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When the Mob Ruled Hollywood
  • June 20, 2011 : 20:06
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On November 4, 1955 William Nelson, a short, stocky 55-year-old retiree who dabbled in stocks and bonds, left his suburban Phoenix tract home, waved good-bye to his wife, slid into his 1953 Ford pickup truck, turned on the ignition and was immediately blown through the top of the cab by a blast so powerful it ripped the door and roof off the nearby garage and rattled windows as far as a mile away. Nelson, with his worn pentagonal wire-rim spectacles and baggy jowls, had looked like a milquetoast, and according to his neighbors, he had lived among them for years without incident—an unobtrusive and quiet man. But Maricopa County sheriff L.C. Boles and his investigator Lieutenant Ralph Edmundson, who were assigned the case, nevertheless called the murder a "revenge killing" and said they were collecting leads from Los Angeles, Chicago and New York.

That's because Nelson wasn't a ­retiree who dabbled in stocks and bonds, and he was anything but a milquetoast. He wasn't even William Nelson. The name of the man whose limbs were scattered over the property was Willie Bioff (appropriately pronounced "buy off"), and in the 1930s he was the undisputed king of Hollywood—the man who terrified everyone in the film industry, from the lowliest stagehands to the most exalted actors to the studio heads themselves. Once, when Bioff arrived at the MGM gate and a guard there didn't recognize him, he phoned MGM vice president Eddie Mannix and ordered him to come down and tell the guard who Bioff was. Mannix complied. When Bioff built a new house that befit his stature as Hollywood's monarch, he told Columbia Pictures executive Leo Spitz that he expected the studio to pay for the furnishings. It did. When he declared to studio executives that he had decided he wanted even more power, he joked that they "jumped like scared cats. I guess I'm their bogeyman."

He was that and more. To the Holly­wood moguls, most of them Eastern ­European Jewish immigrants who aggressively promoted the American dream in their films for fear their adopted country might reject them as aliens, this bumpkin, himself an Eastern European Jew, was the American nightmare. He was cocky, defiant, ostentatious, full of braggadocio and bluster, and happily illiterate—an eccentric out of Damon Runyon but with bloody, bloody hands. Willie Bioff was the king of Hollywood because he was the Capone outfit's operative in Hollywood. And he was the Capone outfit's operative in Hollywood because he had found the secret of how to siphon money from the studios' coffers—­millions of dollars that flowed from the moguls through him and to the mob, with Bioff taking his cut. Had he been given the time, he later said, he would have owned a 50 percent stake in the studios. As it was, he all but ran them—for a while.

He lied. He lied about his name even before he became William Nelson. He was variously Morris Bloffsky, Morris Bioff, William Berg, Harry or Henry Martin and Mr. Bronson. He lied about his age. He was variously born in 1886 or 1899—or one of several years in between. He lied about his place of birth, saying he came to the States with his Russian Jewish parents when he was five or that he had been born in ­Chicago, where he grew up. As he later told it, ­lying or not, his mother died when he was eight, he left school after the third grade and six years later his father threw him out on the streets to fend for himself. By some accounts, he became a childhood pimp, charging boys a dime to fondle girls he paid with 10-cent candy. When one girl refused, young Willie allegedly said, "It's a dime's worth of acid in the face." Among other things, he became a petty thief, stealing hams from Swift & Co. and, despite his kosher upbringing, eating them. ("An empty belly ain't got no religion," he would tell a reporter.) Scarcely out of his teens he ran a ­Chicago brothel, where, police reported, one of his girls serviced 13 men in a single day for a payment of $29. Of this period of his life he would say discreetly, "I peddled papers, run errands and so on, and met a lot of people."

One of the people he met was Jerry Leahy, the Chicago agent for the Teamsters Union, for whom Bioff served as driver while Leahy made "collections"—the tribute businesses paid to avoid union strife. In time Bioff himself was making collections, strong-arming the kosher chicken dealers to organize their workers. It was during this activity in 1932 that he ran into a union agent named George E. Browne who was organizing the ­gentile chicken dealers. Thus began a partnership that would panic Hollywood.

The two new partners couldn't have been more dissimilar. Where Bioff was colorful, Browne was nondescript. His most identifiable characteristic was that he began drinking beer in the morning and didn't stop until he hit his bed at night. (Bioff, later asked to confirm if Browne actually drank 100 bottles of beer a day, quipped, "If you won't hold me to 100, it might have been 101; it might have been 70.") But if Browne was weaving drunkenly through life, he was actually a man of minor prominence in ­Chicago at the time he and Bioff met. Browne's chicken organizing was a sideline to his main profession as the business agent of the local chapter of the International Alliance of Theatrical Stage Employees, or IATSE, the union that represented everyone from stagehands to projectionists to technicians in both theater and film. Browne always claimed he was legit until he met Bioff. It was Bioff, he said, who hatched the plan that would lead them to the Capone gang.

