1929 Atlantic City Organized Crime Convention

Originally published in the Boardwalk Journal - October 2010
ACConsig: 1929 Mob Convention / Boardwalk Journal 10/2010

The 1929 Atlantic City Convention of Organized Crime – Bill Kelly

Atlantic City has been known as a convention town for a long time, but the most significant convention the city has ever hosted didn’t meet at Convention Hall or even conventionally, and certainly didn’t abide by Roberts Rules of Order.

The May, 1929 meeting of organized crime bosses in Atlantic City was probably the most significant ever held, not only because of it’s effect on the future development of the town, but because of the national impact the decisions made there had on society, not only then, but over time, up to and including today.

At the time Atlantic City was considered “wide open,” a place where gangsters could go to make private, if sometimes illegal investments and for sit-down mob meetings, as were a few other cities – Miami, Las Vegas and Old Havana. Atlantic City was run however, by one man – Enoch “Nuckey” Johnson , the local political boss who ran the town as his private domain. Like “Commodore” Lou Kinley had before him. Nuckey got a percentage of practically every business in Atlantic City, especially illegal businesses, and as it was during Prohibition, the most lucrative business at the time was the importation of smuggled liquor.

Lonnie Zwillman of North Jersey controlled most of the bootleg market once the cases of booze from the Caribbean and Canada were transferred at sea from mother ship transports to small Chirs Craft speedboats. Once brought ashore the booze was put on waiting trucks to be transported the goods throughout the rest of the country. It was later estimated, by the Kefauver Committee that Zwillman’s outfit had a 65% market share of all illegal booze in North America.

But there were also illegal casinos in Atlantic City at the time, all operating openly and open to the public. And Big Time confidence men like Charlie Gondorff (of The Sting fame) were allowed to run Big Store Con games, as long as long as they only hit on transients and didn’t take any local citizens for Marks.

Booze, casino gambling, the boardwalk and beach, it didn’t even seem like there was a Depression going on. Things appeared quite normal on May 12th, 1929 when newlyweds Meyer and Anna Citron Lansky checked into one of the city’s finer boardwalk hotels. They were assigned the Honeymoon Penthouse with it’s panoramic view of the ocean and boardwalk.

Which hotel they checked into is not recorded for history, but you can be sure it was one owned by Jewish businessmen, as all the first class hotels at the time were owned by Jews or Quakers, and each served a different clientele. That’s a fact that came into play the very next day when Alphonese “Scarface” Capone stepped off a train and took a cab to one of the city’s classier hotels. Although he entered town unnoticed, and he signed into the hotel under an assumed name, his cover would soon be blown, the city of Atlantic City would be shaken upside down and the nation would rattle with the aftereffects for decades.

Snickering to his lieutenants as he signed the fictitious name to the register, Capone got a smile from Frank Nitti, Murry Humphries, Jake Guzik and Frank Rioi, but the joke quickly turned sour when the somewhat naive and strictly formal desk clerk looked at the name and politely informed Capone that, “I’m sorry sir, but this hotel does not serve those of your persuasion. My I suggest you try the hotel just down the street.”

This was Atlantic City, New Jersey, probably the only place in America where “Scarface” Al Capone could mingle with the masses and go unrecognized. He did however, have a friend in his old pal Nuckey Johnson. Capone had been Johnson’s gracious host two years earlier when Nuckey went to Chicago and was supplied with ringside seats to the Jack Dempsy-Gene Tunney heavyweight fight – the famous battle of the “long count’ bout.

Now Capone was in Atlantic City to meet with Meyer Lansky and other mob bosses. They came to Atlantic City because Nuckey Johnson controlled the town and they were assured they wouldn’t be subjected to the police hassles the Sicilian Mafia guys were subjected to in Cleveland a few weeks earlier.

Although Nuckey Johnson couldn’t protect Capone from some ethnic embarrassment, he did have such tight control over all facets of the city’s operations that, unless they robbed a bank or made a scene, known gangsters from out of town didn’t have to worry about being picked up for questioning by the police. Capone made a scene.

