Meade Esposito, the powerful Democratic Party leader of Brooklyn, is currently under active investigation by four separate law enforcement agencies — special anti-corruption prosecutor Maurice Nadjari, the Justice Department’s Organized Crime Strike Force, the IRS, and the SEC.
The SEC probe involves fraud and manipulation of a stock called Frigitemp. Two of Esposito’s closest friends — Bernard Deutsch and Joe Marando — have already been indicted in the case and an SEC complaint mentions Esposito’s personal lawyer, George Meisner. Meisner is also a Brooklyn district leader. And Deutsch was honorary chairman or a dinner that honored Esposito on January 7, 1970.
In addition to these four active investigations. Esposito was questioned by two grand juries last year, and an earlier IRS audit was terminated under suspicious circumstances. At that time, several IRS agents complained of a coverup.
The earlier IRS audit of Esposito’s finances was so inadequate and incomplete that the late U.S. Attorney Robert Morse, and Dennis Dillon, chief of the Organized Crime Strike Force, refused to sign the final report, according to documents on file in Washington.
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The original IRS audit of Esposito’s finances was closed out late in 1972.
Esposito had several secret meetings with former Attorney General John Mitchell during the autumn of 1972. These meetings were never listed on any of Mitchell’s official office logs, and were at first denied by Esposito. However, after Nelson Rockefeller disclosed he arranged the first of the meetings, Esposito then admitted he did in fact meet secretly at least twice with the Republican Attorney General. Esposito says the subject of those meetings with the now indicted Mitchell is “private.”
The meetings with Mitchell not only coincided with the IRS audit, but also with the inexplicable vote of Brooklyn congressman and Esposito protege Frank Brasco against investigating the Watergate scandal while the 1972 Presidential campaign was still in progress.
On October 3, 1972, the House Banking and Currency committee voted in executive session against giving its chairman, Wright Patman, subpoena power to launch a full-scale Watergate inquiry.
Brasco was the only Northern urban Democrat to vote with the Republicans successfully and block the investigation. Brasco is the politician personally closest to Esposito in the whole city. Esposito got Brasco his nomination for Congress in 1966. Esposito had a no-show $500-a-month job on Brasco’s congressional payroll during 1967 and 1968. And Brasco’s cousin, also named Frank, is Esposito’s personal chauffeur. Brasco would do anything Esposito asked him to do.
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Moreover, John Dean has told the staff of the Select Senate Watergate committee that there were several long and anxious White House meetings on how to prevent the banking committee inquiry. According to Dean, at one of those meetings, Mitchell said he could “take care of one of the Democrats from New York” on the committee. Brasco was the only New York Democrat to vote against the Watergate inquiry.
About a month after Brasco’s vote, the IRS audit of Esposito was halted over the objections of Morse and Allan.
According to a source in IRS, before the Esposito audit was terminated, three agents went secretly to U.S. Attorney Morse to say there was a cover-up in progress, and that they were not being permitted to conduct a thorough professional investigation of Esposito.
The IRS agents said they were ordered by their supervisors not to interview and investigate judges, or to explore the financial records or the Brooklyn Democratic county organization, or to analyze the books of Grand Brokerage, the insurance agency Esposito owns with Stanley Steingut.
Sources in IRS say that the area of judicial investigation was crucial because there had been allegations that Esposito had accepted undeclared cash in the sale of judgeships.
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The current IRS investigation of Esposito’s finances began six weeks ago, and is expected to take at least nine months to complete. It is being conducted by a special team of agents and accountants that had nothing to do with the suspicious 1972 audit.
If Mitchell did, in fact, stop the inquiry into Esposito, it was probably not the first time the former Attorney General manipulated justice. There is also considerable evidence that Mitchell improperly interfered with the ITT, Dairy Cooperative, Robert Vesco, and Robert Abplanalp investigations, and played politics with the pardons granted Jimmy Hoffa and Mafia boss Angelo “Gyp” De Carlo.
