ARNOLD ROTHSTEIN COULD EASILY HAVE walked away from gambling and loan-sharking and entered the world of legitimate business. In 1912 he was offered a $25,000-per year position as a stockbroker. He said no. Not that he ever wished to leave the demimonde of gambling. Not that he ever considered $25,000 a year enough money.
A. R. claimed that gamblers got a fairer shake in casinos than anybody did on Wall Street-and he wasn't necessarily wrong. Wall Street could be as crooked as any Bowery stuss parlor or Broadway floating crap game. Disreputable brokers-often career con menpeddled worthless stocks, manipulated prices, and swindled millions from investors. Regulatory oversight barely existed. The federal government occasionally prosecuted brokers for mail fraud, but that was about it. Investors relied on local and state officials for protection. On Wall Street, that meant Tammany district attorneys and Tammanyinfluenced governors.
As Arnold Rothstein would say, "God help them."
Wall Street scams often involved mining stock. Gold. Silver. Copper. Platinum. It didn't matter. Mining was an ideal cover for fraud. There might be a fortune underground. There might not. Who knew? With manufacturing or shipping, you either had a factory or a ship, or you didn't. Either you had merchandise or cargo or passengers, or you didn't. With mining, there might be rich veins of gold underground-or there might not. You didn't know until you put your money down.
Some of Arnold Rothstein's best friends-strike that, his closest associates, he didn't have, or want, friends-operated their own fraudulent brokerage houses. George Graham Rice. Charles Stoneham. Edward Markel Fuller. W. Frank McGee. Dandy Phil Kastel. If stock fraud was your line of work, it paid to know people like Rothstein, who could provide the necessary connections at Tammany Hall.
As the twentieth century began, an uneducated little Lower East Side hoodlum named Jacob Simon Herzig left Elmira Reformatory. Renaming himself George Graham Rice, he soon invented the racing tip sheet: but after a quarter-million-dollar miscalculation at a New Orleans track, Rice switched to peddling fraudulent mining stock. He again went to prison. In 1914, seemingly reformed, he penned his memoir, My Adventures with Your Money, warning investors:
You are a member of a race of gamblers. The instinct to speculate dominates you. You feel that you simply must take a chance. You can't win, yet you are going to speculate and continue to speculate-and to lose. Lotteries, faro, roulette, and horse race betting being illegal, you play the stock game. In the stock game the cards (quotations or market fluctuations) are shuffled and riffled and stacked behind your back, after the dealer (the manipulator) knows on what side you have placed your bet, and you haven't got a chance. When you and your brother gamblers are long of stocks in thinly margined accounts with brokers, the market is manipulated down, and when you are short of them, the prices are manipulated up.
Going straight didn't interest Rice, for in many ways he resembled A. R. "Rice was unquestionably born with an extraordinary intellect," noted one history of 1920s stock fraud. "With it he had imagination, a colossal nerve and an irrepressible ego. He was inspired not so much by ambition, and the desire for money as he was to prove that he, George Graham Rice, could accomplish anything he chose."
Thus, Arnold Rothstein and George Graham Rice maintained a warm relationship, with A. R. spending a great deal of time with Rice ("a very interesting and unusual man, a brilliant and fascinating conversationalist" in Carolyn Rothstein's words) and his equally shady attorneys.
But Rice and Rothstein did more than talk shop at the Cafe Madrid and various Broadway haunts. The Big Bankroll viewed Rice as a distinguished elder statesman in the art of fleecing suckers. And, putting sentiment aside, he saw him as a new source of profits and provided him with advice-and cash-to finance his operations. He also served as Rice's landlord, renting him a floor of his 28-30 West 57th Street office building. Later, when business boomed, Rice rented a whole loft building on East 17th Street from A. R. "I remember," wrote Carolyn Rothstein, "his outgoing mail was taken from his offices in great burlap bags."
Rice's incoming mail also arrived in great burlap bags, filled with cash and checks, for by the early 1920s George Graham Rice had returned to bilking investors. His The Iconoclast became America's largest-circulation financial paper, cautioning readers about other crooks and ranting against Wall Street's legitimate firms. Rice was merely bad-mouthing competition, but Iconoclast readers saw him as their defender, a truthteller, unafraid of special interests. With credibility established, The Iconoclast moved in for the kill, shilling blatantly for Rice's Columbia Emerald Company. When Columbia Emerald collapsed, Rice's disciples invested in The Iconoclast's next big tip: Idaho Copper. "Sell any stock you own," the paper shouted in April 1926. "and Buy IDAHO COPPER. We know what this language means AND WE MEAN IT."
Rice's empire collapsed when a disgruntled henchman exposed his operations. For over a year afterward, the con man evaded process servers by holing up in Manhattan's Hotel Chatham. When his chiropodist refused to make house calls, Rice left the building-and walked into a four-year sentence in Atlanta.
John Jacob "Jake the Barber" Factor (Iakow Factrowitz) was a Polish-born conman, who might also have gone straight-straight into his half-brother Max Factor's successful cosmetics business. Jake Factor moved from barbering to stock fraud to selling worthless real estate in the Florida land boom of the early 1920s. In 1923 A. R. loaned Factor $50,000 to bankroll his latest scheme-what would turn out to be Europe's largest stock swindle. Operating out of England, Factor started by promising investors guaranteed interest rates of between 7 and 12 percent at a time, when most banks paid between 1 and 3 percent. Factor actually kept his promise-until he had lured enough suckers into his trap. He then returned to stateside, with $1.5 million in investors' cash in his pockets. His dupes were too embarrassed to press charges.