Told by a hotel clerk that he couldn’t check in because he signed his name under a wrong ethnic persuasion, Capone’s famous temper flared, and after a burst of obscenities and the trashing of some lobby furniture, Nuckey Johnson quickly learned that Al Capone was in town. Moving quickly to meet him, Capone and his entourage were heading south on Pacific Avenue when they were intercepted by Johnson’s convoy of dull, black limos heading the other way. They met in the middle of the street, blocked traffic for a few minutes as Capone emerged from his cab, cigar in hand, and gave Nuckey an obscenity laced public verbal lashing, letting off steam from the hotel desk incident.

Once appeased by Johnson, always the gracious host, they hugged and patted each other on the back and adjourned to the back of Nuckey’s limo. After seeing that Capone and his people had proper accommodations at the right hotel, Johnson and Capone were later seen taking in the tourists sights together and strolling down the world famous boardwalk.

Johnson and Capone then had dinner in the Italian “Ducktown” neighborhood, not far from the recently completed Convention Hall – the new auditorium which was then the largest of its kind in the world, with the biggest stage and the largest pipe organ as well. While it established Atlantic City as a major convention town on the East Coast, it’s facilities were not to be used by the guys who started checking in behind Lansky and Capone.

From Cleveland came Al “the Owl” Polizzi, one of the Sicilians hassled by cops at the earlier regional sit-down a few weeks earlier. Also from Cleveland was Moe Dalitz of the Mayfield Road Gang and his bootleg companions, Morris Kleinman, Sam Tucker and Louis Rothkopft. Other gangsters who have been identified as having attended the Atlantic City meeting include Charles “King” Solomon from Boston, Joe Bernstein from Detroit, and Joe Lanza from Kansas City, all of whom came with their henchmen in tow.

From North Jersey there was Abner “Longie” Zwillman, who controlled most of the New Jersey bootleg shipments. Philadelphia was well represented by Harry “Nig Rosen” Stromberg, Max “Boo Boo” Huff, Sam Lezar and Charles Schwarts. By far, the biggest delegation came down from New York, and consisted of Frank Costello, Author “Dutch Schultz” Flegenheimer, Louis “Lepke” Buchalter, Joe Adonis, Salvadore “Lucky” Luciano and Meyer Lansky.

Anne Citron Lansky got angry the next morning when she read in the morning newspaper that Al Capone was in town, and knew that it had to more than just a coincidence. Her new husband couldn’t even go on his honeymoon without having business to take care of.

Born Maier Suchowljansky in Grodno, Poland in 1902, young Meyer came to the United States in 1911 with his mother, sister and younger, but bigger brother Jake. Like so many other arrivals, his birthdate was noted by immigration officials as July 4th, and he took quickly to the American dream.

Later telling Israeli journalists Uri Dan that he took to gambling early, relating an incident that occurred when he was a young boy walking down Delancy Street in Manhatten on an errand for his mother. Coming across a sidewalk craps game he quickly lost his mother’s nickel, an event that had a profound affect on his life. “What troubled me more than anything else,” Lansky said, “was that I had been a loser, and that night….I swore to myself that one day I would be a winner.”

Going back to the sidewalk craps game young Lansky watched and studied the gamblers intently, and learned when to place his bet with a sure winner. “Then I began to notice,” he said, “that the men who actually ran the dice games were only pawns…of other well dressed and prosperous men,” who he also noticed seemed to be all Italians who in turn were “servant” who were “collecting the money for somebody bigger. So it must be a very big business, gambling with nickels and dimes on the sidewalks of the Lower East Side.”

After graduating from Public School #34 in 1917, Lansky worked as an auto mechanic, and first came to the attention of the police when he was arrested for fighting with Charles Luciana and Benjamen Siegel. That was the first time he was known to have officially used the name Lansky, and after the judge listened to their story, he decided that the boys had “bugs in their heads,” which temporarily gave Lansky the nickname “Meyer the Bug,” but Siegel could never shake the name “Bugsy.”

The three boys became fast friends and developed business associations, while Luciana rose in the ranks of the Italian Mafia allied under Joe “the Boss” Masseria. They were perennially at war with another New York gang run by Salvatore Maranzano, whose henchmen picked up Luciano and took him for a ride to Statin Island where they shot him a number of times and left for dead. Luciano miraculously survived, earning him the nickname “Lucky” Luciano.

Lansky, Siegel and Luciano formed a life-long alliance with each other and established themselves on the Lower East Side as a competent and efficient guns-for-hire entrepreneurs that became known as “The Bugs and Meyer Mob,” which also included Joseph “Doc” Stacher, Joe Adonis, Abner “Longie” Zwillmen and Arthur “Dutch Schultz” Flegenheimer. They either escorted Zwillmen’s bootleg liquor or they hijacked any competitors who tried to muscle in on their rackets in their territory.