Congressman Brasco, meanwhile, has been indicted by a federal grand jury on charges of conspiring to accept $27,500 in illegal cash pay-offs from a truck leasing company owned by Mafia capo John Masiello.
One of Esposito’s 1972 grand jury appearances also involved a Mafia capo — Paul Vario.
It turns out that Esposito’s name was “all over” the famous tapes made in the bugged junkyard trailer the Mafia used in Canarsie during 1972. The junkyard tapes led to the conviction of 40 Mafia members and 21 policemen.
Esposito’s name was used frequently in the trailer by Vario, who has since been indicted six times by Brooklyn D. A. Gene Gold as a result of the trailer bug. Vario was recorded saying things like “Ask Meade a bout that,” and “Meade’s a good guy.”
Esposito’s appearance before the Brooklyn grand jury was carefully arranged so that the press never found out about it. The county leader admitted under oath that he knew Vario “very well” for more than 15 years, and that he had first met Vario (who has a record of 27 arrests and a conviction for rape) while he was “in the bail bonds business.”
Esposito, however, said he couldn’t possibly imagine why Vario would so freely drop his name in private conversations with other mobsters.
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Meade Esposito is by far the single most powerful Democratic county leader in the state. The Brooklyn Democratic organization has produced, and can claim loyalty and patronage from Mayor Abe Beame, City Council Majority Leader Tom Cuite, State Comptroller Arthur Levitt, Assembly Minority Leader Stanley Steingut, more than 40 Supreme Court Justices, Surrogate Nathan Sobel and Borough President Sam Leone.
Esposito controls more than 1000 jobs. He’s made more than 25 Brooklyn judges, and approves the appointment of every law secretary in Brooklyn Supreme Court. Through Tom Cuite, Esposito influences the committee assignments and chairmanships or the City Council. Through his close friendship with Nelson Rockefeller, Esposito was able to secure a favorable re-apportionment of the state legislature in 1972. Dozens of appointments to the Beame administration have to be “cleared with” Esposito. People think he can influence tax assessments, liquor licenses, zoning decisions, government contract and judicial decisions.
Every candidate for state-wide office next year will seek Esposito’s private, if not public, support. Ted Kennedy, Hubert Humphrey, and George McGovern have all publicly praised Esposito as a great party leader. The New York Times, in a nattering magazine cover story in December 1972, described Esposito as “a new breed of party leader,” and compared his power to that of Mayor Daley or Chicago.
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Esposito was born in Ocean Hill 64 years ago. He quit Manual Trades High School at the age of 14 to become an office boy in an insurance company owned by old-time Brooklyn Democratic boss James Powers.
In 1947 Esposito went into the bail bonds business with Ronnie Carr. (Carr is now a law assistant to Brooklyn Surrogate Nathan Sobel even though he is not a lawyer.)
Esposito admits that many of his bail bond clients were mobsters, including Joe Colombo, Jimmy Napoli, and Apples McIntosh.
In 1958 Esposito ran as an insurgent for district leader in Canarsie and lost by 200 votes. In 1960, he was elected with the public endorsement of Eleanor Roosevelt and Herbert Lehman. Esposito named his home club after Thomas Jefferson. And he quickly arranged for his campaign manager — Mike Kern — to become a judge.
In 1960 Esposito suddenly became assistant vice-president of the Kings Lafayette Bank, despite no apparent experience as a banker. His friends say Esposito knew he could never become county leader while a bondsman: the bank title gave him the respectability needed to acquire party power.
At the time Esposito was hired by the bank as an executive, the single biggest depositor in the bank ($2 million) was the ILA, which many law enforcement agencies believe is Mafia-dominated. It is suspected that the ILA used its influence to get Esposito the job.
In 1970. U. S. Attorney Robert Morgenthau said that while Esposito was vice-president of the bank, he arranged for ILA leader Anthony Scotto’s family to obtain a $250,000 unsecured loan. Morgenthau further stated, “This loan went to buy a country club in New Jersey that became a prime meeting place for members of organized crime.”
