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Dexter Babin, II History 505 Winter 2018-2019

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Dexter Babin, II History 505 Winter 2018-2019 Dexter Babin, II History 505 Winter 2018-2019 The FBI’s Unsuccessful Investigations into the New Orleans Mafia, 1977-1989 At a time when the FBI was eliminating entire chains of command in East Coast Mafia families with numerous investigations, eventually culminating with sentencing the bosses of the infamous “Five Families” to 100 years each in prison, a structural RICO indictment of the New Orleans Mafia was never successful until after New Orleans Mafia boss Carlos Marcello’s death.1 Though the FBI’s 1981 BRILAB insurance kickback sting would send Marcello to prison, his conviction would later be thrown out by an appellate court in 1989; freeing Marcello after serving only 8 years of his 17 year sentence, which also included bribing a California federal judge in an unrelated matter.2 This would leave the FBI’s BRILAB sting the only successful FBI operation in a handful that targeted Marcello during the 70s and 80s. This paper will propose that the FBI’s lack of success when it came to Marcello at this time as threefold: a general lack of structural identity of the New Orleans Mafia, Marcello’s political connections, and the way Marcello handled his finances all shielded him from a major indictment. These three factors will be examined through three unsuccessful FBI investigations against Marcello, which occurred later in his criminal career: the abortive 1975 UNIRAC (Union Racketeering) 1 Selwyn Raab, Five Families: The Rise, Decline, and Resurgence of Americas Most Powerful Mafia Empires [New York: Thomas Dunne Books, 2005], 329-331. 2 Steve Cannizaro, “81 BRILAB Convictions Overturned.” The Times Picayune, June 23, 1989. Babin 2 Investigation, the 1980 St. James Parish corruption investigation, which was an offshoot of the overall BRILAB sting, and lastly the 1985 CAMTEX investigation. Before the FBI’s efforts to further imprison Marcello are examined, a review of the historiography of the Marcello-era of the New Orleans Mafia is necessary. Compared to its East Coast counterparts, the New Orleans Mafia lacks extensive scholarship. Presently, the seminal work on the Marcello-era of the New Orleans Mafia is Mafia Kingfish by John H. Davis. Davis’ work is not only the first full account of Marcello’s life and underworld career, but Davis also successfully sued the FBI for the release of a portion of Marcello’s undercover BRILAB tape transcripts; the FBI sting that landed the Mafia boss in prison in which he personally describes the inner workings of his criminal enterprises.3 While Marcello is not the focus of Michael L. Kurtz’s Earl K. Long: The Saga of Uncle Earl and Louisiana Politics, Kurtz was able to obtain the FBI’s entire file on the Louisiana Mafia, and document to a great extent the symbiotic relationship between Louisiana politicians and the New Orleans Mafia. Lamar Waldron’s Legacy of Secrecy, which was the first book to detail the FBI’s CAMTEX (Carlos Marcello, Texas) operation against Marcello, Waldron was able to undercover the identities of the principal undercover informant and agent that participated in the operation, despite their names being redacted in the files, giving more depth to the investigation. It also must be noted that both Davis and Waldron’s works both delve into the conspiracy theory that Marcello was involved in plotting the assassination of President John F. Kennedy. Such theories sensationalize the criminal career of Marcello, for if a mob boss can get away with killing the President, why not get away with an array of other crimes? This paper will not only attempt to understand the structure of the 3 John H. Davis, Mafia Kingfish: Carlos Marcello and the Assassination of John F. Kennedy [New York: Signet, 1989], 539. Babin 3 New Orleans Mafia through comparison of mob families on the East Coast, but will also examine the political corruption and underworld economy that allowed Marcello’s organization to flourish in New Orleans and escape major prosecution. The first major obstacle that hindered law enforcement in investigating the New Orleans Mafia from the start was identifying its structure. From the beginning of the government’s inquiry into investigating Marcello with the 1951 Kefauver Committee to the FBI’s 1985 CAMTEX investigation, little was known about the structure of the New Orleans Mafia besides the fact that Carlos Marcello was the head of it. Names of different associates, gamblers, and suspected members have always been tossed around, but the New Orleans Mafia seems to lack the detailed hierarchy of a traditional American Mafia “family” structure that we have seen with East Coast crime families.4 So absent is the structural knowledge of the New Orleans Mafia that historian Michael L. Kurtz doubts its existence in his article Organized Crime in Louisiana: Myth vs. Reality, saying