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DEPOSITORY
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
EIGHTY-FIFTH CONGRESS
SECOND SESSION PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
MAY 14, 15, 16, 20, 21, AND 22, 1958
PART 29
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
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INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
EIGHTY-FIFTH CONGRESS
SECOND SESSION PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
MARCH 21, JULY 8. 9, 10, AND 11, 1958
PART 33
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
I
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
EIGHTY-FIFTH CONGRESS
SECOND SESSION PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS
MARCH 21, JULY 8, 9, 10, AND 11, 1958
PART 33
Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field
UNITED STATES GOVERNMENT PRINTING OFFICE r2K43 WASHINGTON : 1958
Boston Public Library Supertntend"nt of Documents
OCT 2 8 1958
SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD
JOHN L. McCLELLAN, Arkansas, Chairman IRVING M. IVES, New York, Vice Chairman JOHN F. KENNEDY, Massachusetts KARL E. MUNDT, South Dakota
SAM J. ERVIN, Jr., North Carolina BARRY GOLD WATER. Arizona
FEAJ^K CHURCH, Idaho CARL T. CURTIS, Nebraska
Robert F. Kennedy, Chief Counsel Ruth Young Watt, Chief Clerk
II
CONTENTS
The Restaurant Industry in the Chicago Area
(hotel and restaurant employees and bartenders international union)
Page
Appendix _ 12855
Testimony of —
Accardo, Anthony J 12782
Battaglia, Sam 12774
Butler, George 12519
Caifano, Marshall 12802
Carson, Chris 12637, 12648
Cerone, Jack 12809
Champagne, Anthony V 12499, 12840
DiVarco, Joseph 12809
Duffy, LaVem J 12797
Duffy, William 12730
English, Sam 12846
Esrig, Sheldon 12622
Gotsch, Gerald 12559, 12568, 12646, 12665
Greenfield, Robert S 12745
Gutgsell, Ralph J 12679
Johnson, Leslie A 12615
Kellv, James P 12527, 12536, 12583, 12606
Kerf, William H 12587
Marienthal, George 12666
Marquis, Clifton 12824
Marquis, Donald 12824
McCann, John 12548, 12562
Morris, Lt. Joseph 12730
Mundie, James F 12702
Peterson, Virgil W 12510, 12531, 12536, 12539, 12546
Prio, Ross 12809
Reade, Edward Harold 12689, 12705
Romano, Louis 12593, 12606
Rupcich, John 12563, 12568
Schimeal, Frances 12584
Schwimmer, Harold 12624
Smith, Sidney 12654
Strang, Donald W 12572
Teitelbaum, Abraham 12714, 12721
EXHIBITS
Introduced on page
Appears on page
13. Letter of resignation dated June 14, 1954, to Chicago
Restaurant Association, attention Don Kiesau, from
Anthony V. Champagne 12506 (*)
13 A. Application for charter of affiliation to the Hotel and Restaurant Employees and Bartenders International Union, for local 658, dated March 7, 1950 12527 12855
14. Criminal record of Claude Maddox, a/k/a John Edward
Moore 12536 (*)
15. Application for charter of affiliation with the Hotel and
Restaurant Employees and Beverage Dispensers Inter- national Alliance, for local 450, dated August 12, 1935,
Cicero, 111 12537 12856
* May be found in the file? of the select committee.
m
IV
CONTENTS
EXHIBITS— Continued
Introduced on page
Appears on page
16. Check No. 546, dated June 11, 1952, payable to Abra-
ham Teitelbaum in the amount of $2,240, drawn by
Bar-Don Corp 12579 12857
17. Membership ledger for Howard Johnson's Restaurant,
June 1952, listing 40 employees as members of the
union 12583 (*)
18. Cashier's check No. 156853, dated March 25, 1958,
payable to Gerard R. Pucci in the amount of $500... 12607 12858 18A. Application for exchange in the amount of $500, dated March 25, 1958, showing Gerard R. Pucci as appli- cant 12608 12859
19. Letter dated May 1, 1952, addressed to Mr. A. Teitel-
baum, signed by George E. Marienthal 12669 12860
20. Compilation made by James Mundie of expenses of the
Nantucket Restaurant 12703 (*)
21. Crime Commission of Chicago report on Mr. Greenfield. 12761 (*)
22. Pictures of Mr. Accardo and Mr. Giancana 12785 (*)
23. Picture of 6 men; Paul Ricca, Sylvester Agoglia, Charles
Lucania, Meyer Lansky, John Senna, Harry Brown. _ 12790 (*) 23A. Picture of 6 men: Eugene Cacciatore, John Miragalia, Albert Tomasello, Emil Jancer, James Mirro, and Ned Bakes 12790 (*)
24. Picture of Marshall Caifano and Sam Battaglia 12805 (*)
25. Picture of Ross Prio and Libby Nuccio 12817 (*)
26. Picture of Sam Hunt, Tony Accardo, and Sam English.. 12847 (*) Proceedings of —
March 21, 1958 12499
July 8, 1958 12509
July 9, 1958 12593
July 10, 1958 12679
July 11, 1958 12773
•May be found in the flies of the select committee
I
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGE3IENT FIELD
FRIDAY, MARCH 21, 1958
United States Senate, Select Committee on iMrRorER Activities
IN TnE Labor or Managethent Field,
Washington^ D. C. The select committee met at 1 : 40 p. m., pursuant to Senate Resolu- tion 221, agreed to January 29, 1958, in the caucus room, Senate Office Building, Senator John L. McClellan (chairman of the select committee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator Karl E. Mundt, Republican, South Dakota ; Senator Barry Goldwater, Republican, Arizona ; Senator Carl T. Curtis, Republican, Nebraska. Also present: Robert F. Kennedy, chief counsel; Jerome S. Adler- man, assistant chief counsel ; James Mundie, investigator ; Ruth Young Watt, chief clerk.
AFTERNOON SESSION 1 14 0 P. M.
(At the convening of the hearing, the following members were present: Senators McClellan, Curtis, Mundt.)
The Chairman. The committee will come to order.
The witness we will call at this time is Anthony V. Champagne.
(At this point, the following members were present: Senators McClellan, Mundt, and Curtis.)
The Chairman. You will be sworn, please. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God?
Mr. Champagne. I do.
TESTIMONY OF ANTHONY V. CHAMPAGNE, ACCOMPANIED BY COUNSEL, CLIEFORD ALLDER
The Chairman. State your name, your place of residence, and your business or occupation, please, sir.
Mr. Champagne. My name is Anthony V. Champagne. I reside at 1501 Bonnie Brae, River Forest, 111. I am an attorney at law, duly licensed to practice in the State of Illinois.
The Chairman. All right, sir. Do you have counsel present to represent you, also ?
JNIr. Champagne. Yes.
The Chairman. Counsel, identify yourself for the record, please.
12499
12500 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Allder. My name is Cliflford Allder, a member of the bar of Washington, D. C. ; my local office is at 401 Third Street NW.
Mr. Chairman. Thank you very much.
Mr. Champagne, I hand you a document and ask you to examine it and state what it is, and if you received a copy of this document, if it was served on you.
(The document was handed to the witness.)
(The witness conferred with his counsel.)
Mr. Champagne. This is the subpena that was served on me on Monday of this week.
The Chairman. On Monday of this week, the subpena that you have, a copy of it was served on you ?
Mr. Champagne. Yes.
The Chairman. Thank you very much. The subpena in full will be printed in the record at this point.
United States of America Congress of the United States L-3026
To Anthony V. Champagne, 5679 West Madison Street, Chicago, III., Greeting:
Pursuant to lawful authority, you are hereby commanded to appear before the Senate Select Committee on Improper Activities in the Labor or Management Field of the Senate of the United States, on forthwith, 195 — , at — o'clock — m., at their committee room, 101 Senate Office Building, Washington, D. C, then and there to testify what you may know relative to the subject matters under consideration by said committee, and produce your personal and business records for the period 1950 to present. See schedule A on reverse side.
Hereof fail not, as you will answer your default under the pains and i)eualties in such cases made and provided.
To James F. Mundie to serve and return.
Given under my hand, by order of the committee, this 14th day of March, in the year of our Lord one thousand nine hundred and fifty-eight.
John L. McClellan, Chairman, Senate Select Committee on Improper Activities in the Labor or Management Field.
Production of these records in Washington, D. C, will be waived at this time if they are made available in Chicago, 111.
SCHEDULE A
Bank accounts (checking and savings).
Deposit tickets.
Brokerage accounts.
Bank statements.
Canceled checks.
Check stubs.
Records of securities and other assets purchased and liquidated during period
1950 to present. Correspondence file relating to bank accounts, savings and checking, and other
assets.
Also all correspondence from or to Chicago Restaurant Association.
March 17, 1958. I made service of the within subpena by hand, the within-named Anthony V. Champagne at room 206, 5679 West Madison, Chicago, 111., at 4:20 o'clock p. m., on the 17th day of March 1958.
James F. Mundie.
The Chairman. The subpena from this committee directs you to appear forthwith before the committee in room 101, Senate Office Building, Washington, D. C, and then and there to testify on what you may know relative to the subject matter under consideration
IMPROPER ACTIVITIES IN THE LABOR FIELD 12501
by said committee, and produce your personal and business records for the period 1950 to the present.
See schedule A on reverse side.
On the reverse side, schedule A refers to bank accounts, checking and savings, deposit tickets, brokerage accounts, bank statements, canceled checks ; check stubs ; record of securities and other assets pur- chased and liquidated during the period 1950 to present ; correspond- ence file relating to bank accounts; savings, checks, and other assets; also correspondence from or to Chicago Restaurant: Association.
Mr. Counsel, before I proceed further, will you make a statement for the record as to the subject matter that this committee is inquir- ing into and to which this subpena is related, and to which we antici- pate the testimony of the witness will be related ?
Mr. Kennedy. Mr. Chairman, we are making a study in Chicago as well as elsewhere regarding the activities of various employer asso- ciations. We are looking into the relationship of certain employer associations with various labor unions, and the employment of attor- neys for the purpose of settling labor disputes and labor difficulties by unusual methods. We are looking into the infiltration
The Chairman. Methods, you mean, that might be regarded as improper practices in connection with labor-management relations?
Mr. IvENNEDY. That is correct. And we are looking into the em- ployment or use of gangsters or hoodlums for the purpose of settling labor difficulties and for bringing labor peace. We are looking into shakedowns and also collusive arrangements between certain dishonest management and dishonest labor.
The Chairman. In other words, where there may be the possi- bility that these matters were being handled by attorneys employed for that purpose, and where the character of people that you have referred to are employed or used for improper labor practices ?
Mr. Kennedy. That is correct.
The Chairman. All right, Mr. Champagne, you acknowledge that you received the subpena; that it was served on you. According to the return it shows it was served on the I7th day of March 1958. I believe you say it was served on you last Monday.
Mr. Kennedy. That is correct.
The Chairman. I believe that is the correct date. Have you re- sponded to the subpena ?
Mr. Champagne. Yes.
The Chairman. What is your response to it ?
Mr. Champagne. I have the records called for in the subpena.
The Chairman. In the first place, you appear here in response to it.
Mr. Champagne. Yes, sir.
The Chairman. In the first place, you have appeared in person in response to the subpena and you are now present.
Mr. Champagne. I appear in person.
The Chairman. With respect to the documents that you were di- rected to deliver by the subpena, I will ask you : Do you have those documents, the bank accounts, deposit tickets, brokerage accounts, bank statements, canceled checks, check stubs, record of securities, and other assets purchased and liquidated during the period 1950 to the present, correspondence file relating to bank accounts, saving and checking and other assets, also all correspondence from or to Chicago Restaurant Association ?
12502 IMPROPER ACTIVITIES IN THE LABOR FIELD
Have you complied with the subpena by bringing to the committee the documents and the items that I have referred to here in schedule A of the subpena ?
(The witness conferred with his counsel.)
Mr. Champagne. Yes.
The Chairman. You have all those records present ?
Mr. Champagne. Yes.
The Chairman. All of them ?
Mr. Champagne. All that I have.
The Chairman. I assume you have a copy of the subpena before you. I think I read the subpena in full. If I overlooked anything, I am referring to all called for by the subpena. Do you have them physically present — all of such records as called for there that you have?
Mr. Champagne. Yes.
The Chairman. Which of those records do you not have ?
Mr. Champagne. I have them all.
The Chairman. You have them all. So there is no question about there being some missing, then. You have all of them physically pres- ent here ?
Mr. Champagne. That is correct.
The Chairman. Are you ready to comply with the order and de- liver them to the subpena ?
(The witness conferred with his counsel.)
Mr, Champagne. No.
The Chairman. You refuse ?
Mr. Champagne. Yes.
The Chairman. You refuse to deliver them to the subpena ?
(The witness conferred with his counsel.)
The Chairman. The Chair now with the approval of the committee orders and directs you to immediately deliver these documents to the committee.
(The witness conferred with his counsel.)
The Chairman. Do you refuse ?
(The witness conferred with his counsel.)
Mr. Champagne. I refuse with one exception, Mr. Chairman, the exception being that under the Constitution of the United States, and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
I am ready to produce and turn over to this committee the cor- respondence
The Chairman. The what?
Mr. Champagne. The correspondence between myself and the Chi- cago Restaurant Association.
The CiiAiKiNrAN. That is the only one you are willing to comply with of the items listed in schedule A ? That is the last item there on "Also all correspondence from or to the Chicago Restaurant Associa- tion.''
Is that the only order and directive with respect to these documents, records, and so forth that you are willing to comply with ?
(Witness conferred with his counsel.)
Mr. Champagne. Yes.
IMPROPER ACTIVITIES IX THE LABOR FIELD 12503
Tlie Chairman. On the others, you positively refuse, takiug the position that to disclose them would be testimony against yourself?
Mr. Champagxe. Yes.
The Chairman. And that such testimony, if submitted to the com- mittee, or given by you, might tend to incriminate you ?
Mr. Champagne. Yes.
The Chairman. Is that your position ?
Mr. Champagne. Yes.
The Chairman. Do you honestly believe under oath that if you sub- mitted such documents to the committee, these documents here called for, these records here called for, that you are now declining to submit, that the records called for and the information revealed therein by them, might tend to incriminate you ?
Mr. Champagne. I do.
The Chairman. You honestly believe that ?
Mr. Champagne. I honestly and sincerely believe it.
The Chairman. Well, you would know better than I. Are there any further questions ?
Mr. Kennedy. Mr. Chairman, I might just ask Mr. Champagne if we have the correct facts about his tieup. Do you know anything about the Chicago Restaurant Association ?
(The witness conferred with his counsel.)
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. According to the information that we have, you were employed by the Chicago Eestaurant Association, between the period of September 1953 and July 1954 ; is that correct?
(The witness conferred with his counsel.)
Mr. Champagne. Under the Constitution of the United States, and all of its amendments, including the fifth amendment, I decline to an- swer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. And that when you were in private practice, before you went to the association, you were making approximately $10,000 a year in private practice.
Is that correct ?
(The witness conferred with his counsel.)
Mr. Champagne. I refuse to answer under the terms of the Consti- tution of the United States and all of its amendments, including the fifth amendment, because my answer might tend to incriminate me and I refuse to be a witness against myself.
Mr. IvENNEDY. And then when you went with the Chicago Restau- rant Association, you were being paid a salary of approximately $10,000 a month, is that correct ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. IvENNEDY. And then you resigned in July 1954 from this post which paid you $10,000 a month, because you said you had to get back to your other clients ?
12504 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. Weren't you in fact hired in order to settle an impor- tant strike of a large restaurant chain in Chicago, 111.
Mr. Champagne. Under the terms and amendments of the Consti- tution of the United States, including the fifth amendment, I decline to answer, because my answer might tend to incriminate me, and I refuse to be a witness
Mr. Kennedy. And wasn't it felt that because of your association with certain of the underworld in Chicago, 111., that you could settle the strike ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. Do you know Tony Accardo ?
Mr. Champagne. Under the terms of the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. KJENNEDY. Aren't you a close associate of Tony Accardo, Vin- cent Insierro, who is also called the Saint, and Mooney Giacanna ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. And didn't you hire an assistant to help you in this job, a man by the name of Sam English, who has been arrested ap- pjoximately eight times ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
(At this point. Senator Curtis withdrew from the hearing room.) Mr. Kennedy, And he has been convicted of burglary, has he not, and he has associations with Bill Ardarcio, Olie Frabotta, and An- thony DeKosa ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. Did you pass any of the money that you received on to any individual, any of the money that you received from the Chicago Restaurant Association ?
Did you pass that on to anyone ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
Mr. Kennedy. Mr. Chairman, we have a good deal more informa- tion on this matter, and we will be going into it rather extensively and have the witnesses from the Chicago Restaurant Association as
IMPROPER ACTIVITIES IN THE LABOR FIELD 12505
well as from the restaurant chain that was involved in this particular strike.
But I would like to say that the strike was settled satisfactorily to the restaurant chain.
The Chairman. I believe you stated under oath that you have present all of the records the subpena calls for, you have them physi- cally present?
(At this point, Senator Curtis entered the hearing room.)
Mr. Champagne. Yes.
The Chairman. Will you show them to us? Let's see the bulk of them.
( The witness complied with the question of the chairman.)
The Chairman. You have, in that briefcase, those records ?
Mr. Champagne. Yes.
The Chairman. Will you take them out and lay them on the table ?
Mr. Allder. That was some of his traveling equipment, Senator.
The Chairman. I assume that was his toilet kit. That may be placed back in the briefcase. Just a moment. Just put the kit back.
Mr. Allder. Excuse me. I had already put that back. I didn't understand you.
The Chairman. I said it was all right to put it back.
(The witness conferred with his counsel.)
The Chairman. Mr. Witness, your counsel has laid out before you there what looks like some 4, 5, or 6 packages, or folders, presumably of records and so forth ; is that correct ?
(The witness conferred with his counsel.)
Mr. Champagne. Yes, sir.
The CiLviRMAN. Does that constitute, what is now on the table be- fore your counsel and to your left, just in front of your left hand, do those 2 packages or those 2 piles of documents contain all of the documents called for by schedule A of tliis subpena ?
Mr. Champagne. Yes, sir.
The Chairman. Do you mean to say that the documents on your left contain all of your bank accounts, deposit tickets, brokerage ac- counts, bank statements, canceled checks, check stubs, record of securi- ties and other assets purchased, and liquidated during the period 1950 to the present, correspondence file relating to bank accounts, savings, checking, and other assets ?
Does that stack of documents there in front of your counsel con- stitute all that the subpena calls for, which I have just read, and do you say that is all of the records during that period of time?
Mr. Champagne. Yes, sir.
The Chairman. Since 1950?
Mr. Champagne. Yes, sir.
The Chairman. Then you, obviously, do a lot of your business by cash, do you not ?
( The witness conferred with his counsel.)
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment — excuse me.
The Chairman. I believe we would like to hear it.
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
12506 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Wliat documents do you have now before you that you are willing to turn over to the committee ?
Mr. Champagne. The correspondence between myself and the Chi- cago Restaurant Association.
The Chaikman. Will you now deliver that to the clerk of the committee?
Mr. Champagne. I will.
(The documents were handed to the clerk.)
The Chairman. Thank you very much. You still decline to deliver the other documents to the committee ?
Mr. Champagne. Yes.
The Chairman. Let me ask you: Are you a member of any bar association ?
(The witness conferred with his counsel.)
Mr. Champagne. Yes, Mr. Chairman.
The Chairman. What bar association?
Mr. Champagne. The Chicago Bar Association.
The Chairman. The Chicago Bar Association? All the Chair wanted to know — I don't know what they will do about it, but, you know, the labor unions have passed a code of ethics, the AFL-CIO, and I remember one of their codes is that those who take the fifth amendment regardino; matters relating to their unions and so forth are ineligible — well, m other words, that practice is condemned by their ethical code.
I am going to watch, with a little interest, the attitude of a bar association with respect to its members. Being a member of the pro- fession myself, I know often the bar is unjustly criticized. But I think that, in a case like this, in an instance that you present here now, it is something that the public will look toward with some concern, and a bit of curiosity, to know what will be the reaction of the bar association when one of its members finds it necessary to invoke the fifth amendment regarding the business transactions.
Are there any other questions ?
May I present to you now a photostatic copy of a letter ? I ask you to examine it and state if you identify it?
TThe document was handed to the witness.)
(The witness conferred with his counsel.)
The Chairman. Have you examined the document, the photostatic copy of the letter the Chair presented to you ?
Mr. Champagne. Yes, sir.
The Chairman. Do you identify it?
(The witness conferred with his counsel.)
The WiTKi:ss. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
The Chairman. This photostatic copy may be made exhibit No. 13, for reference (and may be found in the files of the select committee), so as to give background information as to the matter about which the witness has been interrogated, and about which he will now be interrogated.
I have before me a photostatic copy of a letter on the stationary of Anthony V. Champagne, attorney at law, 5679 West Madison Street, Chicago 44, 111.
IMPROPER ACTIVITIES IN THE L/\BOR FIELD 12507
The letter is dated June 14, 1954, addressed to Chicago Restaurant Association, 7 South Dearborn Street, Chicago, 111., attention Mr. Don Kliesau, executive vice president.
Gentlemen : I hereby submit my resignation as an attorney for your associa- tion and its members, effective July 1, 1954. It would be appreciated if you would advise the oflBcers of the association and each of your members of my resignation, as such. I wish to acknowledge the pleasant relationship which I have enjoyed with you, personally, the oflBcers and directors, as well as the in- dividual members who have sought my counsel during my tenure as their at- torney. It has become apparent to me that the responsibilities and decisions to be made in behalf of your association and its members require the full time and attention of myself or any other person in order to completely and competently solve the many issues which arise. As you know, I have been practicing law for the past 25 years, and am confronted with many legal problems and decisions to be made in behalf of my clientele, all of which require considerable time and effort on my part. In view of the established practices which I have enjoyed for many years, I feel it my duty to continue serving these clients without interruption.
