In March 1951, Frank Costello took his seat at a Senate witness table in New York, sixty years old and certain he had set the terms of his own appearance. His lawyers had won an unusual concession: the cameras would not show his face. The chairman agreed, and so the camera crews pushed in tight on his hands. For hours, millions of Americans watched those hands fiddle with eyeglasses, twist a handkerchief, lift a glass of water, and tear paper into shreds.
The New York Times called it television’s first ballet of the hands. What Costello could not yet see was that every word he spoke in that room, and every question he refused to answer, would hand the government two separate cases against him. The committee’s chief counsel, Rudolph Halley, opened with an odd question. Had Costello ever used the name Saverio?
Costello admitted he might have. When pressed, he said he did not know, but he would not say he had not. Halley knew exactly what he was doing. On his naturalization papers from 1925, Costello had sworn under oath that he had never used an alias and that his occupation was real estate.
A man named Harry Saverio, listed as a railroad worker, had vouched for him. Saverio was a bootlegger, and so was Costello. When confronted, Costello claimed the Saverio he knew was a different man. How many Harry Saverios did you know, Halley asked.
Costello said he might have known two or three. Every word went into a sworn Senate record, and perjury on citizenship papers was something the government could strip a man’s citizenship for. Costello would not understand that opening line of questioning until a decade later. The man running the room was Senator Estes Kefauver of Tennessee, who had drafted the resolution creating the special Senate committee on organized crime in interstate commerce.
The committee only existed because Vice President Alben Barkley cast the tie-breaking vote. It opened in Miami in May 1950 and over fifteen months sat in fourteen cities, hearing hundreds of witnesses. By the time it reached New York, crime commissions across the country had named Costello a key figure in the nation’s biggest gambling syndicates. Kefauver had his own name for him: the wispy string puller.
New York was where the investigation became television. The hearings were held in the federal courthouse at Foley Square, and five of the city’s seven stations carried them live, with coaxial cable pushing the feed to twenty-one more cities across the East and Midwest. Stores emptied during what people called Kefauver hours and filled back up at the noon recess. Consolidated Edison put an extra generator on the line to carry all the sets switched on across the city.
The Senate’s own history put the audience for the March hearings at around thirty million Americans. What they watched was a pair of hands. Costello’s lawyer, George Wolf, had told the committee his client did not care to submit himself as a spectacle. The committee reluctantly ordered the cameras off his face, leaving the camera operators with only one shot available.
For hours, the country watched those hands, and what millions saw was a man with something to hide. Nothing Halley asked that day did as much damage as that picture. But the detail almost nobody paid attention to was the money. Halley walked Costello through his income, and Costello insisted his business was legitimate: oil, real estate, even a company that made Q-shaped dolls.
He told the committee he was cleaner than ninety-nine percent of New Yorkers. Then came the numbers. Eighteen thousand dollars a year from the Beverly Country Club, a nightclub and casino in New Orleans where he claimed he was just a goodwill man. Fifteen thousand a year from a Long Island racetrack for doing, in his words, practically nothing other than keeping bookmakers away.
Twenty-five thousand for promoting a brand of scotch a friend imported. Every one of those income streams was now in a sworn transcript in his own words. When the tax case later reached the court of appeals, judges would point to that racetrack money as a likely source of income he never reported. Senator Charles Tobey of New Hampshire tried a different kind of question.
Had Costello ever offered his services to any war effort of the country? No, Costello said. Tobey asked him to name something, anything, he had done to his credit as an American citizen. Costello answered with three words: Paid my tax.
The room laughed, and it became one of the most quoted lines of the hearings. It was also a claim the government was in a position to check, and eventually, it did. On March 15, 1951, Costello returned to the witness table, and this time his lawyer spoke first. Wolf told the committee his client was too ill to testify and asked for an adjournment, handing over a physician’s certificate saying Costello had acute laryngotracheitis and ought to be in bed.
The committee rejected the certificate and directed him to answer the question. Am I under arrest, Costello asked. No, Halley told him. Then I am walking out.
The committee reminded him he was under subpoena and that leaving was a violation. He got up anyway and walked out with his lawyer. The next day, March 16, the committee called the physician who had signed that certificate. Under oath, the doctor said that in his opinion, Costello was capable of testifying for an hour or so a day.
