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INVESTIGATION OF ORGANIZED CRIME
IN INTERSTATE COMMERCE
HEARINGS
BEFORE THE
SPECIAL COMMITTEE TO INVESTIGATE
ORGANIZED CRIME IN INTEESTATE COMMEECE
UNITED STATES SENATE
EIGHTY-SECOND CONGRESS
FIRST SESSION
PURSUANT TO
S. Res. 202
(81st Cong.)
AND
S. Res. 129
(82d Cong.)
A RESOLUTION AUTHORIZING AN INVESTIGATION OF
ORGANIZED CRIME IN INTERSTATE COMMERCE
PART 15
KENTUCKY
JUNE 20 AND JULY 23, 1951
Printed for the use of the Special Committee To Investigate
Organized Crime in Interstate Commerce
A
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 105
' JJ
SPECIAL COMMITTEE TO INVESTIGATE ORGANIZED CRIME
IN INTERSTATE COMMERCE
HERBERT R. O'CONOR, Maryland, Chairman
ESTES KEFAUVER, Tennessee CHARLES W. TOBEY, New Hampshire
LESTER C. HUNT, Wyoming ALEXANDER WILEY, Wisconsin
Richabd G. Moser, Chief Counsel
Joyce W. Mack, Editor
II
CONTENTS
Testimony of— r PaBe
Berndt, Henry A., sheriff, Kenton County, Ky 114
Bo wen, Wesley, county attorney, Campbell County, Ky 26
Brink, James H., Covington, Ky 5
Connor, Leonard J., sergeant-at-arms of the senate of the State of
Kentucky 129
Diebold, Ray, sheriff, Campbell County, Ky 26,210
Eha, Charles J., city commissioner, Newport, Ky 26, 217
Florer, W. Sharon, Covington, Ky 48
Goddard, Lawrence C, Washington, D. C 17
Goodenough, Hon. Joseph P., Judge, Kenton circuit court, Coving-
ton, Ky 81
Gugel, George, chief of police, Newport, Ky 26, 161
Hageman, Theo "Tate," field agent, Kentucky State Alcohol Board.. 198
Kuresman, Jack, Cincinnati, Ohio, accompanied by Sol Goodman,
attorney, Cincinnati, Ohio 11, 21
Moloney, John J., commissioner, city of Covington, Ky 70
Moore, Mrs. Virginia Purcell, Newport, Ky., accompanied by Daniel
W. Davies, attorney, Newport, Ky 1
Murphv, Hon. Rav L., judge, Campbell County circuit court, Ken-
tucky 179
Quill, James E.f commonwealth attorney, Covington, Ky 99
Rhoads, Malcolm Reet, city manager, Newport, Kyr 26, 166, 175
Schild, Alfred S., chief of police, Covington, Ky 186
Thiem, Jack C, police sergeant, Newport, Ky 26
Warren, Fred, city solicitor, Newport, Ky 26, 124
Winters, James, chief, Campbell County police, Kentucky 26
Wise, William J., commonwealth attorney, Campbell County, Ky__ 26, 151
in
IV
SCHEDULE OF EXHIBITS
SCHEDULE OF EXHIBITS
Number and summary of exhibits
Appears on page
12.
13.
1. Financial statemenl of Beverly Hills Country Club, South-
gate, Campbell County, Ky_.
2. Financial statement of the Yorkshire Club, Campbell
County, Ky
3. Financial statement oftheLookoul House, Kenton County,
Ky
h Newspaper clipping entitled "Moebus Want.- Diebold To
Help County Police," and a letter reply, submitted by
Sheriff Ray Diebold .
5. Copy of orders to Chief of Police Gugel, re Finance Build-
ing in Newport, Ky., submitted by City Manager
Rhoads
6. Statement submitted by City Commissioner Eha, New-
port . Ky
7. Agreement of March II, 1950. by and between law-enforce-
ment officials of Kenton County, Ky., and the Kenton
County Protestant Association
8. Newspaper article from the Kentucky Times Star, Sep-
tember 11, 1950, listing 163 slot-machine taxpayers in
Covington, Ky
9. Documents and statements submitted by City Commis-
sioner John J. Moloney, Covington, Ky
.0. Two clippings submitted by Commonwealth attorney for
Kenton County, James E. Quill
LI. Memo dated February 15, l!»">0, submitted by George
Gugel, and sworn to in Cleveland on January 19, 1951
1 >ocum tit submitted by City Manager Rhoads of Newport,
Ky., listing handbooks and casinos in Newport, which
were licensed as brokerage houses in 1949
Judgment in an injunction proceeding in Campbell County
Circuit Court, submitted by Judge Ray L. Murphy
225
226
227
227
228
228
228
229
(2)
235
236
(2)
