Organized Crime

Organized Crime, a term that has been used selectively in the twentieth century to identify particular criminal coalitions that were often ethnically based and which others wished to define as especially dangerous illegal conspiracies. Generally speaking, the criminal groups identified as “organized crime” have possessed neither the hierarchical structure nor the power ascribed to them. But the label has, nevertheless, strongly influenced both popular attitudes toward the groups involved and the policies of law enforcement. The history of “organized crime,” therefore, must include both a history of criminal structure itself and of the use of the term.

From the 1860s until well into the twentieth century, certain types of gambling became increasingly coordinated in some urban neighborhoods. During and after the Civil War, policy gambling—a kind of illegal lottery—enjoyed wide popularity. Fans could bet on the numbers in bars, barber shops, newspaper kiosks, and other neighborhood outlets. At the same time, policy entrepreneurs backed the local retailers, so that the retailer retained a fixed percent of each bet while the backer(s) assumed the risk when betters won. By the 1880s, as horse racing became a national, professional sport, fans wished for an opportunity to bet off‐track as well as at the track. Off‐track bookmaking was coordinated much like policy, with bets taken in local retail outlets while bookmakers backed the local sellers. As a result, especially by the 1890s, policy and off‐track bookmaking syndicates had the support of betters as well as local businesses and politicians. The activities of these important criminal entrepreneurs were not yet labelled “organized crime,” however.

During the Progressive‐Era antiprostitution crusade, many reformers argued that the redlight districts in American cities could not exist without the systematic recruitment of thousands of young girls each year. They claimed that shadowy, organized networks of “white slavers”—often with an Eastern European Jewish background—lured innocent girls from American small towns, port cities, and foreign countries to become slaves in the cities' bordellos. Again, the specific term “organized crime” was not used, though the concept, with its exaggerations, was clearly present.

The term itself was first used in the 1920s, perhaps in John Landesco's Organized Crime in Chicago (1929). In the period of Prohibition, the press and movies, in their treatment of the bootleggers, often ascribed to the largely decentralized and independent bootleggers a mythical centralized control and power. Chicago, where the violence of bootlegging wars was capped by the famous 1929 St. Valentine's Day massacre and where Al Capone revelled in media attention, was the focus of worldwide attention. Capone was one of four partners who entered into partnerships with others to establish numerous relatively small bootlegging, gambling, and vice enterprises. Because he lived chiefly at his Miami home after 1927 and spent much of 1929 in a Philadelphia jail, Capone was perhaps the least important of the four partners. The media, nevertheless, defined him as the lord of Chicago bootlegging and a controlling figure in local politics. Such films as Little Caesar with Edward G. Robinson (1932) and Paul Muni's Scarface (1932) provided vivid images of the gangsters' power and ruthlessness and made Capone a symbol of “organized crime.”

The most important twentieth century development involving the split between the reality of criminal structure and the mythical uses of the term “organized crime” was the creation of the idea that “the mafia” coordinated crime in the United States. An important early step came in 1950 to 1951 when the U.S. Senate's Special Committee to Investigate Organized Crime (popularly known as the Kefauver Committee after its chair, Senator Estes Kefauver of Tennessee) held widely‐watched televised hearings in a number of cities and concluded officially that a secret society called “the mafia,” operated across the United States to oversee crime. In 1963–1964, Joseph Valachi, a long‐time member of a New York City Italian‐American crime family, testified before Congress and for the first time provided a public description of the structure of such groups. He was motivated to do so because, while in prison for drug dealing, he had killed a fellow prisoner and then sought leniency by agreeing to talk. More important, perhaps, the President's Commission on Law Enforcement and the Administration of Justice published a report on Organized Crime (1967), based chiefly upon information gained from telephone wiretaps. The report claimed that 24 “Cosa Nostra” cartels in some 20 cities, with membership restricted to Italian Americans, controlled criminal activities in their own cities and cooperated across city boundaries in gambling, loansharking, and drugs. Building on such developments, Hollywood contributed vivid and exaggerated images of “the mafia” in movies like The Godfather (1972) and Prizzi's Honor (1985).

