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  In 1931, it seems likely that Del Grazio was completing a narcotics deal that had been set up by Luciano in Germany a year earlier. The Bureau of Narcotics report, quoted by the FBI, said “a conspiracy existed to smuggle narcotics from Europe into the United States” and had subsequently failed because of Diamond’s arrest, but this was only partly right. Diamond’s arrest had thrown his own personal part of the deal into disarray, but Luciano must have completed the deal in the shadows. Otherwise, why would Del Grazio—known well to Luciano and his associates—still be there a year later?

  It seems remarkable that Charles “Lucky” Luciano should be walking the streets of Weimar Germany in 1930. At the same time, Adolf Hitler and his Nazi party were campaigning hard to win national elections, and on September 14 they won over six million votes, making them the second-largest political party in the country.

  Luciano would have seen their election posters and anti-Semitic slogans everywhere. He might even have seen Nazi Brownshirts bullying Jewish citizens. He had grown up in a heavily Jewish populated district of New York and many of his closest friends and business partners were Jewish. Seeing German Nazis at close quarters gave him a bitter dislike for Hitler and his racist cause that would endure into World War II.

  It is important to note that Luciano’s business trip to Naziinfested Germany has not been mentioned before in any of the studies of the mobster and his career. It is not mentioned at all in The Last Testament of Lucky Luciano, the book that controversially claimed to be based on the firsthand recollections of his life. Even when Meyer Lansky, his closest lifelong criminal associate, related his memoirs to an Israeli journalist, he failed to mention Diamond and Luciano’s journey to Germany. The reason for this is not altogether surprising. In later life, Luciano and Lansky were happy to talk about their profiteering during Prohibition and their shoot-outs with other gangsters, but they were certainly not going to admit to being at the heart of an international drug-smuggling network.

  In 1930, dealing in illicit drugs was a relatively new criminal business. Heroin—the most infamous of narcotic drugs derived from morphine—was first manufactured in Germany in 1898 by Bayer Pharmaceutical as a cough medicine. Early users said it made them feel “heroic,” and from that was born its commercial name. By the first decade of the twentieth century, heroin was marketed widely in the United States and attracted its first recreational users from the middle classes, but the habit soon spread to the less affluent, who became increasingly desperate to fund their next fix.

  Tales of these “junkies”—so called because they sold anything, including junk metal, to raise money for heroin—stirred the government into action and they banned its use without prescription in 1914. “The most harmful form of opiate with which we have to deal is heroin,” declared Dr. Charles B. Towns in 1915, an early campaigner against it. “Heroin is three times as strong as morphine in its action. It shows more quickly a deleterious effect upon the human system, the mental, moral and physical deterioration of its takers being more marked than in the case of any other form of opiate.” In 1917, the New York Times ran a headline claiming there were three hundred thousand drug addicts in New York City—the majority of them from the prosperous middle classes. Two years later, doctors were banned from prescribing heroin altogether, but by then an underworld market in illegal drugs had already been established.

  Charles Luciano’s first and only prison sentence, until the mid-1930s, came about because of his involvement in dealing heroin in the Lower East Side in 1916, when he was just eighteen years old. In April 1924, a bill prohibiting the importation of crude opium for the purpose of manufacturing heroin was put before the House of Representatives in Washington, D.C. Sidney W. Brewster was the deputy warden of Hart Island prison in New York City, and he gave chilling testimony at the bill hearings.

  “In 1910 or 1911 and up to four or five years ago in the underworld the drug chiefly used was morphine and cocaine, morphine being termed a necessary drug and cocaine a luxury,” explained Brewster. In the last four or five years heroin has gradually succeeded morphine and to quite some extent cocaine. The reason for this is that heroin is approximately three times as powerful as morphine; and further, the addict in taking heroin gets some of the effects which he ordinarily would get from cocaine.”

  Brewster said that a cocktail of drugs was used by a variety of addicts from actors to gangsters to “jazz up” their lives, but he said there was a worrying trend for drugs being used during criminal acts.