As Bioff told it, it was 1932 or 1933 and he was now working for Browne's union as his personal representative. At the time, 250 of the union's 400 members were out of work, so the local set up a soup kitchen. For Browne, it may have been a gesture of concern, but Bioff saw opportunity in the philanthropy. Bioff had made a great discovery: Whoever controlled the projectionists controlled Hollywood, and IATSE controlled the projectionists. So he brought Chicago theater magnate Barney Balaban to the hospital room where Browne was convalescing from an illness and asked for a donation to the soup kitchen in lieu of restoring pay cuts to his projectionists. Actually, Bioff warned Balaban to make the donation or else suffer a strike that would close his theaters. Balaban gave $20,000—$300 of which Bioff and Browne immediately skimmed so they could celebrate by drinking and gambling at the Club 100. (Bioff later said that they did buy a few cases of canned goods for the soup kitchen with the $20,000.) The club, however, just happened to be managed by Nick Circella—alias Nick Dean, alias Nickelodeon—who was a Capone soldier, and Circella got to wondering what these two bottom-feeders were doing with so much money. Bioff and Browne, unable to keep their mouths shut, bragged to Circella about how they had forced Balaban to give them the loot. The next day Frank Rio, one of Al Capone's chief lieutenants, arranged to meet Browne, ordered him into the car and demanded a 50 percent cut of whatever he and Bioff were able to extort from Balaban.

And so began the first shakedown scheme. Bioff soon met with an executive of the ­Balaban and Katz theater chain and insisted that the chain add a second projectionist to each booth. The executive howled that this would be prohibitively expensive and ultimately bankrupt the company. To which Bioff quipped, "You'll have two men or else. If that is going to kill Grandma, Grandma is going to die." But there was an option, Bioff added. Balaban and Katz could make a payoff to him. Balaban chose the payoff. Soon Bioff and Browne were raking in $100,000 from Chicago exhibitors, which prompted Frank Rio and Frank Nitti, Capone's successor after Capone was sent to prison for income tax evasion, to hold another ­meeting—this one at a downtown Chicago hotel. The mob now demanded two thirds of the take from Bioff and Browne or else. As Bioff later deadpanned, he thought it better not to discover the "or else."

The mob's greed, however, wasn't slaked. In 1932 Browne had run for president of the national IATSE and been defeated. Now that Nitti saw how much money he could rake in from the movie industry just by intimidating the theater owners in a single city, he decided not to let that verdict stand. Nitti convened a meeting at the Riverside, Illinois home of mob enforcer Harry ­Hochstein and laid out the strategy. Nitti wanted to know which locals had opposed Browne in 1932. Browne mentioned New York City, New Jersey, Cleveland and St. Louis. Nitti told him there would be no problem. He would make certain these locals lined up behind him thanks to his "connections."

In June 1934, IATSE gathered for its national convention in Louisville, and affable George E. Browne once again stood for the presidency. To assist his candidacy, a delegation of mobsters arrived from Chicago and ordered a complete media lockdown. Just before the vote, half a dozen men tapping white canes entered the hall—the blind men's tool evidently a warning of what would happen to delegates who opposed Browne. He won. When members of one local complained of vote rigging, Bioff, who upon Browne's election had immediately been appointed the president's new special representative, arranged to have a gang of longshoremen rough them up.

But not everyone was amenable to Browne's ascension, so now began the months of the long knives. When Tommy Maloy, the boss of Chicago Local 110 of the Motion Picture Operators Union, bridled at yielding power to the newcomers, he was shot and killed while cruising in his car on the Outer Drive. (In recounting the incident to an FBI agent, Capone would wink that Maloy had had a traffic accident.) When a man named Clyde Ostenberg threatened to start a rival union to organize projectionists, Bioff, according to Ostenberg's bodyguard, warned him to desist. Ostenberg was later gunned down. So was a union organizer named Louie Alterie. When Bioff suspected union goon Fred "Bugs" Blacker, so nicknamed because he would release bedbugs in uncooperative theaters, of double-dealing, Bioff had him murdered. It was a tribute to Bioff's incorrigibility that when a rival union circulated fliers accusing Bioff of these crimes, he hired the PR man who had distributed them.

By the end of 1935, with their rivals dispatched, Browne and Bioff controlled IATSE. Now it was just a matter of time before IATSE would control Hollywood.

THE TAKEOVER

As Bioff would later describe it, he was merely Browne's assistant, at a salary of $22,000 a year. "Me? I ain't an important guy. I work only for our president, George E. Browne," he told a reporter. "I do what I'm told to do and go where I'm sent." But like so much else that Bioff said, this wasn't true, and he privately boasted that he was the real power and Browne was just a figurehead. In fact, the vainglorious Bioff quickly instituted a pay cut for his union's members, then had the studios kick back their savings to him, which he distributed to himself and the mob, and he instituted a two percent levy on members' wages, which accumulated to $1.5 million more for himself, Browne and their Mafia partners.