Philadelphia gangster “Waxy” Gordon was especially upset at the Bug and Meyer Mob for hijacking some of his truck shipments and, as with the Capone-Moran feud in Chicago, there was tension between gangs. Since Capone actually controlled only certain sections of Chicago, other Chicago gangsters also came in to the Atlantic City meeting, including Joe “Polock” Saltis and Frank “Machine Gun” McEarlane, complete with violin cases under their arms.

Other than Capone, these were mostly new names and faces in the underworld of 1929, but before long they would make their mark and become household names. The old-guard “Mustache Petes” who ran the big city rackets for the previous few decades, referred to these new, young gangsters as “The Young Turks,” but they in turn, were considered too old fashioned, narrow-minded and set in their ways to mingle with the gangsters of other nationalities and neighborhoods. The “Petes” were not even invited to this meeting.

To some, Luciano was thought to represent the New York capo de capi Guseppi “Joe the Boss” Masseria, but in retrospect, Luciano had Masseria murdered and replaced him after the protracted war that was wagged between Masseria and the other New York rackets boss Salvadore Maranzano. Masseria and Maranzano were from the Old Order and were on the way out, and The Young Turks knew it.

One member of the old school who was invited and did attend the Atlantic City conclave was John Torrio, who was born in Naples and was one of the first immigrants to leave the notorious “Five Points” section of Brooklyn to go to Chicago, where he ran his uncle’s whorehouse. After killing his uncle and setting up his own numbers racket, Torrio brought in Al Capone from the old neighborhood to be his enforcer.

Torrio, who didn’t drink or smoke, was Capone’s mentor and one of the oldest and wisest of the delegates at the Atlantic City convention. He would play a significant role by making key policy decisions concerning the promotion of other vices, most notably gambling.

While there would be other, more notorious meetings of mobsters – Havana, 1946, the 1957 Apalachin, New York meeting that was broken up by local police, a New York restaurant sit down that was also busted by the cops, the 1929 meeting in Atlantic City was most significant because it established a new policy of inter-city-gang cooperation on a nationwide basis.

It was not a question of who was at Atlantic City, but who was not there. Besides the Mustache Petes from the Old Order of things, Bugs Moran was the most notable big name absentee. He was left back in Chicago to lick his wounds and regroup his forces after the disastrous St. Valentine’s Day Massacre.

As the most blatant gangland mass murder in history, the massacre called attention to the mobsters and put pressure on them from the public, the press, politicians and the police. It became the most influential factor in persuading the factional mob leaders of the necessity for a meeting to hash things out. Rather than let the situation get completely out of hand and reach a level of violence that would force the authorities to take action, the gangsters decided to sit down at the same table for the first time, discuss their mutual problems and arrange for an agreeable solution like normal businessmen.

Although most of the published sources place the main gathering of gangsters at the President Hotel on the Boardwalk, the large number of delegates made it necessary for them to meet in smaller caucus to discuss the topics on the agenda. Pushed along the boardwalk in wicker-rolling chairs, they didn’t talk in front of the push cart operators, but at the end of the boardwalk, like other tourists in from the big city, they took off their shoes and socks, rolled up the cuffs of their pants and waded in the shallow surf like any normal day-tripper. With their conversations muffled by the sounds of the surf breaking, the mobsters plotted strategy and began the long term planning that would control organized crime activities for the next fifty years.

Since minutes of the meetings were not transcribed for posterity, legend has it that the order of business was basically two fold. For one, they had to agree on an amiable solution to the conflicts that erupted into mob warfare, primarily geographic turf battles. Secondly, since by then it was obvious that Prohibition would not last forever, they had to get involved in legitimate businesses as well as devise an alternative source of illegal income once Prohibition ended.

As for mob warfare, since such violence hurt everyone’s business, they decided to end such conflicts by adhering strictly to the territorial spheres of influence, with each gang controlling particular rackets in each area. They also agreed to work together in setting prices, sharing warehouse space and coordinating the wholesale distribution of liquor.