Again assuring you that it has been a pleasure to be of service to your splendid organization, I remain, sincerely yours —
and it appears to be signed "Anthony V. Champagne."
Mr. Champagne, is that your signature on this letter ?
Mr. Champagne. Under the Constitution of the United States and all of its amendments, including the fifth amendment, I decline to an- swer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
(At this point, the following members were present: Senators Mc- Clellan, Mundt, and Curtis.)
The Chairman. Did you write this letter ?
Mr. Champagne. Under the terms of the Constitution of the United States and all of its amendments, inclduing the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
The Chairman. Do you deny this as your signature? I believe I asked you that. We will pass that one.
At the time that you resigned here, were you receiving from $100,- 000 to $120,000 a year from this association ?
Mr. Champagne, Under the Constitution of the United States, and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
The Chairman. Would you care to tell the committee the real rea- son why you resigned ?
Mr. Champagne. Under the Constitution of the United States, and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
The Chairman. Mr. Champagne, you can well appreciate, bein^ a lawyer, I think, the Chair need not go to much trouble to admonish you or to suggest to you that you realize that you can anticipate that the committee is going to have some evidence along these lines. We are going to get some testimony about it, and it will come and it will be produced. Now, would you care to make any explanation of this matter, to help the committee, and in your own interest?
(The witness conferred with his counsel.)
12508 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Champagne. Under the Constitution of the United States, and all of its amendments, including the fifth amendment, I decline to answer because my answer might tend to incriminate me, and I refuse to be a witness against myself.
The Chairman. All right; Mr. Champagne, before you leave the stand, the Chair orders and directs you to deliver the records referred to in this schedule A, which you have so far declined and refused to deliver. Do you comply or do you refuse to comply ?
Mr. Champagne. I refuse.
The Chairman. You will remain under the same subpena, subject to being recalled by the committee at any time. Accepting that re- cognizance, the Chair will let you go at this time if you agree to re- appear without further subpena at such time as the committee may desire your presence, by giving you reasonable notice.
Mr. Champagne. Yes, sir.
The Chairman. I have one other thing I wish to admonish you about. These documents, you have not delivered them, are under sub- pena, and any destruction of them, being a lawyer, I think you can appreciate might bring you within contempt of the United States Senate.
Mr. Champagne. I understand.
The Chairman. You may stand aside.
(Whereupon, at 2:10 p. m., the committee adjourned, subject to call of the Chair.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGE3IENT FIELD
TUESDAY, JULY 8, 1958
United States Senate, Select Committee on Improper Activities
IN the Labor or j\L\nagement Field,
Washington^ D. C.
The select committee met at 10 a. m., pursuant to Senate Resolution 74, agreed to January 30, 1957, in the caucus room. Senate Office Building, Senator John L. McClellan (chairman of the select com- mittee) presiding.
Present: Senator John L. McClellan, Democrat, Arkansas; Sen- ator Frank Church, Democrat, Idaho ; Senator Carl T. Curtis, Repub- lican, Nebraska.
Also present : Robert F. Kennedy, chief counsel ; John J. McGov- ern, assistant counsel; LaVern J. Duffy, investigator; James P. Kelly, investigator; James Mundie, investigator; Ruth Young Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the committee present at the opening of the session were : Senators McClellan, Church, and Curtis.)
The Chairman. The Chair will make a brief opening statement. Today we are beginning an investigation into the labor-management affairs of the restaurant industry in Chicago, 111.
We expect to inquire into.
( 1 ) Whether groups of employers banned together for the purposes of destroying legitimate unionization.
(2) Whether collusive deals were made between dishonest manage- ment and dishonest union officials.
(3) Whether gangsters or hoodlums were employed by an associa- tion of employers to keep out unionization or to handle their labor relations.
(4) "\^'liether certain union officials have been or are presently in the control of the criminal syndicate in Chicago.
During these hearings, which will run probably for 2 weeks, we expect to develop the fact that, in arrangements of the types men- tioned above, the needs and interests of the employees are completely ignored. Unions exist for the purpose of helping and assisting the employees or workers.
However, where union officials ignore their trust and becoiiio inter- ested only in money, where you have employers interested only in keep- ing down their costs, no matter what may be the hardship that they impose on their employees, you have a situation that is a perversion of the whole idea of proper and legitimate labor-management relations.
12509
12510 IMPROPER ACTIVITIES IN THE LABOR FIELD
Such situations need to be exposed and, where possible, Congress must act to insure that they do not continue.
I would like to say that throughout this whole investigation we have had the complete cooperation and invaluable assistance of Mayor Rich- ard Daly of the city of Chicago. As in New York, where District Attorney Frank Hogan and Police Commissioner Stephen Kennedy were of such assistance, in Chicago Mayor Daly and those under him have been of great help in furnishing to the committee background information and other assistance in its investigation. The committee is very grateful, for without this aid the investigation would have been far more difficult.
I want to emphasize the value of assistance given the committee from time to time by local officials. Where they cooperate with us we are able to get the information and follow up leads and develop the facts much easier than where they are indifferent to our labors and to our mission, or where they provide some passive resistance to our efforts.
It is always gratifying when we have tliat cooperation from local authorities who are responsible for law enforcement in their areas.
All right, Mr. Kennedy, will you call the first witness ?
Mr. Kennedy. Mr. Virgil Peterson, Mr. Chairman, who is the oper- ating director of the Chicago Crime Commission.
The Chairman. Will you be sworn, please ?
Do you solemnly swear that the evidence, given before this Senate select committee, shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Peterson. I do.
TESTIMONY OF VIEGIL W. PETERSON
The Chairman. Mr. Peterson, state your name, and your place of residence, and your profession or occupation.
Mr. Peterson. My name is Virgil W. Peterson, I am the operating director of the Chicago Crime Commission, 79 West Monroe, Chicago.
The Chairman. Thank you. How long have you been in that posi- tion?
Mr. Peterson. Since April 1, 1942, a little over 16 years.
The Chairman. You waive counsel, of course, Mr. Peterson ?
Mr. Peterson. Yes, sir.
The Chairman. Thank you. The Chair overlooked asking, and I apologize for not asking any other member of the committee if they had any comment.
Senator Curtis. I have no comment, Mr. Chairman.
Senator Church. I had no comments, Mr. Chairman.
The Chairman. All riglit, Mv. Kennedy, proceed.
Mr. Kennedy. Mr. Chairman, in the course of the investigation that we have been making in Chicago, we have had great assistance also from Mr. Petoi'son, wlio is acknowledged I think throughout the United States as one of the foremost authorities in the held we are inquiring into. We have called Mr. Peterson to give some back- ground information regarding some of the individuals in whom Ave have an interest. I would like to start out by asking Mv. Peterson if he has any information indicating that the old Capone group out of Chicago was interested in moving into any of the labor unions or into legitimate business durinjr the 1920's and 1930's.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12511
Of course, Mr. Chairman, this is a continuation of what we were inquiring into last week when we asked similar questions of other indi- viduals from other sections of the country.
Mr. Peterson. Definitely, we have such information.
Mr. Kennedy. "V^Hien did it start, Mr. Peterson ?
Mr. Peterson. A number of years ago. For example, in 1940 the crime commission at that time, together with other officials of the Chicago Association of Commerce and the employers' association, went to the maj'^or of the city of Chicago at that time, Edward J. Kelly, and also to the State's attorney and advised them or we urged them to take action to prevent this infiltration of notorious Capone hoodlums into the labor field.
Following a conference that we had at that time — and I say "we," I was not with the commission at that time, but our president, Mr. Kohn, was.
Mr. Kennedy. How long have you been with the commission ?
Mr. Peterson. Since 1942, and this was in 1940, the time I am speaking of.
Mr. Kennedy. Your testimony is based on the records of the crime commission ?
Mr. Peterson. Yes, sir.
Mr. Kennedy. What had you been doing prior to the time you came with the commission ?
Mr. Peterson. Prior to that time I was with the FBI from 1930 until 1942. In a short time, and only a few days later, the Chicago police then conducted raids on certain unions that it considered domi- nated by Frank Nitti and the Capone ^ang.
Mr. Kennedy. Who is Frank Nitti, and how do you spell his name?
Mr. Peterson. N-i-t-t-i. He was the successor to Al Capone as the leader of the Capone syndicate or gang in Chicago.
Mr. Kennedy. Was he also known as "The Enforcer" ?
Mr. Peterson. Frank "The Enforcer" Nitti.
Mr. Kennedy. What does that term mean, "The Enforcer" ?
Mr. Peterson. I think it is rather self-explanatory. He was a vicious hoodlum and he enforced demands through violence and that sort of thing.
Mr. Kennedy. Was he known as "The Enforcer" for the Capone mob?
Mr. Peterson. Yes, and he was commonly known as Frank "The Enforcer" Nitti, that is right.
Mr. Kennedy. And the Chicago Police Department then moved in on some of the unions that they believed were dominated and con- trolled by people and individuals such as Frank Nitti, is that right?
Mr. Peterson. Yes, and in fact on August 12, 1940, the Chicago police raided the headquarters of local 593 of the Hotel, Apartment Employees and Miscellaneous Workers Union at 10 North Wells Street, in Chicago. They seized 2 officers, or 3 officers at the union headquarters who were James Blakely, then secretary-treasurer of local 593, and a pal of Danny Stanton, a well-known Capone gang- ster, and in fact IBlakely is still secretary-treasurer of local 593 and a vice president of the international union.
Mr. Kennedy. That is B-1-a-k-e-l-y ?
21243— 58— pt. 33 2
12512 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Peterson, Yes, and they also seized a man by the name of John Lardino, a business agent of that union, who also was very close to a number of Capone hoodlums, and another business agent by the name of Mike Mikley.
A writ of habeas corpus was filed in connection with the seizure of the records and arrests of those individuals on that occasion, and Police Officer Frank O. Sullivan in return to the writ stated that these men were wanted in connection with an investigation then being conducted by the Chicago Police Department into labor terrorism in Chicago.
Mr. Kennedy. Now, you stated earlier that Blakely was a friend of Danny Stanton ?
Mr. Peterson. Yes.
Mr. Kennedy. Who was Danny Stanton ?
Mr. Peterson. Danny Stanton was a notorious Capone gangster, and he was engaged in gambling activities, particularly on the South Side, and he was also considered a power in a number of the unions in Chicago. He was later killed in gang warfare.
Mr. Kennedy. When was he killed ?
Mr. Peterson. May 12, 1943. I think I can give you the exact date.
Mr. Kennedy. It was 1943?
Mr. Peterson. It was May 5, 1943, and he was slain in a tavern at 6500 South May Street.
Mr. Kennedy. Now, prior to that, there had been some information indicating that the Capone groups were moving into some unions ?
Mr. Peterson. Oh, yes.
Mr. Kennedy. They had in 1929 and 1930 moved in on some of the teamsters locals, had they not ?
Mr. Peterson. And the building trades unions, and as a matter of fact in the building trades there were special grand juries and investi- gations in the early 1920's, and in fact during those times there were a number of prosecutions at that time. As I recall the former president of the Chicago Crime Commission, Frank Lesh, was a special prose- cutor in connection with some of those cases.
Mr. Kennedy. There had been a number of killings of union offi- cials ?
Mr. Peterson. Yes.
Senator Curtis. Excuse me, but I would like to ask a question right there. Wliy do these hoodlums — some of them are gangsters and mur- derers and gamblers and extortionists and all sorts of bad actors — why did they select unions as the field of exploitation ?
Mr. Peterson. Well, when they are able to dominate a particular union, it is, as I think will be shown in these hearings, a tremendously lucrative operation for the hoodlums themselves.
Senator Curtis. By "lucrative," where do they get their money ?
Mr. Peterson. Well, with reference to the income of the union itself.
Senator Curtis. The checkoff of dues ?
Mr. Peterson. The dues from the employees, and, as a matter of fact, during the period that Mr. Kennedy was inquiring about, in the 1920's, for example, in the building trades, they weren't interested in the welfare of the employees, of course, but they had these contracts with penalty clauses in them if they didn't complete the contract by a certain time.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12513
Well, a racketeer would fjo to a contractor and say in substance, "Well, if you give me $20,000 or $30,000 or $50,000, we won't call a strike; and if you don't give me the $50,000 we will call a strike."
A number of the racketeers made tremendous incomes during that period through those means.
Senator Curtis. In other words, it appealed to them as a lucrative proposition first to get their hands on the treasury of the union be- cause of the checkoff and the compulsion that men must pay to con- tinue to work, and another source of income was that it gave them an opportunity for extortion and blackmail and that sort of thing.
Mr. Peterson. That is right. And there have been instances that I don't think you are going into this morning — take in the jukebox field, where controlling a union enables monopolistic practices on the part of those with whom they may be in collusion.
Senator Curtis. I think one of the most important things brought out by this committee in the months of its work has been that the laws of our land are such in reference to unions that it invites hoodlums and the wrong sort of people to come in. The law permits unions to be run from the top. We have seen that over and over again. The law does nothing about the grievances of individual union members so far as, by and large, getting any relief through court action.
The law grants a certain cloak of respectability and immunities to unions both as a matter of law and as a matter of practice. The unions' practice of blocking a sidewalk or street goes unnoticed and it puts a weapon in the hand of the wrong type of people to harass, intimi- date, and extort, and slow up, and do those other things. We have the helpless situation of union members and their inability to withdraw from the union without losing their job.
I think that we are going to have to strive for those laws that will free the union member and no longer make it profitable for hoodlums to get in.
That is all. I am sorry for the interruption, Mr. Chairman, and that is all I have at this time.
The Chairman. All right, we will proceed.
(At this point, the following members were present: Senators McClellan, Church, and Curtis.)
Mr. Kennedy. You stated that Blakely was a good friend of Danny Stanton, and he was arrested, and also Mr. John Lardino. Can you give us any more of the background of some of these individuals, for instance Mr. Blakely ? Mr. Peterson. Yes.
Mr. Kennedy. Was he tied in with any of the other of the Capone group ?
Mr. Peterson. Well, his principal connections at that time were, as I understand it, with Danny Stanton.
You asked for background information. We have an observer's re- port from 1930, relating to an indictment returned against Danny Stanton for carrying concealed weapons. In that particular case, a police officer, William Drewry, who has since been killed, testified that at 2 p. m. on December 16, 1929, he saw Danny Stanton and James Blakely on the northeast corner of Randolph and Clark Streets; he arrested them. He went over to Danny Stanton, and in his overcoat
12514 IMPROPER ACTIVITIES IN THE LABOR FIELD
he found a revolver loaded with dum-dum bullets, and he placed them both in a taxicab and drove them to the police station.
While they were en route to the police station, Stanton told, ac- cording to Drewry's testimony told Blakely, he said, "Remember that they found this gun on the floor of the taxicab.
"Thatisourout."
Well, apparently the court believed that testimony also, because they returned a verdict of not guilty in connection with the particular case. But Blakely has been arrested on two or three different occa- sions. On another occasion he was arrested by Lt. George Barnes for abusive language and that sort of thing in connection with an election of Local 88 of the Cooks and Pastry Workers' Union.
Mr. Kennedy. He still has this position with the union, does he not ?
Mr. Peterson. Yes ; that is right.
Mr. Kennedy. Isn't that the largest hotel employees' union in the Chicago area, 593 ?
Mr. Peterson. That is right.
Mr. Kennedy. Wliat about Mr. Lardino ? Do you have any back- ground on him ?
Mr. Peterson. Yes. During the latter part of 1956 the Crime Com- mission received information that a number of individuals, that was as late as 1956, had recently stepped into places of somewhat impor- tance as aids to Tony Arcardo, the head of the Capone syndicate.
Among those mentioned in this capacity was John Lardino. From a number of other individuals mentioned by these same sources of information, we know that to be true.
Lardino's record goes back, as far as the police records are con- cerned, a number of years, over 30 years, to be exact. Our observer's report of October 3, 192'7, relates to an indictment, indictment No. 44028, charging Lardino with robbery, together with 3 other indi- viduals, Joseph Castalenti, Mide Reggri, and Sam DeCesera.
These men all had prior records and he was placed on probation, as I recall, in that particular case. In fact, the police records show that on June 9, 1927, Lardino was sentenced to 6 months in the house of correction on vagrancy charges, and on October 14, 1927, he was placed on probation for robbery, which was reduced to petit larceny. On October 7, 1927, he was arrested under the name of Edward Nardi, No. C-69840, and was arrested on suspicion and for investiga- tion. Again on March 14, 1948, he was arrested by the Chicago police, by the detective bureau, Sergeant Pape, and company.
Mr. Kennedy. Have you found that he has been a companion or a contact with a number of the well-known gangsters in the Chicago area?
Mr. Peterson. Definitely. As a matter of fact, you might have some interest in this: On May 30, 1955, Louis "Little New York" Campagna, who was one of the leading Capone syndicate gangsters in Chicago, and who, as you may know, was convicted in the movie extortion case a number of years ago, together with Paul Ricca, Cliarles Joey, Phil DeAndre, Nick Deane, and a number of others.
Mr. Kennedy. Little New York, he was called ?
Mr. Peterson. Yes. On May 30, 1955, Campagna died on a boat off the coast of Florida. His body was returned to Chicago, and there was a wake in John Ra<2:o's Funeral Parlor on South Harlem
IMPROPER ACTIVITIES IN THE LABOR FIELD 12515
Avenue. At this wake we had such syndicate hoodhuns as Joe Aiuppa, Sam Giancana, Jack Cerone, Willie Alosio, Ealph Pierce, James Emory, Frank LaPorte, Jolin Lardino, Tony Accardo, Mur- ray Humphrej's, Rocco Fischetti, Joe Glimco, Claude Maddox, Sam Battaglia.
He drove a car to the wake with 1955 license plates 745-748, issued to John Lardino, 10 North Wells Street, Chicago, which is the address of local 593.
Mr. Kennedy. "Wlio are these other individuals that you men- tioned ?
Mr. Peterson. They are all notorious hoodlums. Tony Accardo undoubtedly is the successor to Frank Nitti as head of the Capone gang, particularly since Paul Ricca has been under wraps somewhat with reference to denaturalization proceedings and the extortion case. Murray Humphreys, Rocco Fischetti, all of those individuals, they are well-known Chicago Capone syndicate hoodlums.
Mr. Kennedy. And John Lardino was in their company at that time?
Mr. Peterson. That is right.
Mr. Kennedy. Didn't his brother Danny Lardino control one of those hotel and restaurant employees' unions in the Chicago area?
Mr. Peterson. Yes. He was head of Local 658 of the Drugstore, Fountain, and Luncheonette Employees' Union, which also has an address of 10 North Wells Street.
Mr. ICennedy. That is local 658?
Mr. Peterson. Local 658. From 1950 through 1957, he was in that capacity. In January 1958, local 658 merged with local 593, and Daniel Lardino is now a business agent in local 593.
Mr. Kennedy. 593 is the one that belongs to John Lardino?
Mr. Peterson. That is correct.
Mr. Kennedy. And 658 merged with them ?
Mr. Peterson. That is right.
Mr. Kennedy. Rather than head of local 658, he then became just business agent for 593 ?
Mr. Peterson. Yes.
Mr. Kennedy. Would you tell us a little about Danny Lardino?
Mr. Peterson. Well, Daniel Lardino has a criminal record. On August 18, 1944, he was arrested as a burglary suspect by Officers McGuire, Daley, Hall, and Ward, of the detective bureau, as Dan Lardino, No. D-27863. On October 5, 1944, he was sentenced to 90 days in the house of correction on a malicious mischief charge and a plea of guilty before Judge Ward, and as Daniel Lardino he was arrested July 16, 1950, for investigation by Officers Megan and com- pany.
Mr. Kennedy, Did you ever receive any reports from the Chicago Crime Commission regarding Danny Lardino's activities in the labor field in the Chicago area ?
Mr. Peterson. Yes. In September 1950, we received information based on a complaint of a number of druggists on the North and West Sides of Chicago. At that time, they were subjected to certain violence tactics, and they appealed to us to try to n:et at that time the Senate committee, the Kefauver committee, to investigate what thev called racket unions, which were preying on them.
i
12516 IMPROPER ACTIVITIES IN THE LABOR FIELD
In fact, I wrote a letter to the counsel for the whole Kefauver committee at that time, suggesting that they look into this matter. Included in the complaint was local 658, 10 North Wells Street, Chi- cago, and the union officials complained of were Daniel Lardino and Henry C. Koberts. The complaint alleged that these union officials had instituted picketing and violence, that windows of drugstores had been mysteriously broken, and intimidating telephone calls had been received by the wives of druggists, suggesting death to their husbands. This activity centered, as I said, largely on the North and Northwest Sides of Chicago. Business agents representing one or more of the unions complained of would visit a druggist, suggest that he place his employees in the union, pay initiation fees and dues, and it was claimed that if he would pay $20 a month he would there- after remain absolutely unmolested, that is, on each employee, by the imion.
It was also claimed to us, reported to us, that a number of the drug- gists were paying off in this fashion.
Senator Cuktis. Mr. Chairman?
The Chairman. Senator Curtis?
Senator Curtis. You identified that union by number, I believe.
That dealt with the druggists. What kind of a union was it ?
Mr. Peterson. Well, it was the Drugstore, Fountain, and Lunch- eonette Employees' Union. It took in that type of employee.
Senator Curtis. I would like to have this background information. In the course of the years that you have had to deal with this problem and other problems in this Chicago area, you have become familiar with many of these things. I would like to know what unions in the Chicago area have been infiltrated by the criminal elements. I am not asking that specific locals be named by number, but what occu- pations ?
What are the principal ones ?
Mr, Peterson. Well, that would cover a pretty wide field. Cer- tainly the Taxicab Drivers' Union, headed by Joey Glimco. You have had certainly, the activities in the jukebox field with the Electri- cal Workers' Union. There have been just innumerable cases of that.