  “At the present time, in one of the most recent crimes of violence,” said Brewster, “the Diamond case, in New York, which involved the robbing and murder of two bank messengers in broad daylight, two of the actual perpetrators of the crime were under the influence of heroin. In many cases the leaders of the various gangs of gunmen do not use narcotics themselves but when they send out members of the gang on a crime to commit murder or robbery they see that they are well charged before they go.”

  The jazzed-up robbers who killed the two bank employees in November 1923 were Barlow Morris Diamond and Joseph G. Diamond. They were no relations of Jack Diamond, but the crime made the headlines. Clearly, drug use among psychopathic criminals only enhanced their level of violence. In his testimony, Brewster quoted New York police records for 1923, saying there were approximately six thousand arrests in the city in connection with illegal drugs.

  “The man who uses heroin is a potential murderer,” said Brewster. “He loses all consciousness of moral responsibility, also fear of consequences.”

  Did Luciano use drugs himself? In later life, he admitted that as a teenager he smoked opium. “I used to hit the pipe joints in Chinatown when I was a kid, we all did,” he recalled. An unlicensed dentist gave him his first smoke. “I liked it, the stuff did funny things to my head. But I’d never let it suck me under.” He saw it more as a business opportunity.

  In 1923, European government medical experts met in Paris to discuss the abuse of heroin. For them, it seemed to be largely an American problem. “If heroin is abused in America,” said a British Ministry of Health report, “let Americans who like prohibition forbid it, but why should countries where heroin is not abused be put to all the trouble for the benefit of the United States.” This narrow-minded view would be blown apart a few years later.

  By the time Diamond and Luciano took their voyage to Germany, smuggling heroin and other narcotics had expanded into an international business with enormous profits to be made. On March 17, 1930, one hundred U.S. customs agents boarded an ocean liner that had arrived from France. They had been tipped off that two thousand pounds of narcotics manufactured in Germany were on board. Shortly beforehand, a trunk-load of narcotics valued at $200,000 was seized on a New York pier after the arrival of the White Star liner Majestic. Later, before a grand jury, an English passenger explained that he had not recognized one of his heavy leather trunks deposited on the pier, despite it bearing his name. He left the trunk behind and customs agents became suspicious when another man claimed it.

  The international network stretched from America to Germany to Turkey. Major-General T. W. Russell Pasha was commandant of the Cairo police and he was very well placed to observe the flow of the narcotics market. He reported back his findings to a League of Nations committee set up to investigate the global trade. Although countries suffering from the traffic tended to “think in grammes and kilogrammes” he explained, “the unit of calculation in the central European manufacturing countries when talking of narcotics is the metric ton.”

  Russell Pasha identified one illegal factory in Alsace in 1928 that had produced 4,349 kilograms of heroin—more than two and half times the legitimate requirement of the world population—and that was just one factory. Recently, his Central Narcotics Intelligence Bureau had broken up a gang of Polish smugglers operating out of Vienna who sourced narcotics from Austria, Switzerland, and France. These were then passed on through ports in Italy, Greece, and Turkey to end up in the drug dens of Alexa
ndria, Egypt, servicing the needs of an estimated five hundred thousand addicts. One of the arrested dealers was an outwardly respectable doctor who claimed he was simply “engaged in making and selling something for which there was a world-wide demand. No visions of demented, tortured victims of his poison came ever to disturb him.” The raw materials for this trade—opium—came mostly from Turkey, although factories in Istanbul were also responsible for shipping thousands of kilograms of heroin and morphine.

  The United States established its own Federal Narcotics Control Board and Narcotics Division as a result of the Harrison Narcotic Act in 1914. In June 1930, these were combined to form the Federal Bureau of Narcotics (FBN), part of the U.S. treasury department. It was this agency that pointed the finger at Luciano and Diamond setting up a drug-smuggling network in Germany. They passed their information on to the FBI, who made the connection between Italian gangsters in New York and the drug business. Early on, they claimed that narcotics were arriving hidden in barrels of olive oil. Much of this came to the Lower East Side of Manhattan—the heart of the Italian immigrant community. This was the place where Charles Luciano began his criminal career as a teenage peddler of heroin.

