Evening star. [volume], March 13, 1951, Page A-5, Image 5

About Evening star. [volume] (Washington, D.C.) 1854-1972

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Liquor Industry Sees
Anti-Trust Threats
In Policing Outlets
By th« Associated Press
What can be done to keep
criminal elements out of the
wholesale liquor business?
The question, raised by the Sen
ate's special crime investigating
committee, has brought varying
replies from spokesmen for the
Nation's major distillers and the
Federal alcohol tax unit.
The distillers say they cannot
summarily cut off liquor supplies
to wholesalers “who are engaged
in underworld activity" without
running afoul of anti-trust laws.
If they entered into any agree
ment not to sell to a wholesaler,
they contend, they not only
would be subject to criminal suits
under anti-trust laws but also to
suits by the wholesaler for treble
damages.
Possible Individual Action.
Deputy Commissioner Carroll
E. Mealey of the alchol tax unit
said a report submitted by distil
lers’ representatives outlined their
legal difficulties in taking “any
concerted action to discontinue
sales to racketeering wholesalers.”
But he said their report “disre
gards the possibility of correction
through individual action."
All this came into the open yes
terday with the Senate Crime
Committee's publication of docu
ments relating to consultations it
had with representatives of the
liquor industry last November
about eliminating racketeering
elements from the trade.
Among the documents was a re
port prepared by a special com
mittee of the Washington repre
sentatives of most of the Nation’s
distilleries. Howard T. Jones,
executive secretary of the Distilled
Spirits Institute, served as chair
man of the special committee.
Illegality of Action Cited.
Chairman Kefauver said at a
hearing of his Crime Investigating
Committee last Friday he felt the
industry report was unsatisfactory
in a good many respects.
He said many distillers seemed
more interested in the volume o£
their sales than in who their
wholesalers were.
The industry report submitted
by Mr. Jones said policing of
wholesalers by distillers iS possible
only by “concerted illegal agree
ments.” adding that unless all pro
ducers shut off supplies “the de
sired restraint is not secured.”
“If the producing and import
ing industry is to be asked to
police the wholesale industry,” the
report said, “then the Federal
anti-trust laws must be modified
and State laws must be enacted
to protect the producers and im
porters from suits for damages.”
Crime
(Continued From First Page.)
charged that the committee re
port had named him as a national
arch-criminal before he even
appeared at an executive session.!
Yielding to Costello's request,
the committee agreed not to tele
vise his appearance. All of the
open hearing yesterday was tele
vised. Costello protested this
W'ot^d make him a “spectacle” and
deprive him of the right of coun
sel-client privacy.
Television viewers were allowed
to hear his testimony, but the
reputed gambler’s face was cut
off the screen. At times the TV
cameras focused on his hands.
Costello Is Relaxed.
Costello, appearing relaxed and
nodding smilingly at acquaint
ances, sat directly facing commit
teemen as his long statement
was read.
“For years,'’ he said, “I have re
peatedly been falsely charged with
the most serious and vicious
crimes and with being the leader
of a national crime syndicate.
Whenever possible I have sought j
to deny these charges and on
many occasions have offered to
testify before impartial investi
gating bodies.”
When the committee summoned
him to appear before a closed ex
ecutive session last January, he
said, he was reluctant to do so
because “certain statements made
by certain members of this com
mittee” indicated “I could not ex
pect fair treatment or consider
ation.”
Appeared February 13.
However, after his attorney was
assured the committee would
“treat me fairly” and had not
made any foregone conclusions
“about me,” Costello said he
agreed to appear, and did so Feb
ruary 13.
Costello said he also testified
“fully and frankly” before a Sen
ate subcommittee on Interstate
Commerce last April and asked j
Immunity from self-incrimination1
on only one subject—“whether
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JOE ADONIS.
Afraid answers might incrimi
nate him.
FRANK ERICKSON.
A light moment at the crime
hearing.
—AP WireDhotos.
CHARLES LIPSKY.
Links former Mayor O’Dwyer
to Costello.
gambling was conducted in the
Beverly Country Club of New Or
leans.”
But despite his attempt in Feb
ruary to furnish full information,
Costello said, the committee was
even then issuing a report charg
ing him with “grave criminal of
fenses” and being a vice leader.