1 Returned to witness.
2 On file with cammittee.
INVESTIGATION OF ORGANIZED CRIME IN INTERSTATE
COMMERCE
WEDNESDAY, JUNE 20, 1951
United States Senate,
Subcommittee of the Special Committee To
Investigate Organized Crime ix Interstate Commerce,
Washington^ D. G.
EXECUTIVE SESSION
The subcommittee met, pursuant to adjournment, at 10:45 a. m.,
in room 412, Senate Office Building, Senator Herbert R. O'Conor
(chairman) presiding.
Present : Senator O'Conor.
Also present: Joseph Nellis, special counsel: James M. Hepbron,
administrative assistant ; Lawrence Goddard. investigator; and Julius
Calm, executive assistant to Senator "Wiley.
The Chairman. All right, the committee is now in executive ses-
sion.
Will you call in your first witness ?
Mr. Xellis. We will call in Mrs. Moore.
The Chairman. Mrs. Moore, it is our practice and procedure here
to swear all witnesses. I suppose you have no objection to being
sworn.
Mrs. Moore. Xo objection.
The Chairmax. Will you raise }Tour right hand and be sworn
please ?
In the presence of the Almighty God, do you swear that the testi-
mony which you are about to give shall be the truth, the whole truth,
annd nothing but the truth \
Mrs. Moore. I do.
The Chairmax-. I presume that you are counsel for Mrs. Moore.
Mr. Davies. Yes, sir. My name is Daniel W. Davies, 331 York
Street, Newport, Ky.
The Chairmax. Mr. Davies, we welcome you, and any time that
you feel you have a question that may elicit further information, you
are perfectly free to suggest it.
Mr. Davies. Thank you.
TESTIMONY OF MRS. VIRGINIA PURCELL MOORE, NEWPORT,
KY., ACCOMPANIED BY DANIEL W. DAVIES, ATTORNEY, NEW-
PORT, KY.
The Chairmax*. Now. will you give us your full name, please.
Mrs. Moore. Virginia Purcell Moore.
The Chairman. Talk very distinctly, if you will be good enough
to do so, so that Ave will not have any trouble in hearing vou.
1
2 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mrs. Moore. All right.
The Chairman. What is your residence address ?
Mrs. Moore. 717 Monroe Street, Newport.
The Chairman. In the State of?
Mrs. Moore. Kentucky.
The Chairman. How long have you lived there?
Mrs. Moore. Let's see, how old am I — 1914
The Chairman. In other words, all your life?
Mrs. Moore. Yes; all my life.
The Chairman. Thank you.
Mr. Nellis, you may proceed.
Mr. Davies. Before we proceed, I might say that I don't think
that there will be any necessity for objection or the claiming of any
privilege on the part of this witness.
The Chairman. Thank you. I want you to feel free to ask any-
thing you care to. We are here to cooperate.
Mr. Davies. Thank you very much, Senator.
The Chairman. Now, if you will, Mr. Nellis.
Mr. Nellis. -You are secretary-treasurer of the Yorkshire Bar &
Restaurant, Inc.; is that right?
Mrs. Moore. That is correct.
Mr. Nellis. And Mr. William Flynn is vice president?
Mrs. Moore. Yes, sir.
Mr. Nellis. And Mr. Oliver Hack is president ?
Mrs. Moore. Yes.
Mr. Nellis. And the three of you have how many shares of stock
in the corporation — all?
Mrs. Moore. It is all in the minute book. Is my minute book handy,
Mr. Goddard?
Mr. Goddard. No ; I left it in the office.
Mrs. Moore. Well, the shares are in there. I am not too familiar
with them.
Mr. Nellis. But in any event, the three of you are the sole stock-
holders in the corporation; is that right?
Mrs. Moore. That is right.
