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“Greasy Thumb”—The Man Who Made the Chicago Mob

2022; University of Illinois Press; Volume: 115; Issue: 2-3 Linguagem: Inglês

10.5406/23283335.115.2.3.07

2328-3335

James S. Pula,

American Political and Social Dynamics

ONE DAY IN MAY OF 1924, during the era of Prohibition, a local tough named Joe Howard entered Heinie Jacobs's saloon at 2300 South Wabash in Chicago. He was in high spirits, having just hijacked a truckload of beer, and wanted to celebrate with his newfound wealth. What happened next was subject to various versions written after the events by people who were not there, but it appears that after indulging too much in a forbidden beverage, Howard did what all bullies do—he looked around for the weakest person he could find. His gaze fell on a short, chubby, otherwise ordinary man with a sad, droopy face that would never stand out in a crowd, much less be taken for anyone of importance. It may indeed have been his very undistinguished countenance that made him appear a helpless mark. Approaching, Howard slapped his unsuspecting victim across the face several times with his open hand, a gesture known to all as one of humiliation, then pelted him with his fists. Finished with this sport, as his victim stumbled away Howard turned to the stunned onlookers with a smirk, proud of his conquest.1Shortly after, Howard was enjoying another drink and selecting a cigar from Jacobs's tobacco case. While he pondered his choice, two men walked in, one tall and muscular, the other shorter, more rounded. Turning his head, Howard recognized the shorter one. “Hi Al,” he offered, extending his hand in friendship. Before he could utter another word, the muscular man grabbed Howard's coat, pulling it down so his arms would not move and pinning him to his seat. The short man pulled out a pistol, placed it next to Howard's head, then pulled the trigger, splattering blood and brain matter several feet. Five more times he fired, then the two walked casually out the door while what was left of Joe Howard still sat in his chair, the pool of blood about him slowly widening.2The police arrived within a few minutes to find three witnesses: auto mechanic George Bilton, carpenter David Runelsbeck, and owner Jacobs. Runelsbeck told Detective Michael Hughes that Howard appeared to know his attacker and called him “Al.” Both he and Bilton said they could identify the attacker, while Jacobs also informed police that he was present and saw the entire episode unfold. But then a very strange thing happened. When the inquest convened the following day, Jacobs claimed he had been called to the telephone in the rear of his shop just before the altercation and only heard the shots without actually seeing what happened or who was responsible. Runelsbeck stated that he could not identify the person who shot Howard, and, although he lived next door to gangster Alphonse Capone's headquarters in the Four Deuces saloon, named for its address at 2222 South Wabash, when pressed he claimed that he had never even heard the name Al Capone in his entire life. The third witness, Bilton, had disappeared altogether. Not convinced by the sudden change of testimony, Detective Hughes was certain that “Al” was “Big Al” Capone, head of the notorious South Side Gang of racketeers. However, with no witnesses who would testify, the coroner's jury concluded that Howard had been killed by gunshots from “one or more unknown white male persons.” No one was ever indicted.3The bully's undistinguished looking victim had been revenged. But who would be important enough to bring forth personal retribution from Chicago's most notorious gangster? In the criminal underworld, where nothing was exactly as it appeared to be on the surface, the mysteries surrounding the man Al Capone protected, most often known in popular literature as Jake Guzik, begin with his birth and even his name. Despite its reputation for investigation, as late as November 1952, just four years before Guzik died and after over three decades of investigation, the Federal Bureau of Investigation was still asserting that he was “allegedly born May 20, 1886, in Moscow, Russia. He was allegedly brought to the United States by his parents when he was a baby. His citizenship status is not known.”4Guzik is most often referred to as “Jake,” “official” documents often list him as Jacob, and he is even occasionally recorded as John. Regardless of his given name at birth, there is ample evidence that he consistently used the name “Jack,” so I am following his preference here. His date of birth is almost always given as March 20, 1886, although his World War I draft registration form listed February 15 and at least one Jewish genealogy website lists him as “John” and his year of birth as 1887. The great bulk of evidence, including his family burial information, suggest that the correct date was March 20, 1886. Information on the place of birth is even more contradictory. Some authors assert Guzik was