"I respectfully request,” Cos
tello said, “that I be treated as
impartially as any ordinary wit
ness and that no attempt be made
to single me out and make a field
day of my examination.”
Aware of Claims.
Chairman Kefauver told him
the committee treated all wit-;
nesses “as fairly as we know how"1
and that the committee was “well'
aware” of his claims he has “been
misrepresented.”
Under questioning. Costello ad
mitted he had -failed to state in
his naturalization application that
he once used the name “Frank
Sevario.” He admitted he had
been convicted of a misdemeanor
under that name in 1915, after
being arrested for possession of a
revolver.
In the late 20s, Costello ad-!
mitted, he bought liquor smuggled
into the United States from Can-;
ada for resale in prohibition days.1
On his application, he said, he
listed his occupation as "reah
estate.” i
‘‘Were you in the liquor busi
ness?” he was asked.
A. Yes.
Q. Did you buy liquor in
Canada?
A. No.
Q. Did you do business in
Canada?
A. Persons did business in Can
ada. They brought it to the United
States. I bought from them."
Q. In other words, they smug
gled it in?
A. Yes.
Q. And you bought from them?
A. Yes.
Loses His Composure.
When asked if he was engaged
in illicit liquor trade before his
1925 naturalization application
Costello's composure lfet him for
the first time.
"I was not,” he shouted.
Costello said he once bought
smuggled liquor from one "Harry
Saucer,” but insisted this was not
the "Harry Saucer” whose name
appeared as a witness on his citi
zenship application.
The gambler said he knew two!
or three “Harry Saucers."
The witness was asked: “Where
is the Harry Saucer who signed
your application?”
"I don’t know',” Costello said.
“I think he is dead.”
Costello said he believed Saucer
was “a railroad man.” He said
he had no recollection of this
particular Harry Saucer being in
the rum-running business. Re
minded that the application said
Saucer was a real estate man,
Costello said:
“He might have been.”
Indicted in 1925.
Costello said Saucer was “a
friend but I was not familiar
with his activities.” Also witness
ing his application, Costello said,
was a Frank Goss.
Costello said he was indicted in
1925 for conspiracy to smuggle
liquor into the country along with
62 others arfd that the case was
dismissed by a “Federal Judge
Winslow.”
When asked if Judge Winslow
subsequently quit the Federal
bench as a result of an investiga
tion of the dismissal. Costello’s
attorney protested the question
was “unfair” and a "smoke
screen.”
Mr. Ambro, taking the wit
ness stand before Costello ap
pealed, said that when he met
Adonis, Mr. O'Dwyer and other
prominent men were present.
Names Others at Meeting.
Mr. Ambro, one-time under
sheriff of Kings County (Brook
lyn), said the others included
Irwin Steingut, State Assembly
Democratic leader; Frank Quayle,
former city fire commissioner, and'
the late Prank Kelly, former
Brooklyn Democratic leader.
Mr. O’Dwyer, now Ambassador
to Mexico, is scheduled to appear
at the hearings here Monday.
The introduction to Adonis,
Mr. Ambro said, occurred at a
Brooklyn restaurant operated by
the reputed racketeer.
“I was then undersheriff of
Kings County and leader (Dem
ocratic) of the 19th assembly dis -
trict,” Mr. Ambro said.
The committee's recent report
named Adonis, whose real name
is Joseph Doto, as a lieutenant
of Costello.
Mr. Ambro said numerous well- j
known personages, including Sam
Leibowitz (Samuel Liebowitz is a i
Kings County judge), frequented
Adonis' restaurant. Comedian
Jimmy Durante was a patron, he
said. "
Asked the regularity of Mr.
O'Dwyer’s visits, Mr. Ambro said:
“Oh, often.”
Faces Hard Questions.
Costello faced questions about as
sertions that his influence ex
tended to mayoralty elections,
legitimate racetracks and under
world bookmaking. His name
dominated proceedings yesterday.
One witness testified that Cos
tello's backing determined a
man’s chances of becoming Mayor
of New York. Another said $60,
000 paid to Costello kept book
makers^ away from Roosevelt'
Raceway on Long Island.