Costello showed up with a second doctor’s note. Halley asked whether he had had a meeting with William O’Dwyer, the former Brooklyn district attorney who had become mayor of New York in 1942. I refuse to go further with the questioning, Costello said. In the middle of the exchange, the chairman ordered the cameras cut off.
When the senators asked Costello his net worth, whether he owed more than ten thousand dollars to anybody, and what his total debts came to, he refused to answer. His refusals on his net worth and on O’Dwyer made the senators angriest of all. A federal appeals court later pointed out what everybody in the room already understood: the questions carried obvious income tax implications. Costello did return to the table on March 19, 20, and 21 and answered what was asked, but his lawyers would later offer those three days as proof that his walkout never really blocked the investigation.
The courts ruled that evidence irrelevant, because a witness does not have the legal right to dictate the conditions under which he will or will not testify. On March 30, the Senate ordered printed a report titled Proceedings Against Frank Costello for Contempt of the Senate. The case went to the United States Attorney in New York, and a grand jury indicted him for contempt. The first trial in January 1952 ended in a deadlocked jury.
The government tried him again, and the second jury convicted him on ten counts. The judge gave him eighteen months in federal prison and a five-thousand-dollar fine. The version often told, that Costello went to prison because he would not tell the Senate what he was worth, is not the full picture. On July 3, 1952, the Second Circuit Court of Appeals took the conviction apart count by count.
The counts for refusing to answer what his net worth was, whether he owed more than ten thousand dollars, and what his total indebtedness was, were reversed. The court ruled his privilege against self-incrimination had been validly asserted, and those refusals were within his rights. The counts that stood were the walkout on March 15 and the refusal to testify on March 16. The contempt conviction that put Costello behind bars came from walking out and refusing to testify at all the next day.
The famous silence about his money was something the law let him keep. The fine dropped to two thousand dollars. If Costello had simply sat in that chair and refused each money question on his privilege one at a time, he would have been standing on solid legal ground. What sent him to prison was the walkout and the blanket refusal, on live television, where it looked toughest.
On August 15, 1952, at ten in the morning, Costello walked into the federal courthouse in New York and surrendered to United States Marshal Tom Farley. Tell the boys I have come in to do my bit, he told reporters. I don’t want no favors from nobody. He moved through maximum security prisons, Atlanta among them, before landing at the minimum security federal prison in Milan, Michigan, on December 27.
He served about fourteen months of the eighteen and walked out on October 29, 1953. His wife met him, and they boarded a train in Detroit. Instead of riding into Grand Central, where reporters were waiting, they got off in Westchester County and finished the trip to Manhattan by car. For a little while it looked like Costello had paid for his walkout and put the hearings behind him.
It did not last. While he was in Milan, the second case from that hearing room sat in a file at Foley Square, waiting for somebody to make something of it. The file was thin. The previous United States Attorney’s Office had convicted Costello of contempt and obtained an indictment for tax evasion, but it had wrapped up the grand jury without gathering much evidence.
In 1953, President Dwight Eisenhower picked J. Edward Lumbard to be the United States Attorney for the Southern District of New York, and Lumbard brought Lloyd F. McMahon along as his chief assistant. McMahon inherited the thin tax indictment against Costello, and his team had to put the case together almost from scratch.
Costello had something Al Capone never had: a record of filing tax returns. His returns showed large miscellaneous income, and he figured that covered him. When he said Paid my tax on live television, he had paid it. Back in February 1947, though, he had had to hand over more than twenty-one thousand dollars in penalties and interest on taxes left unpaid since 1930.
McMahon went at him with the net worth method. You prove what a man owned at the start of a year and what he owned at the end, add what he spent in between, and set that against what he reported. Whatever is left over is income he never declared. It was the exact question Costello had refused to answer in front of the cameras, and now the government was going to work out the answer without him.
The starting point for the math came from Costello himself. On October 18, 1937, he had given a sworn statement to an official of the tax bureau, and on that day his net worth was substantially forty thousand dollars. By January 1, 1946, a little over eight years later, the government put it at two hundred forty thousand dollars. The man’s worth had gone up six times over in eight years, and his returns never explained where it came from.
McMahon worked deep into each night in his office overlooking Foley Square, the same square where the Kefauver cameras had been set up three years earlier. The trial opened in April 1954 and ran six weeks. The government called 144 witnesses and put 368 exhibits in front of the jury. There was the Louisiana casino that paid Costello cash profits.
