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Conveniently for the Mob, the work of manufacturing garments is divided
between two kinds of companies, each performing a different but necessary job.
Some known as jobbers, design the clothing, buying the cloth and accessories,
organize the manufacturing and ultimately sell to the retailers. The makers,
known as “cut and sew” are referred to as contractors. They employ the most
labour; the jobbers make the most decisions. Lucchese was a jobber.
The two main unions involved in the industry are the International Ladies
Garment Workers Union (ILGWU) and the Teamsters. All fabrics and raw materials
needed in the construction of clothing has to be moved by road, either from
interstate mills, or from docks when goods are being imported. All finished
goods have to be trucked to their final destination, either within New York or
across America.
The opportunity for the Mob to cream off huge profits by controlling these
two vital areas was illustrated on August 22nd, 1977 when Women’s Wear
Daily, the trade paper of the textile and apparel industry, started a series
of investigative reports entitled” The Mafia: Seventh Avenue’s Silent
Partner” in which it reported-“ that Cosa Nostra, our thing, could
call New York’s multi-billion dollar clothing industry their thing, because
just about every piece of clothing made there is touched by the hands or the
money or the influence of organized crime.”
The articles identified at least twenty firms by name in the garment centre
as being controlled by Mob figures, names such as Gambino, Eboli, Lucchese,
Diouguardi, Plumeri, and the details were staggering.
The article stated that most of the legitimate businessmen in the industry,
accepted the Mob as inevitable just as they accepted traffic-clogged streets and
high taxes, it was part of doing business. Leading New York banks and textile
firms apparently had no reservations about dealing with Mob-controlled firms,
and the major department stores didn’t mind buying from them. Local garment
manufacturers and union officials would often sit down with gangsters in the
discreet darkness of fashionable restaurants or busy bars and cocktail lounges,
and amiably discuss the day’s business trials and tribulations. Others, if
they were well enough connected and having problems with late deliveries or
labour disputes, would ask favours from powerful Mafiosi such as Frank
Tieri, boss of the Genovese family, or Anthony Corallo, ruling head of the
Lucchese family, but there was always a price to pay in return.
A New York City police detective who worked undercover as a garment
manufacturer, explained-“If you ask for certain favours, one of the conditions
is that you put one or two names on your payroll. Those persons don’t do any
work. They may come in from time to time. Eventually they may start telling you
how to run your business.”
The article also contained extensive examples of how overall Mob control in
the garment industry facilitates loan-sharking, shakedowns for “labour peace”
and professional truck hijackings.
The article explained how the industry avoided antitrust prosecutions under
its non-competition arrangements. Years before the government had started making
inquiries about possible antitrust violations in trucking, the industry simply
stopped keeping written logs of which truckers were wedded to which companies.
Now the arrangements were simply “ gentlemen’s agreements,” and no longer
put in writing.
One trucker was quoted as saying, “When I first joined the association I
asked if I had to register my accounts and they said, 'no we don’t do that any
more. It’s illegal.'”
What was disclosed in the Women’s Wear Daily was news, but it wasn’t
new. It had been going on for almost fifty years.
The Garment Centre stretches over 40 square blocks in mid-town Manhattan --
rabbit warren of clothing manufacturers and wholesalers, textile houses and
hundreds of sub contractors, cutting and sewing clothing for the huge,
insatiable ready-made retail market. The industry grew out of the massive
immigration into New York in the latter half of the nineteenth century, and by
the 1920’s was a major element in the economy of the city. Three quarters of
all New York City Jews engaged in manufacturing were in the clothing industry.
It was an industry subject to constant conflict. Among the more significant of
the professional criminals to exploit it and gain control over it were Louis “Lepke”
Buchalter and his fearsome partner, Jacob “Gurrah” Shapiro.
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Louis Buchalter
and Jacob Shapiro (POLICE)
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"Lepke" Buchalter’s nickname was a term of Yiddish endearment,
while Shapiro’s came from his almost unintelligible pronunciation of the
English language. When ordering anyone away from him he would shout, “get out
of here,” but the words would tumble out of his mouth as “Gurrah.”
Lepke started out as a lowly sneak thief, so poor that when he was first
arrested at the age of sixteen, the police officer noticed he was wearing stolen
shoes, both for the left feet! In 1914 he teamed up with Shapiro, strong as a
bull and built like an ape. Having both robbed the same street cart, they found
they were running off in the same direction, so kept going for the next
twenty-two years. Together they began to infiltrate the unions that represented
the garment workers. By 1922, Buchalter had been in prison twice, and he and
Shapiro were working with a gang of professional strikebreakers operating
through the industry. Slowly they moved into labour racketeering, and by the
early 1930’s Buchalter had gained virtual control of the business.
His formula for success was simple. Take control of unions and at the same
time infiltrate and control trade associations. That way as “Lepke” was
heard to say, “ You get both management and labour in your pocket.”
Buchalter soon discovered the gold mine offered by the men’s suiting
industry. Although there were as many as 50,000 workers in the union that
supported this industry, The Amalgamated Union of Clothing Workers, each
individual section had its own local. Buchalter also found out that the entire
industry depended on the workers who cut the cloth, and the truckers who shipped
the goods. Out of the 50,000 union members, they amounted to only 1900. By
controlling them, he had a closure on the entire movement.
By 1932, he had control of Local 4- the cutters local- aided by its corrupt
leaders, and consequently could stop and start the business whenever it suited
him. He was raking in over $2 million dollars a year from this point on from
payoffs by manufacturers for “labour peace” He also simultaneously organized
the truck owners and self employed drivers into an employment trade association.
This was an act that would have far reaching consequences, and was perhaps the
most significant step in the development of what is now called business
racketeering. One of the first actions of the association was to raise cartage
costs for men’s clothing- and then share out the windfall profits among the
association members.
Racket investigators recalled that the terrible twins did not have to buy
their way into any business. Their reputation for violence sufficed. Lepke would
go into a firm and say “You don't have to put us on your payroll, nothing will
happen to you.” Businessmen told investigators that the most frightening thing
in the world was to hear Lepke and Gurrah say nothing was going to happen.
Always on the lookout for new ways to milk the economic flow of the Garment
Centre, Lepke came across another innovative measure that would bring him into
partnership with Gaetano Lucchese.
Twice each year the buyers from department stores, retail chains and
wholesalers, poured into the area to start searching for the new season's lines.
These were critical times for manufacturers, whose very existence could often
hinge on the capricious whim of the visiting buyer. They were courted
assiduously, with anything that might influence them. Good quality booze was one
of the most highly prized commodities, especially during Prohibition. Buchalter
approached his good friend Charlie Luciano who, in turn, passed him on to
Lucchese.
The two men clicked immediately and Buchalter soon had Lucchese working
alongside him. Before long, there was access to another innovation that would
lead to greater involvement of the Mob into the area. The new season's offerings
in the garment business required huge amounts of short-term capital, not always
easily accessible from traditional banking sources. Lucchese had the answer --
loan-sharking.
Loan-sharking consists simply of lending money at rates higher than the
legally permitted limit, at times as high as twenty percent per week. The
President’s Commission on Organized Crime in 1967 stated that the business is
in “the multi-billion dollar range.” The three main ingredients in
successfully running this business are -- customers, capital and methods of
collection. The Mob had all three, and has used this formula with great skill
over the last sixty years.
What Thomas Lucchese introduced into the Garment District in the early 1930’s
was a crime tool of great effect that was still being used over thirty years
later by one of his successors, Anthony Corallo. The only difference was that
while Lucchese was corrupting and manipulating an industry, Corallo went
straight for the jugular, into the office of the Mayor of New York.
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