born in Russia, others specifically mention Moscow, while others cite Poland or even Austria. The situation is complicated by the fact that at the time of his birth Poland did not exist as an independent nation, having been partitioned between Austria, Germany, and Russia. Hence, if he was “Polish,” he might well be listed as a native of any of the three occupying powers in official US documentation. The 1910 US census lists his nationality, along with his father Max and mother Mamie, as “Russ.Yiddish” and Max's declaration of intent to become a US citizen lists his “country of birth or allegiance” as Russia. These documents appear to support the idea that Jack was born in Russia. However, other documentation related to his death and burial lists his place of birth rather specifically as Miasto Kraków, Małopolskie, Poland, where Miasto Kraków refers to the city of Kraków in Małopolskie, a region in southern Poland along its border with Slovakia. At the time of his birth, this was within the Austrian partition.5Regardless of the conflicting information on his birth, US immigration and naturalization documentation clearly indicate that his parents, Max Guzik and Mamie Zeitlin Guzik, migrated to America in 1892, settling in Chicago, where the 1910 census listed Max as the proprietor of a cigar store. Max obtained citizenship on November 5, 1898, which, by law, extended to his minor children as well. His son, then recorded as Jack, married Rose Lipschultz in Lake County, Indiana, on April 13, 1907, but by 1910 the couple still lived with Jack's parents, three brothers, three sisters, and Jack's own daughter Jeannette and son Charles in the same, seemingly very crowded house.6Jack Guzik apparently had little formal education as a youth, and his early life remains enveloped in the mists of contradictory testimony and mythology. One story was that as a youth, he worked as a waiter in a restaurant owned by his uncle. The establishment specialized in fried chicken, and Guzik was said to have been given the nickname “greasy thumb” because of his habit of carrying plates of the oily repast with his thumb planted squarely in the meal. Another version was that he acquired the nickname while working at a shabby saloon on 21st Street named McCarthy & Duvalls, where he apparently could not keep his thumb out of bowls of soup he delivered to the patrons. In truth, it appears that his brother Harry was the original owner of the nickname, but it was later inherited by Jack through circumstances that will soon become apparent.7By 1910, older brother Harry and his wife Alma were involved in the Chicago underworld, eventually rising to manage the Roamer Inn, a brothel in the South Side Posen district of Chicago. The ground floor of the establishment contained a bar, while prostitutes plied their profession in the upstairs areas. As early as 1914, the Chicago Tribune reported that three groups controlled vice in the Levee District, linking Harry as a leader in one of these. An attempted crackdown on vice in 1914 convinced Harry and Alma to move their operation to a suburb where, in 1921, the couple was convicted “of selling a country girl into white slavery . . . under pretense of employing her as a maid, then taking her clothes away from her.” It is indicative of the strong connections the Guziks had that Governor Len Small granted a pardon.8 It is also suggestive that they had associations with other Chicago underworld operations.Younger brothers Jack and Sam apparently worked for Harry initially before graduating into slot machines, with the youthful Jack running errands for the prostitutes. By age twenty, he was working as a bartender and solicitor for the girls upstairs, but he soon developed a fondness for numbers and ventured out into gambling operations in Chicago's suburbs, making contact, or strengthening contacts already made, with gangland kingpin James “Big Jim” Colosimo and his political allies. At some point, Colosimo loaned Jack Guzik $25,000 to purchase an interest in a small brewery at 2340 South Wabash Avenue, a block from the Four Deuces mob headquarters. Guzik made a profit selling his beer to suburban dives.9When Colosimo succeeded in uniting much of Chicago's South Side criminal interests in gambling, prostitution, and union activity into a single organization, Guzik allied with Colosimo as a small part of his new South Side crime empire. Colosimo's success also attracted a number of younger men to Chicago eager to make a mark for themselves in the increasingly profitable criminal world. Among these were Johnny Torrio and Alphonse Capone, who sensed more opportunity for themselves in Chicago than New York. With the passage of the Eighteenth Amendment, the new era of Prohibition offered especially lucrative promise in a city whose inhabitants largely ignored the new law. When Colosimo proved reluctant to move into this promising new line of business, he was replaced by Johnny “The Fox” Torrio, in the time-honored gangster tradition, when Torrio ordered