One would think that Factor wouldn't dare return to England. He did-in 1925-once more bankrolled by Rothstein. He now began by selling investors a legitimate stock, Simplex, at $4 per share. He then had a dummy brokerage firm buy up their shares at $6 each. He repeated the process with Edison-Bell stock. His customers-who rarely saw anything beyond paper profits-thought Factor a financial genius and rushed to plunge more money into whatever he recommended. What he recommended were two worthless African mining stock, Vulcan Mines and Rhodesian Border Minerals. A. R. met his death before Factor closed up shop again-and left England for Chicago with another $8 million.
The Rice and Factor episodes, however, were mere bagatelles compared to Arnold Rothstein's major activities within the tangled, predatory world of the bucketshops.
On Tuesday afternoon, June 12, 1922 twenty-seven-year-old motion picture actress Nellie Black arrived unannounced at the lower Broadway offices of E. M. Fuller & Co. Elegantly dressed, she wore perhaps $15,000 to $20,000 worth of jewelry. More importantly, she was almost hysterically irate. For an hour, she screamed to see the firm's senior partner, Edward Markel Fuller. Fuller, and his counsel Michael Delagi, a protege of Tammany chieftain "Big Tom" Foley, called police, claiming that Black threatened Fuller's life.
Miss Black carried no weapons, but Magistrate Charles Oberwager ordered her held without bail in the Tombs. In court Black told a story that began in 1915, when she met Fuller at the Knickerbocker Hotel cafe. Six years later, she sued him for breach of promise, seeking $30,000 in damages. On June 6, 1921, she met with Arnold Rothstein, who gave her $5,000 and promised $5,000 more-if she dropped her suit. She never received the second installment.
Judge Oberwanger found Miss Black guilty of disorderly conduct and returned her to the Tombs, again without bail. She now finally grasped the power of Messrs. Fuller and Rothstein. Two days later, she again appeared before Oberwager. She vowed contritely never to annoy Fuller again. Oberwager suspended her sentence.
Nellie Black went away. Edward Fuller and Arnold Rothstein's troubles didn't.
E. M. Fuller & Co. had over a hundred employees in 1922, 10,000 clients (down from a recent peak of 16,000), offices in New York, Chicago, Cleveland, Boston, and Uniontown, Pennsylvania-and two known partners in Fuller and W. Frank McGee. McGee's major claim to fame was his recent marriage to Broadway musical comedy star, Louise Groody.
"Ed Fuller and Frank McGee . . ." observed Arthur Garfield Hays, one of their attorneys, "were a well-balanced but strangely assorted pair, with nothing in common except their strewing of largess, their love of gambling, and their partnership. To me they were likable roughnecks. Lacking in all moral scruples, they were ready to handle any racket which would bring in `jack.' They completely ignored the suffering that might result from their activities; as long as they dealt with numbers on their books, rather than with people known to them."
Stated bluntly, Fuller and McGee were crooks. They were also very close associates of Arnold Rothstein.
The pair had formed E. M. Fuller & Co. in 1914. In June 1920, federal authorities indicted them for mail fraud regarding stock in the California-based Crown Oil Company. In 1921 a new United States Attorney took office and never bothered to prosecute the case. Remarkably, E. M. Fuller not only survived, but prospered.
The market was good. America quickly recovered from the depression of 1919-20, and Wall Street initiated its wild ride through the 1920s. Fuller and McGee might have contented themselves with selling stocks in normal fashion, collecting commissions, and living moderately prosperous lives.
But that was no fun.
They specialized in deliberately selling bad stocks to good but greedy people, but not actually selling bad stocks. True, they dutifully placed orders and took checks, but they never bothered purchasing the securities in question. Instead, they pocketed their customers' cash and prayed as hard as such men could that their stocks decreased in value.
Ninety percent of the time, they guessed right-and when they guessed wrong, they had enough margin to cover mistakes. Brokerage houses, operating in this fashion-"bucket shops"-were not uncommon. Most belonged not to the New York Stock Exchange, but to the rival Consolidated Stock Exchange ("The "Little Board"). E. M. Fuller was the Consolidated's biggest house.
As long as the market behaved predictably, bucket shops had little to fear. But in 1922, the market unexpectedly enjoyed a very good year, and dozens of stocks Fuller picked to fail increased in value.
On June 26, 1922, nine days after Nellie Black's sentencing, E. M. Fuller & Co. unceremoniously collapsed-one of the biggest brokerage house failures of the postwar era. Gullible investors lost a total of $5 million. Numerous other shady firms, the Consolidated Exchange itself, and the entire bucket shop system collapsed in its wake.
The system had operated with the suffrage of the authorities, the authorities being, as usual, Tammany Hall, and the authorities being aided as usual, by Arnold Rothstein. "Big Tom" FoleyWilliam Randolph Hearst's old enemy-was the man to see at Tammany Hall. Hearst ordered New York American editor Victor Watson to have his top muckracking reporter, Nat Ferber, investigate Foley, Rothstein, et al.