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Esposito claims he severed all his ties to the Kings Lafayette Bank in 1970. But an investigator for Special Prosecutor Nadjari told me this week: “Esposito’s relationship to the bank still exists. Only now it is more disguised, more circumspect, and more sinister.”
Over the last year, five Mafiosi have been convicted of receiving illegal loans from the Kings Lafayette Bank.
Esposito is also a vice-president and part owner with Stanley Steingut of Grand Brokerage, an insurance company now located at 70 Broadway. Law enforcement agencies are now trying to discover if Grand Brokerage has sold insurance policies to politicians who became judges, or received other favors from Esposito.
Grand Brokerage, mysteriously, refuses to provide any information about its finances to Dun and Bradstreet. A normal insurance company would depend on a good rating from Dun and Bradstreet for customers and credit. Grand is run on politics, not merit or business acumen. Esposito has often told friends: “I don’t need graft. I got premiums.”
Esposito also was quoted by Tim Lee of the New York Post as saying: “There’s no sense kidding myself — the people wouldn’t be bringing their insurance business to me if I wasn’t county leader.”
Investigators are also looking into the finances of the Brooklyn Democratic Party, Brooklyn regulars estimate that the organization raised more than $400,000 last year — $140,000 of it at one dinner at the Waldorf — and there has been no public accounting of those funds. As the result of a loophole in the state’s election law, party organizations do not have to report these receipts and expenditures even to the IRS, or to city and state tax authorities.
The county organization does provide expenses, a limousine, and a chauffeur for Esposito.
Also, Esposito admits that Brooklyn Supreme Court candidates are asked to contribute at least $10,000 to the party campaign fund although with multi-party endorsement no significant campaign is conducted. Frank Vaccaro, who received a Supreme Court judgeship from Esposito last year, says his district leader was told by Esposito that a $10,000 contribution “would be an appropriate amount.”
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Esposito’s immense power even awes some of the men who are now diligently investigating him. This is how one federal investigator talked this week:
“I think we will eventually make a case against Esposito, but I’m afraid of what happens after that. I know he was able to protect himself all these years. He’s more than lucky. I can’t prove it, but I’m convinced that John Mitchell protected him. That’s got to be the reason the original IRS audit was covered up. I know how many friends Esposito has, from the lowest hood up to the Rockefellers.
“It worries me. After we get the evidence, then we need a prosecutor to impanel a grand jury and actually sign an indictment. Then we need an honest jury, and honest judge to try the case and give him a sentence. Then we need five appellate judges who can’t be fixed to affirm the conviction.
“I know how much the judges and appellate judges hate Nadjari, for example. I know how many judges, and appellate judges, are friends of Esposito.
“Back during the 1960s, when Joe Hoey was the U. S. Attorney and when Aaron Koota was the D. A., no politicians were ever investigated in Brooklyn. The borough was wide open
“But now, after Watergate, and Agnew and the Knapp Commission, things are changing. At least now we can get permission to go after an important politician, at least now we have a chance.
“But I’m still scared. We’ll work our ass off for the next six months to make a case. We’ll work 18 hours a day. But I admit it. I’m afraid of what happens after that. This guy Meade has more power than the Pope.”
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The current law enforcement probes into the Brooklyn Democracy should be viewed, and understood in the larger context of the recent wave of indictments for political corruption in Brooklyn, and in the historic connection between the Brooklyn Democratic Party and organized crime.
During the last six months, corruption indictments have been voted by grand juries against seven prominent Brooklyn Democratic political figures.
Brooklyn Congressman Ben Podell was indicted on charges or conspiracy, bribery, and perjury after a two-year investigation by the Department of Justice and the PRI. The 10-count indictment alleged that Congressman Podell had accepted $41,350 in bribes in exchange for using his influence to obtain a route to the Bahamas for Florida Atlantic Airlines.