Senator Curtis. I think it is important that this senatorial commit- tee have somewhat of a detailed list on that. You have mentioned the hotel workers, the restaurant and hotel workers.
The Chairman. Would it be well to let him submit us that list?
Mr. Peterson. I will be glad to do that.
The Chairman. Some of them are presently under investigation by the committee.
Senator Curtis. Did you also mention the building trades ?
Mr. Peterson. Yes. In time gone by. I don't recall right offhand whether that situation prevails right at the moment or not.
Senator Curtis. Following the chairman's suggestion, I think it would be very fine if you would submit in writing a detailed answer to my question.
Mr. Peterson. I will be glad to.
Senator Curtis. It will show the extent of the problem, and we can also follow through and see what the international unions have done about it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12517
The Chairman. Your statement will be submitted under oath, so that at such time as the committee may desire, it may be made a part of the committee's record.
Senator CuRxrs. In that connection, I have one further question. As a matter of public opinion, is it pretty well accepted around Chicago that a number of the unions are dominated by criminal elements?
Mr. Peterson. I am sure that is true, yes. In fact, I think you would find if you talked to many rank-and-file members of the unions themselves they would be of the same impression, many times, and there have been instances where there has been a feeling of hopeless- ness on the part of many of the members.
Senator Curtis. I am sure that is true. I am sure you have rendered an invaluable public service in the work you have carried on.
That confirms what I hear, too. Many rank-and-file members feel that our present laws permit too much regulation from the top, and they feel hopeless.
Mr. Peterson. Wherever you have gangster infiltration, whether it be in the labor-union fields or in the legitimate business field, hoodlums still remain hoodlums, they still know only one law and that is the law of the jungle.
That is the way they operate, that is, if they are in positions of importance, whether it is in unions or business. They are interested, of course, in maintaining monopolies for the benefit of the hoodlums. They are not interested in the welfare of the individuals whom they are supposedly representing.
Senator Curtis. And they gravitate to those activities where there is money and power and monopoly ?
Mr. Peterson. "V\nierever there is money, where there is easy money. In other words, the "fast buck," so to speak, that is what your hood- lum elements are always interested it.
Senator Curtis. That is all, Mr. Chairman.
Senator Church. Mr. Chairman ?
The Chairman. Senator Church.
Senator Church. Mr. Peterson, returning to the testimony that you were giving, you were comi^ncing to make a case against local 593. You had mentioned two of the officials, James Blakely and John Lardino, and had mentioned the fact that each had criminal records. You also mentioned Danny Lardino, who was once presi- dent of local 658, which later merged with this same union, local 593. Can you tell me, in order that I can better follow your testimony, what connection these officers of local 593 had, if any, with Frank Nitti, "the Enforcer," the successor to Al Capone ?
Mr. Peterson. Well, as I mentioned before, Blakely for example was a friend of Danny Stanton. It was the common understanding of the police in 1940, which I will go into a little bit later, in connection with the bartenders union and that sort of thing, but there were a number of unions which were taken over by the so-called Capone syndicate, headed by Frank '"the Enforcer" Nitti, and this was one of them that the police at that time were confident was in that par- ticular category, particularly in view of the relationship of Lardino and Blakely with some of the Capone hoodlums.
Senator Church. Tell me, what kind of jurisdiction did local 593 have ? That is to say, did in include waiters or chefs ?
12518 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Peterson. In the city of Chicago. You had another local that covered the suburban areas.
Senator Chukch. Can you give me an idea about the size or scope of its activities ?
Mr. Peterson. I did have those figures, I think in the memorandum that I prepared. It went into several thousand of employees.
Mr. Kennedy. I think there are about 10,000.
Senator Church. About 10,000 employees. It would cover, then, a great many separate restaurants in Chicago.
Mr. Peterson. Yes.
Senator Church. And it operated within suburban Chicago ?
Mr. Peterson. No. It operated primarily within the city limits of Chicago.
Senator Church. Within urban Chicago ?
Mr. Peterson. Yes, that is right.
Mr. Kennedy. Just on what we have been discussing, you did not mean to say or imply that all of the unions in the Chicago area are controlled by gangsters.
Mr. Peterson. Oh, my, no. No.
Mr. Kennedy. Actually, in some cases, some instances, they are a minority of unions, are they not ?
Mr. Peterson. Yes. The same thing would apply — I don't want to generalize to that extent. In other words, you have a number of hoodlums that are in legitimate businesses, but that does not mean that they control all legitimate businesses.
Senator Church. I think we have to be careful to make that distinc- tion. Just because hoodlums get into business does not mean we should indict business, and just because hoodlums get into labor does not mean we should indict labor.
Mr. Peterson. I would agree with that a hundred percent. Even those that they have infiltrated into, that is no indictment of labor itself ; that is an indictment of the individuals who have been success- ful in taking over those particular unions.
Mr. Kennedy. Have you found in your experience that one of the great problems in breaking this contl-ol is the failure of businessmen to cooperate with the law-enforcement officials ?
Mr. Peterson. Yes. You see, whenever hoodlums get into any activity of that kind, then, of course, there is fear, intimidation, and it is in many instances apparently just easier to go along than it is to fight it.
Mr. Kennedy. Also, we have found in our investigation, there is collusion that exists. Often businessmen can find that by making this deal with gangsters or hoodlums, they can keep competitors out. Have 3^ou found that also ?
Mr. Peterson. Well, I have heard that.
Mr. Kennedy. Mr. Chairman, we were talking about Danny Lar- dino. He controlled local 658, which had up to 1,000 members. When they merged with local 593 it had only approximately 400 workers, but he had complete control and dominion of the local and the individuals in the local. Mr. Peterson has given some background information on Mr. Lardino, but we have another witness who will give some more background information on him. For that reason, I would like to have Mr. Peterson step aside and call Lieutenant Butler.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12519
The Chairman. Lieutenant, you do solemnly swear the evidence you shall give before the Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Butler. I do.
TESTIMONY OF GEOKGE BUTLER
The Chairman. State your name, your place of residence.
Mr. Butler. George Butler, Dallas, Tex.; police officer.
The Chairman. How long have you been a police officer ?
Mr. Butler. 22 years.
The Chairman. What is your rank ?
Mr. Butler. Lieutenant of detectives.
The Chairman. That is in Chicago ?
Mr. Butler. Dallas, Tex.
The Chairman. Dallas, Tex. ?
Mr. Butler. Yes, sir.
The CHAiRiiAN. Do you waive counsel ?
Mr. Butler. Yes, sir.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Lieutenant, were you with the intelligence division of the Dallas Police Department for a period of time ?
JSIr. Butler. No, sir; it was not called the intelligence division then.
Mr. Kennedy. What was it called at that time ?
Mr. Butler. Just special assignments detail.
Mr. Kennedy. Were you working on the racketeers and gangsters ? Was that your specific assignment?
Mr. Butler. Yes, sir.
Mr. Kennedy. Are you on that assignment at the present time?
Mr. Butler. No, sir.
Mr. Kennedy. How long have you been not working on that?
Mr. Butler. I have been assigned to juvenile work for the past 3 years.
Mr. Kennedy. But prior to that you were an expert in the field of racketeers and gangsters ; is that right ?
Mr. Butler. Yv^ell, that is
Mr. Kennedy. Well, you had worked on it ; hadn't you ?
Mr. Butler. Yes, sir.
Mr. Kennedy. And for the last 3 years you have been working on juveniles ?
Mr. Butler. Yes, sir.
Mr. Ivennedy. You were transferred into this juvenile work?
INIr. Butler. Yes, sir.
ISIr. Kennedy. Did you find in the mid-1940's that there was a group of gangsters that came from Chicago to try to take over the rackets in the city of Dallas and that area?
Mr. Butler. That is right, sir.
Mr. Kennedy. Could you tell the committee what you found in the course of your investigation and some of the individuals that were involved, and what they were trying to do ?
Mr. Butler. Well, in 1946, or 1945, there had been a change in ad- ministration in Dallas. The gang that ordinarily operated down there was run out, which left the gambling field and racket field wide
12520 IMPROPER ACTIVITIES IN THE LABOR FIELD
open. These boys from Chicago came in, looked the situation over, and decided that they wanted to take over not only Dallas but the whole State of Texas and the Southwest.
Mr. Kennedy, Who were some of the people that came in? Can you tell us that ?
Mr. Butler. The first man that came down that we got informa- tion about was Paul Roland Jones.
Mr. Kennedy. Who was Paul Roland Jones ?
Mr. Butler. He is a con man. He has been handled for murder. He has been handled for narcotics.
Mr. Kennedy. He has been handled ?
Mr, Butler. Well, he has been sent to the penitentiary for murder. That is a term we use in police work, handled.
Mr. Kennedy. He was convicted for murder; was he not?
Mr, Butler. Yes, sir.
Mr. Kennedy. And for narcotics?
Mr. Butler. Yes, sir.
Mr. Kennedy. And he had been pardoned on the murder charge?
Mr. Butler. That is right.
Mr. Kennedy. Out of a penitentiary in Kansas, was it ?
Mr. Butler. That is right, sir.
Mr, Kennedy, And he had come down to Dallas. Had he come originally from Chicago? Had he been associated with the gang- sters there ?
Mr. Butler. He had been associated with the Chicago people in black-market operations and counterfeit ration-stamp deals and things of that character during the war years.
Mr. Kennedy. Will you tell us what happened after that ?
Mr. Butler. He came down and put in a liquor store with the thought in mind of taking over the bootleg whisky running into Okla- homa, the adjoining dry State. We got onto him, and he sold his liquor store. Then a man named Marcus Lipsky
Mr. Kennedy. Wlio is Marcus Lipsky ?
Mr. Butler. He was a man from the Chicago area who we later found to have developed some milk unions there in the milk industry for the Capone people.
Mr. Kennedy. Was he also a well-known gangster in Chicago ?
Mr. Butler. Well, I had never heard of him prior to that. He was a supersalesman type of person, high pressure, a con man, a very smooth' operator. He could mix in any company, with all kinds of people.
He came down and got with Jones. They made a survey of Dallas and estimated that the rackets there would pay around $18 million a year. He goes back to Chicago and wants to get those people to O. K. him. By that he indicated that they would back him up financially, and with any manpower he may need should he run into resistance on this new enterprise that they had in mind.
Lipsky wanted tlie Mhisky, he Avanted the gambling, he wanted the slot machines, the coin machines, and he wanted the whole business, not only in Dallas but all of the Southwest.
Mr. Kennedy. What other States were specifically included in what they were going to take over?
Mr. Butler. They took over coin machine and amusement com- panies in Texas, Louisiana, and Arkansas.
IMPROPER ACTrV^TIES IN THE LABOR FIELD 12521
Mr. Kennedy. They were going to take over Arkanscas, also?
Mr. Butler. Yes, sir; they were operating in Fort Smith, Ark., a slot-machine and jukebox route up there which was very lucrative.
Mr. IvENNEDY. This was not just slot machines, but it was these pin- ball machines and, generally, coin-operated machines ?
Mr. Butler. Yes, sir.
Mr. Kennedy. You say he went up to Chicago to see if he could get this operation fmanced ?
Mr. Butler. Yes, sir. He made arrangements through a man known as Nick DeJolin. DeJohn, according to our investigation, was an arbitrator or acted as the judge in any disputes in the Capone gang at that time. When he O. K.'d Lipsgy and the boys up there put up the money for Lipsky to come into Texas and the Southwest, Nick DeJohn, in ejffect, serv^ed to guarantee the return of that money should anything happen. A little later on it developed that a gang war was about to break loose down there between Lipsky, who had brought in
Mr. Kennedy. ^Hio did Lipsky bring into Texas with him?
Mr. Butler. He brought Danny Lardino. Paul Labriola.
Mr. Kennedy. "VA-lio was Danny Lardino? Did you find out any- thing about him, what his background had been ?
Mr. Butler. Lardino had been associated, we found out, with the Capone interests for some time, and they sent him down here on a dual purpose : One, to keep track of Lipsky, and watch how he was running the show, and the other, of course, as a bodyguard to Lipsky.
!Mr. Kennedy. Was he known as a strong-arm man ?
Mr. Butler. He was known as a bodyguard down there; yes, sir.
Mr. Kennedy. Wlio were the other individuals ?
Mr. Butler. Labriola.
Mr. KJENNEDY. AMiat was Labriola ? Would you spell his name ?
Mr. Butler. L-a-b-r-i-o-l-a ; the first name is Paul.
Mr. Kennedy. Did he have a nickname ?
Mr. Butler, Needlenose ; yes, sir.
Mr. Kennedy. Needlenose ?
Mr. Butler. Yes, sir.
Mr. IvENNEDY. Paul "Needlenose" Labriola?
Mr. Butler. Yes. sir.
]Mr. Kennedy. AVlio was the other ?
Mr. Butler. James Weinberg.
Mr. Kennedy. Mr. Chairman, Labriola and Weinberg played very important roles in the investigation as it continues, and it is of con- siderable interest that they were down in Dallas, Tex., during this period of time, with Nick DeJohn and with Danny Lardino. They will play extremely important roles in our investigation.
Mr. Butler. Another member of that goon squad was "Marty the Ox," whose real name was, I believe, Martin Ochs. He was a well- known Chicago hoodlum. In all, there were about 20 members of that mob that came down into Dallas.
Mr. Kennedy. Did they set up this operation ?
Mr. Butler. They set up the operation ; yes, sir.
Mr. Kennedy. "\'\^iere did they live when they arrived there ?
Mr. Butler. Well, at that time, hotel space was at a premium, and they could not stay anywhere over 5 days at a time. They were stay-
12522 IMPROPER ACTIVITIES IN THE LABOR FIELD
ing at the Whitmore Hotel, and they stayed at a place called the Scott Hotel. Then there was a man named Sam Yaras.
Mr. Kennedy. How do you spell his name ?
Mr. Butler. Y-a-r-a-s, from Chicago. He had an apartment there. Occasionally, they stayed with him.
Mr. Kennedy. Is he the brother of Dave Yaras ?
Mr. Butler. That is right, sir.
Mr. Kennedy. Mr. Chairman, we have already had testimony about Dave Yaras in cennection with taking over of certain unions in the Miami area at the present time, and that he has also moved in, I believe, in some gambling in Cuba, has he not ? Do you have infor- mation along those lines ?
Mr. Butler. That is my understanding ; yes, sir.
Senator Curtis. Mr. Chairman?
The Chairman. Senator Curtis.
Senator Curtis. I would like to ask, Mr. Butler, did hoodlums and criminals move in and, if so, did they have any measure of success in infiltrating unions in the Dallas area ?
Mr. Butler. No, sir ; I would not think so.
Senator Curtis. Did they have any successs in moving into unions anyplace in Texas ?
Mr. Butler. No, sir.
Senator Curtis. Why didn't they.
Mr. Butler. Well, at that time, the gambling business was appeal- ing to them more than anything else.
Senator Curtis. What year was this ?
Mr. Butler. 1945 and 1946.
Senator Curtis. Have the criminal elements, such as described by the previous witness, Mr. Peterson — and you heard his testimony — have they at any time since been successful in moving into unions in Texas?
Mr. Butler. Not that I know of, sir.
Senator Curtis. Apparently, not on any large scale ?
Mr. Butler. That is right.
Senator Curtis. Why is it ?
Mr. Butler. Well, maybe it is the breed of men down there. They resent somebody trying to tell them what to do. There have been some fights from time to time. Somebody might start something and one of those Texas boys would peal his head with a club or something; so, so far, they have not had enough on the ball to get started.
Senator Curtis. And Texas does not permit compulsory unionism, do they ?
Mr. Butler. That is my understanding; that is right.
Senator Curtis. That is all, Mr. Chairman.
Mr. Kennedy. Did they appear to have a great deal of money when they were down there ?
Mr. Butler. Who is that ?
Mr. Kennedy. This group that moved in ; did they appear to have a great deal of money ?
Mr. Butler. Yes, sir; they had unlimited.
Mr. Kennedy. For instance, Weinberg and Labriola ; did they give any occupation ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12523
Mr, Butler. Well, they claimed to be clerks at the San Jacinto liquor store, which was run by this mob, but actually, they were living in a hotel suite at that time that cost them around $30 a day.
Mr. Kennedy. Would you tell us how it developed then, or what occurred ?
Mr. Butler. Well, when this pending trouble began to materialize between the Dallas group and this outside group
Mr. Kennedy. Was there any suggestion by this outside group as to how they were going to handle the Dallas group ?
Mr. Butler. Yes, sir. Lipsky's idea was to kill the four top gamblers in the Dallas area, put their bodies in a stolen car, and park the car alongside the police department, and let everybody know how tough he was, and that he would not stand for any foolishness down there.
Mr. Kennedy. Was that plan opposed by some of the other people ?
Mr. Butler. Yes, sir. Jones thought this was a foolish move. He ^ets on the phone and calls Nick DeJohn and tells him what Lipsky IS up to, and he suggests that he get Danny Lardino, Weinberg, Labriola, and Marty the Ox out of Texas.
Mr. Kennedy. If any killing was to be done, it was to be done by this group, Labriola, Weinberg, Danny Lardino, and the Ox?
Mr. Butler. Yes, sir.
Mr. Kennedy. And he suggested to Nick DeJohn, who was financing this whole operation, that he get the four individuals out of Texas back to Chicago?
Mr. Butler. John told Jones that he would have John call Danny back to Chicago.
Mr. Kennedy. John Lardino ?
Mr. Butler. John Lardino. And which was done. We did, about the same time, or just a few days after that instant, the police depart- ment rounded up possibly 20 of these characters and discouraged them as much as possible. So they liquidated their interest and got out of the State for a while.
Mr. Kennedy. Werethey also running down into Mexico?
Mr. Butler. Some of that equipment that they bought to operate in Texas they did move into Mexico. They set up a gambling deal down there.
Mr. Kennedy. With pinballs and jukeboxes ?
Mr. Butler. Yes, sir. And they also had a big crapgame down there. They had made a fix with some official. They ran into a little trouble there. Some of the politicians that were not in on the fix give them a big check for chips, lose $15 or $20 and cash the rest of the chips in and stick the money in their pockets. Of course, the chips weren't any good.
Mr. Kennedy. Was it Jones' idea, rather than to kill this other group, that he could make some deal down there with the officials?
Mr. Butler. Jones wanted to make a fix, and he tried to make a fix with the elected sheriff, Steve Guthrie. During this time, we con- ducted an extensive investigation into the whole setup, and, as a re- sult of that, we got Jones trapped and a man named Pat Mano, from Chicago, supposedly the fifth member of that group, who was going to bankroll Jones in his operation there. Incidentally, when the group effort fizzled out as far as Lipsky was concerned, they lost a good deal
12524 IMPROPER ACTIVITIES IN THE LABOR FIELD
of money. Nick DeJohn was called on to make this guaranty of his stand up, and he couldn't produce the money. We knew several weeks ahead of time that he was going to get killed. They finally did kill him.
Mr. Kennedy. Where did they kill him ?
Mr. Butler. He was finally located in San Francisco.
Mr. Kennedy. How did they kill him ?
Mr. Butler. They tied a wire around his neck and stuck him in the back end of a car. Incidentally, it was the same, identical way that Labriola and Weinberg were killed in 1954.
Mr. Kennedy. Labriola and Weinberg, who were also down there, were ultimately killed, also ?
Mr. Butler. In the same manner ; yes, sir.
Mr. Kennedy. By the wire around their neck ?
Mr. Butler. Yes, sir.
Mr. Kennedy. Is that an old, gangland way of disposing of friends ?
Mr. Butler. It apparently does not make much noise or attract too much witnesses.
Mr. Kennedy. Mr. Jones, who was down there, did he ultimately talk and expose a lot of these things to the police department ?
Mr. Butler. Well, sir, in this investigation we found out some of the moves that the gang had planned to make, and some of the busi- ness ventures that they were going to enter into. It developed that they were going to muscle into the Continental Press, the nationwide wire service. That happened just like he said it would happen.
Mr. Kennedy. He described what they were going to do; is that right?
Mr. Butler. Yes, sir. They would use this means to muscle into other communities, which was followed almost to a letter when they muscled into Miami, Fla. Another venture, of course, was their enter- ing into the labor unions.
Mr. Kennedy. Did he discuss their entrance into the labor unions ?
Mr. Butler. Yes, sir; that was one of their prime objectives at that time.
Mr. Kennedy. Would you describe what was said about that?
Mr. Butler. Well, he discussed many different angles of putting pressure on different companies and businesses. One of the things that he brought out was the fact tliat they were going to try to organ- ize or unionize every truckdriver in the Nation. He said, "Wien we do that, we can bring industry to its knees, and even the Government, if we have to." He was talking about different angles.
Mr. Kennedy. Did he indicate that that was the most important area — to get control of the truckdrivers ?
Mr. Butler. In the general conversation. For the most part, I let these people talk without pinning them down too much because when I did they would shut up.
Another way that they worked was in this waiters union that they used, and one of the gimmicks there was some of these racket boys would go into a higli-class restaurant and say, "We are going to sell you some meat. You are paying $1 a pound for this stuff, and we are going to charge you $1 .25, but it will be better meat."
Of course, the restaurant owner would be pretty well satisfied with what ho had, and tliey would run the man off, and tha next day, through these unions' control, the restaurant operator would not get
IMPROPER ACTIVITIES IN THE LABOR FIELD 12525
any linens, and he would not have any tablecloths or napkins. The racket boys would go back and say, "I still want to sell you that meat, and it has gone up to $1.50."
The man would run him off again, and finally this racket boy would have the union call and call all of his help out of the restaurant. So, eventually, he had to do business with them and that is just one phase of their activities, excessive charges on commodities that they used in the restaurants, and terror.
He claimed that the coin-machine business was theirs.
Mr. Kexnedy. Will you speak up a little louder?