Ferber had his work cut out for him. Save for bulging bank accounts, crooked politicians normally leave no paper trail. Neither would Ferber enjoy cooperation from Manhattan's new district attorney, Joab H. Banton, who owed his election to Foley. Banton wasn't particularly interested in pursuing Fuller and McGee-an investigation that could lead only to Foley.
Ferdinand Pecora served as Banton's first assistant. Pecora's family had immigrated from Sicily when he was five. He abandoned distinctly non-Sicilian plans to become an Episcopalian minister, out of consideration for his family's tenuous finances. Working his way through City College and New York Law School, he joined the prosecutor's office in 1919, becoming Banton's first assistant in 1922. Ferdinand Pecora was the jewel in the district attorney office crown-but Banton didn't like being reminded of it. Before Ferber approached Banton, he convinced his editor Watson to editorialize glowingly about Pecora-and how Pecora ran Banton's office. Only then did Ferber request access to E. M. Fuller's records. Normally, Banton would consult Pecora-and in this case, prudence dictated denying Ferber's request. But stewing over Pecora's favorable publicity, Banton blurted his assent.
Banton wasn't risking much. E. M. Fuller's records consisted largely of buy-and-sell orders, and Ferber's chances of finding anything significant were infinitesimal. Banton also knew that his staff had already picked the best stuff clean, depositing it in a locked file cabinet. Unfortunately, they had marked that drawer-ever so faintly-"District Attorney." Ferber spied the notation patiently, waited until he alone was in the room, and jimmied the file. He discovered dozens of checks from Fuller payable to fellow bucket shop owner Charles Stoneham, huge checks to Arnold Rothstein and, most amazingly of all, a $10,000 check to Tom Foley.
Foley tried talking his way out of it. Nobody believed his story, but it had a nice ring to it. Generous soul that he was, Big Tom claimed to have lent the firm $10,000, out of friendship for Bill McGee's wife, who had grown up in his election district. "I didn't know the partners very well," Foley swore. "I am a fool, and I've been a damned fool all my life. But I was asked for help by McGee's wife. I have known her since girlhood.... I don't know the difference between bucket-shop, the Curb, or the Big Exchange. I only knew McGee's wife, Nellie Sheehan, and that she needed help."
Foley faced other questions: Why had he loaned E. M. Fuller & Co. an additional $15,000 when it began going under, and why had he never even bothered to receive a formal note in exchange? ("What the hell good is a note? If you pull out, all right. If not, put it down as a bad bet.") He also needed to explain why and how he cajoled Charles Stoneham into pumping $147,500 of his money into the failing operation.
Nonetheless, Foley, battered and embarrassed to be implicated in the swindle of thousands of families, escaped scot-free. He was too high-up, and Tammany remained powerful enough to save him. Hearst and Watson and Ferber realized that and went looking for other targets: Fuller, McGee, Stoneham, and Rothstein
District Attorney Banton reluctantly indicted Fuller and McGee, who went into hiding, with accommodations provided by Arnold Rothstein. As it developed, Stoneham was a secret partner in E. M. Fuller and, in September 1923, was indicted for perjury for denying it.
Between August 1, 1916 and September 30, 1921, Rothstein collected $336,768 from sixty checks drawn on E. M. Fuller's accounts. Were they payoffs for services rendered with Tom Foley and Tammany? That would be hard-if not impossible-to prove. Or were they what Rothstein said they were-gambling debts?
Attorneys for E. M. Fuller's creditors took A. R. at his wordaware of his reputation as a "sure-thing" bettor. If they could prove Rothstein had cheated Eddie Fuller to win that money, it would be ordered returned to the firm's list of assets.
Some said that Arnold had, in fact, cheated Fuller with a variant of his old dollar-bill serial-number scan. Rothstein and Fuller would loiter outside Lindy's. Someone would suggest betting "odds" or "evens" on the license plate of the next Cadillac or Hupmobile to turn the corner. A. R. had a small fleet of vehicles-even a Mack truck-nearby, waiting to be summoned by prearranged signal.
But their big bets had been on baseball, and investigators were particularly curious about the 1919 World Series. In October 1923, attorney William M. Chadbourne, representing E. M. Fuller's creditors, grilled Rothstein regarding the Black Sox fix. Chadbourne asked a lot of questions and obviously had a lot of the answers. We will never know for sure which questions had real meaning-and which were mere fishing expeditions. But the resulting exchanges are A. R.'s most direct and detailed comments regarding the scandal. They are also the most authentic, surviving accounts of the Rothstein mind at work, of his attitudes and arrogance. They bear listening to.
The double-crossing that began in 1919 continued long after the World Series ended. Not only did the Black Sox double-cross their fans, Attell and Sullivan and Rothstein double-crossed the Black Sox. Not only did Attell and Zelser and the Black Sox double-cross Bill Burns and Billy Maharg, Arnold Rothstein double-crossed Sport Sullivan. And Sullivan and Boston attorney William J. Kelly gained revenge by blackmailing Rothstein.