Mr. Nellis. All right. Now, I want to make this very short, be-
cause your presence on the stand is for one purpose only, and that is
to determine whether or not you know about the operations of the
gambling casino at the restaurant, at the Yorkshire, the restaurant
where you work.
When you run short of money in the bar and restaurant, who do you
go to to get money ?
Mrs. Moore. I go to Mr. Croft— John Croft.
Mr. Nellis. John Croft?
Mrs. Moore. Yes; or Mr. Morris Nemmo.
Mr. Nellis. Is that spelled N-e-m-o?
Mrs. Moore. No, N-e-m-m-o.
Mr. Nellis. Anybody else?
Mrs. Moore. Those are the only two that I have ever asked for
funds when I needed them.
Mr. Nellis. These persons you have just mentioned are not officers
of the corporation, the Yorkshire Bar & Restaurant?
Mrs. Moore. No, sir.
ORGANIZED CRIME IN INTERSTATE COMMERCE 3
Mr. Nellis. They are, in fact, the operators of the gambling casino
that used to be at the Yorkshire; is that right?
Mrs. Moore. Yes, sir.
Mr. Nellis. Is it your statement that there is no gambling at the
Yorkshire at the present time?
Mrs. Moore. There is no gambling at the Yorkshire at the present
time.
The Chairman. Since when, Mrs. Moore ?
Mrs. Moore. Well, to the best of my knowledge, Senator, April
1950.
The Chairman. I am just asking approximately for the time. I
realize you may not have the exact date.
Mrs. Moore. Sometime in April 1950.
Mr. Nellis. On the other hand, Mrs. Moore, you leave work about
4 : 30 in the afternoon, do }rou not ?
Mrs. Moore. Yes.
Mr. Nellis. You would not presume to testify about anything that
went on afterward?
Mrs. Moore. No, sir ; I would not.
Mr. Nellis. There are upstairs of the bar and restaurant two
rooms, are there not?
Mrs. Moore. That is right.
Mr. Nellis. And so far as you know, gambling could go on up
there, could it not?
Mrs. Moore. So far as I know, it could.
Mr. Nellis. Yes. In other words, what would Mr. Croft and Mr.
Nemmo be doing, giving you sums of money to make up deficits in the
bar and restaurant, if they are not members of the organization we
were just discussing? What would their interest be in making up
your deficits?
Mrs. Moore. To keep the bar and restaurant operating.
Mr. Nellis. Did you ever see Mr. Charles Polizzi in the Yorkshire
Bar?
Mrs. Moore. No, sir. I don't know him.
Mr. Nellis. Mr. Chairman, I might just state that this informa-
tion I am about to give is in the record in Cleveland.
The partnership of the Yorkshire Club as late as 1949 included local
people, three of whom Mrs. Moore has mentioned, as well as Robert
F. Bergin, Sol Gutterman, Cincinnati, Ohio; A. R. Masterson of Fort
Thomas, Ky. ; Alfred Goldtsman, of Cleveland; George Gordon, of
Cleveland, Ohio ; John Angersola, of Cleveland, Ohio ; Samuel Tucker,
whose address is given as Southgate, Ky. ; James Brink, Fort Mitchell,
Ky. ; R. Wolad, of Cleveland, Ohio; Charles Polizzi, of Cleveland,
Ohio; John Croft, whom Mrs. Moore has mentioned before; George
Bear, of Detroit, Mich. ; and Frieda Bragal, of Melbourne. Ky.
Now, Mrs. Moore, have you seen any of those people in that es-
tablishment?
Mrs. Moore. I know Mr. Bergin.
Mr. Nellis. Yes.
Mrs. Moore. I know Mr. Masterson. Do you mean have I seen him
in there, or do I know them?
Mr. Nellis. Have you seen them in the establishment there; that
is the question?
Mrs. Moore. Mr. Bergin, Mr. Bear.
4 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Xkllis. And you said Mr. Master-son?
Mrs. Moore. Yes. t know Mr. Mastorson. Let me see.
Mr. Da vies. Do you want to hand her t he list so that she can refresh
her recoiled ion '.
Mr. Nellis. Certainly, you are welcome to look at the list I will
come over there with you while you are looking at it.