Again and again Costello's name
came up to overshadow testimony
by those previously billed as star
witnesses, including Gamblers
Frank Erickson and Adonis.
Costello himself was not present
yesterday at the Federal court
house. He reportedly was watch
ing the proceedings on a tele
vision set in his favorite cocktail
lounge.
A Brooklyn Republican, Charles
Lipsky, 74, was asked if he
thought
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Costello backing in the selection
of a (mayorality. candidate.”
“I would say so,” Mr. Lipsky
replied. "That’s why I went to
him.”
Went to Costello’s Home.
Mr. Lipsky explained that he
dabbled in Democratic city pol
itics because the Republican
Party had no chance of electing
a Mayor.
The witness said he went to
Costello’s home after the then
Mayor O’Dwyer said he would not
run again in 1949. Mayor O'Dwyer’s
announcement left the Democratic
mayoralty plum dangling.
Mr. Lipsky said he told Costello
he favored the Democratic nomi
nation for Mayor of Mr. Quayle,
then fire commissioner.
But Costello, Mr. Lipsky said,
replied: "I'm committed to Char
lie Silver.”
Mr. Lipsky referred to Mr. Silver
as ‘Charlie Silver, of the Ameri
can Woolen Co.”
However, a short time later the
whole matter became academic
when Mayor O'Dwyer decided to
run for re-election. He retained
the post, but resigned after a
short time to become Ambassador
to Mexico.
Mr. Lipsky also said he asked
Spy Trial Spectators Learn of Implosion
By the Associated Press
NEW YORK, Mar. 13.—Spec
tators at the atom spy trial
learned a new word: Implosion.
It’s a sort of reverse explosion,
with the force contracting in
wardly instead of bursting out
wardly.
They learned also that the ex
pression “lens” in connection with
an atom bomb has nothing to do
with taking pictures. It refers to
a curve-shaped high explosive.
Thirty-six of these lens form
a ball around the fusible material.
Their simultaneous “implosion,”
concentrating force toward the
center, creates the necessary stim
ulus to set off a chain reaction
and resulting atom bomb explo
sion.
Adonis, now facing gambling
charges in New Jersey, to see Cos
tello about the mayoralty race.
The witness said he hoped Adonis
would make Costello change his
mind about Mr. Silver.
During his own testimony,
Adonis denied any interest in
politics.
However, Adonis was reluc
tant to answer other questions put
to him by Committee Chairman
Kefauver and other investigators.
Erickson also refused to answer
questions, and now faces the pos
sibility of being cited for contempt
of Congress. The Senators rec
ommended this action after yes
terday's hearings.
Senator Kefauver and the others
also studied a contempt recom
mendation against Adonis, but did
not act, since the gambler already
has been cited after a hearihg in
Washington.
Sent to Costello.
Erickson is serving a two-year
sentence for bookmaking. He told
the committee members that he
was remaining silent for fear that
he might further incriminate
himself.
Mr. Lipsky also testified that
in 1946 Mayor O’Dwyer sent him
to try to get Costello to join in a
purge of the leadership of Tam
many Hail, the Manhattan Demo
cratic organization.
The purge, Mr. Lipsky said, was
suggested by Mrs. Franklin D.
Roosevelt to Mayor O’Dwyer dur
ing the 1945 campaign.
At the Copacabana night club,
the witness said, he met with
Costello, Clarence H. Neal, a
Tammany official, and former
Judge Francis X. Mancuso. The
trio spurned Mr. Lipsky’s tinder
taking, he said.
Informed of this, Mayor O'Dwyer
was quoted as saying:
“All right, we’ll starve them
out.”
Mr. Lipsky said Mayor O’Dwyer
announced the purge by telling
him “to see the boys and give
them a message that he wanted
them to supplant the leader at
Tammany Hall.”
Edward V. Loughlin was Tam
many Hall head at the time, but
resigned shortly thereafter.
Cocke to See Chiang
TAIPEI, Formosa, Mar. 13 (JP).
—J. Erie Cocke, jr„ American
Legion commander, arrived on his
world tour today to visit Nation
alist China’s island stronghold.
He was scheduled to see President
Chiang Kai-shek soon after ar
rival.
A $1 million farm planned for
Cape Town, South Africa, will
have conveyor belts instead of
other means of transportation.
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