In their fascinating but little-known 1940 work, Gang Rule in New York, crime reporters Craig Thomson and Allen Raymond shed additional light regarding Rothstein's testimony. Among the many incriminating papers A. R. left behind were documents relating to the World Series fix. Thompson and Raymond revealed:
In a file marked "William Kelly" the delving authorities found papers showing that a Boston lawyer of that name had come into possession of four affidavits dealing with the Black Sox affair, and promptly filed a bill with Rothstein for $53,000. The four affidavits were by Abe Attell . . . , Fallon ... , Eugene McGee, Fallon's partner, and a Joseph Sullivan. Lawyer Kelly asked Rothstein for $53,000 for "legal services rendered." Rothstein paid him off, and got an unconditional release from Kelly, who later was indicted in Boston for blackmail in some other enterprise. Rothstein also regained the affidavits which told of his bribing the "Black Sox," and left them in his files.
That information goes a long way toward explaining otherwisemystifying exchanges between Referee Chadbourne and A. R. Chadbourne wanted to know. Their sparring began on general terms, but soon escalated to specifics. "Did Fuller or McGee put a bet on the World Series with you in 1919?" Chadbourne wanted to know.
"I do not recall," Rothstein responded blandly.
"Is that your answer?"
Again A. R. could not recollect, but later he answered quite astoundingly, "The only bet I made with Fuller on the World Series I lost." Chadbourne wanted to know if Rothstein honored that wager.
"Certainly-I pay my bets."
"I wouldn't be so sure about that," Chadbourne countered. "I've been looking up your record for some time ... "
"Well," A. R. counterattacked, "I've been looking up yours, too, and I'll stack up against you. So we're even at that."
Later, Carl J. Austrian (no known relation to Alfred Austrian), an attorney representing many creditors of these failed bucket shops, expressed chagrin at Rothstein's supercilious Nothing is more outrageous than what we believed happened, and the conduct of witnesses in this proceeding."
"This baseball thing has been the sore spot in my career," Rothstein responded self-righteously. "I faced the Cook County Grand Jury in Chicago and got vindication."
Referee Chadbourne demanded to know: "Do you know a man in Boston named William J. Kelly?"
Rothstein wouldn't talk, didn't want to talk about Kelly. "What's that got to do with this case?" he snapped.
Chadbourne retorted that a witness couldn't pick-and-choose what questions to answer.
"Do I know him?" A. R. sneered. "Yes, I know him."
"He's an attorney, isn't he?"
"I know him as something different," said A. R. "I think he's a blackmailer, to tell you the facts."
"Did you engage W. J. Kelly to represent you in the Grand jury proceedings over the World Series in 1919?"
"You ought to be ashamed to ask me that," Rothstein spat back. "This is no place to ask that kind of question. You ought be ashamed. Before I'd be a tool like you are I'd jump into the Hudson River."
Despite such insults, Chadbourne bore on: "Did you have any conversation with W. J. Kelly with respect to the Chicago-Cincinnati series of 1919?"
"I never had any conversation with Mr. Kelly regarding those games," A. R. lied. (He later admitted that he had met him in Chicago in 1921 and had once spoken to him on the phone.) "I never spoke to him but once in my life. That ought to stop all your silly questioning."
The sparring continued as A. R. commented superciliously, "I am just answering those questions to please you. How can a man refrain? It's an absolute outrage."
Q-"Did Fuller place any bets with you on the world's series in 1919?
A-I don't remember whether he did or not....
Q-And do you know J. J. Sullivan of Boston, commonly called "Sport" Sullivan?
A-Yes, I know him too.
Q-Now don't you know you had a conversation with Kelly about representing you and Attell and Sullivan during the Chicago investigation?
A-Absolutely not.
Q-Did you have any conversation with William J. Fallon regarding his representing Sullivan, Attell, and yourself?
A-Absolutely not, I'm not going to answer any more such questions.
Q-Isn't it a fact that you paid William J. Fallon $26,000 to represent you in those proceedings?
A-No, positively no.
Q-Sullivan is known as one of the great handicappers in racing circles in this country, is he not?
A-He wants me to tell him something, is that it? [The referee ruled Rothstein did not have to answer questions about Sullivan being a handicapper.]
Q-You actually did place bets, including one with Fuller, didn't you?
A-That hasn't anything to do with this case, and I refuse to answer it.
Q-What do you know about a handicapper?
A-I'm not going to answer. I don't know anything about it. I'm in the insurance business. I'm not a gambler.
Q-You seem pretty well informed.
A-Yes, and you do too.
Q-I've been following your career pretty closely.
A-And I've been following yours, too.
Q-Do you not know that Sullivan doped out percentages on races, crap games, etc.?
A-I refuse to answer. What has that to do with this case?
Q-Did you bet with Fuller on the result of the world series in 1919?
A-Yes, I had one bet, and Fuller won that.
Q-[By Referee Coffin]: Did he get his money?
A-Sure he did. I always pay my bets.
Q-[By Chadbourne]: Didn't you consult Sullivan regarding the world's series of 1919 with respect to the various games so as to be in a position to determine what odds should be placed?
A-I don't remember. That's too far back. It's a silly question.
Q-You refuse to answer?
A-Yes, on the ground that it has no bearing on the case.
Q-Didn't you consult "Sport" Sullivan as to the way bets should be placed on the World Series?
