods, acquiring them with counterfeit ration coupons, or stealing them when those methods failed, criminal elements amassed quantities of items such as rubber, leather goods, and foodstuffs that they sold at a high profit. At the same time, activities for which the Mafia had become famous—extortion, theft, gambling, racketeering, and prostitution—continued with virtual impunity, especially as the country mobilized for war and law-enforcement agencies saw their ranks depleted due to military call-ups.
One of the more unusual twists occurred shortly after the United States entered the war in December, 1941. Many in the federal government worried that enemy agents might try to sabotage efforts to ship goods overseas to U.S. forces and the Allies. The major ports were controlled by the longshoremen’s unions, which had been heavily infiltrated by organized crime decades earlier. In February, 1942, an explosion and fire aboard the SS Normandie, a cruise liner being converted to a transport ship at a New York City pier, convinced authorities that help was needed. Although later investigation proved that the fire had been caused accidentally, at the time officials in Naval Intelligence, fearing more of the same activity, launched a secret program dubbed Operation Underworld, aimed at getting leaders of organized crime to assist in preventing sabotage. The real beneficiary of this initiative was Luciano, who was provided better prison accommodations in exchange for assistance in getting his organization and others to keep the ports open and goods flowing. Ostensibly, Luciano also arranged for associates in Sicily and Italy to aid the U.S. invasion there in 1943. Ironically, one of the men who ended up as a translator for the Allies was Carlo Gambino, future leader of one of the five principal crime families in New York, who had fled to Italy from the United States in 1937 to escape arrest for murder.
Organized Crime After the War
After hostilities ceased, organized crime entities continued operations as if nothing had changed. Although their black-market operation dried up when rationing ceased, they quickly shifted back into traditional activities such as racketeering, extortion, gambling, and prostitution. Additionally, their activities in the drug trade increased, as they were once again able to obtain illegal substances from suppliers in the Far East and Middle East over shipping routes that had been closed during the war.
Perhaps the Mafia’s most significant move in the years immediately after the war ended was an expansion into the newly flourishing gambling mecca in Las Vegas. In 1946, Benjamin “Bugsy” Siegel, a mob associate who had been living in California since the mid-1930’s to oversee Mafia interests in Hollywood, convinced other mob leaders to invest in construction of the Flamingo casino. Once a base had been established in the city, mobsters were able to infiltrate other gambling houses, often becoming silent partners in these operations. Casinos provided places where mob leaders could “launder” funds—that is, invest illegal profits into legitimate enterprises in order to hide the original source from which the money had been obtained.
The effectiveness of law enforcement in meeting these new challenges was mixed. In 1946, the U.S. Congress passed the Hobbs Act, an amendment to a 1934 law, to help combat the increase in robbery and extortion associated with interstate commerce. In the long run, this act would provide the basis for more effective enforcement, but its immediate impact was negligible. Part of the problem lay in the nature of criminal activity, much of which was confined within state borders. Additionally, some politicians seemed willing to turn a blind eye to the activities of organized crime, especially if it meant they could get support for elections. The case of William O’Dwyer, elected mayor of New York with behind-the-scenes help from Frank Costello in exchange for O’Dwyer’s aid in thwarting investigations of Mafia activities, is the most egregious example of a common practice.
Law-enforcement officials were especially chagrined when New York governor Thomas E. Dewey, who had made his reputation fighting organized crime during the 1930’s, granted a pardon to Lucky Luciano in 1946 in recognition of his assistance with the war effort. Although Luciano was deported to Italy as a condition of his pardon, his continued involvement from abroad in drug smuggling and other illegal enterprises demonstrated that the move had done little to curb criminal activity.
Despite the successes organized crime leaders enjoyed during the decade, organized crime in America began its slow demise in the final years of the 1940’s. Across America, district attorneys determined to reduce the Mafia’s influence empanelled grand juries to investigate its activities. In 1947, journalist Herbert Asbury began a series of articles exposing Costello’s involvement with New York politicians. At the start of the next decade, the activities of a congressional committee chaired by Tennessee senator Estes Kefauver, aided by committee counsel Robert F. Kennedy, would shine the national spotlight on organized crime, finally marshalling law-enforcement agencies to begin putting real pressure on the vast illicit empire.
Impact
Acting with virtual impunity during the first half of the decade, organized crime groups were able to consolidate gains made during the previous ten years and solidify their hold over a number of key legitimate industries across America. Many businesses were forced to purchase from mob-controlled suppliers or provide substantial portions of their profits for ostensible protection. At the same time, theft, arson, and other violent crimes took a toll on thousands of innocent citizens who were not able to obtain relief from law-enforcement agencies that lacked either the manpower or the political will to deal with organized criminal groups. The positive role organized crime played in helping keep American ports open and goods flowing to the armed forces overseas was outweighed by the enormous negative impact these groups had in operating a black-market system to steal and sell rationed goods at exorbitant prices—goods that would otherwise have been available to the fighting forces or sold on the legitimate market. Additionally, the expansion of organized crime into the Las Vegas gambling industry gave leaders of organized crime a valuable new outlet for laundering illegal funds through a legal enterprise where business was transacted almost exclusively in cash.
Bibliography
Fox, Stephen. Blood and Power: Organized Crime in Twentieth-Century America. New York: William Morrow, 1989. Survey providing a historical perspective on the activities of key leaders of organized crime in cities throughout America.
Lunde, Paul. Organized Crime: An Inside Guide to the World’s Most Successful Industry. New York: Dorling Kindersley, 2004. Describes operations conducted by American criminal groups during the 1940’s. Part of a historical review of organized crime activities worldwide.
Peterson, Virgil. The Mob: Two Hundred Years of Organized Crime in New York. Ottawa, Ill.: Green Hill, 1983. Contains a chapter focused on organized crime activities during the 1940’s; explains the relationship between leaders of criminal groups and elected officials.
Raab, Selwyn. Five Families: The Rise, Decline, and Resurgence of America’s Most Powerful Mafia Empires. New York: St. Martin’s Press, 2005. Detailed history of organized crime in New York, supplemented by discussions of activities conducted by criminal organizations in other parts of the United States.
Reppetto, Thomas. American Mafia: A History of Its Rise to Power. New York: Henry Holt, 2004. Detailed examination of the rise of organized crime in America; provides information on activities by key criminal leaders during World War II and immediately after.