Mr. Butler. They told me that they had control of the coin-machine devices, and one of their big gimmicks was the cigarette deal, that they put those cigarettes in liquor stores because they controlled the liquor business, and they would sell you cigarettes at a very cheap price by simply cutting the retailer, the liquor-store operator, out of his profits and telling him that he could use only cheap cigarettes as a leader to get people to come into his store. Most of them did.
Mr. Kennedy. Did they indicate what the value of all of these operations was going to be at any time ?
Mr. Butler. The Dallas Survey, according to most people, would run about $18 million a year. The wire-service deal that they planned to muscle in, and did muscle in by killing Kagan
JSIr. Kennedy. That was Kagan that was killed up in Chicago, was it, in 1948 or around then ?
Mr, Butler. I believe it was 1946 or 1947, or somewhere in there.
Mr. Kennedy. He had indicated just prior to that that he had expected to be killed ?
Mr. Buti.er. That is right. They said that this thing would run them $1 million a week, the wire service, which is a pretty fat thing.
Senator Church. Wliat is a wire service ?
Mr. Butler. It was the service that bookies used back when the country was wide open, and they would charge each bookie according to the volume of business that he did. All of them would get the same service, but a man who had 20 customers would not pay as much as a man that had 300 customers.
It depended on the size of the operation.
Mr. Kennedy. Did you ever learn anything as to who was responsi- ble for killing Kagan ?
Mr. Butler. Well, nothing that I could swear to. It was en- gineered by these people.
Mr. Kennedy. This same group down in Dallas ?
Mr. Butler. The same group that were behind this bunch, yes.
Mr. Kennedy. Wasn't Yaris involved in that ?
Mr. Butt^er. Dave Yaris, according to the information given out by these people was the man behind the killing, yes, sir.
Mr. Kennedy. Did they indicate what these enterprises would bring in in these other States they were moving into ?
Mr. Butler. No, sir. I never did hear any estimate give to that.
Mr. Kennedy. Just the $1 million a week for the wire services and then the $18 million in Dallas, Tex., alone, would indicate that it is a very profitable enterprise.
Mr. Butler. Yes, sir.
Mr. Kennedy. Now, Jones was arrested and was convicted was he not, for the attempt to bribe the sheriff?
12526 IMPROPER ACTIVITrES IN THE LABOR FIELD
Mr. Butler. That is right.
Mr. Kennedy. What was the sheriff's name ?
Mr. Butler. Guthrie, Steve Guthrie.
Mr. Kennedy. Did you have any more difficulty with Mr. Jones after that?
Mr. Butler. He was given a 3- to 5-year sentence and while he was out on appeal we got him for bringing in 57 kilos of opium from old Mexico, and he had previously told us that he was not interested in narcotics. Later on, it developed that they had some plans to have decisions handed down by certain judges that they controlled, which practically handcuffed the law-enforcement field in their fight against narcotics.
Mr. Kennedy. Danny Lardino was called back to Chicago by John Lardino through Nick de John, and Weinberg and Labriola were actu- ally there but he moved into this group.
Mr. Butler. Yes, sir, they were arrested.
Mr. Kennedy. And you put them out of Texas, is that right ?
Mr. Butler. That is right.
Mr. Kennedy. Now, Mr. Chairman, as I explained, this is the same Danny Lardino that subsequently went back to Chicago and took over this local and controlled it, and John Lardino is the one that runs and controls the biggest hotel and restaurant workers union in Chi- cago.
That is 10,000 members and both of them are still miion officials.
The Chairman. Are there any questions ?
Mr. Kennedy. Just in passing, did you request to be transferred to juvenile delinquency ?
Mr. Butler. No, sir. In 1955 I worked for Senator Kefauver on his investigation into juvenile delinquency and when I got back to Dallas they assumed I was an expert on the subject and transferred me there.
Mr. Kennedy. Was there also a man by the name of Mirro down there?
Mr. Butler. He was down there. They called him "Cowboy."
Mr. Kennedy. Do you know how he got the name "Cowboy" ?
Mr. Butler. No, sir ; I don't.
Mr. KJENNEDY. He also will be here in the course of our investiga- tions further on, Mr. Chairman. Mr. Butler, was Lou Schneider down there?
Mr. Butler. Yes, sir.
Mr. Kennedy. He was also down there ?
Mr. Butler. That is right.
Mr. Kennedy. Do you know what Schneider's position was ?
Mr. Butler. No, sir. They tell me that Lou Schneider was a pretty nice sort of person and he got in with those people and as soon as he did he realized he was over his head, and tried to get out, but he couldn't doit.
Mr. Kennedy. That is all.
The Chairman. All right. Are there any further questions ?
Mr. Kennedy. Was there anything else that you can think of ?
]Mr. Butler. No, sir.
The Chairman. Thank you very much. Lieutenant.
All right, do you wish to interrogate Mr. Peterson any further ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12527
Mr. Kennedy. Mr. Chairman, could I call Mr. Kelly who can put in the charter for local 658 ?
The Chairman. All riffht.
Mr. Kelly, come around.
You do solemnly swear that the evidence you shall give before this Senate select committee shall be the truth, the whole truth and nothing but the truth, so help you God ?
Mr. Kelly. I do.
TESTIMONY OF JAMES P. KELLY
The Chairman. State your name, and your address, and your pres- ent occupation.
Mr. Kelly. My name is James P. Kelly. I live in New York City and I am presently a staff investigator for the committee.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy. Mr. Kelly, have you gone through the books and records of the International Union of Hotel and Restaurant Workers ?
Mr. Kelly. Yes, sir ; I have.
Mr. Kennedy. And did you obtain a photostatic copy of applica- tion for charter for local 658 in Chicago ?
Mr. Kelly. Yes, sir ; I did.
Mr. Kennedy. Mr. Chairman, could I present that to the witness ?
(A document was handed to the witness.)
The Chairman. Please examine the photostatic copy presented to you by counsel and state if you identify it.
Mr. Kelly. Yes, sir ; I do. I had this photostat made when I was Cincinnati, at the office of the Hotel and Restaurant and Bartenders International Union, the first week of June of this year. It is an appli- cation for charter of affiliation to the Hotel and Restaurant employees and Bartenders International Union.
It is dated March 7, 1950, Chicago, 111., and the name of the organi- zation is the Drug Store, Soda Fountain, and Luncheonette Employees Union, and the address is 10 North Wells Street, Chicago, 111. It is for local 658. The charter is dated March 8, 1950.
The Chairman. Could you tell us whether Mr. Danny Lardino's name appears there ?
Mr. Kelly. Mr. Danny Lardino's name witli the address, 10 North Wells Street, Chicago, 111., appears as secretary, and the international vice president, James Blakely, appears as organizer with the address 10 North Wells Street, Chicago, 111.
There were 25 applicants on the original charter and it is interesting to note that of the names mentioned, Danny Lardino is listed as appli- cant No. 6, and he is the only one for whom no occupation is listed. He gave his address at that time as 4875 North Magnolia.
The Chairman. That may be made exhibit No. 13A.
(The document referred to was marked "Exhibit No. 13A" for ref- erence and will be found in tlie appendix on p. 12855.)
Mr. Kennedy. Blakely, who appears on this local as an organizer, what is his position at the present time ?
Mr. Kelly. He has several positions, Mr. Kennedy. He is the sec- retary-treasurer of local 593.
Mr. Kennedy. That is the largest local ?
21243— 58— pt. 33 3
12528 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kelly. Yes; the largest local in the joint executive board in Chicago and he also has been, since 1947, an international vice presi- dent of the fifth district which covers Chicago, 111.
Mr. Kennedy. He was an international vice president at the time that he appeared on this local application charter as an organizer ; is that right?
Mr. Kelly. That is right.
Mr. Kennedy. And it would appear therefore, that he was the one that sponsored this ?
Mr. Kelly. Well, Mr. Duffy and I had a conversation with Mr. Lardino in our office in Chicago
Mr. Kennedy. He will be a witness later on, and so you need not testify.
Senator Curtis. This Danny Lardino as secretary and James Blakely as organizer, they are the same individuals that have been previously mentioned today in the hearings ?
Mr. Kelly. Yes, sir ; they are.
Senator Curtis. Have you investigated this list of applicants to find out whether they were genuine employees and applicants?
Mr. Kelly. Not each individual one ; no, sir. Senator.
Senator Curtis. Did you investigate some of them ?
Mr. Kelly. No, sir.
Senator Curtis. This charter was granted ?
Mr. Kelly. The charter was granted.
Senator Curtis. By whom ?
Mr. Kelly. By the international in Cincinnati.
Senator Curtis. And by the president or by an executive board, or how was it granted ?
Mr. Kelly. Well, usually the approval is given by the interna- tional vice president, and in this case Blakely in District 5 in Chicago, and it is usually on his recommendation to the international that final approval is given.
Senator Curtis. Blakely files an application before himself and then approves it ?
Mr. Kelly. I don't know whether it exactly works that way. Sena- tor, but Blakely in this particular instance on the application for local 658, does appear as the organizer for it.
Senator Curtis. How long has Blakely been a vice president ?
Mr. Kelly. Since about 1947.
Senator Curtis. How does he get that job ?
Mr. Kelly. By election.
Senator Curtis. Was he elected ?
Mr. Kelly. I believe he was ; yes, sir.
Senator Curtis. When ?
Mr. Kelly. In 1947 there was a convention at that time, I think, in Milwaukee, Wis.
Senator Curtis. Who was the head of the international union at that time ?
Mr. Kelly. At that time I believe Mr, Hugo Ernst was president.
Senator Curtis. Is he still president ?
Mr. Kelly. No ; he is deceased.
Senator Curtis. Who is president now ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12529
Mr. Kelly. Edward Miller.
Senator Curtis. And so Blakely served as vice president under both Ernst and Miller?
Mr. Kelly. Yes, sir.
Senator (Curtis. Has he ever been elected since 1947 ?
Mr. Kelly. I believe there was another election since then, and I do not exactly have the data on that.
Senator Curtis. You do not know whether he had any opposition ?
Mr. Kelly. I do not believe he had opposition in 1947, and I think, if I recall correctly, from what I read in Cincinnati, there was a ballot cast for him, one ballot cast for him, and I don't think there was opposition at that time.
As a matter of fact, in his position as secretary-treasurer of local 593, there is indication that he has not been opposed for that office either.
Senator Curtis. Have they ever had elections in that local?
Mr. Kelly. As far as I can see.
Senator Curtis. Now, President Miller, is he acquainted with James Blakely?
Mr. Kelly. Yes, sir, and at one time now President Miller held the position that Mr. Blakely held in District 5.
Senator Curtis. Mr. Miller is from Chicago ?
IMr. Kelly. He is from Kansas City, and he was connected with local 20 of the Bartenders Union in Kansas City years ago.
Senator Curtis. Was there anything about your investigation that caused you to believe that Mr. Miller knew of the type of character that Daniel Lardino and James Blakely were?
Mr. Kelly. There is nothing from the direct investigation that kould indicate Mr. Miller did or did not know what their characters were except that available reports on the activities of this union in Chicago were made available to him as president of the international union.
Senator Curtis. When is that?
Mr. Kelly. Throughout the years, from the time he became inter- national president and when he was vice president he was aware of the general situation in Chicago.
Senator Curtis. That is all at that point.
The Chairman. I believe that application was dated March 7, 1950, and the charter was granted the following day, on March 8?
Mr. Kelly. The charter was dated March 8, which would be the following day.
The Chairman. It would be the following day and there was not much investigation, if any, made regarding the application for the charter.
Mr. Kelly. As I said. Senator McClellan, the investigation and recommendations usually are made by the international vice president of the district.
The Chairman. The international vice president of the district was the one that really set this up ?
Mr. Kelly. Evidently.
The Chairman. Apparently so, because he listed himself as organ- izer in this application.
Mr. Kelly. That is correct.
12530 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. And the application received his endorsement and there was quick action taken and the charter was issued the following day.
Mr. Kelly. It appears that way. The photostat that I have here sliows that.
Senator Curtis. Mr. Chairman, I do not know whether this witness can provide me with the answer or not, but I would like to know what remedy employees who had to join that union, or employers involved in the contract, what remedy they have to rid themselves of this situation of paying tribute to a union that obviously, is organized and dominated and run and looted by criminals.
Mr. Kelly. It appears to me. Senator, that the employees' choice in these cases is sometimes limited.
Senator Curtis. I mean after they are in.
Mr. Kelly. Pardon me ?
Senator Curtis. I mean after they are in. Here the employer signs a contract and maybe he did it with fear and maybe he believed it to be a legitimate union, and maybe he was in collusion with them, with the criminals, I do not know. But I am talking about an em- ployer, we will say a drug store and these people who work there and work for a living find that they are all in the clutches of this union. Wliat is their remedy at law ?
Mr. I^LLY. I am not familiar with their remedies at law. Their remedy would appear to me. Senator, to be in the election of the officers for their union. Now, as far as I know, Dan Lardino was appointed to this position as secretary by Mr. Blakely.
Senator Curtis. Of course, is it reasonable to anticipate that men of this character are going to conduct a union meeting that is open and aboveboard and give the members a free chance to choose ?
Mr. Kelly. Are you asking my opinion on this, Senator ?
Senator Curtis. I do not mean to ask the witness.
Mr. Kennedy. He can answer anything, but we are getting into what his opinion is, and I do not know, we will have some experts on that.
The Chairman. He may state his opinion from the experience that he has had investigating, for whatever it is worth, if he knows.
Mr. Kelly. For what it is worth, my opinion in this regard is that sometimes the members have the recourse of appearing at meetings and voicing their opinions. I have no direct evidence as to what happened in this particular union, in local 658 as far as elections were concerned.
Wliether or not the members of the union at any time voiced their opposition to the particular officers, I do not know.
Senator Curtis. I ask these questions to raise them in the record, and certainly not to ask the impossible from a staff member.
Mr. Kennedy. I understand that, but I did not know whether we wanted to get in the position of having staff investigators testify as to their opinions on matters such as this where we will have experts.
Senator Cuktis. I regard the staff as experts.
The Chairman. Of course the staff comes to some opinion, no doubt, in the course of their investigations, and that is a matter of individual opinion. What one person's remedy might be, might not be that of another.
IMPROPER ACTIVITIES EST THE LABOR FIELD 12531
The important tiling is to develop these facts and develop the practices that are being engaged in, and the conditions that prevail, and then it evolves upon the Congress to find a remedy and by hiw to correct these conditions insofar as we can do so.
Senator Curtis. I think in other instances this committee has received evidence where a criminal element have run a union and if some member protested in the union he may have had his head bashed in. If he went to court, he might be expelled from the union because he did not proceed through union channels. He does not have too much of a remedy and it is one of the problems this committee has.
The Chairman. That is correct. Judging from the character of these folks, and what has been testified to, I assume if one attended a meeting and raised his voice, he would be incurring some risk, at least, in doing so.
All right, proceed.
Mr. Kennedy. Now, Mr. Chairman, we have discussed local 593 and local 658, and I would like to go to another union of the Hotel and Restaui'ant Employees Union in Chicago, and that would be local 450 of the same international.
TESTIMONY OF VIRGIL W. PETERSON— Resumed
INIr. Kennedy. Did you have any information indicating if there were any gangster infiltration into local 450?
Mr. Peterson. It is our information and quite common knowledge that the dominant influence back of local 450, and this influence prob- ably originally organized this union, was Claude Maddox, alias John Edward Moore, but actually his real name is John Edward Moore, and he has used the name of Claude Maddox.
Mr. Kennedy. And this local 450 is the Hotel, Club, Restaurant Employees and Bartenders International Union in Cicero, 111., is that right i
ISir Peterson. That is right.
Mr. Kennedy. Now, who is Claude Maddox, Mr. Peterson?
Mr. Peterson. He has a long criminal history. He was born in St. Louis, January 26, 1901, and in fact, he died just 2 weeks ago last Saturday, I think it was, in June of 1958.
Mr. Kennedy. I would like to say there, Mr. Chairman, that Mr. Maddox was under subpena to appear before the committee, and he was to have appeared today as a witness but died about a week ago, is that right ?
Mr. Peterson. That is right, and I think it was 2 weeks ago Satur- day, if my memory serves me correctly.
Mr. Kennedy. He also had a very nice wake, did he not ?
Mr. Peterson. That is right.
Senator Church. Did he die of natural causes?
Mr. Peterson. Yes, sir; natural causes and, in fact, I think his wife was watching television and he was asleep in the bed and died a very peaceful death.
Senator Curtis. Is that a natural cause for a hoodlum to die, or an unnatural death?
Mr. Peterson. In view of his background, I would say it could be considered an unnatural death.
Senator Curtis. Maybe "unusual" is a better term.
12532 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Peterson. Yes, sir.
Mr. Kennedy. Would you give us the background of this individ- ual who controlled local 450 ?
Mr. Peterson. When he was quite young, while he was still in St. Louis, he remained there the first few years of his life ; he was a member of a notorious criminal organization known as Egan's Rats. That was in St. Louis.
His first arrest record was in 1919 on a burglary charge. On Au- gust 5, 1919, he was sentenced to 1 year in the workhouse for burglary following a plea of guilty to petty larceny in St. Louis.
On July 10, 1920, he again received a 1-year sentence in the work- house on a robbery charge, after a plea of guilty to petty larceny, in St. Louis.
Information indicates that he came to Chicago early in the 1920's and he became affiliated with the Capone gangsters and some of the most notorious criminal elements in Chicago. In fact, on December 27, 1922, 3 men were arrested by the police following an attempt on November 18, 1922, to rob 2 safes in the Waitere Association Club rooms at 105 West Madison Street, Chicago.
The men charged with burglary on that occasion were Claude Maddox, of 1340 West Madison Street, and Joseph Lafertv, of 17 North Ann Street, and P. J. Dwyer, of 123 South Wood Street.
Dwyer, as a matter of fact, had been arrested 3 years earlier as a suspect in the Charles Stillwell dancehall murder, and Laferty had been arrested in connection with the Dearborn Station mail robbery earlier.
On December 1, 1923, Claude Maddox was indicted by the Cook County grand jury, in indictment No. 30259, for burglary, jointly with John Laferty and Pat D^vyer. That was a result of the at- tempted robbery or burglary of this Waiters Association.
Our observers' report, dated June 5, 1923, indicates that this case was stricken off with leave to reinstate because the witnesses could not be located. The witnesses could not be located, and, naturally, there was nobody to testify in the case. We have another report in our files relating to an incident which happened at 10 : 50 a. m., on November 4, 1924, when John Mackey, Anthony Caissane, a notorious gangster in Chicago at the time, and Claude Maddox, together with another unknown man, were riding in a car in front of 405 South Hoyne Avenue, when they were ambushed by another car, shotgun slugs fired into the place.
Mackey, as a matter of fact, who was driving the car, was so severely wounded from these gunshot wounds that he died en route to the hospital. Caissane and Maddox tried to flee from this obvious, at- tempted gang killing, but they Avere injured. They hurt their ankles in some fashion, and the police were able to pick them up. Caissane admitted to the police that the cause of the shooting stemmed from a fight between two rival alcohol-running gangs, and each gang was out to get the other.
Several years later Chicago was the scene of perhaps one of the most bizarre, notorious crimes in America, known as the St. Valen- tine's Day massacre, on February 14, 1929.
You are probably familiar with the facts in this case. But Capone gangsters dressed as policemen entered a garage at 2122 North Clark Street in Chicago, the headquarters of the old "Bugs" Moran gang.
IMPROPER ACTIVITIKS IX THE LABOR FIELD 12533
The gangsters were dressed in the uniforms of policemen. They told these other hoodlums that they were under arrest, to hold their hands up, to face the wall, and then they mowed them down. There were seven of them killed in this fashion.
During the investigation of this massacre, the police ran down the trail of a burned automobile, which the police were confident figured in the St. Valentine's Day massacre. This automobile was found in a garage at 1923 North Wood Street. The garage owner claimed that it had been rented by a man giving the name of Rogers, and an ad- dress of 1859 "West Xorth Avenue, which was found by the police to be vacant. Plowever, this was just two doors away or a door away from the old Circus Cafe, which at that time was owned by Claude Maddox and was the headquarters of what was known as the Circus Cafe gang. At that time, to show you the reputation of Maddox, who, incidentally, was a primary suspect in this case, he was known and was referred to constantly as the friend and ally of ''Machinegun" Jack McGurn, who was, one of the principal gunmen for the Capone
Several weeks earlier, the police, in a raid, had found Maddox hiding in a basement at this North Avenue address, and right near him were found parts of a machinegun. Incidentally, he was ar- rested in connection with this St. Valentine's Da)^ massacre as a sus- pect, but he had an ironclad alibi and was released in connection with that.
On October 12, 1930, Claude Maddox was again arrested in the com- pany of George "Red" Barker and William "Three-Finger Jack" ^Yllite, by Lt. William Blau and other officers of the State attorney's office. They were seized while sitting in an automobile a few doors away from the Capone's Cicero headquarters on West 22d Street. In the car were found a couple of revolvers.
Mr. Kennedy. Red Barker and Three Finger were close associates of certain union officials of the Operating Engineers?
]Mr. Pp:tersox. That is right.
Mr. Kennedy. We had some testimony about them at an earlier hearing.
Mr. Peterson. That's right. They were very active in labor rack- ets at that time. On June 26, 1931, the press carried accounts of the fact that the Chicago police, that is, from members of the detective bureau, arrested five men when they were released from the DuPage County jail in Wheaton, where they had been arrested on prohibition charges.
The police arrested these 5 men, and they were all close associates, who were, of course, Claude Maddox; "Tough Tony" Capezio, who was, incidentally, also a member of the Circus Cafe gang and was sus- pected with Maddox in the St, Valentine's Day massacre; Rocco De- Grazio, who lived at 145 West 21st Place; Louis Stacey, a well-known hoodlum from Cicero, 111.; and a fellow by the name of John Purdy. In 1931, information indicated that Maddox was then playing a lead- ing role in the invasion of the Chicago Teamsters Union by "Chicago Red" Barker and William J. "Three-Finger Jack" "^Vhite.