A-You don't know what you're talking about. What's that got to do with the case of Fuller assets whether I consulted him or not?
Q-As a matter of fact, you were represented at the hearing [the Cook County Grand Jury] by William J. Fallon and Kelly?
A-I have no attorney.
Q-Isn't it a fact that you had a conversation with Sullivan prior to the series of 1919 with respect to that series?
Again, Rothstein didn't want to answer. Referee Coffin instructed him to. He still refused:
A-I wouldn't answer at all, as it has no bearing on the case.
Q-Did you have a talk with Attell about seeing Sullivan regarding the series of 1919?
A-No.
Q-Did Attell report to you any conversation he had with Sullivan regarding that series?
A-Absolutely not. I really shouldn't answer those questions and only do it to please you, Mr. Chadbourne.
Q-I want to be fair with you.
A-You don't want to be fair with me. That's the last thing in your mind. You wouldn't know how to be fair if you tried.
Q-Didn't Attell report to you that because of the nationwide [sic] interest in that series the results would be determined and millions might be made?
A-[Angrily] I'm not going to say "yes," or "no." This has got to be a joke.
Again Referee Coffin demanded that A. R. answer Chadbourne's questioning. Again Rothstein refused, saying it had no relevance:
Q-Did Abe Attell in 1919, prior to the world's series, repeat any conversation with Sullivan?
A-No sir.
Q-Did you know Bill Burns, a former ballplayer?
A-He knows whether I do.
Chadbourne repeated his question, and Rothstein deigned to answer. "He introduced himself to me one night and I insulted him by telling him I did not want to know him, if you call that knowing him. I'd like to know who's paying you to ask me these questions."
Chadbourne ignored the jibe, now demanding to know if A. R. could recall "another meeting in the Hotel Astor in 1919 with Abe Attell and Sullivan to discuss the world's series."
"I'm not going to answer that either because it hasn't anything to do with the case."
"Isn't it a fact," Chadbourne continued, "that at that conference proper percentages on bets on the world series were doped out?"
"I'm not going to answer because it has no bearing on the case."
"Isn't it a fact," Chadbourne demanded to know, "that at that conference the question of fixing the White Sox was discussed?
"I don't remember," A. R. perjured himself. "I wouldn't discuss such a thing. There wasn't any such conference, so how could I discuss it?"
"Then I understand you never had such a conference?"
"I'm not accountable for what you understand."
"Did you have a conference anywhere else in New York?"
"I don't want to discuss that," said Rothstein, truthfully for once, before lying again. "There never was such a conference."
A. R. wouldn't even admit if he met Attell "at any time in New York in 1919."
"I'll answer all of these questions at the proper time," he responded, knowing there never would be a proper time. Referee Coffin again demanded Rothstein answer. A. R. still refused.
He also refused to answer repeated queries as to whether he had known the 1919 Series was fixed and whether he had fixed bets with Fuller. Then Chadbourne returned to the topic of Sport Sullivan, asking, "Did you ever have a conference with `Sport' Sullivan after the series for a division of the winnings?"
A. R. retreated behind the stock response: "I refuse to answer."
Chadbourne, who seemed to have very good inside information, then asked, "Didn't `Sport' Sullivan accuse you of welshing?"
"I never welshed in my life," Rothstein answered. He hated to be called a welsher. It was the worst thing you could call him. The sparring continued:
Q-Don't you know the White Sox players were to get $100,000 bribes?
A-No, I don't know that.
Q-Don't you know the White Sox players made the charge they'd been double-crossed, and didn't get the money after they had thrown the first game?
A-I never promised them any money. I don't even talk to ballplayers.
Q-Did you have any connection with William J. Fallon as to getting the Chicago Grand jury minutes?
A-No.
Q-Don't you know that Fallon got those minutes?
A-No, did he?
Finally, the testimony got around to how Rothstein and Fallon engineered Sammy Pass's perjury, clearing Abe Attell:
Q-Do you know a lawyer in Chicago named Leo Spitz?
A-Yes, very well.
Q-Did you have Spitz send a man named Sammy Pass here about the extradition of Abe Attell?
A-No, I don't remember.
Q-Are you prepared to testify you didn't ask Sammy Pass to come here to testify in the proceedings against Attell?
A-Yes. Did he?
Q-Didn't you pay Pass $1,000 to come here?
A-No.
Q-Did you make him a loan?
A-Yes, if it's any of your business. I loaned him $1,000, and he paid me back $500. He'll return the other $500. He's a nice little boy.
Q-Did he ever say he didn't consider that a loan?
A-No, he's a nice boy and wouldn't say such a thing.
Not if he knew what was good for him.
Chadbourne had made a valiant attempt to get to the bottom of the Black Sox scandal, acting with far greater diligence than any Chicago grand jury or trial court, but he never got A. R. to admit a thing. Rothstein relied not on his own wits and nerve, but also on excellent counsel. In bankruptcy court, he didn't employ a William J. Kelly, Leo Spitz, or even a Bill Fallon. His counsel was far more respectable: influential Manhattan Republican George Z. Medalie, a former assistant district attorney under Charles Whitman. Whenever federal authorities pursued Rothstein, A. R. turned to Republican attorneys. Medalie argued it was "the most remarkable situation in the history of gambling" that Fuller would have made only sixty bets with Rothstein (the number of checks found by Ferber) and lost each and every one. He also contended his client may have passed Fuller's payments on to other betting "commissioners." Regarding one $30,000 check, Medalie claimed it had merely been cashed at Rothstein's gambling house. Whether Fuller then lost all or part of that $30,000 to Rothstein, A. R. couldn't possibly know. "His client kept no books, Mr. Medalie said," the New York Times reported, "because his business was illegal."