that “the Louisiana “Mafia family” of which Carlos Marcello is “the boss” appears to exist only in fantasy.”5 Kurtz was correct in that applying the typical East Coast Mafia structure to New Orleans would make it a “fantasy”, but the evidence that Marcello was the boss of a criminal network in Louisiana is not. In his research into Marcello, John H. Davis described the structure of the New Orleans Mafia as not a strict hierarchical organization like the East Coast crime families, but “a spontaneous grouping of individuals of like mind and inclination, usually, but not always tied by bonds of kinship…a vast network of professional criminals, shady businessmen, corrupt law enforcement officials, politicians, and government 4 The traditional East Coast Mafia family structure would have a boss on top, followed by an underboss, who was in charge of a number of “crews” headed by capos, which were made up of the lowest rank, soldiers. 5 Michael L Kurtz “Organized Crime in Louisiana History: Myth and Reality”, Louisiana History: The Journal of the Louisiana Historical Association, no. 24 [Autumn 1983]: 22. Babin 4 bureaucrats that resembled a club more than a corporation.”6 The description of the New Orleans Mafia by Davis would resemble more of the “clientelistic structure of the (Sicilian) Mafia cosca, which is required to carry out a continual redistribution of funds among its ravenous members and which involves an endless fragmentation of corporate structures with a view to concealing their activities..” which would operate contradictory to the more vertically “capitalist corporation” styled Americanized structure of East Coast crime families.7 The last major, and most ambitious, investigation against Marcello would be the 1985 CAMTEX investigation. Already incarcerated for the 1981 BRILAB undercover sting, the FBI learned that Marcello was still able to operate his criminal network from inside his cell in Texarkana Federal Prison.8 The major goal of the CAMTEX investigation was to “identify the hierarchy and criminal activities of the New Orleans LCN Family and secure a criminal enterprise prosecution”; similar to what the FBI was doing to the “Five Families” in New York.9 The FBI would openly admit that failure in intelligence gathering on the structure of the New Orleans Mafia (referred to as LCN, La Cosa Nostra, in FBI files) was a historic problem in dismantling the organization.10 The FBI’s lack of structural knowledge of the New Orleans Mafia presented challenges in the CAMTEX investigation. One major problem is that because the FBI didn’t know exactly who key members of the organization were, they didn’t know who to focus their efforts on. 6 Davis, Mafia Kingfish, 48. 7 Salvatore Lupo, History of the Mafia. [New York: Colombia University Press, 1996], Kindle e-book. 8 Federal Bureau of Investigation’s CAMTEX investigation files HQ8374, Section 1, 1985 1987, National Archives, 4. 9 FBI, CAMTEX Section 2, 44-55. 10 La Cosa Nostra, translated as “This Thing of Ours”, is the term which the Mafia uses to refer to itself. Babin 5 Declassified FBI files show that the bureau believed that Marcello’s brother and longtime “underboss”, Joseph Marcello, was “street boss” while Marcello was in prison, and Marcello’s only son, Joseph Marcello, Jr., was also allegedly heavily involved in his father’s criminal network; but besides that the FBI had very little reliable information to go on.11 The FBI had already identified Anthony Carolla, son of Marcello’s deported predecessor Sylvestro “Silver Dollar Sam” Carolla, and Frank Gagliano, the son of another deported New Orleans mobster, Guiseppie Gagliano, as higher level mobsters in Marcello’s organization, but weren’t quite sure where they fit in.12 Because they were unable to identify them, the bureau was unable to penetrate Marcello’s criminal organization through lower ranking members either through surveillance or undercover operations, like the bureau did with New York crime families. Frustrated agents admit in teletype memos that the “traditional methods of investigation are not adequate in this case to develop a prosecutive case against the subjects.”13 A very logical reason the FBI ran into problems clearly identifying the structure of the New Orleans Mafia is because they were applying the strict vertical structure of the New York Mafia family model in investigating the New Orleans Mafia, where it didn’t fit. This can be seen clearly in the FBI’s own files, where they listed suspected members based off of their assumed positions in the organization. The bureau was looking for a straight vertically lined structure, when the New Orleans Mafia may have been more of a circle. Unable to identify members on the outside, the FBI would focus its CAMTEX investigation on Marcello himself; which would present its own set of challenges. The FBI 11 FBI, CAMTEX Section 3, 83. 12 Davis, Mafia Kingfish, 318-323. 13 FBI, CAMTEX Section 3, 86.
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