Police Officer James McBride, of Bellewood, stated, and I quote:
I had arrested "Three-Finger Jack" White in a roadhouse where he had killed my partner. I was, of course, to be the chief witness against him when the trial came. But, shortly before the trial started, I was shot by Johnny Moore.
12534 IMPROPER ACTIVITIES IN THE LABOR FIELD
He fired on me with a sawed-ofE shotgun, blasting me through a window as I sat in a streetcar.
In fact, part of McBricle's jaw was shot off. 'Wliite was later ac- quitted in the trial, but he was later murdered, himself, in an Oak Park apartment by members of the syndicate, that is according to the infor- mation, who could not handle him. On June 30, 1921, the State nolle prossed a case against Maddox, for the shooting of McBride, when a 20-year old girl, Gretchen McDonald, of 422 South 20th Avenue, May- wood, 111., refused to identify Maddox as the person she saw shoot Officer McBride. Our observers' report contains an account of this trial, and it quotes Prosecutor Walker Butler, who, incidentally, is now a very fine judge in Chicago, Walker Butler making this statement to the court at that time.
He says :
Your Honor, this is just another case of gangland's successful intimidation of a witness. The State is helpless under the circumstances.
It appeared that Butler had called the witness to the stand, and he asked her why she had changed her testimony. She had previously identified Maddox. During 1930, Maddox became active in the Cicero, 111., headquarters of the Capone gang, and in the latter part of 1935 he was again picked up as a suspect in the St. Valentine's Day massacre case because of additional information which, I believe, was obtained from the Federal Government at that time, and he again, of course, furnished an alibi for the St. Valentine's Day massacre. But at that time, in 1935, when he was arrested, he was operating a tavern at 2241 South Cicero Avenue, and it was common understanding among police officials, newspaper officials, and others at that time, that Maddox had organized Local 450 of the Hotel, Club, Restaurant Employees and Bartenders Union. There were indications that Maddox was assisted in this matter by Frank "the Enforcer" Nitti, Murray Humphreys, Louis Romano, who was head of Local 278 of the Bartenders Union in Chicago, in establishing control over local 450.
On May 5, 1943, Danny Stanton, a well-known Capone hoodlum, was slain in a tavern at 6500 South May Street, in Chicago.
Mr. Kennedy. Stanton was the one who was the friend of Blakely?
Mr. Peterson. That is right. And Maddox was sought by the police at that time as a keyman in connection with the investigation. Capt. Patrick Collins, of the police department, and Assistant States Attorney Francis McCurrie stated publicly that Stanton had refused to take any orders from or surrender any of his powers to John Edward Moore, alias Claude Maddox, who had recently been placed in charge of labor-union control by Paul Ricca and Louis "Little New York" Campagna.
That was the statement made by those two officials at that time. Press reports indicated or alleged that Maddox was then attempting to take over the checkroom attendants' union which up to that time had belonged to Danny Stanton. Claude Maddox, in Cicero, has operated a place called the Turf Club, and his associate, Joseph Aiup- pa
Mr. Kennedy. Joseph Aiuppa is also an important figure in the course of this.
IMPROPER ACTIVITIES EST THE LABOR FIELD 12535
Mr. Petersox. Yes, alias Joey O'Brien; he is a notorious hoodlum who has figured very prominently in syndicate gambling activities and other activities in Cicero. In fact, there was positive testimony and evidence concerning a handbook that he operated at 4831 West Cermak Road a few years ago. I think the records showed that his income from that handbook annually was in the neighborhood of $1 million.
That is a matter of testimony in the old Kefauver committee hear- ings. Claude Maddox, Joseph Aiuppa, and Robert Ansoni have also been associated together in an outfit or a business manufacturing concern, called Taylor & Co., which manufactures gambling-house equipment.
Equipment from this firm has been shipped all over the United States to various gambling casinos. On January 26, 1956, five part- ners in Taylor & Co., of 4848 West 25th Street, Cicero, were convicted in Federal court, based on an indictment which charged that these defendants had shipped gambling equipment in interstate commerce from Chicago to Pennsylvania in violation of the Johnson Act.
Included in the indictments and convicted at that time, on January 26, in addition to the other two individuals, were Claude Maddox, Joseph Aiuppa, and Robert J. Ansoni. Following their convictions. Federal Judge William J. Campbell sentenced each defendant to serve 1 year and 1 day in Federal prison and to pay a fine of $1,000 and costs. These cases were appealed, but they were upheld on appeal, and the men went to prison.
On January 22, 1955, Claude Maddox's daughter was married. Among those present at the reception were Paul "the Waiter" Ricca, Tony Arcardo, Joseph Aiuppa, Robert Ansoni, Mike Spranse, John Arcardo, Leonard Patrick, and numerous others. And cars bringing guests to the reception bore license plates issued to, in tlie first in- stance, the Produce Drivers' Union, Local 703, 216 South Ashland Ave- nue; to the Hotel, Club, Restaurant Employees, and Bartenders In- ternational Union, Suburban Local 450, 2137 South Cicero Avenue, Chicago; Picture Frame Workers Union, 731 Southwestern Avenue, Chicago, Joseph lello, operator; and to the International Hodcarriers Union, 814 West Harrison Street, Chicago, 111.
We received information in 1953 to the effect — and we gave this report to the police and to the Senate investigating committee and others — that Claude Maddox allegedly was receiving $10,000 a month from certain unions, including local 593, and that in this deal were also the two Lardino brothers, Johnnie and Dan Lardino.
Mr. Kexxedy. This individual that you just described is the indi- vidual that information indicates controls local 593 ?
Mr. Peterson. That is correct.
Mr. Kennedy. This, Mr. Chairman, is a copy of his police record.
Maddox is also known as Screwy, is he not ?
Mr. Peterson. Yes. John Edward "Screwy" Moore. The real name is John Edward Moore, but he is known more frequently under the name of John Maddox.
The Chairman. Is he also known as John Manning?
Mr. Peterson. I have never heard that. It may be.
Mr. Kennedy. Can Mr. Kelly put this in?
12536 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OP JAMES P. KELLY— Resumed
The Chairman. Mr. Kelly, you have the criminal record of this man Moore or Maddox ?
Mr. Kelly. Yes, Mr. Chairman.
The Chairman. You may state what it is.
Mr. Kelly. He is known as John Edward Moore, also known as Claude JSIaddox, also known as Screwy Moore, also known as John Manning.
Mr. Kennedy. Just give the highlights.
The Chairman. Do you have there his criminal record ?
Mr. Kelly. Yes, sir.
The Chairman. That record may be made exhibit No. 14 for ref- erence,
(The document referred to was marked "Exhibit No. 14" for refer- ence and may be found in the files of the Select Labor Committee.)
Senator Curtis. Mr. Chairman?
The Chairman. Senator Curtis.
TESTIMONY OF VIRGIL PETERSON— Resumed
Senator Curtis. Mr, Peterson, do you have an estimate of what has been tlie total take of money, both from the collection of dues, the shakedowns and extortions, the blackmail, by gangster-dominated un- ions in the Chicago area ?
Mr. Peterson. I wouldn't be able to make it. Any estimate along that line would be strictly a guess. Just like the cost of crime, it is very
Senator Curtis, It is very sizable, is it not ?
Mr. Peterson, It would be very substantial, surely.
Senator Curtis, Even on the period of an annual basis or a month- ly basis, it would still be a sizable amount ?
Mr, Peterson, That is right.
Senator Curtis, And that would be true of any reasonable guess that ■would have considerable substantiation ?
Mr, Peterson. That is right.
Mr. Kennedy. Mr. Chairman, we have talked about 596 and 358. I would like to have Mr, Kelly put on the stand to testify as to what the international records show as to who received the charter for local 450.
TESTIMONY OF JAMES P. KELLY— Resumed
The Chairman. Mr. Kelly, I hand you a photostatic copy of a document purporting to be an application for a charter,
I will ask you to examine this document and state if you identify it.
(The document was lianded to the witness,)
Mr, Kelly, Yes, sir, I do.
The Chairman, Wliat is it ?
Mr, Kelly. It is a pliotostatic copy of an application for charter of affiliation with the Hotel and Restaurant Employees and Beverage Dispensers International Alliance. It is dated in Cicero, 111., August 12, 1935, for Local Union 450, Bart^inders Union, 6O291/2 West Roose- velt Road, Cicero, 111.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12537
The Chairman. What date was the charter issued on that appli- cation ?
Mr. Kelly. There are several rubber stamps here, Mr. Chariman. It was received August 13, 1935 ; that would be the international stamp. There is a date that it was answered on August 13, 1935.
There is a notation on the side 12 books and initiation stamps August 12, 1935, which would mean that the initiation books and the stamps were prepared for the local on the dates the application for a charter was made out.
The secretary on this charter application is Joseph Aiuppa.
Mv. Kenxedy. That is the same individual, is it not, that we have been discussing here ?
Mr. Kelly. Yes, sir.
Tlie CiiAiRMAx, Let this be made exhibit No. 15.
(The document referred to was marked "Exhibit No. 15" for ref- erence and will be found in the appendix on p. 12856.)
JNIr. Kennedy. Mr. Kelly, you attempted to subpena Mr. Aiuppa, didyounot?
]\Ir. Kelly. Yes, sir, that is correct.
]Mr. Kenx-edy. Mr. Aiuppa, Mr. Chairman, is one of our missing witnesses in Chicago, who has avoided being subpenaed.
Mr. Kelly, could you tell us if you went to Mr. Aiuppa's home and tried to contact him ?
Mr. Kelly. Yes, sir, I did, in company with another staff member of the committee, Mr. Gosch, on the 14th of June of this year, I went to Mr. Aiuppa's home at 4 Yorkshire Drive in Elmhurst, 111. The purpose of seeing him was to serve him with a committee subpena.
Air. Kexxedy. Would you tell us what happened ?
Mr. Kelly. Well, as we approached the house, we parked the car, we had a Government car, we parked the car down the road on York- shire Drive. As we approached the house, a man wearing working clothes came out from the side of the house and approached us. As we came up the road, we could see a person that I recognized as Joey Aiuppa, standing in the rear of the yard, patting a dog on the head. He had a fenced-in kennel in the back yard. He was patting the dog on the head. We came up to the front of the house, there was a circu- lar driveway, and this person dressed in working clothes came over and asked if he could help us. We told him we would like to see Joey Aiuppa. He said Joey was out in back. He said, "He is going out. He has an important engagement. He is in a hurry. I will tell him you want to see him."
He called in through an open window to a maid inside, and said, "Carlene, tell Joey that these two men want to see him."
At that point, Mr. Gosch and I waited up by the front door. Inci- dentally, they had this one-way mirror glass paneling in the front door.
Mt. Kexxedy. You could look out but you could not look in ?
Mr. Kelly. You could not look in. You would see your own reflection. We waited a few minutes by the door, and this person in the working clothes went back around the corner of the house. Within a very few minutes he came back out with an entirely different expres- sion on his face and said "Joey isn't home, fellows. Is there anything we can do for you ? "
I said "Look, we saw Joey in the backyard as we came in here. You just told us that he was in the backyard and he was home."
12538 IMPROPER ACTIVITIES IN THE LABOR FIELD
I said "I am from the Government, and I want you to tell Joey that we want to talk to him, and we want him to come out or let us come in."
So the maid came to the window and I said "Carlene, I want you to tell Joey to come out and see us. Tell him we are from the Govern- ment."
She said "I don't think he is in, but I will go see."
She disappeared, and she came back in a few minutes and she said "He said he isn't in."
So this man said he was the gardener and cautioned me not to step on his geraniums. I had a conversation with Mr. Gosch and decided to bring the Government car up, and if Joey had an important en- gagement we would wait for him. We parked in front in the car, and as we sat there, I could see this man who identified himself as Mario, having a conversation with someone other than the maid through the window. Mario was rather excited, waving his arms, trying to say something. We brought the car back up and parked it out in front where they could see it. At this point, Mario came out and went over to a car that was parked alongside the house. At this place, the new toll road is going through and there is a bank that extends perhaps 25 or 30 feet, from the side of his home down to the toll road. There were two cars, parked there, one 1957 Ford which Mario had told us he owned, and another 1951 Ford, which he said he didn't know who owned it or who it belonged to.
He got into the 1957 Ford and he started to drive slowly out the driveway. I went over to him again and said, "Look, Mario, we are from the Government. I will show you my credentials again. I want you to try and tell Joey that we want to see him for a few minutes, that it is important. We are not going to take up much of his time."
He said, "Look, fellows, why put me in the middle ?"
With that he drove off. At this point I had another conversation with Mr. Gosch and decided that it was quite possible when we were out of sight of the house getting our car, Joey might have hidden himself in the trunk, as he was mighty anxious to get out.
So I said to Mr. Gosch, "Tail him for a while. He is driving very slowly and maybe he doesn't want to jounce him around. I will wait down here among the trees where he can't see me, and if he tries to bring out the other car, I will try to intercept him."
At this point, Mr. Gosch took off in pursuit of Mario. I waited in the trees in a position where I could see the house. Wlien Mario got out of siglit, the little 1951 came bouncing down the driveway. So I was walking up the road with my credentials in one hand and the subpena in the other and I saw this man that was drivin^^ the car had no intention of stopping. I just got out of the way in tmie. As he went by, he looked up and looked at me, yelled something un- intelligible, but T could see his face clearly, and it was Joey Aiuppa.
He made the turn and went down the road toward Roosevelt Eoad. That was the last I saw of him.
Mr. Kennedy. Did he swerve at all ?
Mr. Kelly. No, sir.
Mr. Kennedy. Was he actually picking up speed?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12539
Mr. Kelly. He was picking up speed as he came out of the drive- way. He did not slow down to make the turn. He just about made the turn.
Mr. Kennedy. He did not attempt to miss you at that time?
Mr. Kelly. He didn't attempt to miss me. He was in the middle of the road, not on the right or left but in the middle.
Mr. Kennedy. And we haven't seen Mr, Aiuppa since that time?
Mr. Kelly. No, sir.
The Chairman. Have you asked the help of officers out there to serve the subpena ?
Mr. Kelly. Yes, sir.
Mr. Kennedy. Mr. Aiuppa has a criminal record; does he not?
]\Ir. Kelly. Yes ; lie has.
Mr. Kennedy. Did you also find that John Edward Moore was a member of that local 450 ?
Mr. Kelly. In the investigation that I made of the records in Cin- cinnati in the early part of June, the first week in June, I went throuffh the membership initiation, with withdrawal, et cetera, of local 450, from the period of its charter to about 1947.
I found one John Edward Moore, and he was initiated into the union in February of 1941. This was approximately a month before the international convention in Cincinnati, Ohio, that year.
Mr. Kennedy. Did Mr. Moore attend the convention in Cincinnati?
Mr. Kelly. The records indicate that he did, although not as John Edward Moore.
Mr. Kennedy. But he did attend the international convention in 1941?
Mr. Kelly. Yes, sir; and attended the convention in 1947, in Mil- waukee.
Mr. Kennedy. This is the same individual we have been discussing ?
Mr. Kelly. Yes, sir.
Mr. Kennedy. That is locals 593, 658, and 450; now I would like to go to local 278 of the same union.
TESTIMONY OF VIRGIL PETERSON— Eesumed
Mr. Kennedy. Do you have any information that Local 278 of the Hotel and Restaurant Workers Union is controlled or has been infil- trated by hoodlums or gangsters ?
IVIr. Peterson. Local 278, Chicago Bartenders Union, is located at 10 North Clark Street.
Mr. Kennedy. Bartenders and Beverage Dispensers Union ?
Mr. Peterson. Yes. That has a long history with reference to hoodlum infiltration. In 1935 Frank Nitti attempted to gain control over 278. At that time, we had — not at that time, but later, there was some J:estimony given by a George V. McLane, who was the head of local 278, and in his testimony also before two different hearings, both master in chancery and before a grand jury, he told of his con- versations with Nitti in 1935. At that time, Nitti was trying to take over local 278. Nitti told him that he placed George G! Browne as presiden of the International Alliance of Theatrical Stage Employees and Motion Picture Operators. As a matter of fact, Nitti, together
12540 IMPROPER ACTIVITIES IN THE LABOR FIELD
with Paul Ricca, Phil DeAndre, Paul Joey, Nick Deane, and a number of others, were convicted. They had taken over control of that union and were convicted in 1943 in connection with a million-dollar extor- tion from the movie-picture industry.
So he was not idly boasting when he said he put Browne in charge of that union. He also was not boasting ^vhen he said he placed Mike Carroza as Chicago czar. He also made George Scalise presi- dent of the Building Service Employees International Union. As you undoubtedly recall, Scalise was sent to prison for looting this union treasury.
During the early months of 1935, according to testimony, or accord- ing to the testimony of George McLane, he received a telephone call in the union headquarters from Danny Stanton, who has been men- tioned earlier today. Stanton wanted $500 from McLane to go to the Kentucky Derby, and said he would send over 2 men to pick up the money.
Mr. Kennedy. What was McLane's position at that time?
Mr. Peterson. He was the president, as I recall, of local 278. He was the official in the union. McLane replied that he had no right to give out union funds. However, a half hour later, according to McLane's story, two men came over to pick up the money, and McLane refused to give it to them.
They then called Danny Stanton, and Stanton told McLane, ac- cording to his testimony, "You son of a so and so, we will get the money and take the union over."
Two or three weeks later, according to McLane's testimony, he was contacted by an emissary of Nitti, who said he wanted to see him at the LaSalle Hotel. At this meeting, Mr. McLane mentioned the problem of Danny Stanton, his previous contact with him, and Nitti said, "The only way to overcome this is to put one of our men in as an officer."
McLane replied that this was impossible, and Nitti said, "We have taken over other unions. You will put him in or get shot in the head."
According to McLane's testimony, his next contact with this Capone group was at the old Capri Restaurant on the third floor of 1232 North Clark Street. He said present at this meeting were Frank Nitti, Murray "the Camel" Humphreys, "Little New York" Cam- pagna, Paul "the Waiter" Ricca, Joe Fusco, and Jake Guzick. Nitti called McLane over to his table in this restaurant and told McLane that he had to put his man in as an officer of the union. McLane re- plied that this was impossible as he had to have the approval of the executive board, and the man had to be a member of the union.
Nitti replied, "Give us the names of anyone who opposes, and Ave will take care of them. We want no more playing around. If you don't do what we say, you will get shot in the head. How would your wife look in black ?"
That was the conversation that McLane reported he had on that occasion.
His next summons was to the Capri Restaurant some time later where he met Nitti, Campagna, and Frederick Evans. At this meet- ing, he said, according to JSIcl^ane, "Why haven't you put a man in as an officer? What are you stalling for? The slugging of your
IMPROPER ACTIVITIES IN THE LABOR FIELD 12541
pickets and intimidation of your business agents will stop if you put our man to work. I will give you a man without a police record. The i)hices that our syndicate owns will join the union. There will be no pickets and no bother."
That is according to McLane's report of this conversation. Mc- Lane told Nitti that the executive board had refused to accept the gangster as an officer, and Nitti and Humphreys then demanded the names of those who had opposed, and McLane refused to give them to him. They then said, "We will take care of that."
This was said by Humphreys.
"This is your last chance. This is the only way we will stand for anything." And "Put in our man or wind up in an alley."
McLane then went back to the board, according to his testimony, told them about the threats and what it meant, and it was finally agreed in the latter part of July 1935 to put in the syndicate man in control of the union. This man was Louis Romano.
^Ir. Kexxedy. Tliat is R-o-m-a-n-o?
]\Ir. Peterson. Yes.
Mr. Kexxedy. He will also be important in the course of this in- vestigation, Mr. Chairman.
Mr. Peteksox. Apparently then, in 1940, McLane was not too happy with Romano's domination of the union. He tried to get him ousted. That is tlie time he went before the Cook County grand jury and testified that Romano, along with Nitti, Hum- phreys, Campagna, and Evans controlled Local 278.
Following McLane's testimony, Romano and other syndicate hood- lums were indicted on October 3, 1940, by the Cook County grand jury. The defendants named in this indictment were Frank Nitti, Afurray Humphreys, Louis Campagna, Paul Ricca, also known as Paul DeLuccia, Louis Romano, alias Louis Stern, Frederick Evans, and Thomas Panton.
Mr. Kexxedy. Mr. Chairman, we might just talk about Paul "the Waiter" Ricca, who is probably the most important gangster in Chicago; is he not?
Mr. Petersox. Yes, certainly one of the most important.
He would have been, without any question, in my opinion, the leader of the syndicate following Frank Nitti, had it not been for his difficulties with the Federal Government beginning in 1943, his sentence to prison in connection with the motion picture extortion case.
Mr. Kexxedy. We had some testimony about Paul "the Waiter" Ricca in our hearings last fall, where it was developed that Jimmy Holfa, who is now international president of the Teamsters, and Bert Brennan, who is a vice president, had purchased for the Teamsters Mr. Ricca's home, spending $150,000 in union funds. Mr. Hoffa testified that it was going to be used as a place to instruct and teach the business agents of the Teamsters.
Go ahead.
Mr. Petersox. When this case came to trial, of course, the pi-inci- pal witness was George V. McLane, and he invoked the fifth amend- ment and refused to testify. According to the State attorney's office, the chief investigator for that office claimed that in November 1940, before the trial came up, Claude Macldox, alias John IVIoore,
12542 IMPROPER ACTIVITIES IN THE LABOR FIELD
had talked to McLane and made a deal with McLane that he would be reelected as a union business agent if he promised to save Nitti and others from conviction.
Shortly after he invoked the fifth amendment at the trial, McLane's testimony before the grand jury was made public and much of this testimony or story that I have related here came from that grand jury testimony.