  2

  HOW TO BECOME A GANGSTER

  Salvatore Lucania sat at the back of a classroom in Roman Catholic Public School 19. He was nine years old with thick black hair and a sunburned complexion. He couldn’t understand a word the teacher was saying. The other kids in the class were much younger than he, but they all spoke English. He knew nothing but his native Sicilian. He was embarrassed and stubbornly refused to enter into the lesson. He stared out the window at the decrepit tenement blocks of the Lower East Side. Outside on the streets of New York, he vowed to make himself understood and respected—and feared. By the time he reached his goal, he would have a brand-new name to go with his brand-new American character—Charles “Lucky” Luciano.

  Salvatore was born in Sicily on November 11, 1897. In the spring of 1907, he left the Mediterranean island with his family to emigrate to America. Their point of entry was the Lower East Side in New York City. In just one day in May 1907, twenty thousand immigrants arrived there, breaking all previous records by five thousand. It was a human flood of economic refugees that included Italians, Irish, Portuguese, and Jews. Salvatore Lucania and his family arrived by transatlantic steamship from Palermo on the northern coast of Sicily. In the previous year, a total of 273,000 Italian immigrants had come to America. They were just one more family added to an army of poor people looking to earn a better living.

  Salvatore’s family numbered his mother, Rosalie, and father, Antonio, older brother, Giuseppe, and his older sister, Francesca. A younger brother, Bartolo, was born later in the United States When the family finally stepped ashore and wandered through the teeming streets of southern Manhattan, jostled by thousands of other immigrants, they took a deep intake of breath. The smell of poverty was different in America. Back home in Lercara Friddi, a little village in the dusty heart of sun-blasted Sicily, it had been the reek of sulfur dug out from the mine where Antonio labored. Here it was a pungent multitude of odors: rotting fish, decaying garbage, stale alcohol—the smell of the big city. It would only get worse.

  The Lower East Side was paralyzed by a series of strikes in the summer of 1907. One of these was led by Italian street cleaners. Garbage piled up on the streets outside tenement blocks. In the heat, clouds of flies buzzed around and the city’s health commissioner feared an outbreak of disease. His men poured chloride of lime and bromide solution over the rotting piles, but his biggest concern was for immigrant children. “They play freely all over them,” he said, “and rummage among them to find playthings. They smear themselves with the refuse and then eat with unwashed hands. Therein lies the real risk; the smell is only unpleasant.”

  The Italian street sweepers wanted to raise their $720 a year income to $800, the same as the drivers of garbage carts, and were violently supported by their wives and friends, who threw bricks and fireworks at the police escorting strikebreakers. Later, in the summer, Teamster union members who packed meat for big wholesalers went on strike. Jewish kosher butchers had to pick up the meat themselves, but when the prices went up, they refused to buy. No meat was bought for the Jewish Sabbath and all the Lower East Side went without, Italian butchers included. Mounted police had to guard wagons of meat driven by strikebreakers from the city abattoirs. Conflict was in the air as poor immigrants fought to get their fair share of American riches. Sometimes they turned to gangsters to help them out.

  Dopey Benny was a renowned thug hired by Italian union officials to attack strikebreakers. “I got my men together,” he later admitted to a district attorney, “divided them up into squads and saw that they were armed with pieces of gas pipe and with clubs, but this time not with pistols, and when the workmen came up from work the men I had got set on them and beat them up.” It was one of the earliest lessons Lucania learned about the way things worked in New York City.