Only for Arnold Rothstein could such a defense succeed.
Federal authorities pursuing Fuller's assets indicted A. R. for a single minor transgression. As E. M. Fuller collapsed in 1922, Eddie Fuller asked Rothstein to hide an asset from the bankruptcy court, his lavish Pierce-Arrow. Accordingly, A. R. and Fuller backdated a $6,000 mortgage for the vehicle. In April 1924, a federal grand jury indicted Rothstein for the crime. The case never went to trial.
While A. R. testified one day at the John Street offices of bankruptcy referee Terrence Farley, Watson and Ferber were present to watch. Ferber peered out a window, and saw the street literally lined with gunmen-twenty-two Chicago mobsters led by hoodlum Joe Maroni. Watson and Ferber feared revenge from A. R. and Tammany for having stirred everything up. In those days, major newspapers employed private armies to battle each other in vicious and bloody circulation wars. Watson wanted his circulation manager Ben Bloom to dispatch the American's own goons to scare off these hoodlums, but Ferber argued that if gunfire erupted every other paper would enjoy a field day blasting the Hearst papers and their hired gunmen.
Ferber agreed that reinforcements were necessary-but not gunmen. By phone he summoned every photographer on staff, each equipped with his largest camera. They would indeed shoot Maroni's men, but with something more feared than guns: cameras. Within a few minutes, Maroni's mob slipped away quietly.
While Rothstein fought to retain his gambling earnings, Bill Fallon-acting at the behest of Tom Foley-defended Eddie Fuller and Bill McGee valiantly against charges of stock fraud. Through two hung juries and a mistrial, Fuller and McGee remained free. With Fallon already possessing a reputation as New York's premier jury-fixer, the New York American's suspicions were naturally aroused.
Nat Ferber remained busy investigating the bucket shops (eventually bringing down eighty-one crooked operations), so Victor Watson assigned Carl Helm, another top reporter, to snare Fallon. Charles W. Rendigs was one of four jurors holding out for acquittal in the third Fuller trial. Helm discovered that Rendigs had also served jury duty during Fallon's November 1922 defense of the Durrell-Gregory bucket shop. In the Durrell-Gregory case, six of twenty-three defendants presented no defense and seven of their former associates actually pleaded guilty to mail fraud, but Charles W. Rendigs held out for acquittal and hung the jury.
A remarkable coincidence. The fates had conspired to favor Mr. Fallon. However, fate also played a cruel trick. In most criminal or civil cases, jurors are asked if they know the attorneys involved-but usually not under oath. In the third Fuller trial, they were, and Charles W. Rendigs swore he'd never seen Fallon before in his life.
Rendigs now faced prison for perjury. To save himself, he swore that in the Durrell-Gregory case, Fallon paid him $2,500, laundering the bribe through Joe Pani, proprietor of the Woodmansten Inn. Before long, Helm had others who were willing to testify against the Great Mouthpiece.
The American's staff cajoled bankruptcy referee Coffin to subpoena certain E. M. Fuller records, documents Nat Ferber conveniently misfiled while riffling through firm archives. When Fuller and McGee failed to produce the evidence, Coffin jailed them for contempt of court, ordering them held in the city's worst and hottest lockup, the Lower East's Side Ludlow Street Jail, until they surrendered the missing documents.
Fuller and McGee would now testify against Bill Fallon. They never were close friends with the attorney. Were it not for Tom Foley, Fallon would never have taken their case. In addition, when Coffin first demanded the missing E. M. Fuller papers, Fallon compounded his clients' problems by announcing arrogantly that he had no obligation to turn over any documents, making their failure appear willful.
Also turning against Fallon was his 300-pound factotum Ernie Eidlitz, an all-around scoundrel with whom Bill shared all his business secrets. Fallon overlooked Eidlitz's numerous faults until Ernie forged The Great Mouthpiece's signature to one check too many. At Billy LaHiff's Tavern, Fallon fired Eidlitz. The American quickly secured Eidlitz's testimony against his former boss.
Fallon fled. While on the lam, he brooded about one client he never possessed much respect for: Arnold Rothstein. In the course of Fallon's troubles, he and A. R. had split. Now they despised one another so fiercely that they plotted the other's destruction.
"I wonder what Rothstein is saying?" Fallon announced to his most faithful girlfriend, Broadway showgirl Gertrude Vanderbilt. "He'll be glad to see me on this spot."
This puzzled her-shouldn't Fallon worry about more important matters?
"Rothstein is peculiar," Fallon retorted. "His whole aim in life is to school himself against fear. That's why he goes up to the toughest characters on Broadway and browbeats them. His system is to take the play away from people. Well, he never could get away with it when I was around."
