Criminals prey Upon Industry

New Zealand Herald, Volume LXXIV, Issue 22819, 28 August 1937, Page 2 (Supplement)

Criminals prey Upon Industry

New York's Fight Against "Racketeering" Activities

By RUTH HOWE—(Copyright)

JN a bullet-proof office, High among the skyscrapers, a man is planning to give New York a real " spring-clean." He is Thomas E. Dewey, a young lawyer, appointed by the " reform administration" of Mayor La Guardia to fight New York's criminals. Mr. Dewey's crusade is aimed at the "racketeer," newest type of blackmailer, who is said to get millions of dollars a year from' industry. This is the criminal who has superseded the gangster and bootlegger.

A BUSINESS man's "protectr\ ive" association is formed •J- and comes under the control of a "racketeer." Notice is served on the owner of a business that he must pay h. lump sum down—anything from £IOO to £2OOO, according to the size of his business—and a weekly levy, or suffer sabotage and acts of personal violence. When this organised "racket" first sprang up in connection with the restaurant trade, employers sought redress in the courts. Here the "racketeer" worked hand in glove with the corrupt politician, and suits were dismissed. Not only did "the plaintiff lose his case but was forced to settle with his extortioners on considerably worso terms. He learnt to pay up and keep his mouth closed. '/Difficult Task * "Racketeering" soon spread to every industry, exacting toll from the smallest business. But even the easy-going New Yorker could not stand for the succession of scandals, and Mayor La Guardia'^'reform'' administration resulted. A citizens' committee for "the control of crime" was formed and demanded the appointment of. a special prosecutor of "i - ackets." \\ ith a brilliant reputation made as Chief Assistant United States Attorney, Dewey was obviously the' man for the iob. The new administration knew that it was asking Mr. Dewey to undertake an almost superhuman task, probably at the risk of his own life. Moreover,

f prosecution for contempt of court or income-tax evasion unless they tcstilied against their persecutors. The "racket" in the restaurant trade provided the new department with its first big job. Tribute money in this particular "racket" amounted annually to £500,000. New York abounds in restaurants and cafctarias. Wages and conditions have been notoriously bad with the result that, under the impetus of President lioosevelt's New Deal, workers have sought remedy in organisation. "Gangster" Unions Many unions" sprang up over-night and, led by inexperienced and even unscrupulous men, easily camo under the domination of the "racketeer." As restaurants were unionised, employers received demands from these "gangster" unions for purposely impossible wages. Failing to comply, their premises were packed with evil Blld dangerous-looking men who drovo customers away. Then an intermediary would approach, promising settlement on reasonable terms if a union contract was signed and a certain sum of money paid over. For a much larger sum, the union could be bought off altogether. At the outset, efforts were made to stop it. Olio restaurant keeper hauled the union officials into court, only to hear his case dismissed. A handful of unionists took similar action, one leader at the risk of his life. But only minor "racketeers" were tried and