  Among the main immigrant communities of the Lower East Side, the Irish were the oldest and most senior, with many of their members in the police force. The Italians included Sicilians, Neapolitans, and Calabrians, while the Jews came from Eastern Europe and Russia. Sharing the Catholic faith, the Irish and Italians tolerated each other and looked down on the more alien-looking Jews, but each community hung tightly together and viewed other nationalities with suspicion. The Lucania family first lived in a tenement block on First Avenue, between East Thirteenth and Fourteenth streets. This was on the northern boundary of the Lower East Side in an area now called the East Village. To the south were Little Italy and Chinatown.

  “Home came equipped with a fire escape for summer sleeping,” is how one Jewish immigrant remembered the cramped living conditions. “Every floor had four railroad flats. On our floor, the one toilet in the hall served the four families—two Jewish, one Russian, and one Polish. There was a yard in the back and a house in the rear, two stories high. Here lived the poorer of the poor—in back, unable to see what went on in the tumbling, fierce activity and continuous gabble of the streets.”

  A typical tenement apartment from this period had just three rooms for a family to live in. Only one outside window illuminated the interior, so a second window was built into the wall of the living room to allow light to pass through into the kitchen; the interior bedroom was in complete darkness. At different stages of the day, the front room served as work space, dining room, and a second bedroom. The majority of immigrants worked in the clothing industry. The head of the family set up his sewing machine by the outside window while the rest of his family busied themselves in the gloomy, stuffy interior, finishing off dresses and suits destined for swanky shops in uptown Manhattan. Aside from working and sleeping, most life in the tenement blocks was lived out on the streets.

  Antonio Lucania had been a sulfur miner in Sicily and carried on with his law-abiding but humble existence as a laborer in New York. Whenever his son Salvatore got into trouble he would beat him, but in the overcrowded tenement blocks, it was easy for boys to get into gangs and compete with each other to establish their reputation. Salvatore Lucania was no different from any of them and gravitated to the street corner and the network of kids involved in petty crime.

  “There are thousands of New York boys attending organized schools for crime,” wrote one reporter in 1908. “Their operations during the day, conducted out of school hours, also provide much more than a comfortable income for the masters of these schools for pickpockets, thieves, and gamblers. The problems that beset the Principals of the schools of the Lower East Side, with its predominating un-American population, are more perplexing and multifold than in any other metropolis in the world.”

  The reporter compared the situation to Charles Dickens’s tale of Oliver Twist with young men—teenage “Fagins”—training teams of kids to act as thieves for them, knowing they would not face harsh punishment if caught. In the Lower East Side, many of these boys, as
young as six, were involved in illegal crap shooting games, in which they tried to hustle other kids out of their money. They were also taught how to pick pockets on the rear end of trolley cars, subway trains, or ferry terminals, wherever a crowd of well-off commuters could be found. The money was brought back to their adolescent Fagins who would first reward them with sweets but then bully them if they failed to bring in enough revenue.

  Salvatore Lucania absorbed early lessons in crime when he ran with these child gangs. They broke into neighboring apartments and mugged people in the streets. A tough and fearless kid, Lucania organized his own protection racket, offering to shield Jewish boys on their way home from school from being attacked by other Italians or Irish. On one occasion, he offered his services to a puny-looking schoolboy. “If you wanna keep alive, Jew boy,” he said, “you gotta pay us five cents a week protection money.” The little Jew fixed him with a stare and told him—“Go fuck yourself.” The defiant kid was Meyer Lansky, who would later become one of Lucania’s leading crime associates.

  As Lucania caused mayhem on the streets of his neighborhood he also skipped more school. Finally, in 1911, he was punished for his persistent truancy by being sent to a secure school in Brooklyn. Full of similar rough-minded kids like him, all he learned was how to perfect his criminal skills. When he emerged four months later, his reputation was enhanced on the streets and he never went back to school.

  He was fourteen years old and got his first job as a shipping clerk for the Goodman Hat Company on Greene Street. He was paid $5 a week and this rose to $7. He must have got on well at the hat factory because he stayed there for four years, but all the time he was watching who had the real money in his community—who wore the flash clothes and drove the smartest cars. He was observing the world of organized crime and wanted part of it.