In McLane's testimony before the grand jury it was learned that in the middle of 1938, Nitti forced McLane to run for the presidency of the Bartenders' International Union at a meeting which was held in the Bismark Hotel in the middle of 1938. McLane met George Browne, who also figured in the moving picture extortion case, inter- ijational president of the Stagehands Union; Willie Bioff, who also figured in that case; Nick Deane, Louis Romano, and Frank Nitti. Bioff advised McLane that as far as the west coast is concerned — that is, in connection with their desire to put in McLane as president of the international union — as far as the west coast was concerned, in Seattle he would contact various organizations, including the Teamsters, and see "That our people there will vote for McLane for the general president."
Mr. McLane explained to them that they were picking an organi- zation that was 28 years old and it was almost impossible to beat an organization of that standing.
He also said that others would know that he was being used strictly as a front man or a yes man for the syndicate. It was explained to McLane, however, that he would wind up in the penitentiary or out in the alley if he did not consent to run for office.
Mr. McLane testified that the syndicate hoodlums said, and I quote, this is McLane's testimony, "They had run other organizations and had taken other organizations through the same channels, and all they said they Avanted was 2 years of it and they would see that I was elected. Then they would parcel out different parts of the country. Browne was supposed to take care of the eastern part of it, around Boston and through there. Deane was supposed to take care of some other place. I do not recall just where he was deleoated."
According to McLane, Nitti did most of the talking after Browne. Nitti again said they had made Mike Carozzi the czar of the Chicago Street Cleaners Union, how they controlled the treasury of the organi- zations, and what position they were in to do it.
Nitti said Carozzi did not amount to anything until he affiliated with the syndicate, and they were going to do the same for McLane. Nitti made that very clear at the end of the meeting — that McLane would run for office or he would be found in an alley. Incidentally, McLane did run for the office then, but he was defeated. As a result of McLane's charges, the syndicate control of local 278, tlie local was put into receivership in August of 1940, in hearings before Judge Robert Jerome Dunn of Chicago.
On January 6, 1941, 4,000 union bartenders cast their votes in the courtroom of Judge Dunn, who had placed this union in receiver- ship in August of 1940. At this election, James Crowley was elected president, and McLane was defeated for reelection as business agent. He was defeated by Joseph McGilliott. The States attorney's office chief investigator at that time stated publicly that the Nitti mob is
IMPROPER ACTIVITIES IN THE LABOR FIELD 12543
still in control. Rather interestinirly, on February 13, 1941, master in chancery, Isadore Browne, who had heard testimony from Mc- Lane and others before him, held that this testimony had established (1) that the present head of the Al Capone gang in Chicago was Frank Nitti, that is 1941; (2) that Nitti said he was going to take over the Bartenders Union and did so; (3) that there was fear among some of the bartenders that Nitti and some of his gang was going to take olF with some of the bartenders' money, and this fear was a valid one.
This master in chancery held that with the exception of those charges relating to fiscal irregularities, the original charges made by George V. McLane had been absolutely sustained.
(At this point. Senator Curtis withdrew from the hearing room.)
Mr. Kenxedy. You mentioned that James Crowley was elected president.
]Mr. Petersox. Yes.
Mr. Kennedy. Did he continue to hold the office or position of president ?
Mr. Peterson. He has until recently. On March 18, 1947, gun- men attempted to assassinate him.
Mr. Kennedy. What happened then ?
Mr. Peterson. He and his wife drove up in front of their resi- dence at 7225 Merlo Avenue, in a Cadillac automobile. Gunmen from another car drew alongside and blasted several shotgun blasts into the car. As a matter of fact, five blasts from the shotgun struck the left front window of the car. At least 25 slugs hit Mrs. Crowdey and killed her instantly. Crowley himself had five shotgun bullets in his left arm and back. He was taken to the Jackson Park Hospital, where he recovered.
Mr. Kennedy. Did they amputate his arm ?
]\Ir. Peterson. I don't recall. I don't think so. I don't know about that. He was later questioned, I know, at the Grant Cross- ing police station and in the pre.sence of his attorney and also Morris Sheiber, secretary and treasurer of local 278, he denied that he had any knowledge as to who had attempted to take his life, or he denied that his life had been threatened.
Mr. Kennedy. Did he remain in as president after that ?
Mr. Peterson. He resigned as president of local 278, May 5, 1958, just this year, and was succeeded by Morris J. Sheiber.
Mr. Kennedy. He just resigned in the period of the last month or so, is that right ?
Mr. Peterson. That is right.
Mr. Kennedy. You talked about Louis Romano being placed in control of this union for the syndicate. Can you tell us anything about the background of Louis Romano ?
Mr. Pf:TERS0N. Yes. The crime commission files contain informa- tion about him going back many years. In fact, he was involved in a shooting in a saloon at 2059 Division Street, in Chicago, on April 5, 1922, and on that occasion he shot Abe Rubin four times. Rubin was killed. During the same affray Romano shot Isadore Sulporr, of Potomac Avenue, and also Charles Hadesman once. On April 20, 1922, three indictments were returned by the Cook Countv grand jury against Louis Romano, indictment No. 28308, charging Romano with
21243—58 — pt. 33 4
12544 IMPROPER ACTIVITIES IN THE LABOR FIELD
the murder of Kiibin ; No. 28309, assault with intent to murder Isadore Sulporr; and No. 28310, assault with intent to murder Charles Hadesman.
On June 20, 1923, indictments 28309 and 28310 were stricken off with leave to reinstate, and indictment 28308 was nolle prossed.
We also have information that reveals that Romano was arrested in 1923 for the fatal shooting of Albert Lucentti. This fatal shooting occurred during a traffic argument.
Witnesses failed to identify Eomano, however, and he was sub- sequently released. Of course, I have mentioned as part of his crimi- nal record, or criminal history, at least, this indictment returned October 3, 1940, by the Cook County grand jury, and that indictment, incidentally, a motion for directed verdict of not guilty was returned on December 2, 1940, following McLane's invoking of the fifth amendment.
Mr. Kennedy. So in summary he was ultimately removed, was he not?
Mr. Peterson. Yes, as a result of those receiversliip proceedings.
Mr. Kennedy. Of local 278.
Mr. Peterson. Yes.
Mr. Kennedy. He was placed in this position, supposedly because he was the one that did not have the long criminal record, is that right ?
Mr. Peterson. Yes.
Mr. Kennedy. And after he got out of local 278, or was put out of local 278, who did he go to work for within a short period of time?
Mr. Peterson. Abe Tietelbaum, labor relations counselor for the Chicago Restaurant Association. Tietelbaum admitted Romano was on his staff, and said he is an expert in labor relations matters.
Mr. Kennedy. So he was involved in these criminal activities dur- ing 1930, had this connection with the union, was expelled and then was picked up by the employers as a labor-relations consultant ?
Mr. Peterson. That is right.
Mr. Kennedy. And that was within a short period of time?
Mr. Peterson. Yes ; not too long after that. I don't have the exact date.
Mr. Kennedy. Back in 1935, hadn't he also been head of the Joint Council of the Hotel and Restaurant Employees' Union?
Mr. Peterson. Louis Romano?
Mr. Kennedy. Yes.
Mr. Peterson. That is my recollection.
Mr. Kennedy. That was' 1935 to 1940. So he held this important position during this period of time that the syndicate was attempting to move in on these unions, and then went to work for the emjiloyers to handle their labor relations.
Mr. Peterson. Louis Romano went with the employers. You have given the background of the syndicate control of some of these local unions. Was there also some etForts by the syndicate to get in and control the association, and did the association or the employers Avel- come the representatives of the syndicate?
Senator Church. Mr. Chainnan, before we get into this aspect of the case, I have a couple of questions I would like to ask witli respect to tliis local 278 to complete the story before we get into the associa- tion side.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12545
You have already given evidence here with respect to two locals as to how they were initially organized by these mobster elements.
With respect to local 278, we have a case where the mobster ele- ment muscled in through an established local. Not only was it inter- ested in that particular local, but it was interested in an attempt to take over the international, and it made McLane its front man in that attempt. That attempt failed ; did it not ?
Mr. Peterson. Yes, in that instance.
Senator Church. But they did manage to muscle in and gain con- trol of local 278. They put Louis Eomano in charge. It then went into receivership and in a proceeding Federal court
Mr. Petersox. No, not Federal court.
Senator Church. In the local court, then. Crowley was elected president of the local ?
Mr. Peterson. Yes.
Senator Church. Now, did this same element, that is, the Frank Nitti element, continue to dominate the Crowley regime in local 278 ?
Mr. Peterson. As I mentioned, the States attorney's office stated as a result of that election, the Nitti mob is still in control, and there was a rather interesting incident which would indicate they certainly still had a considerable amount of influence. As a result of the decision that placed the union in receivership, the union was forced to fire cer- tain business agents and other officials, because of their connections, including Thomas Panton, one of the individuals who was named in this indictment.
Almost immediately after the receivership then was dissolved, that is, after the control was placed back in the hands of the union, they then, Crowley then fired or the union fired these individuals who had been placed in there during the course of the receivership, and took back several of the individuals who had been fired as a result of this so-called hoodlum domination, and, as I recall, one of those that was taken back was Thomas Panton, who had been indicted in connection with this.
So certainly there was a very strong indication that the complexion of the union had not changed too much insofar as syndicate domina- tion was concerned.
Senator Church. Since this occurred a number of years ago, the receivership proceeding in 1940, 1 think it is important that we try to bring it down to date so that we have some appraisal of the current situation. The Crowley regime has also passed into Limbo, has it not ?
Mr. Peterson. That is right.
Senator Church. What, in your opinion, is the situation today in local 278?
Is it still influenced by this same racketeer element ?
Mr. Peterson. Certainly the influence has not completely disap- peared. That is my opinion.
Senator Church. Thank you.
The Chairman. When did Mr. Crowley get out?
Mr. Peterson. Just May 5, 1958.
The Chairman. A little while after this investigation started?
Mr. Peterson. Yes.
The Chairman. I don't suppose this had anything to do witli his retirement.
12546 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Peterson. I think that would be a good question. I think any- one is entitled to make his own deduction.
The Chairman. Yes, sir. Thank you. Proceed.
Mr. I^NNEDY. Mr. Chairman, should we continue this afternoon ?
The Chairman. I am advised by counsel we can't conclude with this witness this morning. So we will stand in recess until 2 o'clock this afternoon.
(Whereupon, at 12 : 20 p. m., the hearing was recessed, to reconvene at 2 p. m. of the same day, with the following members present : Sena- tors McClellan and Church.)
AFTERNOON SESSION
The Chairman. The committee will be in order.
(Members of the committee present at the reconvening of the session were : Senators McClellan and Curtis.)
The Chairman. All right, Mr. Peterson, if you will resume the witness stand, please.
TESTIMONY OF VIRGIL W. PETERSON— Resumed
Mr. Kennedy. Now, Mr. Chairman, this morning we went into the hoodlum control of the four different locals in Chicago of the Hotel and Restaurant Employees Union 278, 593, 450, and local 658. Now, on the other side, we also developed the connection that Louis Romano who was a member of the Capone syndicate, first is associated with the union and then is associated with the employers.
Were there any others other than Louis Romano who were asso- ciated with the employers side of this industry ?
Mr. Peterson. Well, of course, Romano was brought into the pic- ture for the Chicago Restaurant Association by Abraham Teitelbaum, who was formerly attorney for Al Capone.
Mr. Kennedy. Who is he ?
Mr. Peterson. He was formerly an attorney for Al Capone and maintained close relations with the members of the Capone syndicate.
Mr. Kennedy. He was the attorney for Capone, and was it also established that he was a close associate of those in the Capone syndicate?
Mr. Peterson. Many years ago, that is right.
Mr. Kennedy. Was he a close associate of Capone other than being his attorney ?
Mr. Peterson. If you are going to be an attorney for a man like Capone, you have to be a close associate also.
Senator Curtis. At that point, do you happen to know whether that is the same Mr. Teitelbaum that featured in the investigation of the tax scandals in 1951 and 1952 ?
Mr. Peterson. He was involved in tax cases.
Senator Curtis. I am informed by the staff it is the same individual. I happened to be a member of the House committee that conducted those investigations, and the name rang a bell with me.
Mr. Peterson. I am sure it is the same.
Mr, Kennedy. We have reviewed your questioning of Mr. Teitel- baum, and you did question him during that investigation.
Senator Curits. I had forgotten it, it has been so long ago.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12547
Mr. Kennedy. Now, Teitelbaum worked with the association for a number of years, did he not ?
Mr. Peterson. Yes, and he was brought into the picture as I under- stand it in this fashion : Around 1939 a very well respected restaurant owner by the name of Gus T. Drake had his place of Dusiness picketed and goons smashed his windows, and he was hit over the head himself or slugged with a baseball bat. Following this violence, that is when Abraham Teitelbaum was brought into the picture as a labor relations counsel for the Chicago Restaurant Association.
It was contended that because of Abraham Teitelbaum's relation- ship with members and officers of local 593 and the union there, he was able to perform very good service for the restaurant association, and also for the union. He was supposed to make around $125,000 a year from that source.
Mr. Kennedy. He received $125,000 a year ?
Mr, Peterson. That was reported.
Mr. I^NNEDY. He remained in that position, and I think, Mr. Chairman, that we will be able to establish that he did receive $125,000 a year, and when he resigned in 1954 another man took his place, is that right?
Mr. Peterson. That is right. I thought it was in 1953.
Mr. Kennedy. "\"Miat happened was he resigned and then came back again in 1954 ?
Mr. Peterson. That is right. But at that time apparently in 1953, Teitelbaum lost some of his favor with officials of local 593, and during that period there was a lot of violence and a lot of difficulty, particu- larly involving a chain of restaurants known as the Marquis Restau- rants, Inc. So Teitelbaum was then replaced as counsel for the Chi- cago Restaurant Association by Anthony V. Champagne.
Mr. Kennedy. Who was Anthony V. Champagne ?
Mr. Peterson. Anthony V. Champagne has long been a close friend of many of the Capone hoodlums, and he has represented many of them, going back as far as 1945. Champagne represented Sam Mooney Oiancana who is a right-hand man of Tony Accardo, in the purchase of some property. He represented a number of these individuals and he was in 1953 representnig for a time this Anthony De Rossa who brought charges that police officers had manhandled him.
His brother. Dr. Carl Champagne, also appeared as a witness on behalf of DeRossa and Champagne has represented Ray Jones, Phil Katz, and others of the well known Capone syndicate wire service operators, and Joseph Icaro, and Carl Cananda, who operated gam- bling places in Cicero.
Rather interestingly in our investigation both in 1954 and in 1956 — in 1954 there was a very notorious gambling joint called the "Wagon "Wlieel" on the northwest side of Chicago and this place had an alter- nate operating place at 6416 Gunnison. In August of 1956, we learned that this same place which is owned by the syndicate and operated by the syndicate was going to operate this big crap game. There was a sign on this syndicate place "Building for sale, call Estebrook 8834," which is the number of Anthony V. Champagne.
It also appears that Champagne appeared in connection with loans made on the same Giancana's River Road Motel. He arranged the loans; that is what the party who made the loans stated. Anthony
12548 IMPROPER ACTIVITIES IN THE LABOR FIELD
Champaf^ie also brought into the picture as a labor relations counsel another hoodlum, a well-known Capone man, Sam English.
Mr. Kennedy. Now, these individuals, Mr. Chairman, will all be witnesses later on during the hearing, and we have already touched on Mr. Champagne at an earlier hearing.
I believe that gives us a general outline. It was gangster and hoodlum infiltration into both the management side and into the labor- union side ?
Mr. Peterson. That is right.
The Chairiman. Are there any questions, Senator Curtis ?
Senator Curtis. I have no questions at this time.
The Chairman. Thank you very much.
Call the next witness.
Mr. Kennedy. Mr. Rupcich.
Mr. RupciCH. I would like just a moment; my counsel hasn't re- turned from lunch.
Mr. Kennedy. "V^Hiere is j'our counsel ?
Mr. RupciCH. I believe he went downstairs to lunch.
Mr. Kennedy. We told him to be here at 2 o'clock.
Mr. Rtjpcich. I will take a look in the hall.
The Cpiairman. We will stand at ease for 2 or 3 minutes.
Mr. Kennedy. Mr, Chairman, we are now going into a new phase of the investigation. We have given the background of the employer association and we have given some background of the unions. Now we are going to explore how the union and the employers handle their labor-management relations and whether the union officials are, in fact, interested in the employees of the various restaurants in Chicago.
So as long as your attorney is not here, we will have to call Mr. McGann, then.
The Chairman. Do you solemnly swear that the evidence given before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. McGann. I do.
TESTIMONY OF JOHN McGANN
The Chairman. State your name and your place of residence and your business or occupation.
Mr. McGann. My name is John McGann, and I live at 9113 South Albany, Evergreen Park, and I am a part owner of the Beverly Woods Restaurant.
The Chairman. Do you waive counsel ?
Mr. McGann. Yes, sir.
The Chairman. All right, Mr. Kennedy.
Mr. Kennedy. That is the Beverly Woods Restaurant ?
Mr. McGann. In Chicago ; yes.
Mr. Kennedy. You are a part owner of that restaurant ?
Mr. McGann. Yes, sir.
Mr. Kennedy. Do you also have a part ownership in the Lincoln Heights Restaurant ?
Mr. McGann. In Chicago Heights ; yes.
Mr. Kennedy. During the period of 1949 and 1950, you worked for Rupcich's Restaurant ?
Mr. McGann. As manager ; yes, sir.
IMPROPER ACTR'ITIES IN THE LABOR FIELD 12549
Mr. Kennedy. You were the general manager ?
Mr. McGann. Yes, sir.
Mr. Kennedy. Now, when that restaurant had opened, were you approached by any members of the Hotel and Restaurant JEmployees Union about having the waitresses and the other employees join the union ?
Mr. McGann. Shortly after we opened, we were approached.
Mr. Kennedy. When M'ould that be ?
Mr. McGann. In the early summer of 1950.
Mr. Kennedy. When is that?
Mr. McGann. In the early summer of 1950, around June or July of 1950.
Mr. Kennedy. '^\^io approached you at that time?
Mr. JNIcGann. Mr. O'Connor, James O'Connor.
Mr. Kennedy. "NMiat was James O'Connors position ?
Mr. ]McGann. Business agent for the South Chicago Restaurant Union, I believe.
Mr. Kennedy. I believe he is president of local 394.
INIr. ]McGann. I think he is now, and I didn't know whether he was at that time or not.
Mr. Kennedy. Of the Cooks, Waiters, and Waitresses' Union?
Mr. McGann. Yes, sir.
]Mr. Kennedy. Could you tell us the conversation that you had with Mr. O'Connor?
Mr. McGann. Well, he came in shortly after we were opened as I said, and told me that he would like us to join the union, and at that time I told him I was just the manager and I would take it up with Mr. Rupcich, which I did.
(At this point the following members were present: Senators Mc- Clellan and Curtis.)
Mr. Kennedy. That is Rupcich ?
Mr. McGann. John Rupcich.
jNIr. Kennedy. Go ahead.
Mr. McGann, Mr. Rupcich had not had any previous experience in the restaurant business prior to opening this restaurant, and I had had some. I knew of the restaurant association. I suggested that I ^o down and talk to the Chicago Restaurant Association and find out if they had any comment or advice that they could give me on this matter. So I called up and made a date to go down there and did go down and talk to Mr. Kiscau of the Chicago Restaurant Association.
Mr. Kennedy. K-i-s-c-a-u ?
Mr. McGann. That is correct, sir.
Mr. Kennedy. T\niat was his position in the restaurant association ?
Mr. McGann. I think he was the executive secretary of the Restau- rant Association at the time.
Mr. Kennedy. And he stills holds that position, does he?
Mr. McGann. As far as I know, he does, yes, sir.
Mr. Kennedy, Would you relate to the committee what your con- versation was about ?
Mr. McGann. At that time I told him I had been approached by Mr. O'Connor to put our employees in the union, and at that time I was aware that there was a movement underfoot which was by some other restaurant owners on the South Side of Chicago, and that there
12550 IMPROPER ACTIVITIES IN THE LABOR FIELD
had been talk of forming a voluntary committee and contributing funds to see if they could not fight this type of union organization.
He knew of such a movement. In fact, he gave me some informa- tion on it.
Mr. Kennedy. Wliat did he say about it ?
Mr. McGann. He said yes, that they had had several meetings on that, and that they were in the process of organizing such a group.
Mr. Kennedy. That was to fight unionization of your restaurants, is that right ?
Mr. McCann. That is correct.
Senator Curtis. At that point, may I ask : Was it to fight all union- ization of restaurants?
Mr. McGann. No, not necessarily. I mean to help us in our labor relationship. Let's put it that way.
Senator Curtis. The reason I was prompted to that question was that your remark was to fight this type of unionization.
Mr. McGann. Well, it was the only type I knew of at the time, sir.
Senator Curtis. Had you run into any situations where the em- ployees themselves got together and formed a union ?
Mr. McGann. I had never, not in my experience, no, sir.
Senator Curtis. All right.
Mr. Kennedy. What information had you had as to how this union- ization was fought in the past ?
Mr. McGann. How it was fought, sir ?
Mr. Kennedy. Yes.
Mr. McGann. Up to that time, I had none.
Mr. Kennedy. What did Mr. Kiscau indicate to you ?
Mr. McGann. He told me that there was a movement underfoot to form a committee such as this group, and that there would be a volun- tary contribution to it, and these funds would be used for legal services and other means of helping with us our labor problems.
Mr. Kennedy. Did he indicate to you or did you learn as to how this kind of problem had been handled in the past ?
Mr. McGann. No, I did not know that.
Mr. Kennedy. Well, continue.
Mr. McGann. At that, I went back and talked to Mr. Kupcich, and he agreed we should join the restaurant association. He thought it was a good idea, and so did I. We made application and did join the restaurant association.