since the racketeers terrorised even judges and juries, the services of any prosecution ho might bring would be doubtful.. To meet this situation, a special judge and grand jury was selected from men who would not bo moved by threat of violence. Quarters were provided for the new prosecutor away from the public buildings which teemed with political spies. The offices were made gangster-proof. All inside windows were constructed of frosted glass, walls made sound-proof and telephones installed which could not be tampered with. Mr. Dewey and the staff use a private lift; policemen and detectives are stationed in the lobbies. How Leaders Live From' the first, all publicity was forbidden. The new crime-fighter was out to act, not -talk. That rule he has rigidly observed, never showing his hand until he actually has the "racketeer" in court. He did announce, however, that above all ho was out to get the "big shot," the organising genius behind the "racket." This individual is more the gentlemanly villain of the films than tho real gangster who is simply an armed outlaw, kidnapping and living outside the law. "Tho important 'racketeer,' " said Mr. Dewey, "lives in the very best hotel or has a luxurious flat, pften with his wife and family. He is on excellent, terms with corrupt political leaders. "Ho 'usually operates one ostensibly legitimate liiiiht club, a manufacturing firm or ytlier business. He may sit next to you at dinner; and your children play with his in Central Park or in private schools. He presents no police problem; he carries no gun; and ho would not-think of personally committing a crime of violence. All he does is to direct others." Only mercenaries in tho "racketeer's" army commit tho overt act, petty thugs hired by tho day to throw stench-bombs in restaurants where owners fail to pay tribute, who scjuil'l acid in the eyes of workers who refuse to join,the "racketeer's trade union," who slash tyres and destroy engines of independent carters and pour -kerosene on floui: bags and vegetables. , ' Victims' Fear When everything was ready, the office-furniture in place, the detectives waiting, Mr. Dewey announced that his office was open for complaints. He sat at his desk and waited for the rush. Nobody came. Ho broadcast, guaranteeing witnesses secrecy and protection. Still nobody came. It looked as though the new prosecutor was beaten from the start by tbe victims' fear. He then decided on a littlo "fearmedicine" of his own. Assistants, under the guise of income-tax inspectors, visited tho "racket-ridden" businesses. Books were examined, tell-tale entries of sums paid for "protection" discloied. Where persuasion failed, business men wero threatened with

eventually acquitted. The rebellious unionists were expelled from their union as "communisms." First Success To quote Mr. Dewey: "The 'racket' had been tried and found perfect. Restaurant after restaurant, cafetaria after cafetaria, and finally large china stores fell before it with never a complaint. There was just a haggling over price and extortions ranging from 500 dollars to 10,000 dollars wero demanded and paid." When investigation of this industry was started, the "racketeer" had 300 employers in his grip. It took Mr. Dewey eighteen months to secure witnesses, 100 in all, and prepare his case. Thirteen men were indicted, found guilty and all given sentences. Another "clean-up" saw tho end of the loan-shark, a petty extortioner who preyed upon the poor and ignorant. These Shylocks picked as their clientele, clerks, typists, shop assistants and particularly persons on relief, loaning money at interest rates from 50 to 1000 per cent. They frequented relief stations to pick up business and collected Ly threats of torture and blackmail. Use ol "Strikes" After months of secret investigation, Mr. Dewey arrested suspects in a concerted raid. Identification by witnesses was made behind a Venetian blind so that the people giving evidence could not be victimised later. . Twenty-eight loan-sharks were indicted, all convicted and sentenced. One labour-contractor in the building trade turned "racketeer" and called

strike after strike for extortion purposes. The builder, working on a time contract, had no alternative but to pay. No fewer than 500 workmen were held in complete subjection, Rebellion meant unemployment and assault by gangs of toughs. It was only after long and patient working up of evidence that could not bo "bought" that this activity was cjuelled. ' • To date Prosecutor Dewey's record has been perfect; (30 indictments and 60 convictions. Moreover, his guarantee of protection has held good. So far ho has "never lost a witness." Much as ho would like to return to his lucrative private practice, ho is the first to insist that the battle is only half won. Hundreds of "racketeers" still walk the streets; ne<v "rackets" keep appearing. Success or failure rests finally with the business man, the worker, and the attitude of the public.

"AH I can liopo to do," he says, "is demonstrate that organised crime is not above the law." Corruption Eules To people in British countries, pursuing their means of livelihood unmolested and without fear, this will sound a fantastic story. But America is a young country and a very large one. She has hardly finished exploring her frontiers. Much of her political and legal machinery is makeshift and outrun by the too rapid.growth of urban and industrial life. Corruption rules as it did in England up ; .to a century ago. Nevertheless, immense changes are taking place. The bootlegger and his evil regime have gone with prohibition; the gangster is passing and the fight is on with the "racketeer." Chicago alone has cut down her crime statistics by half in the last few years. What Chicago did with sub-machine guns, New York hopes to do with civic pride. The Citizens' Committeo for crime control wants support from the honest residents of that city. Colonel Lindbergh recently gave £SO to. help in the war against the "racketeers."— L.G.P.