Colisimo's assassination on May 11, 1920. In the wake of “Big Jim's” removal, Torrio not surprisingly emerged as the new kingpin.10Torrio quickly expanded his operation by acquiring breweries that were in financial difficulty due to Prohibition, using them to stock his speakeasies, gambling parlors, and brothels. Needing someone to oversee these operations, Torrio recognized Jack Guzik's talents with numbers and his apparent business acumen by appointing him chief accountant, a very important position that required not only financial expertise but exceptional loyalty on Guzik's part and trust on Torrio's. In this position, Guzik had access to all of Torrio's most important business secrets. Obviously, Torrio trusted Guzik, increasingly listening to his advice on business matters. In return, Guzik made his boss a very rich man by reorganizing his operations along the lines of a holding company in which Torrio held substantial interests in a variety of illegal activities, but without being identified as the business's owner. This stratagem distanced Torrio from day-to-day operations while maximizing his profits from a variety of diversified sources. In the process of making Torrio rich, Guzik also expanded his own enterprises into the Loop area, where he was active in prostitution and various gambling rackets, including purchasing for the Capone organization the Harlem Inn, which he placed in the name of his brother-in-law Louis Lipschultz. Another brothel he owned in the name of his sister-in-law Rose and yet another under sister-in-law Jeannette Keithly. This was not unusual for nothing was quite as it appeared in the environs of the Chicago underworld.11The combination of Torrio's strength and Guzik's business acumen worked well until January 24, 1925, when gunmen from the North Side Gang wounded Torrio in a botched assassination attempt. Fearing for his life, and rich beyond his needs, Torrio took an avenue seldom traveled by crime bosses when he voluntarily gave up power and left Chicago in March of the same year. Moving into the vacuum created by Torrio's exit was twenty-six-year-old Alphonse “Big Al” Capone. Guzik apparently met Capone for the first time in 1922 when both worked for the Torrio organization. Gangland lore has it that around that time Guzik, who apparently did not know Capone well, overhead two thugs discussing a plan to murder him and passed the information along to Big Al, an act that won for the chubby financial whiz a fast friend who soon would be the most important crime figure in all of Chicago, and who would protect him against bullies like Joe Howard. Probably because of a combination of Capone's gratitude, Guzik's loyalty, and his financial expertise, Capone installed Guzik as his treasurer and business manager. The two quickly became such close associates that people who referred to Capone as “the Big Fellow” frequently branded Guzik “the Little Fellow.”12One of Guzik's responsibilities in the Outfit, the new name assumed by Capone's organization, was insuring that collections arrived on time and appropriate payoffs made their way to local politicians and police officials as security for the Outfit's business interests. Guzik set up operations two nights a week at a large round table just inside the entrance of the Old English Grill and Chop House at the St. Hubert Hotel at 316 South Federal Street in Cicero, where Capone established an office to avoid raids by the reform mayor of Chicago, William E. Dever. One night was reserved for collections, the other for payoffs. On the first night, as Guzik leisurely dined, runners would arrive from the Outift's various businesses with the weekly collections. On the second night, a steady stream of police, aldermen, and other politicians, or their runners, arrived to collect their payoffs. It was undoubtedly Guzik's role in greasing the palms of Chicago's influential by rapidly peeling off large denomination paper currency from the huge wad he kept in his pocket that earned him the sobriquet “Greasy Thumb.”13But it would be wrong to conclude that Guzik's role in the Capone organization was simply that of an accountant and paymaster. As a trusted Capone confidant and a financial wizard, Guzik assumed the role of treasurer and business manager for the Outfit's entire operations, rising quickly to become the number three man in the crime organization. He accompanied Capone to major gangland meetings and was even trusted to attend meetings on Capone's behalf to represent the interests of the Outfit which was, in fact, a four-man partnership. Comprised of the Italians Al Capone, his brother Ralph, and their cousin Frank Nitti, along with the Polish Jew Jack Guzik, the popular image is that Capone exercised dictatorial control over the Outfit, but Mark Haller, who conducted the first detailed and systematic examination of the Internal Revenue Service records, concluded that “Jack Guzik was the most intelligent, most influential of the four people.”14 One of his contributions was to promote