Brooklyn Congressman Frank Brasco was indicted by a federal grand jury for conspiring to receive a $27,500 bribe for helping a Mafia truck leasing company win government contracts. This investigation was carried by Mike Shaw, chief of the Organized Crime Strike Force.
Brooklyn Supreme Court Justice Dominic Rinaldi was indicted on three counts of perjury by Special State Prosecutor Maurice Nadjari.
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Brooklyn Civil Court Judge Ross Di Lorenzo was indicted for perjury in a case involving organized crime.
William Steinman, a long-time Brooklyn political figure, who is administrative assistant to State Comptroller Arthur Levitt, was indicted for attempted bribery, conspiracy, and grand larceny. The indictment alleges that Steinman tried to fix a criminal case in Brooklyn Supreme Court.
Brooklyn Assemblyman Calvin Williams was indicted for bribery by Brooklyn D. A. Eugene Gold.
Brooklyn City Marshal Irving Sable was indicted for grand larceny by extortion, also by Gold’s office.
Also, Norman Levy, former president of the City Tax Commission and chairman of the John V. Lindsay Association of Brooklyn, was convicted two weeks ago, of conspiracy, obstruction of justice, and tampering with public records. Levy Faces a sentence of up to nine years in prison for his role in a system of fixing about 2000 parking tickets for Brooklyn politicians.
In addition, four Brooklyn judges are now under investigation by Special Prosecutor Nadjari’s office.
Nadjari’s staff of 65 investigators and 24 lawyers currently has more investigations active in Brooklyn than in any other borough.
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Municipal corruption seems historically endemic to specific places — Chicago, Miami, New Jersey, and Brooklyn.
In his wonderful book. “The Great Bridge,” David McCullough describes the graft of the “Brooklyn Ring” while the Brooklyn Bridge was under construction after the Civil War. Millions were stolen by Boss Hugh McLaughlin, “a former waterfront gang leader”; William Kingsley, “Brooklyn’s most prosperous contractor”; and Henry Murphy, founder of the “Brooklyn Eagle and Kings County Democrat.”
Almost a century later, the Kefauver Committee’s televised crime hearings exposed the sophisticated connection between the Brooklyn Democratic Party and organized crime. The Third Interim Report of the Kefauver committee, released in May 1951 said:
“Mobster Joe Adonis’s influence upon the Kings County Democratic organization may go far to explain why neither he, nor a major subordinate like Anthony Anastasia, was ever subjected to prosecution or punishment …
“William O’Dwyer (D. A. of Brooklyn from 1941 to 1945) failed to take effective action against the top echelons of the gambling, narcotics, waterfront, murder, or bookmaking rackets. His defense of public officials who were derelict in their duties, and his failure to follow-up concrete evidence of organized crime, particularly in the case of Murder, Inc., and the waterfront, have contributed to the growth of organized crime, racketeering, and gangsterism in New York City.”
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In recent years, the publicly available cumulative evidence of the influence of organized crime on Brooklyn politics should trouble any thoughtful citizen.
Two Brooklyn Democrats have been indicted in connection with attempts to use their public trust in behalf of the Mafia — Congressman Frank Brasco, and Civil Court Judge Ross Di Lorenzo.
A careful analysis of judicial decisions in Brooklyn suggests at least a pattern of favoritism toward organized crime.
The staff of the Joint Legislative Committee on Crime has studied the disposition of 147 felony cases in Brooklyn Supreme Court involving Mafia defendants between 1960 and 1970. Sixty-three per cent of all the organized crime defendants won dismissals in Brooklyn. This compares with a 15 per cent dismissal rate for all other types of defendants. Only five per cent of the mobsters indicted actually went to prison. The 63 per cent dismissal rate in Brooklyn compares with less than 40 per cent in the four other boroughs for mobsters.
In the last two years, one Brooklyn Supreme Court Justice — Joseph Corso — threw out indictments against five different Mafia defendants, and all five of his dismissals were later reversed on appeal by the Appellate Division.