Vanderbilt remained mystified, but Fallon continued: "He's a contradiction in terms. A lot of us are that way. He actually loves his wife, no matter how much he has neglected her. I have it figured out; he thinks he is not worthy to touch her."
Gertrude still didn't want to hear anything about A. R., but Fallon's rage built. He wanted revenge against The Big Bankroll and all his other supposed friends: "I have half a mind to drive into Broadway, challenge the whole gang of back-biters. The squealers!"
Vanderbilt, meanwhile, needed funds for Fallon's continued flight, and cashed a check at Billy LaHiff's. On her way out, she saw Rothstein-trying best not to notice him. But A. R. wouldn't be ignored. "Why, Gertie," he said, exuding maximum pleasantness, "where are you going? And where have you been?"
She was smart enough not to answer, responding curtly: "I've been cashing a check, if that means anything to you."
"Well, now, Gertie, I would have cashed your check."
"Not my check," she shot back.
"Now look here, Gertie," A. R. continued. "Bill was my pal. Of course he was careless, but nevertheless I know he needs money; and he can have it."
"He'll never come to you. So that's that."
Vanderbilt believed that someone followed her back to Fallon's hideout. He moved, then moved again. But it was no use. On June 14, 1924, police arrested him. The Great Mouthpiece was now a ginsoaked, stubble-faced, cowering little man. But he retained some vanity and asked to shave before being led away. The cops wouldn't let him; they feared he'd slit his throat.
While in hiding, Fallon had considered surrendering voluntarily. If he did, he would have needed bail money, a lot of it. He swallowed his pride-and his suspicions-and asked Rothstein. A. R. turned him down.
Bill Fallon was in the Tombs, deteriorating physically, and just about broke.
But he was not beaten.
Gertie Vanderbilt mortgaged her home to provide bail money. And Fallon, despite the steady alcoholic haze about him, retained his wits, the sharpest in any Manhattan courtroom. He would defend himself.
His defense was pure offense. If Fuller and McGee turned against Fallon (Bill always referred to himself in the third person), who could believe the word of such vultures-"confessed bucketeers and robber of millions of poor people"? Ernie Eidlitz? Of course, Eidlitz would testify against Fallon-of course, he would lie against Fallon. Fallon caught him stealing and fired him. The American had kept Eidlitz at great expense in luxurious hotels to lie against Fallon. The American had promised Eidlitz a job for life to lie.
The American. Hearst. Fallon's mad genius took wing. He would not merely attack the integrity of Fuller and McGee and Eidlitz and Watson and Ferber. Any lawyer worth his salt-even an honest lawyer-would do that. No, The Great Mouthpiece would roll the dice and place William Randolph Hearst himself on trial.
Why, he argued, had Hearst targeted Fallon for destruction? It had nothing to do with bribery. It had to do with protecting Hearst's precious public reputation.
The very-married Mr. Hearst had a longtime mistress, stage and film star Marion Davies. Everyone knew of their affair, but no one dared mention it publicly. Fallon possessed birth certificates proving Marion Davies had delivered twins fathered by Hearst. Hearst had to silence Fallon, and if that meant ruining him with trumped-up bribery charges, that's what Hearst would do--what Hearst and his highpaid stooges and their phony witnesses had done.
Fallon's tale was nonsense, bluff, and diversion. Hearst had no vendetta against Fallon, only against Big Tom Foley. But Fallon's own dishonesty and carelessness had left him vulnerable to prosecution. The American's war against the bucket shops was winding down; a new war against the crookedest attorney in town would sell papers.
Beyond that, Hearst had no twins by Miss Davies, no offspring by her at all. "Believe me," one of Miss Davies's friends once exclaimed, "if Marion had one child by Hearst, she'd have worn it around her neck."
But Fallon's outrageous strategy worked: baiting the presiding judge; distancing himself from his former clients; discrediting his former henchman, Eidlitz; knocking holes in the story told by Charles Rendigs ("that miserable creature who faces ten years under a conviction for perjury"); questioning Joe Pani's motives (he feared pros ecution for liquor-law violations); and above all making William Randolph Hearst the focus of the trial. Said Fallon to the jury:
Eidlitz said to me that he told Watson he was fearful he would be arrested, and that he [Eidlitz] knew I had the birth certificates of the children of a motion-picture actress, and that I knew Mr. Hearst had sent a woman, who pretended to be a countess, to Florida to get evidence against his wife. He said he had told Watson that I intended to use that information to blackmail Mr. Hearst.
Eidlitz said he told Mr. Watson that I had the number of the car and the name of the man who went to Mexico with the same party, the same moving-picture actress. He said a few days later Hearst communicated with Watson, and said to Watson: "Fallon must be destroyed."
Newspapers of that era ignored the sexual indiscretions of the rich and powerful unless statements about these peccadilloes were uttered in a court of law. When Fallon mentioned William Randolph Hearst (and that was as early as the jury-selection process), the gloves came off. Every paper in town rushed to chronicle Fallon's charges. Worse, Victor Watson had to phone Hearst to report this catastrophe. Hearst ordered Watson: Print it, print it on page one of the American.
Hanging over the trial was a more sinister presence than Hearst: Arnold Rothstein. At one point The Great Mouthpiece interrogated Victor Watson about a conversation they had:
FALLON: Was the name of anyone else [besides Tom Foley] mentioned in that conversation?