Shortly after we were a member of the restaurant association, IVIr. O'Connor came back, and I believe his only comment at this time was, "I see you have joined the restaurant association," and I said, "Yes, we have," and he said, "Well, that is all right."
And then he walked out. There was no further comment. Then the next thing I know is a short time after that, one morning, there were pickets in front of Eupcich's restaurant. At that time— I was not there the day it came, I was in the hospital — Mr. Rupcich called me and told me there were pickets there. I suggested he call the restaurant association right away, and I would try to get there as soon as I could. I was able to get out of the hospital for a short time and I came back to the restaurant and got there around 4 o'clock in the afternoon. At that time, Mr. Kiscau had made arrangements for a Mr. Tietelbaum.
Mr. Kennedy. Who was Mr. Tietelbaum at that time ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12551
Mr. McGann. At that time I did not know who he was. But since then, he was the lawyer for the restaurant association.
Mr. Kennedy. What did you understand the arrangements were?
Mr. McGann. Well; there was a conversation over the phone, I believe, at first, between Mr. Tietelbaum and Mr. O'Connor, as to how many members would be put in the union, and there was a little bit of quibbling, I think, whether it was G, 7, or 8.
Mr. Kennedy. Approximately^ how many employees did you have at that time ?
Mr. McGann. I would guess about 20 to 25, sir.
Mr. Kennedy. And there was going to be just a selection of seven names to be put into the union ?
Mr. McGann. That is correct.
Mr. Kennedy. Just any seven people ?
Mr. McGann. Nobody stipulated who they had to be There was no stipulation as to who they had to be. They were picked at random, I believe.
Mr. Kennedy. Can you speak a little more clearly ?
Mr. McGann. They were picked at random.
Mr. Kennedy. Just seven names were picked out ?
Mr. McGann. Right.
Mr. Kennedy. And they were just placed on the union rolls; is that right?
Mr. McGann. That is correct.
(At this point. Senator Church entered the hearing room.)
Mr. Kennedy. Wliat about their dues ?
Mr. McGann. They were paid by check, by Mr. Rupcich.
Mr. Kennedy. He paid the dues and initiation fees ?
Mr. McGann. Yes, sir.
Mr. Kennedy. Do you know how much he paid ?
Mr. McGann. I don't know the exact amount; no, sir. I believe it was around $3 per employee, or $21 for the first month.
Mr. Kennedy. Were the employees ever consulted about it?
Mr. McGann. No, sir.
Mr. KJENNEDY. Were they ever told that they were in the union?
Mr. McGann. I don't know that they were.
Mr. Kennedy. You have no information? You were general manager?
Mr. McGann. Yes. and I didn't tell them.
Mr. Kennedy. And you have no information that the union ever consulted with any of these people ?
Mr. McGann. Not that I know of.
Mr. Kennedy. It was just a question of selecting any seven names and paying the initiation fees and the dues of those people and then the union went away ?
Mr. McGann. That is correct.
Mr. Kennedy. There was never any discussion about wages, hours, or conditions ?
Mr. McGann. No, sir.
Mr. Kennedy. And while you remained as general manager of the restaurant, did the union ever come back or a representative of the union ever come back and discuss this matter with you as far as the wages or the hours ?
Mr. McGann. No, sir.
12552 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. What did vou regard such an arrangement as that to be?
Was it just a shakedown ?
Mr. McGann. Well, it was an unfortunate situation we found ourselves in, sir.
The Chairman. I understand. You were confronted with either a picket line or making some arrangements on the order you have described ?
Mr. McGann. That is correct, sir.
The Chairman. And you regarded it as a shakedown, didn't you ?
Well, name it, if that isn't it. State what it is.
Mr. McGann. I think it could be construed as that ; yes, sir.
The Chairman. And the people whose names you selected and put in the union had no knowledge of it ?
Mr. McGann. To my knowledge they had no knowledge of it; that is right, sir.
The Chairman. In other words, you did not say anything to them about it?
Mr. McGann. No, sir ; I didn't.
The Chairman. You never at any time told them about it ?
Mr. McGann. I did not ; no, sir.
The Chairman. Well, did they ever indicate to you they knew they were in the union ?
Mr. McGann. No, sir ; they did not.
The Chairman. You paid the initiation fees ?
Mr. McGann. I didn't, but Mr. Rupcich did.
The Chairman. All right. The business paid it ?
Mr. McGann. The business paid it ; yes, sir.
The Chairman. They paid the initiation fees. What were those fees?
Mr. McGann. I couldn't tell you the exact amount because it was 8 years ago. I believe the dues were $3 per employee or $21 per month, but what the initiation fee was, I don't know.
The Chairman. You don't recall what it was ?
Mr. McGann. I don't remember what it was.
The Chairman. In other words, by this arrangement, part of your employees were in a union, not a union of their choice, not with their knowledge, and you were handling this as a business expense of the restaurant ?
Mr. McGann. That is correct, sir.
The Chairman. It was charged oif as a business expense; was it not?
Mr. McGann. I believe it is, sir.
The Chairman. Therefore, it wouldn't be taxable; is that correct?
Mr. McGann. That is correct, sir.
The Chairman. That is another way of getting around paying taxes.
Mr. McGann. You can say it, yes, sir.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Did you know that under section 302 of the Taft- Hartley Act, making this kind of paj'ments is a violation of the huv, and you can be subject to a year in prison and a $10,000 fine?
Mr. McGann. No, I did not, sir.
Mr. Kennedy. Wlien did you leave the employment of Rupcich?
IMPROPER ACTrV'ITIES IN THE LABOR FIELD 12553
Mr. McGann. Approximately 2 years later, in 1952.
Mr. Kennedy. Did you then form your own restaurant?
Mr. McGann. Not at that time, no. I went to work for another restaurant.
Mr. Kennedy. After a while did you form a restaurant?
Mr. McGann. Yes, I did. Three years ago.
Mr. Kennedy. What was the name of that ?
Mr. McGann. The Beverly Woods Restaurant.
Mr. Kennedy. Located where?
Mr. McGann, 11532 Southwestern in Chicago.
Mr. Kennedy. How many employees have you there ?
Mr. McGann. We have approximately 50 employees.
Mr. Kennedy. Were you approached about bringing those indi- viduals into the union?
Mr. McGann. Shortly after we were opened we were approached, yes, sir.
Mr. Kennedy. Did you go to the restaurant association then?
Mr. McGann. No, I did not, sir.
Mr. Kennedy. Why didn't you go at that time ?
Mr. INIcGann. I felt I didn't have to, sir.
Mr. Kennedy. That you could make this deal yourself ?
Mr. McGann. Yes, sir.
]\Ir. Kennedy, Formerly this deal had been made through Mr. Kiscau and through Tietelbaum and you felt you could handle this yourself ?
Mr. McGann. Yes, sir.
Mr. Kennedy. All right. Wliat did you do then ?
Mr. McGann. Well, Mr. O'Connor came in, and after conferring with him on several occasions we agreed on the number of employees, either 12, 13, or 14, something similar to that, I am not sure exactly. I think it was 12.
Mr. Kennedy. Did you then pay the initiation fees ?
Mr. McGann. Yes, we did.
Mr. Kennedy. And the dues?
Mr. McGann. Initially I did, yes, sir. Since then we have taken the dues out of the employees' pay.
Mr. Kennedy. Did you select the names of the people that were to be put into the union ?
Mr. McGann. Yes.
Mr. Kennedy. You selected them initially ? Mr. McGann. Yes, sir.
Mr. Kennedy. Did you tell your employees that they vrere in the union?
Mr. McGann. Yes ; they all knew it.
Mr. Kennedy. Did you then start deducting the dues from their salaries ? Mr. McGann. Yes ; we did, sir.
Mr. Kennedy. Had they given you a card with permission to deduct the dues ?
Mr. McGann. No, sir ; they did not.
Mr. Kennedy. You just told them you were deductmg the dues?
Mr. McGann. Well, we had a meeting, sir, and I told them that we
would, yes.
Mr. Kennedy. Do you know whether in this restaurant you are
paying union rates or not ?
12554 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. McGann. I do not know that, sir.
Mr. Kennedy. Did anybody from the union ever discuss that with you?
Mr. McGann. No, sir ; they did not.
Mr. Kennedy. Did anybody from the union ever discuss wages, hours, or conditions with you ?
Mr. McGann. No, sir.
Mr, Kennedy. They just received the initiation fees and the dues of the employees and then left, is that right ?
Mr. McGann. That is correct, sir.
Mr. Kennedy. That is the only thing they were interested in ?
Mr, McGann. It seems so.
Mr. Kennedy. You do not even know what you are supposed to be paying your employees ?
Mr. McGann. No, sir ; I do not.
Mr. Kennedy. What about your second restaurant that you just opened up ?
Mr. McGann. That has just been opened about 5 months now, sir.
Mr. Kennedy. Have you been approached by the union on that?
Mr. McGann. Yes ; I have, by the same union.
Mr. Kennedy. By the same individuals ?
Mr. McGann. Tlie same individual, yes, sir.
Mr. Kennedy. O'Connor, again ?
Mr. McGann. James O'Connor, yes, sir.
The Chairman. He is still operating ?
Mr. McGann. Apparently he is, sir.
Mr. Kennedy. Have you made any arrangements with him on that?
Mr. McGann. I have discussed it with him, but we have not made anything definite on it ; no, sir.
Mr. Kennedy. But you will make the same deal, if you can?
Mr. McGann. If I have to, I will.
Senator Curtis. Mr. Chairman ?
The Chairman. Senator Curtis.
Senator Curtis. I will wait until Mr. Kennedy finishes this point.
Mr. Kennedy. Mr. Chairman, may I just read into the record this provision of the Taft-Hartley Act, section 302 (a) :
It shall be unlawful for any employer to pay or deliver or to agree to pay or deliver any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce.
Section (c) :
The provisions of this section shall not be applicable —
and then it says under section 4 :
With respect to money deducted from the wages of employees in payment of membership dues in a labor organization ; provided that the employer has re- ceived from each employee on whose account such deductions are made a written assignment which shall not be irrevocable for a period of more than 1 year or beyond the termination date of the applicable collective agreement, whichever occurs sooner.
And then (d), says:
Any person who willfully violates any provision of this section shall upon con- viction thereof be guilty of a misdemeanor and be subject to a fine of not more than $10,000 or imprisonment of not more than 1 year or both.
IMPROPER ACTIVITIES EST THE LABOR FIELD 12555
Wliat you did in the restaurant that you owned, you paid the in- itiation fees and the dues for the first month without consulting your employees?
Mr. McGann. That is correct.
Mr. Kennedy. ^Vnd then the deduction was made at a later time without the written permission of the employees, is that correct?
Mr. McGann. Yes, sir ; that is correct.
Mr. Kennedy. Mr. Chairman, we made a study of the wages of some of these restaurants that we are going to have witnesses on be- fore the committee. First, however. Senator Curtis has some ques- tions.
Senator Curtis. How many employees do you have now ?
Mr. McGann. Between 50 and 55.
Senator Curtis. How many of them belong to the union ?
Mr. McGann. Fifteen of them, sir.
Senator Curtis. How are their dues paid at the present time ?
INIr. McGann. They are deducted from their salary and they are paid by check once every 3 months.
Senator Curtis. They are deducted from their salaries ?
Mr. McGann. Yes, sir.
Senator Curtis. Did any of those employees ever ask you to do that?
Mr. McGann. Did they ask me to ? No, sir ; they did not.
Senator Curtis. Do you know whether any of them ever attended a union meeting?
Mr. McGann. I don't believe they do, sir.
Senator Curtis. Do they get any benefits from it ?
Mr. McGann. None that I know of, sir.
Senator Curtis. Why do you take the money away fi*om them ?
It is their money. They earned it.
Mr. McGann. That's right.
Senator Curtis. Wliy did you take it ?
Mr. McGann. Well, we have to pay the dues, and at the time we were organized, sir, I did not have the money to pay it myself or I would have.
Senator Curtis. You would be violating the Federal statute any way you run. But why did you take their money ?
Mr. McGann. We had a meeting and they agreed that they would pay the dues, sir.
Senator Curtis. Fifteen of them agreed that they would pay the dues?
Mr. McGann. All the waitresses at the time agreed that they would pay the dues; yes, sir. Any of the girls that were working. There was no objection voiced when we told them that we were going to belong to the union.
Senator Curtis. You told them that they were going to belong to the union ?
Mr. McGann. Yes, sir.
Senator Curtis. They didn't do their own organizing ?
Mr. McGann. No ; they did not.
Senator Curtis. These 50 or 55 employees, of them how many are waitresses ?
Mr. McGann. About 25 of them.
12556 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. And 15 of them agreed to pay dues, how about the other 10?
Mr. McGann. Well, they also pay dues, sir. In other words, we deduct a dollar from each one of their wages per week. Senator Curtis. You deduct from all of them ?
Mr. McGann. From all of the waitresses after they are working there ; yes, sir.
Senator Curtis. You took money out of the paychecks of some of them whose names weren't even sent to the union ?
Mr. McGann. Well, they get into the union. Every 3 months when Mr, O'Connor comes, the ones who have left, he picks up their books and new girls are put in, sir.
Senator Curtis. But you have about 25 waitresses continuously ? Mr. McGann. That is correct ; yes, sir.
Senator Curtis. And you take money from all 25 and pay dues for 15, is that right ?
Mr. McGann. That is correct, sir. Senator Curtis. And they said that was all right ? Mr. McGann. Yes, sir ; they agreed to it. Senator Curtis. Each one of them ?
Mr. McGann. We had a meeting, sir, and they did not object to it. Senator Curtis. How many times did you have such a meeting ? Mr. McGann. We had a meeting for the union. That was one meet- ing, sir. We have periodic meetings. We don't discuss these union problems at everj^ meeting.
Senator Curtis, How many times did you discuss this dues business ? Mr. McGann. Just the one time, sir. Senator Curtis. lYlien was that ? Mr. McGann. Shortly after we opened. Senator Curtis. When ? Mr. McGann. Back in 1955 ; 3 years ago.
Senator Curtis. Of your 25 waitresses that you have now, how many have been with you since 1955 ? Mr. McGann. I would say about 4 or 5.
Senator Curtis. So at the most, only 4 or 5 have ever agreed to this. Is that true?
Mr. McGann. That was all that was there, probably, on the initial meeting; yes, sir,
Senator Curtis. So it isn't true that the 25 who are paying into this have agreed to it, is it ?
By your own testimony, you say you brought it up once in 1955, and you only have 4 or 5 of those waitresses left. Isn't that true? Mr. McGann. That is correct, sir.
Senator Cttrtis. So when you said a bit ago that they agreed to it, at least 20 of them have not agreed to it, is that correct ?
Mr. Mc(tann, Well, they did not agree to it at the original meet- ing, and T have not discussed it with thorn, but it has been discussed informally among all of us.
Senator Cttrtis. But they have never agreed to it ? Mr. McGann. Pardon me? Senator (Xtrtis. They have never agreed to it ? Mr. McGann. I didn't understand you. SfMiator CuR'i'TS. They have never agreed to it ? Mr. McGann. Not formally or written ; no, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12557
Seniitor Curtis. Or any otlier way ?
Mr. McGann. Yes; they have agreed. They know that the situa- tion exists.
Senator Curtis. But you said that you only brought this up in your first meeting, and you have about 20 waitresses that were not even employees then. Isn't that correct ?
Mr. McGaxx. That is correct, sir.
Senator Curtis. You knew that they were not getting any union benefits?
Mr.McGAXN. Yes, sir.
Senator Curtis. For whose benefit, then, was this money paid to the union ?
Mr. McGanx. I think for all of ours, sir, that work at the Beverly Woods Kestaurant.
Senator Curtis. For what ?
Mr. McGaxx. For all of us that work at the Beverly Woods Kestaurant.
Senator Curtis. How would it help your waitresses?
Mr. McGaxx. It provides a job for them, sir.
Senator Cutitis. They couldn't have a job any other way ?
Ml-. McGaxx. I didn't say they couldn't have a job. But they all seem to be willing to work at our place under the conditions that exist.
Senator Curtis. It seems like to me, when we dig into these cor- rupt situations, that the worker is just a pawn. Management and union bosses just move them around like they were chessmen, for their convenience, their gain, and their enrichment. That is all, Mr. Chairman.
The Chairmax. I just want to ask you : How much do you pay into this union a month out of your establishment ?
Mr. McGaxx. How much do we pay into it out of our restaurant ?
The Chairmax^. Yes.
Mr. McGaxx'. I could not answer that, sir.
The Ciiairmax-^. Well, you have 25 people working for you.
Mr. McGax'x. It is $4 a month for employee, and for each new em- ployee we put in, there is a charge of, I think it is $12 initiation fee, and it varies from month to month.
The CiiAiRMAx-. Then for dues alone you pay in about $100 a month ?
Mr. McGaxx'. That is corrrect, sir.
The CiiAiRMAx. Then you pay in for each new member about $12 initiation fee?
Mr. McGaxx'. That is correct, sir.
The C^HAiRMAx. Do you have any conferences with the union with res])ect to terms of employment, working conditions, or anything else for the benefit of those who work for you ?
Mr. McGaxx. No : I don't sir.
The Chairmax'. Have they ever requested any such arrangements or any sucli conferences ?
Mr. McGaxx. No ; they have not.
The CiiAnoiAX'. What you are actuallj^ doing, then, is collect- ing from these working people $4 a month out of their wages, plus $12 when they start working with you, and paying tribute to a union that is nothing but a shakedown racket. That is the truth about it, isn't it ?
12558 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. McGann. Yes, sir.
The Chairman. And you are caught in a situation there where you are helpless, you can't do anything about it, other than close your business ?
Mr. McGann. That is right, sir.
The Chairman. You would be driven out of business if you didn't pay tribute to this gang of hoodlums.
Mr. McGann. If they put pickets in front of our place, we can't operate.
The Chairman. That puts you out of business.
Mr. McGann. Yes, sir.
The Chairman. So you are a victim of circumstances. You either have to pay off to this criminal element that is operating in that fashion, or go out of business ?
Mr. McGann. That is right, sir.
The Chairman. Is that correct ?
Mr. McGann. Yes, sir.
The Chairman. If there is anything wrong with what I have said, and you are a party to it, you are there, the victim of it, if there is anything wrong with what I have said about it, I wish you would correct me.
Mr. McGann. "Well, as far as the background goes that you are speaking of, sir, my first knowledge of the background was here this morning, listening to the testimony that I heard.
The Chairman. I will take the responsibility for the background that I referred to.
Mr. McGann. All right, sir.
The Chairman. But whatever the background is, it operates as a shakedown racket so far as you are concerned.
Mr. McGann. Yes, sir.
The Chairman. You get no benefit from it, neither do your work- ers get any benefit from it, except this crowd decrees that you may stay in business and they may have their jobs, if you pay tribute.
Mr. McGann. Yes, sir.
Senator Church. Mr. Chairman, I would just like to observe in connection with your statement that I think that perhaps it is not the witness here, Mr. McGann, who pays tribute to maintain the privilege of operating his restaurant without pickets thrown about It, but his employees who pay the tribute, because the deductions are made from the paychecks of his employees who get no representa- tion and no benefit from it.
The Chairman. Well, I do not know whether you were here
Senator Church. I believe that just worsens the picture.
The Chairman. Yes. I don't know wlietlier you were here or not when he testified about another business where the company or the restaurant, the business, itself, paid both the initiation fee and the dues to stay in business.
Senator Church. I heard the witness say that initially the com- pany paid dues, but later they were taken from the pay checks of the employees.
Hut in any case, liere clearly is demonstrated the operations of a labor union that is a union by name, and certainly not in substance, that is conducting a shakedown operation from which the employees derive no benefit whatsoever.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12559
Tell ine, Mr. McGjinn, since you have entered into this arrange- ment Avith local 394, and have been makinir these payments, have you purchased peace in that you have no trouble with pickets?
Mr. McGann. I have had no trouble with them at all, sir.
Senator Church. But you have now every reason to believe that if you were to discontinue these deductions and these payments, that trouble miijht ensue ?
Mr. Mc'Gann. Well, just 5 blocks aAvay from me, the Nantucket Restaurant had a strike for 2 years at the same time we opened our place.
The Chairman. All rioht, Mr. Kennedy.
Mr. Kennedy. Mr. McGann, actually, when the union came in there it cost the employees some wages, did it not, because they did not get an increase in wages at the time you started making the deductions ?
Mr. McGann. That is right, sir.
Mr. Kennedy. So actually the union cost the emplovees money and brought no benefit ? "
Mr. IVIcGann. That is correct.
Mr Kennedy. On the other hand, we were talking about the union officials gain from this because of the money that was paid in, but also you gained as the employer, did you not, because through this arrangement there was no enforcement of any contract as far as wages, hours, and conditions are concerned ?
Mr. McGann. Well, there was no talk of a contract, no, sir.
Mr. Kennedy. Wliat you received, in effect, was a sweetheart ar- rangement with the union, was it not ?
Mr. McGann. Well, I don't know what that exactly means, but we have no trouble with unions.
Mr. Kennedy. For the payment of this money.
Mr. McGann. That is right.
Mr. Kennedy. And, in fact, your employees, the majority of your employees, do not receive union scale.
Mr. McGann. I don't know w^hat union scale is.
Mr. Kennedy. We have a witness here who will give you some in- formation on the situation in your restaurant.
Senator Curtis. Where is your restaurant located ?
Mr. McGann. 11532 Southwestern, and there is another restaurant that ]ust opened up in Chicago Heights, where w^e do not belono- to a union as yet. '^
The Chairman. Be sworn, please.
You do solemnly swear the evidence you shall give before this Sen- ate select committee shall be the truth, the whole truth, and nothino- but the truth, so help you God ? "^
Mr. GoTscH. I do.
TESTIMONY OP GEEALD GOTSCH
The Chairman. State your name, your place of residence, and your business.
Mr. GoTscH. My name is Gerald Gotsch, from Chicago, 111 I work for the General Accounting Office.