Originally the idea was simply to use the projectionists they now represented across the country to launch a national version of the shakedown scheme Bioff had deployed so successfully in Chicago, and the mob was satisfied with the take. But Bioff quickly realized they could collect even more largesse if they represented not only projectionists but virtually all the employees in Hollywood itself. Unfortunately for Bioff, IATSE had staged a disastrous strike in 1933 during which it withdrew from the Basic Studio Agreement between labor and the studios. As a result, its Hollywood membership had dwindled to 150 from 6,000. So the first thing IATSE had to do was enlarge its membership.

For this, Bioff needed the connivance of the studios. Some time in late 1934 or early 1935 he and Browne met with Patrick Casey, the labor liaison for the Hollywood producers, and floated an idea. He proposed that the Chicago projectionists strike on some flimsy pretext. The producers would then meet with Bioff and Browne in an "emergency" session to settle the strike, and in the process they would recognize IATSE again. To make the deal sweeter, the producers would also give it a "closed shop" agreement, meaning it would be the sole bargaining agent for most of the technicians in Hollywood. Other unions were understandably apoplectic at this deal, but they reluctantly went along because Bioff paid them off and because they too feared the "or else."

It was, Bioff said, a eureka moment for him. He realized the plan they had hatched after Louisville to make IATSE the main bargaining agent had worked better than they could possibly have imagined. He had one stick to keep the studios in line via the projectionists, and now with his control of their own labor force he had another. But Bioff had even grander ambitions than doing a little skimming from union dues or getting a few kickbacks for saving the studios money. He would go to the source of the big money, to Hollywood itself, where there were millions more dollars to be wrung from the timorous studios. And Bioff had an idea of how to do it. So he headed West.

THE POWER AND THE GLORY

After all the events of 1935—the murders, the extortion, the consolidation of his power within the unions, the Basic Studio Agreement that gave him his opening to parlay that power—pudgy Willie Bioff, who once said he could lift with one arm any man, met Nicholas Schenck, arguably the most powerful figure in the film hierarchy, armed with his new plan, which was simplicity itself. Schenck was, like Bioff, a Russian Jewish immigrant who, with his older brother Joseph, had opened a pharmacy in New York before moving into the amusement park business, where he caught the attention of Marcus Loew. Loew was the head of Loew's, the parent company of MGM. When Loew died in 1927, Nick Schenck assumed control of Loew's empire. Schenck was gruff, unsophisticated and bullying, but when Bioff met him in Schenck's New York office in April 1936, the two, as Bioff put it, exchanged pleasantries for a minute before Bioff issued his demand: He wanted $2 million or he would pull the projectionists from every movie theater in the United States. "I want you to know I elected Browne president, and I am his boss. He is to do whatever I want him to do. Now your industry is a prosperous industry, and I must get $2 million out of it," Schenck would later quote Bioff as saying, adding that Bioff said if he pulled the projectionists, "In two or three weeks there will be no motion-picture industry. It will be destroyed." Schenck remonstrated that even with the lax accounting practices of Hollywood, he would have a hard time raising $2 million in a single stash. So Bioff halved his demand and agreed to take the money in increments of $50,000 and $100,000. Thus did Bioff and, through him the remnants of the Capone gang, turn Hollywood into their personal bank.

By the time he moved to Hollywood later that year he was in the shakedown business full time and on a much larger scale. He went from studio head to studio head, demanding money in return for his promise that IATSE wouldn't strike. Soon he wasn't going to them; they were coming to his hotel room. The other moguls followed Nick Schenck's lead, handing Bioff bundles of cash, always cash, in plain brown ­wrappers—bundles he would stuff into his jacket pocket. In time the main conduit of the graft would be Nick's brother, Joe Schenck, easily the more popular of the Schencks and the chief executive of 20th Century Fox. As Bioff described it, he would sit in Joe's office munching apples while Joe doled out the money that was now, for efficiency's sake, often funneled through him from the other studios. Bioff was blithe about it all. "The boys in Chicago were expecting a Christmas present," he casually told Harry Warner at the end of 1937. They got one in more bundles of cash, which Bioff fanned on his bed to count.

But Bioff had one more scam up his sleeve. It was actually Nick Schenck who suggested that Bioff become the sales agent for DuPont, which manufactured raw film stock, and take a seven percent commission. Schenck then ordered Louis B. Mayer to buy half of MGM's film stock from Bioff, even though Kodak had been supplying the stock for years and the studios had been perfectly satisfied. Bioff agreed…as long as DuPont didn't tell his Capone gang liaison, Johnny Rosselli. Then Bioff gave the ultimatum to the other studio heads, and they all began buying DuPont's raw film, sending more than $150,000 in "commissions" Bioff's way.

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read more: News, issue july 2011

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