Last year, the State Commission of Investigation twice called in Brooklyn Supreme Court Justice John Monteleone to explain, under oath, why he dismissed an indictment against an alleged Mafioso named Frank Cangiano. Monteleone’s dismissal was later unanimously reversed by a higher court.
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Judge Monteleone is now under intensive scrutiny by the staff of Special Prosecutor Nadjari. Monteleone was elevated to the State Supreme Court by Meade Esposito in 1970.
Aaron Koota was District Attorney of Brooklyn from 1964 to 1968, and is now a Supreme Court Justice.
In July of this year Gerald Martin Zalmanowitz testified in public before Senator Henry Jackson’s Permanent Sub-committee on Investigations. Zalmanowitz, who grew up in Brooklyn, is a federal informer whose testimony helped convict Mafia boss Angelo De Carlo in New Jersey in 1970.
Zalmanowitz testified that two cases — one involving Joe Colombo — were “fixed” in the D. A.’s office while Koota was D. A. of Brooklyn. One case was fixed for $5,000 and the other with a free Buick from a dealership Colombo covertly owned.
Local 1814 of the ILA, and its president Anthony Scotto, are important pillars of the Brooklyn Democracy. The union provides money, printing presses, and man-power in every election. The ILA ‘s support was clearly the difference in John Rooney’s narrow primary victory over Allard Lowenstein in 1972.
The Justice Department, as a result of information from two informants, officially lists Anthony Scotto as a captain in the Carlo Gambino family.
Scotto seems an especially ambiguous figure. He is married to the daughter of Anthony Anastasia, and no one gets to be the leader of Local 1814 at age 26 if he is not somehow connected to wise guys. But Scotto has no criminal record and is a college graduate.
But some Mafia experts are not fully convinced of Scotto’s real role. One respected journalist, who has covered the mob for 15 years, put it this way:
“Anthony is half a wise guy. He’s wired to them, but he would never shoot anybody, or do anything violent. The waterfront is controlled by the mob. He exists in that environment. I think he wants to get out of the mob world before he gets hurt. The really bad mob guys think he’s gone legit with Lindsay. They don’t trust Scotto. Anthony just exists in some twilight zone between two worlds.”
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Scotto was first named as a Gambino captain in 1966 during testimony in executive session before Congressman John Rooney’s subcommittee. Rooney, who has been supported by Scotto’s union in every election since 1946, refused to make the FBI listing public.
But in 1969, the Senate committee of John McClellan released Scotto’s name. Scotto was listed as a Gambino captain on the basis of information provided by two informants, one of whom was Joe Valachi. There is no wiretap corroboration.
The Brooklyn waterfront meanwhile, without ambiguity, remains a center for smuggling, loansharking, extortion, union racketeering, pilferage, contraband cigarettes, and bookmaking.
On Monday night, December 10, Michael Cosme was in the Shorefront Democratic Club, 320 Brighton Beach Avenue. Cosme was a bookmaker and a member of the Joe Colombo family. Two men wearing ski masks walked into the clubhouse, stood Cosme against the wall, and killed him with automatic pistols. Police found $4700 in cash and sports betting slips in Cosme’s coat pocket.
The Shorefront Democratic Club has a charter from the Kings County Democratic Party, and Cosme apparently used the clubhouse as his bookmaking office.
The introduction of private immigration bills for aliens is one way politicians can do favors for organized crime. In 1972, the Immigration and Naturalization Service prepared an analysis of these private bills.
The INS study named Brooklyn Congressman Frank Brasco as one of three Representatives who introduced private bills for aliens “close to organized crime.”
A further analysis disclosed that Brasco introduced a dozen bills for clients of one Brooklyn lawyer — Thomas Lentini — who was convicted of immigration fraud. Lentini was also chairman of a Brasco fund-raising dinner at Victoria House in Brooklyn in 1967.
The Kings Lafayette Bank (17 branches and $23 million in total capital funds) seems an important institution to both the Kings County Democrats and organized crime.