the decentralization of the new financial empire. Under his plan, the organization controlled various criminal enterprises through a web of partnerships that distanced them from the actual operations. As historian Haller explained it: “The group known to history as the Capone gang is best understood not as a hierarchy directed by Al Capone but as a complex set of partnerships” that “were not controlled bureaucratically. Each, instead, was a separate enterprise of small or relatively small scale. Most had managers who were also partners. Coordination was possible because the senior partners, with an interest in each of the enterprises, exerted influence across a range of activities.”15 Under this distributed management system, the four partners could control multiple businesses while also insulating themselves from possible prosecution through the system of assigning to others legal ownership.Among the umbrella of organization, one of the most important was the bookmaking operation centered on the Hawthorne Smoke Shop in Cicero. The partners tapped Frankie Pope to run this operation and Pete Penovich to manage other gambling operations, although in keeping with the overall management system each of the local operations was at least seemingly separate from the others. Guzik brought in his brother Sam to run slot machines in the western suburbs and his brother-in-law Louis Lipschultz to oversee beer deliveries in Chicago's suburbs. Partnering with Louis Consentino, the group purchased the Harlem Inn to expand its prostitution operations. One of their more intriguing undertakings was a dog racing operation known as the Hawthorne Kennel Club. Located in Burnham, a South Side suburb, the partner in this case was town mayor Johnny Patton. Another key player was Edward J. O'Hare who owned a patent for a new mechanical rabbit that the dogs would chase around the track. With each of the partners owning a minority percentage of the operation, it reputedly returned $100,000 per year, although some estimates were much higher.16Along with the criminal empire, the four partners also inherited the scrutiny of legal authorities. Unable to obtain solid evidence to connect Capone, the public face of the Outfit, to any of the many crimes attributed to him, no doubt in part because of the corruption of Chicago's police and political leaders, US District Attorney George E. Q. Johnson, who considered Guzik “a very dangerous underworld character” who “is the conniver and the corrupter of this crowd,” decided to try another approach. If he could follow the money trail to establish Capone's income, he could charge Big Al with income tax evasion.17 Even as Capone took control from Torrio, Johnson and his investigators aggressively followed leads hoping they might uncover evidence that could be used in court. On July 6, 1925, acting on a tip, police raided an office at 2146 South Michigan. The door's nameplate announced it as the workplace of “A. Brown, MD.” Entering, the authorities found a waiting room equipped with chairs, magazines, and everything else one might find in such a facility. However, progressing beyond the waiting room into the “doctor's” office, appearances were not so routine. There the raiders found shelf after shelf of bottles, each carrying the labels of beer, ale, and liquor available for sale. Customers could sample the products before placing orders for cases to be delivered to their own establishments for retail sale to their customers. Beyond this sampling room, investigators found clerks who kept detailed records of customers, including some of Chicago's most prestigious hotels and restaurants, information on the sources of the alcohol, income and expense ledgers, and itemized payoff lists with the names of politicians, police, and prohibition agents who were receiving bribes from the illegal operation. Among the items seized in the raid was a ledger noting payments to “A,” “R,” and “J,” which prosecutors hoped to establish stood for Al Capone, Ralph Capone, and Jack Guzik. Detective Edward Birmingham later stated that Johnny Patton offered him $5,000 “to forget about the books,” but they were nevertheless confiscated and taken to police headquarters for use as evidence. Once there, they mysteriously disappeared. No indictments were ever issued, but the experience caused Guzik to devise a code to frustrate any attempts to identify future transactions should any records ever land in police custody again.18In addition to legal scrutiny, by 1924, the increasing profits to be made from illicit activities intensified the efforts of the various gangs to gain hegemony over Chicago's underworld. The most famous of these included the murder of Dion O'Banion, boss of the North Side Gang. In the wake of his death, gangland murders increased to an average of four per month, including the brothers Angelo, Tony and Mike Genna, leaders of the Unione Siciliana. In revenge for O'Banion's murder, his successor, Hymie Weiss, along with Bugs Moran and Schemer Drucci, opened