In the process of identifying a “mafia” menace, newspaper reporters and criminologists created a history of the American “mafia” that mixed myth with fact. During Prohibition, successful bootleggers, although often young men from poor neighborhoods, learned to think in terms of national and even international markets as the importers and manufacturers made deals with processors and wholesalers so that booze could be moved from its multiple sources to its millions of consumers. During and after Prohibition many bootleggers and their business associates invested in gambling casinos and other gambling enterprises; with a broadened understanding of markets, they sometimes jointly invested in tourist centers like Florida, New Orleans, or Hot Springs. Concurrently, some Italian‐American entrepreneurs, beginning probably in the late 1920s and continuing into the 1930s and 1940s, formed local membership organizations. Like the Masons, Elks, and other fraternal orders, the organizations had formal initiation rituals for members and often acted like secret societies; like Chambers of Commerce or Rotary Clubs, they were a framework within which members, while generally remaining independent in their economic pursuits, could develop contacts, learn about business opportunities, and sometimes settle disputes under circumstances in which the legal system was not available to them.

After World War II, then, investigators discovered both the joint partnerships of independent entrepreneurs and the Italian‐American “families” (which they labelled “the mafia”). They then constructed a history based upon the assumption that the generally independent businessmen in the families were instead controlled by and worked for the profit of the “mafia” and that non‐Italian entrepreneurs were subservient to the Italians. In this history, the “mafia” rose to a central place in coordinating crime nationally through the power of Italian‐American bootleggers. On the one hand, this ignores the fact that entrepreneurs of Eastern‐European Jewish background dominated bootlegging. (Some 50 percent of leading bootleggers were Jewish, 25 percent were Italian‐American.) On the other hand, this ignores that many leading bootleggers (like Capone) were not members of “families” and that many of those who formed the families were not bootleggers. In the history, Lucky Luciano, after a series of assassinations in New York City, consolidated “mafia” control nationally. While Luciano certainly emerged, briefly, as a highly respected “don” in New York, it is an exaggeration to ascribe national power to him. After World War II, according to the dominant history, the “mafia” moved into and controlled the casinos in Nevada. No doubt many entrepreneurs who had operated illegal casinos in the 1930s and 1940s were leaders in the expansion of legal gambling in Las Vegas. But this history overlooks the predominance of Jewish entrepreneurs in the rise of Las Vegas as a national entertainment center; equally important, it overlooks that they were largely independent, acting in their own interests and not seeking profit for a “mafia.”

As the fight against the “mafia” menace became a central focus of law enforcement, the Federal government established Organized Crime Task Forces in many cities where Italian‐Americans were active in criminal activities. States and cities followed suit. Naturally, the focus of federal, state, and local prosecutions almost solely on Italian‐Americans, combined with the media attention, necessarily publicized the exaggerated notions of the power of “the mafia” while obscuring the complexity and diverse roots of criminal activities and generally ignoring similar activities by persons not of Italian‐American background.

In the 1970s, with the launching of the “war on drugs,” drug trafficking gradually supplanted “the mafia” as the focus of law enforcement and media attention. It became clear that Italian‐Americans could not bear the blame for the multiple drug trafficking activities that provided LSD, marijuana, cocaine, and heroin to a diversity of users. As a result, the term “organized crime” was now transferred to drug “cartels,” often centered in other countries like Mexico, Jamaica, or Colombia. This had the effect of again oversimplifying a complex problem while also externalizing America's drug problem by blaming it on powerful foreign organizations. At the end of the twentieth century, with the expansion of international banking and trade and the management of the international economy by computers, the term “organized crime” was expanded to encompass a variety of criminal activities embedded in the new economy, such as money laundering and investment fraud.

The term “organized crime,” introduced in the 1920s, has been applied to a diversity of criminal markets and ethnic groups. While criminal entrepreneurs often enter into joint ventures or use violence as part of market competition, the effect of the term has been to oversimplify the structure of complex and loosely coordinated activities, to suggest that a danger originates abroad, and generally to exaggerate the centralized power and control of those engaged in illegal pursuits.
See also Federal Bureau of Investigation; Hoover, J. Edgar; Police; Prostitution and Antiprostitution; Temperance and Prohibition.

Bibliography

Mark H. Haller , The Changing Structure of American Gambling in the Twentieth Century, Journal of Social Issues 35, no. 3 (1979), 87–114.
Stephen Fox , Blood and Power: Organized Crime in Twentieth‐Century America, 1989.
Mark H. Haller , Policy Gambling, Entertainment, and the Emergence of Black Politics: Chicago from 1900 to 1940, Journal of Social History 24 (Summer 1991), 719–39.
David E. Ruth , Inventing the Public Enemy: The Gangster in American Culture, 1918–1934, 1996.
Terry M. Parssinen and and Kathryn Meyer , Web of Smoke, 1999.

Mark H. Haller