Meade Esposito was an officer of the bank for 10 years, and is believed by law enforcement to still have a covert connection to the bank.
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John Lynch for years has been chairman of the Brooklyn Democratic county committee. For more than 30 years the Brooklyn Democratic organization has banked its own funds at Kings Lafayette. John Lynch is also honorary board chairman of the bank.
State Comptroller Arthur Levitt, a member of the Brooklyn organization’s Madison Club, has deposited large sums of interest-free state deposits in the Kings Lafayette Bank. During 1973, an average balance of $1.6 million in interest-free public money was placed in the bank by Levitt, which is more than was deposited in banks of equivalent size and capital. The bank also received more than $5 million in time deposits from Levitt.
Last year, directors of the Kings Lafayette Bank purchased two tables for $2000 to the annual dinner of the Kings County Democrats.
At the same time, the bank has had significant contact with organized crime.
Over the last year, five alleged mob members and associates have been convicted of receiving false and illegal loans from Kings Lafayette: Natale Marcone, Caesar Vitale, Ilarie Pisani, Joseph De Cicco, and Barry Mancher. Five others have been indicted and are awaiting trial. A bank branch manager, Louis Mellini, was indicted for bribery and loan-sharking, but he later agreed to cooperate with law enforcement agencies.
In 1970, after lengthy hearings, the bi-state Waterfront Commission denied a stevedoring license to the CC Lumber Company because Anthony Scotto had used improper influence to get an unsecured $250,000 loan for the company from the King’s Lafayette Bank.
Scotto’s union had $2 million in pension fund deposits in Kings Lafayette at the time. The CC Lumber Company is owned by relatives of Scotto.
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The State Court of Appeals, in upholding the Waterfront Commission decision in December 1972, concluded in a majority opinion:
“There was sufficient evidence for the Waterfront Commission to find that Anthony Scotto breached his fiduciary obligation as a union officer under Section 723 of the State Labor Law.”
The Kings Lafayette Bank is currently under investigation by the staff of Senator Jackson’s Permanent Investigations Subcommittee as a possible money wash for securities stolen by organized crime.
An investigator for the Jackson committee told me this week: “Kings Lafayette is what you might call a family bank.”
There are at least four reasons for the disproportionate amount of political venality and cynicism in Brooklyn.
One is that Brooklyn is a one-party borough, and the organization Democrats have been uninterrupted in power since Boss McLaughlin started getting rich from the Brooklyn Bridge project in 1867.
Second is the historic roots the Mafia has in Brooklyn, especially on the docks, and in neighborhoods like Canarsie and Red Hook. Three organized crime families — Gambino, Colombo, and Gallo — are based in Brooklyn, and five more derive some income from various rackets in the borough. Joe Hynes of the Brooklyn D. A.’s office estimates that 2500 members of organized crime families now work and live in Brooklyn.
Third the dubious quality of the Brooklyn judiciary is a direct consequence of the control the political structure maintains over the courts and the Brooklyn Bar Association. Until law and justice become separated from patronage and politics, the Brooklyn judiciary will remain a fertile ground for Special Prosecutors and muckrakers.
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And last, there is so much corruption in Brooklyn because there is almost no scrutiny of that borough by the media. Brooklyn has 2.6 million residents dispersed over 80 miles. It is the fourth largest city in the nation. But since the demise of the Eagle, Brooklyn has been without a daily newspaper. The Times, the Post, and the local television news shows continue to report on Manhattan with much more curiosity than on bigger, badder Brooklyn. The Times covers Bangladesh better than it covers Brooklyn.
The future, as always, is inscrutable.
The appropriate remedies, as usual, appear obvious.
Investigation, exposure, analysis, endurance, idealism, and leadership will, hopefully, inspire citizen participation in the democratic process.
Meade Esposito, Stanley Steingut, John Rooney, Frank Brasco, Bert Podell, Dominic Rinaldi, Tom Culte, and James Mangano will all be up for re-election in 1974.
If the prosecutors don’t catch them, perhaps the people will. ♦