The Atlantic City accords were a radical departure from pervious mob practices because they also agreed to form an executive committee to oversee and arbitrate all disputes, denote the degree of punishment to all violators and to set policy for the governing of all future illegal operations.

The creation of the Board of Directors of the National Syndicate of Organized Crime was as big as the founding of the United Nations. Although it’s very existence would be kept hidden from the public for decades, and spy novelist Ian Fleming would ridicule them with his fictional Special Executive for Counter-Intelligence, Terrorism, Revenge and Extortion – SPECTRE, it would become generally known as “The Commission.”

As for the second item on the agenda, they decided to explore gambling as a replacement for the lucrative illegal liquor profits after prohibition. With the repeal of the Volstead Act in 1933, gambling became the main preoccupation of the local mobs until 1946, when, after the Havana meeting, the French Connection became the primary source of the drugs and narcotics that would become the Syndicate’s primary source of revenue other than gambling.

The Federal Bureau of Narcotics concluded, from information provided from undercover informants, that the Atlantic City convention established the basis for the Syndicate that carved the nation into specific territories, developed a system of kangaroo courts that provided the gangsters with their own quasi-judicial system, and protected the hierarchy of the local mafia families.

Arrangements were also made to invest in a multi-million dollar slush fund to bribe law enforcement officials, ensure the election of certain politicians, hire the best attorneys and pay for the educational development of promising young men who could serve their interests in the future.

The hallmark of the meeting in Atlantic City was the centralizing of particular powers with an executive committee, like the board of directors of a blue chip industry, an exceptional and extraordinary concept that was not immediately acceptable to many of the ethnic oriented gangsters like Massaria and Marrassano, who were dinosaurs that had to go the way of the buffalo.

The dissentions of the still primarily ethnically Italian gangsters was overcome in a power-play move when Lansky nominated the Mafia’s own Johnny Torrio as Chairman of the Board, a motion that quickly won the endorsement of most of the mobsters present. Torrio was also the only one who could take care of Capone, whose violent ways were causing problems for all of them.

With the Commission in charge, Torrio at the helm and business completed, the final item on the agenda was Capone, and what to do with him. While the Chicago rackets were combined, and Capone was the nominal boss, he had to take a vacation, or he was going to be thrown to the wolves. He was given the option of dieing right then, or taking a sabbatical from the business for a while. The newspapers had all reported that Capone was in town and one of the William Randolph Hurst newspapers even ran a faked composite photograph of Capone, Knucky Johnson and Meyer Lansky walking down the boardwalk, all of which had the pubic clamoring for Capone to be busted for something.

Although they put an APB – All Points Bulletin out for the man who was seen all over town – throwing chairs in a hotel lobby, screaming obscenities on Pacific Avenue, having dinner in Ducktown, riding in a wicker-walker and strolling down the boardwalk with Johnson, suddenly, Capone couldn’t be found anywhere.

According to local legend, when the heat was turned on, Capone slipped out of Atlantic City and retreated to a local private country club, either the Atlantic City Country Club in Northfield or Seaview in Absecon, where he played bad golf and good cards until the heat was off a few days later.

On May 16, 1929, a week after Lansky’s wedding, Capone showed up at the train station but missed the train by minutes. With a police motorcycle escort to the edge of town, Capone’s entourage drove to Philadelphia, where he again just missed a train to Chicago. Going to a movie on Market Street with his bodyguard Frank Rio, Capone emerged from the theater to be confronted by Philadelphia Police Detective James “Shooey” Malone.

Malone flashed his badge, they talked quietly for a moment and Capone calmly volunteered his .38 caliber revolver and was promptly arrested by Malone. Rio momentarily balked, but Capone smiled and urged him to surrender his weapon too.

Philadelphia’s Director of Public Safety Major Lemel B. Schoefield accepted praise for the arrest of the nation’s number one crime czar, though it later became apparent that Det. Malone had met Capone the year before at Hialeah racetrack in Florida, and Capone had arranged for his own arrest. Besides taking the heat off the rest of the Syndicate, in the secure hands of the law he also acquired sanctuary from a vengeful Bugs Moran.

In the custody of the Philadelphia authorities, Capone was forthcoming about the Atlantic City Sit Down, emphasizing the decision to end mob warfare. “I told them,” Capone said, reciting a line from one of Lansky’s lectures, “there is enough business to make us all rich, and it’s time to stop the killing and look on our own business as other men look on theirs.”