The Chairman. You have been performing services for this com- jmittee, have you ?
21243— 58— pt. 33 5
12560 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. GoTSCH. Yes, sir.
The Chairman. All right.
Mr. Kennedy. How long have you been with the Government?
Mr. GoTscH. For about 2 years.
Mr. Kennedy. I might say, ISIr. Chairman, Mr. Gotsch has been working with the committee for some time and has been a great help and assistance in our Chicago office and has been working on this par- ticular case now for some months.
The Chairman. Proceed.
Mr. Kennedy. Mr. Gotsch, have you made a study of tlie restaurant that is owned by Mr. McGann, the witness ?
Mr. Gotsch. That is correct.
Mr. Kennedy. Have you made a comparison and a study of the salaries that are paid to the employees ?
Mr. Gotsch. Yes, I have.
Mr. Kennedy. Could you tell us — what do the records show as to how many employees worked for that restaurant ?
Mr. GoTSCii. At the time of my examination, sir, there were 65 employees at the Beverly Woods Restaurant.
Mr. Kennedy. Now, how were they broken down ?
Mr. GoTSCH. There were 30 waitresses, and there were miscellaneous workers amounting to 22 employees, and bartenders, also.
Mr. Kennedy. Now, of the 30 waitresses, how many were union?
Mr. GoTSCH. Twenty-nine were union, sir.
Mr. Kennedy. Twenty-nine ?
Mr. GoTSCH. Yes, sir.
Mr. Kennedy. What is the wage scale for waitresses ?
Mr. Gotsch. Sixty-seven cents an hour is union scale.
Mr. Kennedy. What were the waitresses in Mr. McGann's Restau- rant being paid ?
Mr. Gotsch. It varied, depending on whether they worked full- time, lunches, or dinners.
Mr. Kennedy. How many of the 30 were being paid below union scale ?
Mr. Gotsch. Twenty-nine.
Mr. Kennedy. They were being paid below union scale ?
Mr. Gotsch. Yes, sir.
Mr. Kennedy. Plow many of the 29 that are union are being paid below union scale ?
Mr. Gotsch. All of them are being paid below union scale.
Mr. Kennedy. The only one not being paid below union scale is the one that is nonunion ?
Mr. Gotsch. No; she is also being paid below union scale, but slio is nonmiion.
Mr. Kennedy. That must mean 28 out of the 29 ?
Mr. Gotsch. No ; all 30.
Mr. Kennedy. They are being paid below union scale ?
Mr. Gotsch. Yes, sir.
Mr. Kennedy. Including the 29 members of the union ?
Mr. Gotsch. That is correct.
Mr. Kennedy. Now, what are some of the waitresses getting paid there?
Mr. Gotsch. The waitresses that Avork lunches and dinners are paid $2 for doing that.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12561
Mr. Kennedy. Give us the hourly rate for some of these waitresses.
Mr. GoTSCii. Well, in that particular case, the scale is set up on a meal basis.
Mr. Kennedy. Well, let us compare it with the 67 cents. You said the waitresses get paid 67 cents.
Mr. GoTscH, They are being paid 50 cents on hour.
Mr. Kennedy. That is some 17 cents below union scale.
]Mr. GoTSCii. That is right.
Mr. Kennedy. Are any of the other employees in similar circum- stances ?
Mr. GoTSCH. Well, most of the other employees except for the bar- tenders are nonunion, but for instance in the miscellaneous category, all of them are nonunion, and 11 are being paid below union scale, and 11 are being paid above.
Mr. Kennedy. That is the nonunion ?
Mr. GoTSCH. Yes, sir.
Mr. Kennedy. What about the bartenders ?
Mr. GoTSCH. The bartenders are all being paid the scale.
Mr. Kennedy. Are they union or nonunion 't
Mr. GoTscH. There are 3 union and 4 nonunion.
Mr. Kennedy, So it amounts to a disadvantage, does it not, to be a member of the union as far as working at that particular restaurant is concerned ?
Mr. GoTSCH. Yes.
Mr. Kennedy. You have got more chance of being paid above union scale if you are not a member of the miion ; is that right ?
Mr. GoTSCH. That is right.
Mr. Kennedy. Could you tell the committee what this saves the restaurant over a period ? What would they have to pay in union dues, or what are paid in union dues per year by this establishment ?
Mr. GoTSCH. The total is about $1,200.
Mr. Kennedy That goes to the union ?
Mr. GoTSCH. Yes, sir ; that is taken out of their salaries.
Mr. Kennedy. Approximately $1,200 ?
Mr. GoTscH. Yes, sir.
Mr. Kennedy. What were you able to compute as to the savings to this restaurant by the fact that they do not meet union scale for their employees ?
Mr. GoTSCH. They save $21,300, approximately.
Mr. Kennedy. It is a saving of approximately $21,300 ?
Mr. GoTSCH. That is right.
Mr. Kennedy. That is a year ?
Mr. GoTScii. That is a yearly figure.
Mr. Kennedy. Plow much does it cost a waitress, for instance, in wage for a week ? Do you have any computation on that ?
Mr. GoTSCH. Pardon me.
Mr. IvENNEDY. For instance, how much does it cost one waitress in wages a week by not being paid union scale ?
Mr. GoTSCH. I have a daily figure here. The hourly waitresses working 8-hour shift lose about $1.36 a day because they are not paid scale, and the girls that work lunches lose $1.23 a day, and the girls that work dinner, in comparison with union scale, lose $1.61 per day.
Mr. Kennedy. This would ranffe anywhere from approximately $6 to $S a week?
12562 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. GoTscH. Yes, sir.
Mr. I^NNEDY. That it costs each one of these employees ? Mr. GoTscH. That is right.
Mr. KJENNEDY. By the fact that the union contract is not being enforced ? Mr. GoTSCH. Plus the fact they have to pay their union dues. Mr. Kennedy. Plus the deduction ? Mr. GoTSCH. That is right.
TESTIMONY OF JOHN McGANN— Resumed
Mr. Kennedy. Mr. McGann, I take it that you are truthful in your ansyer that you did not know. What it amounts to is that you did receive what is a "sweetheart" contract with the union in this arrange- ment.
Mr. McGann. Could I say something along the lines of what he just said ?
Mr. Kennedy. Yes.
Mr. McGann. Wlien you talk about a union scale for a waitress, I would like to know just how that is computed. Is there any provi- sion for meals and things of that nature, and uniforms ?
Now, in other words, I want to be as fair as I can with you and I expect you to be as fair as you can with me, in reference to this: I think from the general opinion of all of the people here, me and my organization here are painted to be quite Scrooge-like in our dealings with our employees, and yet I can say here right now in front of them, because I am sure they are watching me in Chicago, that I don't think that there is any better labor relationship between employee and em- ployer than there is between myself and my employees.
Although those figures are correct because Mr. Gotsch was in and saw my books, he doesn't know of any of the extenuating circum- stances that go around this.
Mr. Kennedy. I think it is very possible, maybe the union is putting the scale above what anybody could afford to pay.
Mr. McGann. Not necessarily that, but the main thing I was going to bring out, for instance, is this : I could afford to pay my employees 75 cents or 80 cents or $1 an hour and then, like a lot of restaurants, charge them $1 or $2 a day for meals.
In our case, we don't do that. Other restaurants I know pay a higher scale for instance for the waitresses, and then at the end of the day deduct $2 for their meals that they eat there.
That is, I think, a point that should be brought out right at this time.
Senator Curtis. What arrangements do you have about uniforms?
Mr. McGann. The girls buy their own uniforms. We buy the uni- forms and then the girls purchase them from us. If you will go over our figures you will find it is a substantial loss as a result of that. We originally bought the uniforms for the girls, but because of careless use of them we had to put a charge on them. In doing that, I mean, uni- forms become very expensive things. Even though we in effect collect money for the uniforms, we lose an awful lot of money as a result of that because we don't collect but one-third of the money that uniforms cost us.
IMPROPER ACTIVITIES IN THE LABOR FIELD 12563
Mr. GoTSCH. I would like to make a comment on this. As far as the union scale is concei'ned, it does not have anything to do with meals. The union contract or agreement booklet that the union fur- nishes says that these scales do not include meals, and meals are over and above this.
Mr. McGanx. I am not aware of what the contract says, but I thouglit I would like to point out to you our particular arrangement with our employees, between us and our employees, is very satisfactory, I am sure.
Mr. Kennedy. And the point is that the representatives of the union never contacted you about the salaries, or the way you were treating your employees?
Mr. McGann. That is correct.
Mr. Kennedy. You were never contacted after you started paying the dues, isn't that correct?
Mr. McGann. That is correct.
Mr. Kennedy. They never evidenced any interest in it. Just on a factual basis of examining what the union scale should be, we have come up with these figures, and now they have to speak for themselves. I appreciate your stating your position on it.
Mr. McGann. Yes, sir.
Tlie Chairman. Well, there is one thing that stands out clearly, that all they were interested in, those who tried to organize your shop and made these arrangements, all they were interested in was the money and nothing else. They manifested no interest in your welfare or the welfare of your help or anyone else ?
Mr. McGann. That is right, sir.
The Chairman. All right.
Mr. Kennedy. That is all for now.
The Chairman. Thank you very much.
Call the next witness.
Mr. Kennedy. Now, Mr. Rupcich.
The Chairman. Do you solemnly swear that the evidence given before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Rupcich. I do.
TESTIMONY OF JOHN EUPCICH, ACCOMPANIED BY HIS COUNSEL, WILLIAM J. LANCASTER
The Chairman. State your name and your place of residence and your business or occupation.
Mr. Rupcich. I am John Rupcich, of Chicago, 111., and my place of business is Rupcich's Restaurant.
The Chairman. Do you have a restaurant by that name ?
Mr. Rupcich. Yes, sir.
The Chairman. It is located where ?
Mr. Rupcich. 106th and Indianapolis Boulevard.
The Chairman, That is your residence also ?
Mr. Rupcich. Yes, sir.
The Chairman. You have counsel to represent you ?
Mr. Rupcich, Yes, sir.
The Chairman, Will you identify yourself for the record, please?
12564 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Lancaster. William J. Lancaster, 111 West WashinMon Street, Chicago 2, 111.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy. Mr. Eupcich, you opened a restaurant in Chicago in 1950?
Mr. RupciCH. That is right.
Mr. Kennedy. And you had Mr. McGann as your general manager?
Mr. RupciCH. That is right.
Mr. Kennedy. You "were approached shortly after opening up by the union representative about organizing your employees ?
Mr. RupciCH. That is right.
Mr. Kennedy. Then you were approached by James O'Connor, of the union ?
Mr. RupcicH. Yes, sir.
Mr. Kennedy. Did you personally have any conversations with Mr. O'Connor?
Mr. RupciCH. No ; I did not.
Mr. Kennedy. Then you had some conferences after that, did you not, with the representatives of the restaurant association ?
Mr. RupcicH. Yes, sir.
Mr. Kennedy. With whom did you talk down there ?
Mr. RupciCH. I talked once with Mr. Kiesaw.
Mr. Kennedy. With anyone else ?
Mr. RupciCH. Well, the morning that the strike was settled, with Mr. Teitelbaum.
Mr. Kennedy. I am talking about prior to the time they put pickets there, did you have any conversations with them ?
Mr. Rtjpcich. No.
Mr. Kennedy. Now, you had these conversations and then did the union come along and place pickets in front of your restaurant ; did they?
Mr. RupciCH. I didn't have any conversations with anyone before the pickets were there.
Mr. Kennedy. All right, after the pickets were there ?
Mr. RupciCH. After the pickets came ; yes.
Mr. Kennedy. Will you tell what happened then ?
Mr. RupciCH. One morning my wife awakened me and said that the building was surrounded by pickets, and I immediately called Mr. McGann and he said to get in touch with the association, and that he would be out. So later that afternoon Mr. McGann came out and he handled the situation after that. The pickets left that afternoon and the next morning they were there again, and Mr. Teitelbaum came out and settled the strike, and sent the pickets on their way.
Mr. Kennedy. Plow did he settle the strike ?
Mr. RupcicH. He was just there that morning, and they walked into the place, and he walked in with Mr. O'Connor, and asked me if it was satisfactory.
Mr. Kennedy. Was Mr. Kiesaw there at that time ?
Mr. Rurcicii. No ; he was not.
Mr. Kennedy. He had arranged for Mr. Teitelbaum to come out?
l^l^r. RTTpricTi. That is right.
Mr. Kennedy. And Mr. Teitelbaum, when he arrived there, he had some conferences with Mr. O'Connor, and they were able to settle the strike ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 12565
Mr. Rupcicii. I believe so.
Mr. Kexxp:dy. What were the arrancenients that were made ?
Mr. Rurcicii. I don't know wliat arrangements were made. All I know is that Mr. McGann asked me if seven employees was all right, and it was all right, and I said, if he thought so, fine.
Mr. Kennedy. You would agree to pay $21 a month, is that right ?
Mr. Rupcicii. That is right, plus the initiation.
Mr. Kennedy. How much was the initiation ?
Mr. RupciCH. I am not positive at this time.
Mr. Kennedy. Approximately.
Mr. RupcicH. I imagine it was about $12, $10 to $12 per employee.
Mr. Kennedy. $10 or $12.
Mr. RupciCH. Per employee.
Mr. Kennedy. That would be about $100 altogether ?
Mr. RupciCH. That is right, sir.
Mr. Kennedy. Did you pay that by check or by cash?
Mr, RupcicH. All by check, sir.
Mr, Kennedy, Did they tell you that you could select the employees ?
Mr, RupciCH, There was no stipulation made as to employees.
]\Ir. Kennedy. Did you select any seven employees?
Mr. RupciCH. That is right.
Mr. Kennedy. Did you inform the employees ?
Mr. Rupcicii. I did not.
Mr. Kennedy. Did you inform them they were in the union ?
Mr, RupciCH. I did not,
Mr. Kennedy. And you started paying the dues ; is that right ?
INIr. RxTcicH, That is right,
Mr. Kennedy. Now, the ones that you selected were L, Pinkston?
Mr, RupciCH. That is right, sir.
Mr. Kennedy, Helen Young, Margaret Johnson, Rebecca Williams, Ann Toliggel, Mary Kernel, and B. Griffiths ; is that right ?
Mr. Rupcicii. That is right,
Mr. Kennedy, Did you continue to pay dues for those seven indi- viduals ?
Mr. RupciCH. Yes, sir ; I did.
Mr. Kennedy. For instance, L. Pinkston left your employment, according to your records, on September 2, 1950, and how long did you pay dues on her ?
Mr. Rupcicii. Well, I just paid dues.
Mr. Kennedy. In fact, you were paying dues on her when we began our investigation, in 1958 ?
Mr. RupciCH. I believe so, sir.
ISIr, Kennedy. She had left your employment some 71/^ years prior to that time?
Mr. RupcicH, That is right,
Mr. Kennedy. Helen Young, August 18, 1950 ?
Mr. Rupcicii. That is right.
Mr. Kennedy. Margaret Johnson, February 21, 1951; Rebecca Williams, September 22, 1950?
Mr, Rupcicii. That is right,
Mr. Kennedy. Ann Toliggel, August 26, 1950; Mary Kernel, No- vember 11, 1950; and B. Griffiths, June 30, 1951?
Mr. RuPCiCH. That is risht.
12566 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. But you were paying dues on these seven individuals even up to 1958 ?
Mr. KupciCH. As far as I know, that is correct.
Mr. Kennedy. Are you still paying dues on those seven people ?
Mr. RupciCH. I believe so.
Mr. Kennedy. You are just going to continue on the same indi- viduals?
Mr. RupciCH. I had been paying my dues every month.
Mr. Kennedy. Well, have you ever had any conversations or con- ferences with the union officials regarding wages or hours or condi- tions for the employees ?
Mr. RupciCH. None at all.
Mr. Kennedy. They never evidenced any interest in the wages of the employees ?
Mr. RupciCH. No, sir.
Mr. Kennedy. They just wanted this amount of money each month; is that right ?
Mr. KuPCiCH. I believe so.
Mr. Kennedy. They weren't interested in anything other than the money being paid ?
Mr. RupciCH. That is right.
Mr. Kennedy. Now, Mr. Chairman, we have an affidavit from one of the employees, if we could read it into the record.
Senator Church. Yes; it may be read into the record. Before you do that, Mr. Kennedy, I would like to ask the witness : What do you pay the $21 a month for?
Mr. RuPCiCH. Well, I just pay it for the right to operate, and just to be able to operate in a friendly way.
Senator Church. You pay it in order to buy no trouble ?
Mr. Rupcich. That is right.
Senator Church. Is this possible; that there are other advantages that might accrue to you by virtue of this $21-a-month payment, other than no trouble? For example, you have heard testimony here this afternoon as to the local union scale in Chicago. Do you pay that scale in your own restaurant ?
Mr. Rupcich. Well, at the time I opened, my manager took care of the scale.
Senator Church. Do you now pay that scale in your restaurant ?
Mr. Rupcich. I believe so, and I thought I was above scale.
Senator Church. There is competitive advantage, then, you feel, in your cases, derived by virtue of this arrangement whereby you pay $21 a month and have no trouble ?
Mr. Rupcich. That is right.
Senator Church. I am thinking in terms of competition with other restaurants that may be paying the union scale, where the waiters and waitresses may be represented by legitimate unions, and are concerned with their welfare and are negotiating with their employers.
Ml'. Rupcich. I understand.
Senator Church. And it seems to me that this kind of a situation could easily lend itself to conditions of unfair competition with restau- rants that are organized legitimately and are paying union scale.
Mr. Kennedy. Now, we have this affidavit, which we have received permission to read into the record.
The Chairman. The affidavit may be printed in the record.
IMPROPER ACTFVITIES IN THE LABOR FIELD 12567
(The document referred to follows :) Mr. Duffy (reading) :
I, Mrs. Lucille Kertis, who reside at 2727 Birch Street. AVliitiiig, Iiid., freely and voluntarily make the following statement to LaVern J. Duffy, who has iden- tified himself to me as a member of the staff of the United States Senate Select Committee on Impi'oper Activities in the Labor-Mana.s;ement Field. No threats, force, or duress have been used to induce me to make this statement, nor have I received any promise of immunity from any consequences which may result from submission of this statement to the aforementioned Senate select commit- tee.
In the year 1950, I was employed as a waitress at Rupcich Restaurant, located at 106th and Indianapolis Boulevard, Chicago, 111. I left Rupcich's Restaurant in the latter part of 1950. During my employment at Rupcich's I did not join any union, nor was I ever contacted by any individual inquiring if I wanted to join a union.
Mr. Duffy, who has indentified himself as a member of the Senate Select Com- mittee on Improper Activities in the Labor-Management Field, informed me that I was, in fact, a member of Local 394 of the Hotel, Club, Restaurant Fm- ployees and Bartenders International Union while employed at Rupcich's. This information was a great surprise to me and was the first time I had ever been informed that I was a member of a union while employed at Rupcich's.
The first time I ever joined a labor union was in 1953, when I started working as a waitress at Phil Smidt & Son, Inc., located at Whiting, Ind. When I began my employment at this establishment, I was asked by a union representative if I wanted to join Local 32 of the Hotel, Club, Restaurant Employees and Bartenders International Union in Gary, Ind. I joined the union and, for the past 5 years, while a member of local 32, I have paid my own dues and am currently a member in good standing.
I have read tlie foregoing statement, and, to the best of my knowledge, it is true and correct.
Lucille Kektes.
Witnesses :
Margaket Kawalec.
JtTLLA. JACKURA.
Sworn and subscribed to before me this 1st day of July 1958.
Cleo a. Myees, Notary Public. My commission expires February 20, 1962.
(At this point, the following members "were present: Senators Mc- Clellan, Church, and Curtis. )
Mr. Duffy. Her name, prior to her marriage, was Lucille Kingston.
Mr. Kennedy. There are five individuals that you pay dues on since September 1950 that have not been employed at your restaurant ; is that right? There are five employees that you have been paying dues on since September 1950 who have not been employed at your restaurant ?
Mr. RurciCH. That is right.
ISIr. Kennedy. And two since 1951 ?
Mr. Rupcich. That is right.
]\Ir. Kennedy. And none of them knew that they were in the union ?
Mr. RurciCH. As far as I knew, none of them knew that, sir.
Mr. Kennedy. How many employees do you have in your res- taurant ?
Mr. Rupcich. Today?
Mr. Kennedy. Yes.
Mr. Rltcich. About 48.
Mr. Kennedy. How many did you have at that time ?
Mr. Rupcich. I think there w^as about 25.
Mr. Kennedy. Would you say that all your employees have been paid union scale or above ?
12568 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. RupciCH. I don't know, sir, if all of them. I believe, other than the waitresses, I believe that they were.
Mr. Kennedy. We have some information on that, Mr. Chairman.
TESTIMONY OF GEEALD GOTSCH— Resumed
Mr, Kennedy. Could you tell us what the records show, so far as Mr. Rupcich's restaurant?
Mr. GoTSCH. Their total number of employees is 49. At the time of our examination, the employer was paying dues on seven waitresses, none of whom, of course, were there He currently employs, at the time of our examination, 21 waitresses, none of which are union. None of them are registered in the union.
Mr. Kennedy. Of those 21, how many were paid below union scale?
Mr. GoTscH. The 21 union waitresses
Mr. Kennedy. Nonunion.
Mr. GoTSCH. They are all nonunion. Nine are paid above scale and 12 below scale.
Mr. Kennedy. How about the miscellaneous employees ?
Mr. GoTsciT. There are 17 miscellaneous employees, none of which is union.
Mr. Kennedy. How many are being paid below scale on that ?
Mr. GoTscH. Sixteen are being paid below scale and one is being paid above.
Mr. Kennedy. How about the cooks ?
Mr. GoTscH. There are four cooks, none of whom are miion. Three are being paid above union scale and one below scale.