Former Casino Security Worker Testifies At Skimming Trial

(Note: be warned, kind of long background info here, but I think it’s needed)
As far as interesting lives, few can beat Benjamin ‘Bugsy’ Siegel. Born February 28, 1906 in Brooklyn, New York, Siegel came from a poor Jewish family. Before he was even twenty, he’d established a profitable protection racket and a lengthy rap sheet, including armed robbery, rape, and murder. Siegel had connections—he was childhood friends with Al Capone and familiar with many of the well known New York City mobsters of the day—and he also had a taste for violence. Soon, he’d established a small mob specializing in hits for the numerous bootleg gangs of the time with Meyer Lansky, a fellow mobster. His violence and short temper led some to say he was “crazy as a bedbug,” giving him his famous nickname ‘Bugsy,’ which he even more famously despised.
Siegel was making money, which he was happy to flaunt, but he wanted more. He carried out several hits for Charles “Lucky” Luciano, and eventually formed Murder Inc. with his associates, establishing himself as a skilled hitman for the National Crime Syndicate, an organization of mob families. But Siegel was already making enemies, and several assassination attempts were made on his life, some of which came very close to being successful. So, it was time to move out west.
In California, Siegel helped establish gambling rackets, drug trade routes, and prostitution rings. His star was rising outside of the Underworld too, and in addition to the numerous politicians and police on his payroll, he befriended stars like Cary Grant and Clark Gable. Incredibly, while in Italy with a socialite in 1938, he met Hermann Goering and Joseph Goebbels, whom he immediately disliked and offered to kill. The offer was declined by his lady friend. Yet Siegel was not always looked upon fondly by the upper echelons of Hollywood; he borrowed exorbitantly from celebrities, knowing he would never be asked to pay it back, and began to develop extensive plans to extort movie studios. After several trials and acquittals for failed and successful hits, it was time to leave California.
Siegel’s next stop was Las Vegas where, in 1945, he purchased and developed the Flamingo Hotel & Casino, the first luxury hotel on the Vegas strip. As you might imagine, that was expensive, and over the course of its construction, costs were equivalent to over $61 million in today’s money each year. Siegel’s checks were bouncing, and many of the locals felt threatened by him. Mob bosses were beginning to lose patience with Siegel too, and he was refusing to report on business, claiming he was running the California Syndicate himself. For now, they left him alone—he'd been valuable in the past, after all.
The Flamingo Hotel was a dismal failure, and people—very powerful people—were starting to get tired of waiting for the promised money to materialize. By 1947, it was gradually turning around—with the help of Meyer Lansky, now in Vegas—but for most, it was too little too late.
Death:
On June 20, 1947, Siegel was gunned down in the Beverly Hills home of his sometimes-girlfriend Virginia Hill. He was 41. Somewhat suspiciously, Hill had taken an unscheduled flight to Paris the day (or by some sources, week) before. As Siegel sat reading the newspaper with associate Allen Smiley, an unknown assailant fired with a .30 caliber military M1 carbine through the window, striking Siegel many times (NSFW). Two shots hit his head, with one passing through his right cheek and the other his nose. Though he was not hit directly through the eye (NSFW), a bullet-in-the-eye death became a popular trope in Mafia media, including in the Godfather, where a character based on Siegel is murdered in the same manner.
The death was covered extensively in the media, which portrayed Vegas as a bastion of sin and mafia activity. As early as the day after Siegel’s death (or, as some sources have it, during Siegel’s death), however, more personal things were changing: Lansky walked into the Flamingo and took over operations.
Theories:
The mob is famously tight-lipped, and Siegel’s death was no exception. Despite the extensive speculation, no precise motive has ever been confirmed. There was a massive police investigation, but in a case like this, that doesn’t mean much, nor does the media coverage. The media in particular salivated over the potential for splashy crime stories, and the circumstances of this case have been complicated by contemporary coverage. Several days after Siegel’s death, for example, one newspaper ran the headline “BUGSY'S BLONDE EX-WIFE GIVES CLUES TO HIS KILLERS,” while another read “BUGSY'S EX NO AID IN HUNT.” As far as the most popular theories:
A Mob hit: A mob hit seems like the most obvious cause, and it's a theory that’s been popularized by several novels and the 1991 movie Bugsy. It would certainly make sense; it was the mob’s money Siegel had been spending wildly on his unsuccessful hotel after all, and he’d been growing uncooperative. Of the proposed hitmen, the most often mentioned are Frankie Carbo (Ralph Natale, former Philadelphia boss and Mob squealer, claimed Carbo as the true killer) and Eddie Cannizarro, both Syndicate hitmen. But even here, there are several proposed reasons for the hit. As some have it, mob money from the Flamingo’s funding was going missing and Siegel was skimming off the already meager profits. Skimming could have been forgiven, if the Flamingo was a success. It was not. After a meeting of the Syndicate’s “Board of Directors,” it was allegedly decided that Siegel would die, with Lansky reluctantly agreeing. Others believe that a hit might have been ordered whether Siegel was skimming or not; the Flamingo was simply too expensive. As one historian put it, “Bugsy was a dreamer. And he was dreaming with other people’s money.”