WATSON: I believe Stoneham's name was mentioned and Arnold Rothstein.
FALLON: Don't you remember telling me Arnold Rothstein was the one man you were going to get, no matter how long it took you?
WATSON: No, I said there were various rumors at different times reaching my ears about threats against my life, and among others I said I understood that Rothstein had made some foolish talk about shooting me.
Fallon scoffed at Watson's fears and asked if he recalled Fallon saying "sweet things" ("one of the sweetest characters in the world") about A. R. Watson didn't-no doubt, because Fallon never uttered them. Fallon was toying both with Watson and with Rothstein.
Watson did, however, remember Rothstein's attempt to bribe him. A. R. had requested American sports editor William S. Farnsworth to approach his editor-in-chief, Watson, with a proposition: "Would you ask Watson if he had a price." Farnsworth returned with a terse-but coy-"yes" from his boss. At first that sounded positive. Then Rothstein correctly discerned its real meaning. "I don't trust that fellow Watson," he told Farnsworth. "He's a devil. He wouldn't take any money. What he means is that he wants me to squeal, and I can't do that."
Throughout his trial, Fallon had been excitable, argumentative, cutting. In summation, he became white hot, but with a passion that was controlled, brilliant, calculating, and when he concluded with the words, "All that the world means to me, I now leave in your hands," he had done all he could. The trial concluded at 5:08 P.M. on August 8, 1924. Five hours later, the jury found him not guilty. The courtroom went wild, with Fallon's friends rushing toward him to carry him from the courtroom. The Great Mouthpiece leaned over the press table. He had something to say to Nat Ferber: "Nat, I promise you I'll never bribe another juror!"
But trouble still stalked Fallon. He resumed drinking-heavily. Few cases came his way. Some said potential clients feared Hearst's influence, but the denizens of Fallon's world had far more to fear from a far closer source: Arnold Rothstein. They took their business elsewhere.
But not even Arnold Rothstein could tell John McGraw what to do. When, in 1924, Giants coach Cozy Dolan was implicated in a late-season game-fixing scandal, McGraw hired Fallon to defend him. Fallon threatened to sue Baseball Commissioner Mountain Landis for defamation of character. Landis issued his own threat, this one for Charles Stoneham: Call off McGraw and Fallon or I'll run you out of baseball. Fallon backed down.
On a hot August evening in 1926, Fallon entertained a woman and another couple at his Hotel Belleclaire apartment. A former girlfriend burst in and attacked Fallon's companion with a dog whip. He tried pulling her off. She flung acid into his eyes, which he wiped from his face with a gin-soaked piece of cloth. Miraculously, he was neither blinded nor disfigured.
One day Fallon was in Supreme Court, defending McGraw in a minor civil suit, when he crumpled to the floor. They carried Bill to his wife's apartment at the Hotel Oxford, and there The Great Mouthpiece formulated his last defense-in the case of God v. Fallon. His old law partner, the now-disbarred Gene McGee, visited and heard Fallon's line of reasoning:
You know, Gene, I never really sinned at all.... Everyone says I have sinned; that I'm paying the price of sin. That I tried to take life by a tour de force. Let's confine ourselves to the issue and let's not depart from the law. The law of sin is explicit and simple. To sin, one has to premeditate the sin. I never premeditated a sin. I acted spontaneously, always, and as the spirit moved me.
He paused. Maybe from exhaustion. Maybe for effect. With Fallon, even now, you never really knew. He grabbed McGee's hand.
"You see, Gene, I never really premeditated anything at all-not even death."
The next morning, Fallon felt better, stronger, cheerier. He wanted to go the Polo Grounds. Agnes Fallon tried dissuading him. He flashed a smile and responded firmly, "Do you think for a minute that I am going to lie here when I can go to see a ballgame."
She again tried stopping him. But no one ever told Bill Fallon what to do. He went to the bathroom to shave-just as he wanted to on the day of his arrest. He always wanted to look his best.
He didn't make it this time, either. Agnes Fallon heard a gasp. She found her husband on the floor, blood oozing from his mouth, dead from a heart attack.
William J. Fallon was forty-one.
Fallon's sendoff was from the Church of the Ascension, at West 107th Street and Broadway. Val O'Farrell, John McGraw, and Charles Stoneham attended. McGraw, always a soft touch, paid for Fallon's mahogany casket.
For Victor Watson, things had not progressed as planned. He had bagged Edward M. Fuller and Frank McGee-but who cared about them? Tom Foley had escaped. So had Rothstein and Charles Stoneham. The Fallon episode was not just a failure; it was a disaster. Seeing his name and, more to the point, Marion Davies's name, dragged through the mud outraged William Randolph Hearst. Immediately after Fallon's acquittal, Hearst transferred Watson to the Baltimore News, beginning a downward spiral for Watson, once one of the Hearst's rising stars. Marital and financial difficulties compounded his depression. In November 1938, Watson checked into New York's Abbey Hotel. On the back of a dirty envelope, he scribbled in pencil: "God forgive me for everything, I cannot ..."
He then jumped from an eleventh-story window. Hundreds had crowded Fallon's funeral. Only a handful attended Watson's.