fire with Thompson submachine guns on the Hawthorne Inn, where Capone was dining, but somehow missed their target. Capone retaliated with the murder of Weiss. In a five-year period, the Windy City witnessed 136 gangland killings, only one of which ever resulted in a conviction.19In the wake of the Weiss murder, a gangland meeting convened at the Hotel Sherman in October 1926. Although it is unclear whether the underworld kingpins met at Capone's invitation or that of Maxie Eisen, a sometime supporter of the North Siders, the purpose was to craft a peace to end the gangland wars. “We're making a shooting gallery of a great business. It's hard and dangerous work, aside from any hate at all, and when a fellow works hard at any line of business, he wants to go home and forget about it. He don't want to be afraid to sit near a window or open a door.”20 Bugs Moran and Schemer Drucci represented the North Siders, Antonio Lombardo the Unione Siciliana, Eddie “Dutch” Vogel the Cicero gang, and Maxie Eisen had the proxies of several small ethnic gangs and labor unions. Interestingly, two high-ranking police officers were reportedly present to ensure that the proceedings remained peaceful.21Capone used Guzik as his surrogate to present to the assembled leaders a proposal for peace and prosperity. As the skeptical crime bosses listened, Guzik offered a commonsense plan to divide the city into territories. Each gang could set retail prices for alcohol in its own territory and would be free to manufacture or purchase alcohol from whatever source it chose; but, each gang also pledged not to conduct any business outside its own territory. The same rules would apply to gambling and prostitution. Each gang would be responsible for enforcing the peace within its own territory, for protection within its territory, and payments to local police and politicians. Each gang would also contribute to a general fund from which payoffs would be made to City Hall, state politicians, and for retainers to attorneys and bondsmen to represent anyone needing their services. Further, to demonstrate his good will, Capone was willing to give up any claim to the southern and western areas traditionally run by ethnic gangs and to further limit his own territory. When Guzik finished his presentation, a brief silence ensued, followed by spontaneous applause. The costly gangland war that was decreasing profits and increasing public sentiment against the gangs would be ended and profits maximized for everyone, and Guzik had played a key role.22Nor was the Hotel Sherman meeting the only crime conference where Guzik played a leading role. In May 1929, the first major national conference of key underworld leaders convened at the President Hotel in Atlantic City. More than thirty gangland representatives from around the country attended, with Chicago's delegation including Capone and his bodyguard Tony Accardo, Joe Saltis, Frank Nitti, Frankie Rio, Frank McErlane, and Guzik. Among the other notables on hand were New York representatives Frank Costello, Lucky Luciano, and Dutch Schultz; Philadelphia's Max “Boo Boo” Hoff, Sam Lazar, and Charles Schwartz; and Atlantic City's Enoch J. “Nucky” Johnson. The conference was especially important in establishing the framework for what would later be referred to as the “Mafia Commission,” which controlled organized crime for decades. Guzik, in his role as Capone's financial manager and trusted advisor, was crucial in hammering out the final agreements.23All of these various activities did not go unnoticed. In 1930, when the Chicago Crime Commission issued a list of twenty-eight “public enemies,” it ranked Guzik tenth, a status that Chicago Tribune reporter Jim Bowman concluded was an “underrating [of] his value to Capone.”24 Nor was the Commission the only organization interested in exposing the growing crime operation. While the Outfit worked to further organize crime activities, federal agents continued to search for a way to prosecute them. One of those pursuing a new approach was Frank J. Wilson, who was leading an effort to examine Capone's tax records. By this time it became apparent to him and others that if they could not incriminate Capone directly, they might be able to cripple his organization by going after his three chief associates. With this in mind, Wilson began sifting through records seized in raids over the previous several years.25 Their big break came when they succeeded in locating bookkeeper Leslie Shumway and Frederick Reis, a one-time employee of a Capone gambling establishment and a former teller at the Pinkert State Bank in Cicero, who had handled money for Guzik in both of these positions. Under protection provided by the US attorney's office, Shumway provided identification for a number of coded accounts while Reis testified that he would take the profits from the gambling operation to the bank where he would purchase cashier's checks. Once the money was laundered in this fashion, he would give the checks to Guzik. Reis's testimony