Yet many have also argued against this theory. According to one of Siegel’s emissaries in Vegas, for example, no one would have dared to order a hit on Siegel. He and Lansky were close until the end of their lives, and Lansky would never have agreed to it. And if Lansky would not agree, then Charles “Lucky” Luciano, who was “the head of everything,” would never have agreed either. And as others have argued, the method of execution (NSFW) didn’t match with typical mob methods; firing a weapon from outside a house increased the risk of missing as well as the risk of being seen. The preferred method was a clean shot to the back of the head. According to some, the oft-referenced money problems of the Flamingo also wasn’t an issue. At the time, Lansky was paying back any investor who wanted out, and the gradual uptick in its profits was quickening by the day. Personally, I don’t think the financial uptick invalidates the theory. If the hotel was starting to make more money, then that might be all the more reason to get rid of the difficult-to-manage Siegel and take over.
Wire Business: At the time of his death, Siegel was embroiled in a dispute with Jack Dragna, dubbed the Capone of Los Angeles. Siegel and Dragna had had an uneasy partnership in previous years, but Dragna, far less powerful than Siegel and the New York gangs, resented the income and respect Siegel commanded. This came to a head when a racing wire service (a way of cheating on bets) between the two of them soured. Siegel wanted control for himself, and ordered Dragna to turn it over or be killed, to which Dragna agreed. After Siegel’s death, control was returned to Dragna. He had a motive, but his story would only have been one among many for a man as ruthless as Siegel, which, in a way, complicates things further—there’s a real possibility that the culprit in Siegel’s murder was someone never even considered. His list of enemies was long, varied, and probably mostly unknown. Yet another man who had reason to want Siegel dead, for example, was his bodyguard and muscle Mickey Cohen. A Cleveland gangster, Cohen was given control of the Syndicate’s West Coast gambling operations. If Siegel still lived, he would never have gotten it. Interestingly, he, like Al Capone before him, was eventually felled by tax evasion.
Virginia and/or brother: The same emissary of Siegel who shot down the mob hit theory believed that Virginia Hill’s brother had carried out the murder. The brother, a marine stationed at Camp Pendleton named Bob or Bill, had seen Siegel and Virginia fighting outside the Flamingo as well as the bruises Siegel had left on her and threatened to kill him. Another of Virginia’s brothers, Chuck, was also at the Beverly Hills house when Siegel was murdered.
Virginia herself has also been the subject of suspicion. Nicknamed the “Queen of the Mob,” Hill worked, among other powerful jobs, as a cash courier, laundering money and stolen goods as well as blackmailing high-ranking men through sexual liaisons. Her relationship with Siegel was tempestuous at best, and she may have been embezzling from the Flamingo. She’s also been accused of two-timing with rival mob operations, though this is unconfirmed. Eventually fleeing to Europe permanently, Hill died of an overdose in 1966, though some have alleged that she was actually murdered after she, completely broke, attempted to leverage her intimate knowledge of the Mob.
Rival Mobs: Unfortunately, I can’t find much concrete information about this theory (note: story of my life researching these posts haha), but some believe that rival mob operatives wanted Siegel gone. He was a powerful—and very public—figure, which made him something of an obvious target in the cut-throat world of Mafia politics.
Moe Sedway: This is a relatively new theory, emerging after Robbie Sedway was interviewed for LA Magazine after his mother’s death. Here, he alleged that Siegel’s murder was ordered by his mother Bee, the wife of powerful mobster—and childhood friend of Siegel’s—Moe Sedway. According to Bee, who wrote and scrapped a book proposal called Bugsy's Little Lunatic (Siegel’s nickname for her), Siegel had threatened her husband, who was the Flamingo’s numbers man, and therefore watching Siegel—who, remember, had been accused of skimming—closely. So Bee contacted Mathew “Moose” Pandza, a truck driver whom Bee married after Moe’s death. Moose, the perfect killer, since he had no connection to the Mob, then shot Siegel to death. The problem with this theory, however, is that Bee is the only source; as she herself said, anyone who could contradict her was dead. She also squandered most of the fortune left to her by Moe over the course of her life, and died almost penniless.
All of the above: Some believe that almost all the suspects were involved. Usually, it goes something like this: “Virginia supplied the location and received some reward. Cohen knew Bugsy's schedule for the evening, but happened to not be watching him that night…Dragna ordered the hit, with the approval of Lansky and Luciano.” It’s unlikely, but it certainly has its believers, if only for the convenience of it.
Final Thoughts & Questions:
This case is interesting to me because of the sheer number of suspects. In the end, a mob hit seems the simplest and most likely explanation. But there were so many people with means, motive, and opportunity. So:

• Why was Siegel killed and who killed him? The Syndicate, rival mobs, Virginia Hall, her brother, Mickey Cohen, Jack Dragna, Mathew Pandza (as ordered by Moe and/or Bee Sedway), several of the suspects, or someone else entirely?

Sources:
https://www.lamag.com/longform/mobster-murder-moll-secret/
https://www.pbs.org/wgbh/americanexperience/features/lasvegas-bugsy/
https://themobmuseum.org/blog/killed-benjamin-bugsy-siegel/
https://unsolvedmysteries.fandom.com/wiki/Bugsy_Siegel
https://en.wikipedia.org/wiki/Bugsy_Siegel
https://themobmuseum.org/blog/virginia-hill-queen-of-the-mob-was-no-ones-pushove
To many, Siegel’s legacy exceeds his mob connections, and in some ways, even his death; without him, many believe, there would be no Vegas. So if you take anything away from this write-up, let it be this: The Blue Man group’s Vegas residency is Bugsy Siegel’s fault.

M. Wesley Swearingen, an FBI agent from 1951 to 1977, writes in his memoir FBI Secrets: An Agent's Expose about the long-standing rumors within the Bureau concerning the relationship between FBI Director J. Edgar Hoover and Associate Director Clyde Tolson which include allegations that Hoover ignored the Mafia for decades because the wise guys had incriminating goods on the supposed lovers:

One year after arriving in Memphis, Hoover transferred me to Chicago, Illinois. I was thrilled – my mind was full of gangsters, Tommy guns, and the FBI's famous machine gun battles of the 1930s. It was clear to me from Chicago's newspaper headlines that gangsters ruled a Chicago underworld element in the 1950s because gangland style murders averaged close to 100 a year in the Chicago area. * * * But when I told my colleague and veteran agent Vince Coll of my big plans for Chicago, he said that Hoover did not recognize the existence of a mob in Chicago. According to Coll, Mafia leader Meyer Lansky's organization had enough on Hoover and Tolson, as closet homosexuals, that Hoover would never investigate the mob.

The allegations were fleshed out in Official and Confidential: the Secret Life of J. Edgar Hoover by Anthony Summer. A review of the book ("Partners For Life") by Sidney Urquhart for Time magazine summarizes one alleged incident as follows:

Perhaps Summers' most bizarre revelation is an account provided by Susan Rosenstiel, the wife of a liquor distiller and gambling crony. Rosenstiel recalls attending what she thought would be an elegant private party at New York City's Plaza Hotel in the company of lawyer Roy Cohn, Hoover and others. Instead, Cohn introduced Rosenstiel to a woman named "Mary," dressed in a fluffy black dress, lace stockings and high heels. It was obvious Mary was no woman. "You could see where he shaved. It was Hoover," said Rosenstiel. Joined by Cohn, Hoover stripped down to a tiny garter belt and proceeded to have sex with two young boys. Cohn later joked about the evening. "That was really something, wasn't it, with Mary Hoover?"

The "two young boys" with whom Hoover allegedly had sex perhaps were provided by Ed "the Skull" Murphy who was a long-time Genovese associate involved in the crime family's gay bar and boy prostitution rackets in New York City. In Stonewall: The Riots That Sparked The Gay Revolution, David Carter writes:

John Paul Ranieri, a former prostitute interviewed for this history, provided critical testimony for corroborating and better understanding the larger implications of Murphy's criminal enterprises for gay history. Ranieri said that as a youth from Westchester County he had been forced by blackmail and Mafia-supplied drugs into a prostitution ring in which he remained active for three years before he escaped the mob's control. He claimed that a number of youths in the ring had disappeared after they got careless with talk, for while most of the customers were more or less average homosexual men with money, the regular clientele, according to Ranieri, also included famous men such as Malcolm Forbes, Cardinal Spellman, Liberace, U.S. Senators, a vice president of the United States, one of the most famous rock musicians, and J. Edgar Hoover. The mob's order, according to Ranieri, was strictly "Keep your zipper open and your mouth shut."
Ranieri said that he met J. Edgar Hoover at private parties at the Plaza Hotel and that Hoover's name was never mentioned. Hoover was always in drag, and Ranieri said he could tell that the FBI director was sure that no one recognized him. Ranieri said that he had ensured his own survival by having in his possession a photograph of himself with Hoover, given to him by the photographer.
How does the preceding information link Ed Murphy with J. Edgar Hoover? The connection is made evident in a news story written shortly after Hoover's homosexuality and transvestism became public. When [Anthony] Summer's book [Official and Confidential: The Secret Life of J. Edgar Hoover], was published [in 1993], a newspaper story about the 1960s national homosexual blackmail ring suddenly appeared after a quarter of a century of silence on the subject. Without mentioning Murphy's name, it quoted law enforcement sources who had worked on the case as saying that their investigation into the nationwide blackmail ring had turned up a photograph of Hoover "posing amiably" with the racket's ringleader and had uncovered information that Clyde Tolson, Hoover's lover, had himself "fallen victim to the extortion ring." After federal agents joined the investigation, both the photograph of Hoover and the documents about Tolson disappeared. * * * Very suggestive in this context is that Murphy would publicly say in 1978—before it became public information, as it did in the 1990s, that the Mafia had photographs of Hoover involved in sex acts—that he knew that J. Edgar Hoover "was one of my sisters."

Murphy's boys did have a habit of disappearing. For example, one Puerto Rican youth known as Tano with whom Murphy was sexually involved was kidnapped right off the streets never to be seen again according to one eyewitness to the incident as recounted by Carter in Stonewall.
Curiously, Murphy also was a long-standing FBI informant according to a May 8, 1978 article ("Skull Murphy: The Gay Double Agent") by Arthur Bell for The Village Voice. Indeed, this article contained the interview in which Murphy expressly speaks of J. Edgar Hoover as one of his "sisters": "He was the biggest fuckin' extortionist in this country. He had presidents by the balls. He had a record on everybody and his brother."
The allegations that Meyer Lansky had incriminating evidence against the FBI Director are particularly credible in light of the relationships among all the parties with political fixer Roy Cohn -- a fellow closet case who died of AIDS in 1986 -- at the center of it all.
Cohn was a personal friend of Hoover during the 1950s and 1960s, and the two shared extensive correspondence directed to each other on a first-name basis including a September 1957 exchange on an article published by the Director entitled "Let's Wipe Out the Schoolyard Sex Racket." Ironically, only months earlier an apparent obscenity indictment against Cohn had been dismissed according to an FBI memo dated June 28, 1957 from Assistant Director Louis B. Nichols to Clyde Tolson:

Roy Cohn called 6-27-57 to advise that Neil Gallagher of the New Jersey Turnpike Commission represented him in connection with the return of an indictment charging the sale of obscene literature. Gallagher went before the Superior Court judge in Union County, New Jersey, Thursday afternoon and moved the dismissal of the indictment. The district attorney joined him in this recommendation and issued a public apology to Cohn.