When asked about the purpose of the meeting, Capone said, “It is with the idea of making peace among the gangsters that I spent the week in Atlantic City and got the word of each leader that there will be no more shooting.”

But Capone also told them he, “…had to hide from the rest of the racketeers,” who weren’t at the meeting. They had a vendetta against him. It seems that there comes a point in every gangster’s career when, despite all the power and money they have accumulated, life is suddenly vulnerable to one professional contract killer. John Torrio thought that prison was the safest place, Sam Giancana, who would later take over the Chicago mob, fled to Mexico and South America, Joe Bonnano had himself kidnapped. Capone chose jail.

Philadelphia Criminal Court Judge John E. Wash sentenced Capone harshly for such a petty crime of being a suspicious person and carrying a concealed deadly weapon, the maximum of one year at Holmesburg Penitentiary. After a short stint there however, Capone was transferred to the more relaxed confines of Eastern Pen, where he served out the duration of his sentence under the lenient warden Herbert B. Smith, who furnished Capone’s cell with lamps, a library, radio console and lounge chair and gave him access to his private office telephone.

With Capone in jail, the Syndicate began the process of getting rid of the old Mustache Petes and preparing to engage in Big Time gambling activities on a very large scale.

In Hoboken, New Jersey, Lansky’s new father-in-law permitted him to use his Molaska Inc. as a front for a number of his illegal businesses, one of which was the largest distillery in the state. Molaska took its name from molasses chips, a necessary ingredient for the making of rum, which became more profitable than smuggling it.

Molaska rum business took Lansky to Cuba, where he met with Sgt. Fugencio Batista, the strong-arm coup leader who twice took over the reins of Cuba. The first time he was in power Lansky made a deal with Batista to allow him to open a legal casino in Cuba, much like the illegal casinos he operated in Florida, New York and New Jersey. In order for the Syndicate to control casinos in Havana, it was arranged for casinos to operate in hotels with 500 rooms or more, and since the Syndicate controlled Hotel National was the only hotel in Havana with 500 rooms, the Lansky mob owned the only casino in Cuba.

The second Havana hotel to qualify for a casino was owned by Santo Traficante, who hired Atlantic City native John Martino to run his electronics and security operations.

Two weeks before Castro came to power Lansky and the Syndicate sold the National Hotel-Casino to Mike McLaney and Carroll Rosenbloom, both of whom would loose their shirts in the deal. While Mike McLaney’s brother William owned the land near New Orleans where anti-Castro Cuban commandos trained – and reportedly the Magazine Street house where Lee Harvey Oswald lived, Lyndon Baines Johnson would be Rossenbloom’s houseguest in Atlantic City during the 1964 Democratic National Convention.

In 1976 New Jersey law allowed for legal casinos in Atlantic City hotels that had 500 rooms or more, – the Havana model, with only one hotel in the entire city that qualified – Resorts International, a Lansky-Syndicate controlled company. The second and third Atlantic City casinos – Bally and Caesars, were also Syndicate controlled companies, following the policies, delineating the strategies and continuing the traditions laid out at the 1929 Convention.

The federal government did not officially recognize the existence of the syndicate until May 1, 1951 when Estes Kefauver, Chairman of the Senate Crim Investigating Committee, visited Atlantic City, New Orleans, Chicago and New York before determining and reporting that, “a nationwide crime syndicate does exist in the United States,…and behind the local mobs which make up the national crime syndicate is a shadowy, international criminal organization known as the Mafia.”

Even after that, the FBI refused to place a priority on the Mafia or organized crime until years later, when local police broke up a major mob meeting in upstate New York.

The records of Kefauver’s investigation were then promptly and routinely locked away for 50 years as “Congressional Records,” which are exempt from Freedom of Information Act requests.

In 1998, the Assassination Records Review Board refused to release the records of the Kefauver Committee investigation by declaring them “assassination records” because they claimed they were not related to or considered relevant to the assassination of President Kennedy, even though the second chief counsel to the House Select Committee on Assassinations (HSCA) believes that the President may have been the victim of a mob hit.

The Kefauver Committee records were scheduled for release in 2001, but are being systematically released after being reviewed by request.

More recently the HBO TV production of “Boardwalk Empire” has called attention to Nucky Johnson and his control of the rackets in Atlantic City and how he helped fuel the nation during prohibition.