You have seen Mr. Ryan \
Mrs. M m . I have seen Mr. Ryan, and Nemmo, Bergin, Gutterman.
Mr. Davies. Off the record. George Bragal is dead, and Frieda
Bragal is his widow.
Mrs. Moore. Masterson, Lowe. I have seen him. I do not know
that gentleman there.
Mr. Nellis. That is Goldtsman?
Mrs. Moore. Goldtsman; no. Gordon; no. Angersola; no.
Samuel Tucker: yes. Mr. Brink; no.
Mr. Xkllis. You have never seen him?
Mrs. Moore. I know Mr. Brink, but I have never seen him there.
Mr. Nellts. That was the question.
Mrs. Moore. Wolad; no. Snyder; no.
Mr. Davies. Off the record, Abe Snyder is Red Snyder, Mr.
Schroeder's brother-in-law.
Mrs. Moore. I beg your pardon. I did not know his name.
Mr. Xkllis. But you have seen Mr. Snyder?
Mrs. Moore. Yes. and Heims; yes. This one; no. Polizzi; no.
Mr. Nellis. You have testified as to Croft.
Mrs. Moore. Yes.
Mr. Nellis. And Bear?
Mrs. Moore. Yes.
Mr. Nellis. Go ahead.
Mrs. Moore. Frieda Bragal
Mr. Davies. That is "Peanut's" widow.
Mrs. Moore. I don't know her.
Mr. Nellis. Well, just say so if you don't know.
Mrs. Moore. No, sir.
Mr. X 1.1. i. is. All right. Now, when was the last time that Mr.
Croft or Mr. Nemmo gave you money to make up a deficit?
Mrs. Moore. That is hard to say. A deficit was made while I was
on vacation, and it was in the latter pari of January of this year. It
is noted in my records, but the assistant bookkeeper made the entry
at the time. I was on my vacation.
Mr. Nellis. That is the most recent date you remember?
Mrs. Moore. That is the most recent date; yes.
Mr. Nellis. Do you recall the amount of money?
Mrs. Moore. I believe, now, this is just to the best of my knowl-
edge
Mr. Nellis. I understand.
Mrs. Moore (continuing). $1,500, but it might have been more. I
would have to go back to my records. I would rather refer to my
records.
Mr. Nellis. I have no further questions, Mr. Chairman.
The Cii aik.m w. Thank you. Mrs. Moore.
Mr. Davies. May I ask one question for the record S
The ( 'iiaiiim \x. Yes.
ORGANIZED CRIME IX INTERSTATE COMMERCE Q
Mr. Davies. Mrs. Moore, just where in the premises is your little
office located?
Mrs. Moore. On the second floor, over the kitchen.
Mr. Davies. And arc von able to observe the people who come and
go in the restaurant \
Mrs. Moore. No; only when I am on my lunch hour. I sit down-
stairs on my lunch hours.
Mr. Davies. Off the record, that was brought about by the pre-
liminary that you asked about peace officers coming in and out of the
place. Frankly, she is in no position to see unless she happens to
come downstairs.
The Chairman. Just this one question: When gambling was in
operation approximately what was the amount of money that was
handled that you would know about?
Mrs. Moore. In the gambling operation?
The Chairman. Yes; that you would have any record of.
.Mrs. Moore. Oh, no: 1 wouldn't have any record of that. I handle
just the bar and restaurant.
The Chairman. Was there any interchange of money between the
bar and restaurant ( That is what 1 meant.
Mrs. Moore. Yes. Do you mean like when I would pay bills for
them?
The Chairman. That is right. That is what I meant.
Mrs. Moore. Well, they in turn would give me the exact amount of
whatever invoices they were. Mich as gas and electric bills and utilities.
The Chairman. I did not want to go into the details; that is what
I had reference to. I wondered about what they would approximate
in the course of a month.
Mrs. Moore. It is all in my books. Senator. It has been so long,
see, that I could not just recall offhand.
The Chairman. Well, we will get that from the records. Thank
you very much, Mrs. Moore; very much, indeed.
Xow, will you call your next witness, please '.
Mr. Xellis. We will call Mr. Brink.
The Chairmax. Mr. Brink, I am glad to see you again.
Mr. Brink. Thank you.
The Chairman. Mr. Brink, we are asking everyone to be sworn.