Cornelius "Neil" Gallagher later became a U.S. Congressman from Bayonne, NJ until he lost the seat in 1972 after Life magazine ran an article alleging mob ties.
The relationship between Hoover and Cohn is particularly troubling given that the FBI was fully aware that Cohn had ties to the most powerful bosses in the Mafia. For example, in 1964 federal prosecutor Robert Morgenthau was trying Cohn on corruption charges, and at the trial introduced excerpts of earlier grand jury testimony by Cohn. A March 27, 1964 article from The New York Times which the FBI contemporaneously clipped for its files on Cohn states:

The excerpts contained admissions by Mr. Cohn that he was acquainted with Geralde (Jerry) Catena, described by the Senate Rackets Committee as "No. 2 Man" in the Vito Genovese unit of the Cosa Nosta, and with Meyer Lansky, gangster. Mr. Cohn said he scarcely knew Lansky but that he had played golf two or three times with Catena.

Cohn further had represented the Stork Club which was Hoover's favorite stomping ground and Schenley Industries which was one of the country's largest liquor distillers. Louis Rosensteil was the president of Schenley Industries, and he had close ties to Meyer Lansky and Frank Costello. "In fact, on several occassions, Hoover was seen at the Stork Club fraternizing with people like Costello and Rosensteil" according to Peter J. Devico in The Mafia Made Easy. After Hoover's right-hand man Louis Nichols left the FBI in 1957, Cohn allegedly secured him a plum job making $100,000 a year at Schenley Industries although Nichols insisted in Hooveresque fashion that Rosensteil shunned the mob.
Of couse, the best evidence that Meyer Lansky had the goods on the FBI Director is that the storied agency never laid a hand on the gangster who was a bootleg kingpin during Prohibition, later founded Murder Inc., and finally ran gambling operations in Las Vegas and Havana, Cuba for the Genovese family. At the time of Lansky's death in 1983 the FBI estimated that he had a net worth of $300 million, and yet during his long criminal career the G-men never nailed him on a single charge or recovered a single penny. Indeed, the FBI did not even start a file on Lansky until the 1950s, and a review of the file's sparse contents illustrates that the agency's efforts to target him -- a purported top hoodlum -- were half-hearted at best involving little more than the occasional wiretap and a sometimes surveillance. Indeed, the newspaper articles on Lansky which the FBI clipped were more informative on the mobster's activities than the investigator reports. Ironically, Lansky only was arrested in 1972 -- the same year Hoover died -- as a result of an IRS investigation involving an alleged skimming scheme from a Vegas casino, and even that indictment conveniently was dismissed because Lansky was considered too ill to prosecute.

M. Wesley Swearingen, an FBI agent from 1951 to 1977, writes in his memoir FBI Secrets: An Agent's Expose about the long-standing rumors within the Bureau concerning the relationship between FBI Director J. Edgar Hoover and Associate Director Clyde Tolson which include allegations that Hoover ignored the Mafia for decades because the wise guys had incriminating goods on the supposed lovers:

One year after arriving in Memphis, Hoover transferred me to Chicago, Illinois. I was thrilled – my mind was full of gangsters, Tommy guns, and the FBI's famous machine gun battles of the 1930s. It was clear to me from Chicago's newspaper headlines that gansters ruled a Chicago underworld element in the 1950s because gangland style murders averaged close to 100 a year in the Chicago area. * * * But when I told my colleague and veteran agent Vince Coll of my big plans for Chicago, he said that Hoover did not recognize the existence of a mob in Chicago. According to Coll, Mafia leader Meyer Lansky's organization had enough on Hoover and Tolson, as closet homosexuals, that Hoover would never investigate the mob.

The allegations were fleshed out in Official and Confidential: the Secret Life of J. Edgar Hoover by Anthony Summer. A review of the book ("Partners For Life") by Sidney Urquhart for Time magazine summarizes one alleged incident as follows:

Perhaps Summers' most bizarre revelation is an account provided by Susan Rosenstiel, the wife of a liquor distiller and gambling crony. Rosenstiel recalls attending what she thought would be an elegant private party at New York City's Plaza Hotel in the company of lawyer Roy Cohn, Hoover and others. Instead, Cohn introduced Rosenstiel to a woman named "Mary," dressed in a fluffy black dress, lace stockings and high heels. It was obvious Mary was no woman. "You could see where he shaved. It was Hoover," said Rosenstiel. Joined by Cohn, Hoover stripped down to a tiny garter belt and proceeded to have sex with two young boys. Cohn later joked about the evening. "That was really something, wasn't it, with Mary Hoover?"

The "two young boys" with whom Hoover allegedly had sex perhaps were provided by Ed "the Skull" Murphy who was a long-time Genovese associate involved in the crime family's gay bar and boy prostitution rackets in New York City. In Stonewall: The Riots That Sparked The Gay Revolution, David Carter writes:

John Paul Ranieri, a former prostitute interviewed for this history, provided critical testimony for corroborating and better understanding the larger implications of Murphy's criminal enterprises for gay history. Ranieri said that as a youth from Westchester County he had been forced by blackmail and Mafia-supplied drugs into a prostitution ring in which he remained active for three years before he escaped the mob's control. He claimed that a number of youths in the ring had disappeared after they got careless with talk, for while most of the customers were more or less average homosexual men with money, the regular clientele, according to Ranieri, also included famous men such as Malcolm Forbes, Cardinal Spellman, Liberace, U.S. Senators, a vice president of the United States, one of the most famous rock musicians, and J. Edgar Hoover. The mob's order, according to Ranieri, was strictly "Keep your zipper open and your mouth shut."
Ranieri said that he met J. Edgar Hoover at private parties at the Plaza Hotel and that Hoover's name was never mentioned. Hoover was always in drag, and Ranieri said he could tell that the FBI director was sure that no one recognized him. Ranieri said that he had ensured his own survival by having in his possession a photograph of himself with Hoover, given to him by the photographer.
How does the preceding information link Ed Murphy with J. Edgar Hoover? The connection is made evident in a news story written shortly after Hoover's homosexuality and transvestism became public. When [Anthony] Summer's book [Official and Confidential: The Secret Life of J. Edgar Hoover], was published [in 1993], a newspaper story about the 1960s national homosexual blackmail ring suddenly appeared after a quarter of a century of silence on the subject. Without mentioning Murphy's name, it quoted law enforcement sources who had worked on the case as saying that their investigation into the nationwide blackmail ring had turned up a photograph of Hoover "posing amiably" with the racket's ringleader and had uncovered information that Clyde Tolson, Hoover's lover, had himself "fallen victim to the extortion ring." After federal agents joined the investigation, both the photograph of Hoover and the documents about Tolson disappeared. * * * Very suggestive in this context is that Murphy would publicly say in 1978—before it became public information, as it did in the 1990s, that the Mafia had photographs of Hoover involved in sex acts—that he knew that J. Edgar Hoover "was one of my sisters."

Murphy's boys did have a habit of disappearing. For example, one Puerto Rican youth known as Tano with whom Murphy was sexually involved was kidnapped right off the streets never to be seen again according to one eyewitness to the incident as recounted by Carter in Stonewall.
Curiously, Murphy also was a long-standing FBI informant according to a May 8, 1978 article ("Skull Murphy: The Gay Double Agent") by Arthur Bell for The Village Voice. Indeed, this article contained the interview in which Murphy expressly speaks of J. Edgar Hoover as one of his "sisters": "He was the biggest fuckin' extortionist in this country. He had presidents by the balls. He had a record on everybody and his brother."
The allegations that Meyer Lansky had incriminating evidence against the FBI Director are particularly credible in light of the relationships among all the parties with political fixer Roy Cohn -- a closet case who died of AIDS in 1986 -- at the center of it all.
Cohn was a personal friend of Hoover during the 1950s and 1960s, and the two shared extensive correspondence directed to each other on a first-name basis including a September 1957 exchange on an article published by the Director entitled "Let's Wipe Out the Schoolyard Sex Racket." Ironically, only months earlier an apparent obscenity indictment against Cohn had been dismissed according to an FBI memo dated June 28, 1957 from Assistant Director Louis B. Nichols to Clyde Tolson:

Roy Cohn called 6-27-57 to advise that Neil Gallagher of the New Jersey Turnpike Commission represented him in connection with the return of an indictment charging the sale of obscene literature. Gallagher went before the Superior Court judge in Union County, New Jersey, Thursday afternoon and moved the dismissal of the indictment. The district attorney joined him in this recommendation and issued a public apology to Cohn.

Cornelius "Neil" Gallagher later became a U.S. Congressman from Bayonne, NJ until he lost the seat in 1972 after Life magazine ran an article alleging mob ties.
The relationship between Hoover and Cohn is particularly troubling given that the FBI was fully aware that Cohn had ties to the most powerful bosses in the Mafia. For example, in 1964 federal prosecutor Robert Morgenthau was trying Cohn on corruption charges, and at the trial introduced excerpts of earlier grand jury testimony by Cohn. A March 27, 1964 article from The New York Times which the FBI contemporaneously clipped for its files on Cohn states:

The excerpts contained admissions by Mr. Cohn that he was acquainted with Geralde (Jerry) Catena, described by the Senate Rackets Committee as "No. 2 Man" in the Vito Genovese unit of the Cosa Nosta, and with Meyer Lansky, gangster. Mr. Cohn said he scarcely knew Lansky but that he had played golf two or three times with Catena.

Cohn further had represented the Stork Club which was Hoover's favorite stomping ground and Schenley Industries which was one of the country's largest liquor distillers. Louis Rosensteil was the president of Schenley Industries, and he had close ties to Meyer Lansky and Frank Costello. "In fact, on several occassions, Hoover was seen at the Stork Club fraternizing with people like Costello and Rosensteil" according to Peter J. Devico in The Mafia Made Easy. After Hoover's right-hand man Louis Nichols left the FBI in 1957, Cohn allegedly secured him a plum job making $100,000 a year at Schenley Industries although Nichols insisted in Hooveresque fashion that Rosensteil shunned the mob.
Of couse, the best evidence that Meyer Lansky had the goods on the FBI Director is that the storied agency never laid a hand on the gangster who was a bootleg kingpin during Prohibition, later founded Murder Inc., and finally ran gambling operations in Las Vegas and Havana, Cuba for the Genovese family. At the time of Lansky's death in 1983 the FBI estimated that he had a net worth of $300 million, and yet during his long criminal career the G-men never nailed him on a single charge or recovered a single penny. Indeed, the FBI did not even start a file on Lansky until the 1950s, and a review of the file's sparse contents illustrates that the agency's efforts to target him -- a purported top hoodlum -- were half-hearted at best involving little more than the occasional wiretap and a sometimes surveillance. Indeed, the newspaper articles on Lansky which the FBI clipped were more informative on the mobster's activities than the investigator reports. Ironically, Lansky only was arrested in 1972 -- the same year Hoover died -- as a result of an IRS investigation involving an alleged skimming scheme from a Vegas casino, and even that indictment conveniently was dismissed because Lansky was considered too ill to prosecute.

