INVESTIGATIONS: The Kingpin & the Mayor

In some of its early clinical efforts, the Senate’s Kefauver crime investigating committee seemed interested only in examining the lumps, warts and old tattoo marks on the body politic. But in New York last week, it was intent on deeper surgery. Though its hearings were closed, and could only be followed by buttonholing the doctors at the operating-room door, the committee’s interests were plain. It wanted to know all about 1) Underworld Kingpin Frank Costello, and 2) former Mayor and present U.S. Ambassador to Mexico William O’Dwyer.

Costello was called in to testify twice, for a total of 7½ hours. He appeared dressed in the quiet good taste of a Wall Street broker, seemed in fine spirits (his briefcase, he told reporters, contained nothing but “two bottles of whisky and a pair of pajamas”), and acted as though he had just dropped in to see some old pals. The Senators were equally polite. Committee Counsel Rudolph Halley let it be known that Costello was “a good witness,” said he had given information on a dozen politicos of both parties, which was “full of meat,” and had only balked at one mysterious “$64 question.”

What Was Going On? The committee’s references to the former mayor (who invited one of its investigators to take testimony from him in Mexico City last week) were also on a diplomatic and neutral plane. Beyond revealing O’Dwyer’s statement that he had met Costello only once, and then in obedience to an order when he was a World War II officer investigating war frauds, the committee publicly made no attempt to link the two men.

But the list of subsequent witnesses made it obvious that the committee was going further in checking tie-ups between crime and politics; that it was well aware that officials of O’Dwyer’s regime (some of whom were involved in recent fire-and police-department scandals) had demonstrated such an uncanny propensity for getting into hot water that millions of New Yorkers wondered just what was going on before he resigned.

“I’m Small Peanuts.” The Senators quizzed Anthony Anastasia and his brother Albert, the rich Brooklyn mobster and onetime Murder, Inc. suspect who never stood trial, although District Attorney O’Dwyer once described the Anastasia case as “the perfect murder case.” They failed to corral Gambler Frank Erickson (who preferred to stay in his Rikers Island cell, where he is serving a two-year rap for bookmaking). But the committee pulled in Underworld Big Shot Meyer Lansky, Gamblers Gerard Catena and James (“Niggy”) Rutkin, who entered the hearings protesting: “I’m small peanuts. Why don’t these Hollywood investigators retire and get J. Edgar Hoover up here? He’ll tell them all they want to know in two days.” The committee also called two of O’Dwyer’s intimate friends,

Water Supply Commissioner James J. Moran (whose testimony was considered “vague”) and ex-Deputy Police Commissioner Frank Bals (who seemed “sort of hazy”).

At week’s end the committee was back in Washington quizzing bookies and investigating the “billion-dollar” punchboard racket. But it proposed to come back to New York next month, interview O’Dwyer in person, and hold open hearings with a group of witnesses which might even include Virginia Hill, great & good friend of the late “Bugsy” Siegel. New Yorkers could hardly wait to find out whether the city had been suffering from deep-seated Costello-itus or just surface symptoms of itchy fingers.