clearly implicated Guzik in a money-laundering scheme designed to hide income, and thus avoid payment of taxes.26Based on the financial evidence, Guzik was arrested by federal agents on September 30, 1930, on charges of violating Section 1266, Title 26, of the Internal Revenue Laws—income tax evasion. He appeared before Federal Court Judge Charles E. Woodward for arraignment. Dressed immaculately in an expensive tailored suit, he sat quietly as bail bondsman Ike Roderick spoke on his behalf. “How much?” Roderick asked. “Fifty thousand dollars. Cash,” responded the court clerk. Roderick produced a large roll of $500 and $1,000 bills from his pocket and counted off $50,000 in currency, at that time the largest cash bond ever posted in Chicago. The transaction completed, Guzik rose to leave the courtroom, but was approached by Sergeant Jack Dalton who served him with another warrant for his arrest on charges of vagrancy. Roderick peeled off another $10,000 in cash and “Greasy Thumb” left the building. Reportedly, the only comment he made during the proceedings was a quiet aside to Roderick: “I don't know why they call me a hoodlum, I have never carried a gun. I have never been convicted on any charge.”27Guzik's trial on income tax evasion opened on November 12, 1930. For the years 1927, 1928, and 1929, he had claimed on his tax returns incomes of $18,000, $24,000, and $18,000 respectively, a three-year total of $60,000 from gambling and other activities. The Bureau of Internal Revenue claimed Guzik's actual income was as follows:281925288,743.491926159,413.111927647,654.431928331,657.92Total1,427,468.95All of this was at a time when, during the 1920s, the average annual income of a factory worker was $1,267.42. Guzik's total income for the years noted above, in terms of 2019 dollars, would be a staggering $20,928,407.77.29In support of the prosecution's case, Fred Reis testified that the net monthly profit from a gambling house was between $25,000 and $30,000. He further swore that he had taken the cashier's checks he purchased with the gambling money and given them to Bobbie Burton, Guzik's personal chauffeur. As evidence, he produced $149,000 in cashiers’ checks made out to J. T. Dunbar, a Reis alias, that were subsequently endorsed by Guzik and deposited in another bank. The defense claimed that even if the funds in question were Guzik's income, which it did not concede, it could not be assumed to be his net income because he had incurred many business expenses.30While this trial was in progress, Guzik's trial on vagrancy charges began on December 16. In his opening remarks, Assistant State Attorney James A. Brown characterized Guzik as “a man who used lewd and obscene language, who frequented speakeasies and brothels, an idler with no lawful means of support.” Guzik, he explained to the jury, “may have a million dollars, as was proved in Federal Court, but he is still a vagrant because he made it all from gambling and other illegal operations.”31 Brown thus made the case that since Guzik's income derived from illegal sources, he had no legal income and was therefore by definition a “vagrant.” To verify the illegal nature of Guzik's income, Brown called to the stand several witnesses who worked at gambling houses on Clark Street. Each one, when called to testify, either refused to do so, citing the Fifth Amendment protection against self-incrimination, or denied working for Guzik at all. While the witnesses were unproductively examined, Guzik took a large roll of currency and checks from his pocket and began quietly thumbing through them.32“What's wrong about me, anyway?” Guzik was overheard complaining. “There never was a man investigated as I have been in the last year. . . . I bet on the horses and so do a million others. I know some judges that do. I eat at Colosimo's. What of it? I owned part of the Frolics and got dividends from the dog races. Anything wrong about that? Where do they get this vagrant stuff? I could buy and sell half these guys.”33The defense provided evidence that Guzik lived in a $40,000 home, regularly paid his bills on time, enrolled his son in a university, sent his daughter to a finishing school, owned four automobiles, lived in a respectable neighborhood, and that he was a grandfather. While this information was being presented, Guzik took out a horse racing form to which he proceeded to give his undivided attention.34State's Attorney Brown responded to Guzik's defense with these words: “All this the state does not deny. But it does charge that Guzik made all his money from illegal means; the positive evidence is that he is a gambler and that he had no legal means of providing so lavishly for his family. Under the law, he is a vagrant.”35When the court recessed to allow the jury time to deliberate, Guzik called in a bookie to place bets while awaiting the verdict. After only a brief break, the jury returned a decision of “not guilty,” commenting that it did not consider someone who made a living by gambling a vagrant. Guz