M. Wesley Swearingen, an FBI agent from 1951 to 1977, writes in his memoir FBI Secrets: An Agent's Expose about the long-standing rumors within the Bureau concerning the relationship between FBI Director J. Edgar Hoover and Associate Director Clyde Tolson which include allegations that Hoover ignored the Mafia for decades because the wise guys had incriminating goods on the supposed lovers:

One year after arriving in Memphis, Hoover transferred me to Chicago, Illinois. I was thrilled – my mind was full of gangsters, Tommy guns, and the FBI's famous machine gun battles of the 1930s. It was clear to me from Chicago's newspaper headlines that gangsters ruled a Chicago underworld element in the 1950s because gangland style murders averaged close to 100 a year in the Chicago area. * * * But when I told my colleague and veteran agent Vince Coll of my big plans for Chicago, he said that Hoover did not recognize the existence of a mob in Chicago. According to Coll, Mafia leader Meyer Lansky's organization had enough on Hoover and Tolson, as closet homosexuals, that Hoover would never investigate the mob.

The allegations were fleshed out in Official and Confidential: the Secret Life of J. Edgar Hoover by Anthony Summer. A review of the book ("Partners For Life") by Sidney Urquhart for Time magazine summarizes one alleged incident as follows:

Perhaps Summers' most bizarre revelation is an account provided by Susan Rosenstiel, the wife of a liquor distiller and gambling crony. Rosenstiel recalls attending what she thought would be an elegant private party at New York City's Plaza Hotel in the company of lawyer Roy Cohn, Hoover and others. Instead, Cohn introduced Rosenstiel to a woman named "Mary," dressed in a fluffy black dress, lace stockings and high heels. It was obvious Mary was no woman. "You could see where he shaved. It was Hoover," said Rosenstiel. Joined by Cohn, Hoover stripped down to a tiny garter belt and proceeded to have sex with two young boys. Cohn later joked about the evening. "That was really something, wasn't it, with Mary Hoover?"

The "two young boys" with whom Hoover allegedly had sex perhaps were provided by Ed "the Skull" Murphy who was a long-time Genovese associate involved in the crime family's gay bar and boy prostitution rackets in New York City. In Stonewall: The Riots That Sparked The Gay Revolution, David Carter writes:

John Paul Ranieri, a former prostitute interviewed for this history, provided critical testimony for corroborating and better understanding the larger implications of Murphy's criminal enterprises for gay history. Ranieri said that as a youth from Westchester County he had been forced by blackmail and Mafia-supplied drugs into a prostitution ring in which he remained active for three years before he escaped the mob's control. He claimed that a number of youths in the ring had disappeared after they got careless with talk, for while most of the customers were more or less average homosexual men with money, the regular clientele, according to Ranieri, also included famous men such as Malcolm Forbes, Cardinal Spellman, Liberace, U.S. Senators, a vice president of the United States, one of the most famous rock musicians, and J. Edgar Hoover. The mob's order, according to Ranieri, was strictly "Keep your zipper open and your mouth shut."
Ranieri said that he met J. Edgar Hoover at private parties at the Plaza Hotel and that Hoover's name was never mentioned. Hoover was always in drag, and Ranieri said he could tell that the FBI director was sure that no one recognized him. Ranieri said that he had ensured his own survival by having in his possession a photograph of himself with Hoover, given to him by the photographer.
How does the preceding information link Ed Murphy with J. Edgar Hoover? The connection is made evident in a news story written shortly after Hoover's homosexuality and transvestism became public. When [Anthony] Summer's book [Official and Confidential: The Secret Life of J. Edgar Hoover], was published [in 1993], a newspaper story about the 1960s national homosexual blackmail ring suddenly appeared after a quarter of a century of silence on the subject. Without mentioning Murphy's name, it quoted law enforcement sources who had worked on the case as saying that their investigation into the nationwide blackmail ring had turned up a photograph of Hoover "posing amiably" with the racket's ringleader and had uncovered information that Clyde Tolson, Hoover's lover, had himself "fallen victim to the extortion ring." After federal agents joined the investigation, both the photograph of Hoover and the documents about Tolson disappeared. * * * Very suggestive in this context is that Murphy would publicly say in 1978—before it became public information, as it did in the 1990s, that the Mafia had photographs of Hoover involved in sex acts—that he knew that J. Edgar Hoover "was one of my sisters."

Murphy's boys did have a habit of disappearing. For example, one Puerto Rican youth known as Tano with whom Murphy was sexually involved was kidnapped right off the streets never to be seen again according to one eyewitness to the incident as recounted by Carter in Stonewall.
Curiously, Murphy also was a long-standing FBI informant according to a May 8, 1978 article ("Skull Murphy: The Gay Double Agent") by Arthur Bell for The Village Voice. Indeed, this article contained the interview in which Murphy expressly speaks of J. Edgar Hoover as one of his "sisters": "He was the biggest fuckin' extortionist in this country. He had presidents by the balls. He had a record on everybody and his brother."
The allegations that Meyer Lansky had incriminating evidence against the FBI Director are particularly credible in light of the relationships among all the parties with political fixer Roy Cohn -- a fellow closet case who died of AIDS in 1986 -- at the center of it all.
Cohn was a personal friend of Hoover during the 1950s and 1960s, and the two shared extensive correspondence directed to each other on a first-name basis including a September 1957 exchange on an article published by the Director entitled "Let's Wipe Out the Schoolyard Sex Racket." Ironically, only months earlier an apparent obscenity indictment against Cohn had been dismissed according to an FBI memo dated June 28, 1957 from Assistant Director Louis B. Nichols to Clyde Tolson:

Roy Cohn called 6-27-57 to advise that Neil Gallagher of the New Jersey Turnpike Commission represented him in connection with the return of an indictment charging the sale of obscene literature. Gallagher went before the Superior Court judge in Union County, New Jersey, Thursday afternoon and moved the dismissal of the indictment. The district attorney joined him in this recommendation and issued a public apology to Cohn.