There were daily manicures, so the hands the whole country had watched on television turned out to be a line item in a tax case. There were expensive suits, an account at a florist in the name of C. Frank, and a family mausoleum where another man had signed the contract and the first payment came in as three thousand dollars in hundred-dollar bills. Costello’s lawyers answered all of it with one witness, an expert accountant who had once been an FBI agent.
He came in with charts and schedules, and McMahon’s cross-examination took them apart. The summation ran less than an hour, and the jury convicted. It acquitted Costello on 1946 and found him guilty on 1947, 1948, and 1949. Judge John F.
X. McGohey sentenced him to five years on each of the three counts, to be served at the same time, a ten-thousand-dollar fine on each count, and the cost of prosecution, four thousand one hundred eleven dollars and thirty-eight cents. That was two convictions out of one hearing and a five-year sentence on top of the eighteen months. Costello surrendered on May 17, 1954.
A month later, Justice Robert Jackson of the Supreme Court admitted him to bail, and his lawyers went after the case. On April 5, 1955, a Second Circuit panel that included Judge Learned Hand cut it down. On the 1947 count, the court said Costello might have laid aside a cash reserve the government never ruled out, so there was not enough to hold that count. The 1948 and 1949 counts stood.
For 1948 alone, the understatement was thirty-five thousand two hundred forty-five dollars. The last argument went to the Supreme Court, and it was a strange one. The grand jury that indicted Costello had heard exactly three witnesses, all government investigators, and none of them had firsthand knowledge of anything they told it. They had summarized.
Costello’s lawyers argued that an indictment built on nothing but hearsay was void. On March 5, 1956, the Supreme Court answered in an opinion by Justice Hugo Black. An indictment based solely on hearsay evidence does not violate the Fifth Amendment. The grand jury’s job is to decide whether there is enough to go to trial, and it is the trial that tests the evidence.
Costello had already had that trial, with 144 witnesses. The case, Costello v. United States, is still the rule in federal court today, allowing a grand jury to indict a man on an agent’s summary of things the agent never saw for himself. Costello went back in on May 14, 1956, and served until March 11, 1957, when the Supreme Court admitted him to bail again.
He was out for less than two months when somebody tried to kill him. On May 2, 1957, he stepped out of a cab and into the lobby of his apartment building at 115 Central Park West. A black Cadillac pulled in behind the cab. A gunman fired a single shot at his head, and the bullet curved around his skull from his right ear to his neck and came out without doing serious damage.
Police charged Vincent Jannone with firing it, and the orders were reputed to have come from Vito Genovese. When police went through Costello’s coat, they found a handwritten note in the pocket: gross casino winnings as of April 26, 1957, six hundred fifty-one thousand two hundred eighty-four dollars. The figures matched to the decimal point the win at the Tropicana in Las Vegas, which had opened on April 3. Costello would not explain it.
When Judge Jacob Gould Sherman demanded he be more forthcoming, Costello politely refused, and the judge gave him thirty days. He served fifteen of them in the Tombs. After the shooting, Costello handed the family over to Genovese and retired. When Jannone went on trial in 1958, the building’s doorman identified him as the gunman, and Costello would not identify the man who shot him.
Jannone was acquitted. The government was not finished. Costello tried one more time to throw out the tax conviction, claiming it was built on illegal wiretaps, and Judge McGohey turned him down. By the fall of 1958 his last appeal was gone, and he was back in the federal prison in Atlanta, where he stayed until 1961.
And the question Halley had opened with back in 1951 was still working its way through the courts. The government had filed to strip Costello’s citizenship in 1952 and again in 1958, on the ground raised on live television: when he was naturalized in 1925, Costello swore his occupation was real estate, and his true occupation was bootlegging. On February 20, 1961, the Supreme Court upheld the order revoking his citizenship. The government then tried to deport him on the strength of the two tax convictions, and on February 17, 1964, the Supreme Court set that order aside, because the deportation law did not reach a man who was still a citizen when he was convicted.
It was the only fight in the whole file that Costello won outright. The country had watched his hands for hours, and everything he said above them was said under oath. The contempt case came from the two days he refused to testify at all. The tax case came from the net worth he would not state, worked out from a sworn statement he had given the tax bureau back in 1937.
What outlived all of it was the case with his name on it, a rule that kept a boss like Costello in prison, and one that has remained the law ever since.