Cornelius "Neil" Gallagher later became a U.S. Congressman from Bayonne, NJ until he lost the seat in 1972 after Life magazine ran an article alleging mob ties.
The relationship between Hoover and Cohn is particularly troubling given that the FBI was fully aware that Cohn had ties to the most powerful bosses in the Mafia. For example, in 1964 federal prosecutor Robert Morgenthau was trying Cohn on corruption charges, and at the trial introduced excerpts of earlier grand jury testimony by Cohn. A March 27, 1964 article from The New York Times which the FBI contemporaneously clipped for its files on Cohn states:

The excerpts contained admissions by Mr. Cohn that he was acquainted with Geralde (Jerry) Catena, described by the Senate Rackets Committee as "No. 2 Man" in the Vito Genovese unit of the Cosa Nosta, and with Meyer Lansky, gangster. Mr. Cohn said he scarcely knew Lansky but that he had played golf two or three times with Catena.

Cohn further had represented the Stork Club which was Hoover's favorite stomping ground and Schenley Industries which was one of the country's largest liquor distillers. Louis Rosensteil was the president of Schenley Industries, and he had close ties to Meyer Lansky and Frank Costello. "In fact, on several occassions, Hoover was seen at the Stork Club fraternizing with people like Costello and Rosensteil" according to Peter J. Devico in The Mafia Made Easy. After Hoover's right-hand man Louis Nichols left the FBI in 1957, Cohn allegedly secured him a plum job making $100,000 a year at Schenley Industries although Nichols insisted in Hooveresque fashion that Rosensteil shunned the mob.
Of couse, the best evidence that Meyer Lansky had the goods on the FBI Director is that the storied agency never laid a hand on the gangster who was a bootleg kingpin during Prohibition, later founded Murder Inc., and finally ran gambling operations in Las Vegas and Havana, Cuba for the Genovese family. At the time of Lansky's death in 1983 the FBI estimated that he had a net worth of $300 million, and yet during his long criminal career the G-men never nailed him on a single charge or recovered a single penny. Indeed, the FBI did not even start a file on Lansky until the 1950s, and a review of the file's sparse contents illustrates that the agency's efforts to target him -- a purported top hoodlum -- were half-hearted at best involving little more than the occasional wiretap and a sometimes surveillance. Indeed, the newspaper articles on Lansky which the FBI clipped were more informative on the mobster's activities than the investigator reports. Ironically, Lansky only was arrested in 1972 -- the same year Hoover died -- as a result of an IRS investigation involving an alleged skimming scheme from a Vegas casino, and even that indictment conveniently was dismissed because Lansky was considered too ill to prosecute.

M. Wesley Swearingen, an FBI agent from 1951 to 1977, writes in his memoir FBI Secrets: An Agent's Expose about the long-standing rumors within the Bureau concerning the relationship between FBI Director J. Edgar Hoover and Associate Director Clyde Tolson which include allegations that Hoover ignored the Mafia for decades because the wise guys had incriminating goods on the supposed lovers:

One year after arriving in Memphis, Hoover transferred me to Chicago, Illinois. I was thrilled – my mind was full of gangsters, Tommy guns, and the FBI's famous machine gun battles of the 1930s. It was clear to me from Chicago's newspaper headlines that gansters ruled a Chicago underworld element in the 1950s because gangland style murders averaged close to 100 a year in the Chicago area. * * * But when I told my colleague and veteran agent Vince Coll of my big plans for Chicago, he said that Hoover did not recognize the existence of a mob in Chicago. According to Coll, Mafia leader Meyer Lansky's organization had enough on Hoover and Tolson, as closet homosexuals, that Hoover would never investigate the mob.

The allegations were fleshed out in Official and Confidential: the Secret Life of J. Edgar Hoover by Anthony Summer. A review of the book ("Partners For Life") by Sidney Urquhart for Time magazine summarizes one alleged incident as follows:

Perhaps Summers' most bizarre revelation is an account provided by Susan Rosenstiel, the wife of a liquor distiller and gambling crony. Rosenstiel recalls attending what she thought would be an elegant private party at New York City's Plaza Hotel in the company of lawyer Roy Cohn, Hoover and others. Instead, Cohn introduced Rosenstiel to a woman named "Mary," dressed in a fluffy black dress, lace stockings and high heels. It was obvious Mary was no woman. "You could see where he shaved. It was Hoover," said Rosenstiel. Joined by Cohn, Hoover stripped down to a tiny garter belt and proceeded to have sex with two young boys. Cohn later joked about the evening. "That was really something, wasn't it, with Mary Hoover?"

The "two young boys" with whom Hoover allegedly had sex perhaps were provided by Ed "the Skull" Murphy who was a long-time Genovese associate involved in the crime family's gay bar and boy prostitution rackets in New York City. In Stonewall: The Riots That Sparked The Gay Revolution, David Carter writes:

John Paul Ranieri, a former prostitute interviewed for this history, provided critical testimony for corroborating and better understanding the larger implications of Murphy's criminal enterprises for gay history. Ranieri said that as a youth from Westchester County he had been forced by blackmail and Mafia-supplied drugs into a prostitution ring in which he remained active for three years before he escaped the mob's control. He claimed that a number of youths in the ring had disappeared after they got careless with talk, for while most of the customers were more or less average homosexual men with money, the regular clientele, according to Ranieri, also included famous men such as Malcolm Forbes, Cardinal Spellman, Liberace, U.S. Senators, a vice president of the United States, one of the most famous rock musicians, and J. Edgar Hoover. The mob's order, according to Ranieri, was strictly "Keep your zipper open and your mouth shut."
Ranieri said that he met J. Edgar Hoover at private parties at the Plaza Hotel and that Hoover's name was never mentioned. Hoover was always in drag, and Ranieri said he could tell that the FBI director was sure that no one recognized him. Ranieri said that he had ensured his own survival by having in his possession a photograph of himself with Hoover, given to him by the photographer.
How does the preceding information link Ed Murphy with J. Edgar Hoover? The connection is made evident in a news story written shortly after Hoover's homosexuality and transvestism became public. When [Anthony] Summer's book [Official and Confidential: The Secret Life of J. Edgar Hoover], was published [in 1993], a newspaper story about the 1960s national homosexual blackmail ring suddenly appeared after a quarter of a century of silence on the subject. Without mentioning Murphy's name, it quoted law enforcement sources who had worked on the case as saying that their investigation into the nationwide blackmail ring had turned up a photograph of Hoover "posing amiably" with the racket's ringleader and had uncovered information that Clyde Tolson, Hoover's lover, had himself "fallen victim to the extortion ring." After federal agents joined the investigation, both the photograph of Hoover and the documents about Tolson disappeared. * * * Very suggestive in this context is that Murphy would publicly say in 1978—before it became public information, as it did in the 1990s, that the Mafia had photographs of Hoover involved in sex acts—that he knew that J. Edgar Hoover "was one of my sisters."

Murphy's boys did have a habit of disappearing. For example, one Puerto Rican youth known as Tano with whom Murphy was sexually involved was kidnapped right off the streets never to be seen again according to one eyewitness to the incident as recounted by Carter in Stonewall.
Curiously, Murphy also was a long-standing FBI informant according to a May 8, 1978 article ("Skull Murphy: The Gay Double Agent") by Arthur Bell for The Village Voice. Indeed, this article contained the interview in which Murphy expressly speaks of J. Edgar Hoover as one of his "sisters": "He was the biggest fuckin' extortionist in this country. He had presidents by the balls. He had a record on everybody and his brother."
The allegations that Meyer Lansky had incriminating evidence against the FBI Director are particularly credible in light of the relationships among all the parties with political fixer Roy Cohn -- a fellow closet case who died of AIDS in 1986 -- at the center of it all.
Cohn was a personal friend of Hoover during the 1950s and 1960s, and the two shared extensive correspondence directed to each other on a first-name basis including a September 1957 exchange on an article published by the Director entitled "Let's Wipe Out the Schoolyard Sex Racket." Ironically, only months earlier an apparent obscenity indictment against Cohn had been dismissed according to an FBI memo dated June 28, 1957 from Assistant Director Louis B. Nichols to Clyde Tolson:

Roy Cohn called 6-27-57 to advise that Neil Gallagher of the New Jersey Turnpike Commission represented him in connection with the return of an indictment charging the sale of obscene literature. Gallagher went before the Superior Court judge in Union County, New Jersey, Thursday afternoon and moved the dismissal of the indictment. The district attorney joined him in this recommendation and issued a public apology to Cohn.

Cornelius "Neil" Gallagher later became a U.S. Congressman from Bayonne, NJ until he lost the seat in 1972 after Life magazine ran an article alleging mob ties.
The relationship between Hoover and Cohn is particularly troubling given that the FBI was fully aware that Cohn had ties to the most powerful bosses in the Mafia. For example, in 1964 federal prosecutor Robert Morgenthau was trying Cohn on corruption charges, and at the trial introduced excerpts of earlier grand jury testimony by Cohn. A March 27, 1964 article from The New York Times which the FBI contemporaneously clipped for its files on Cohn states:

The excerpts contained admissions by Mr. Cohn that he was acquainted with Geralde (Jerry) Catena, described by the Senate Rackets Committee as "No. 2 Man" in the Vito Genovese unit of the Cosa Nosta, and with Meyer Lansky, gangster. Mr. Cohn said he scarcely knew Lansky but that he had played golf two or three times with Catena.

Cohn further had represented the Stork Club which was Hoover's favorite stomping ground and Schenley Industries which was one of the country's largest liquor distillers. Louis Rosensteil was the president of Schenley Industries, and he had close ties to Meyer Lansky and Frank Costello. "In fact, on several occassions, Hoover was seen at the Stork Club fraternizing with people like Costello and Rosensteil" according to Peter J. Devico in The Mafia Made Easy. After Hoover's right-hand man Louis Nichols left the FBI in 1957, Cohn allegedly secured him a plum job making $100,000 a year at Schenley Industries although Nichols insisted in Hooveresque fashion that Rosensteil shunned the mob.
Of couse, the best evidence that Meyer Lansky had the goods on the FBI Director is that the storied agency never laid a hand on the gangster who was a bootleg kingpin during Prohibition, later founded Murder Inc., and finally ran gambling operations in Las Vegas and Havana, Cuba for the Genovese family. At the time of Lansky's death in 1983 the FBI estimated that he had a net worth of $300 million, and yet during his long criminal career the G-men never nailed him on a single charge or recovered a single penny. Indeed, the FBI did not even start a file on Lansky until the 1950s, and a review of the file's sparse contents illustrates that the agency's efforts to target him -- a purported top hoodlum -- were half-hearted at best involving little more than the occasional wiretap and a sometimes surveillance. Indeed, the newspaper articles on Lansky which the FBI clipped were more informative on the mobster's activities than the investigator reports. Ironically, Lansky only was arrested in 1972 -- the same year Hoover died -- as a result of an IRS investigation involving an alleged skimming scheme from a Vegas casino, and even that indictment conveniently was dismissed because Lansky was considered too ill to prosecute.