I suppose you have no objection.
Mr. Brink. Of course, not.
The Chairman. In the presence of the Almighty God, do you
swear that the testimony which you are about to give shall be the
truth, the whole truth, and nothing but the truth?
TESTIMONY OF JAMES H. BRINK, COVINGTON, KY.
The Chairman. Mr. Brink, vour full name is James H. Brink, is
it not?
Mr. Brink. Yes, sir.
The Chairman. Mr. Brink, just for purposes of identification, give
us your residence address.
Mr. Brink. My residence is iiTu!< > 1 )ixie Highway, Covington, Ky.
The Chairman*. Very good. Just again, to tie in with the previous
testimony which you have testified to previously.
6 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Brink. Yes. I testified before previously, and I still claim the
same exemptions that were claimed in the other record.
The Chairman. The date of your previous appearance was when?
Mr. Brink. That was March 27, 1951.
The Chairman. Yes; I recall the occasion, over in the Capitol
Building, was it not?
Mi. Brink. That is right.
The Chairman. All right. Mr. Nellis.
Mr. Nellis. Mr. Brink, when did gambling reopen at the Lookout
House?
Mr. Brink. What are 37ou talking about? Just let us be more
explicit. Since when?
Mr. Nellis. I am asking you, when did it reopen?
Mr. Brink. There hasn't been any resumption of gambling.
Mr. Nellis. You say that under oath ?
Mr. Brink. Yes, sir.
The Chairman. There has not been?
Mr. Brink. That is right.
Mr. Nellis. Have j7ou had any gambling games in the Lookout
House at all within the past 3 months?
Mr. Brink. There has been no gambling, to my knowledge, since
January 29 or 23, some date around that time, when the grand jury
took over.
Mr. Nellis. What do you mean by "to your knowledge"?
Mr. Brink. Well, I have not been there all the time. There could
have been some games among some of the help.
Mr. Nellis. I am talking about organized gambling.
Mr. Brink. Organized gambling ; no.
Mr. Nellis. Now, do you remember when you testified here previ-
ously that you talked about your Cleveland partners in the Lookout
House ?
Mr. Brink. My former partners.
Mr. Nellis. Who are the present partners of Lookout House?
Mr. Brink. James H. Brink, Marion Brink, B. W. Brink, Charles
Dranman, George Todd, the Carr brothers.
Mr. Nellis. Give us their names.
Mr. Brink. Well, they are listed as the Carr brothers. There are
two of them, Edward and Robert.
Mr. Nellis. Yes.
Mr. Brink. And Sam Schroeder.
Mr. Nellis. Of Cincinnati?
Mr. Brink. No; this is strictly a Kentucky thing.
Mr. Nellis. Just a moment. He lives in Cincinnati, doesn't he?
Mr. Brink. No ; he does not live in Cincinnati.
Mr. Nellis. That was the address he gave us.
Mr. Brink. I am sure that he has not lived there. I am very posi-
tive he did not give you that address. He has lived in Newport,
Campbell County, for the past 6 years, I would say, anyhow.
Mr. Nellis. Six years?
Mr. Brink. At least 6 years.
Mr. Nellis. AH right. Who else?
Mr. Brink. Mitchell Meyers.
Mr. Nellis. Some of these are former partners, are they not?
Mr. Brink. Yes, Schroeder and — and myself.
ORGANIZED CRIME IN INTERSTATE COMMERCE 7
Mr. Nellis. Who else besides Schroeder — I mean, who else besides
Meyers ?
Mr. Brink. That is all.
Mr. Nellis. You are not operating any gambling there, is that
right?
Mr. Brink. That is correct.
Mr. Nellis.. Why do you need so many partners for a restaurant
operation ? I take it that it is a restaurant ?
Mr. Brink. This is a partnership that took effect January 1, 1951,
when we bought out the interests of the few remaining so-called Cleve-
land interests.
Mr. Nellis. Who were they— by the way, who did you buy out in
January of 1951 ?
Mr. Brink. I think there was Croft and Polizzi, and
Mr. Nellis. That is Charles Polizzi ?
Mr. Brink. Charles Polizzi, yes.
Mr. Nellis. Yes.
Mr. Brink. Whom I did not know, incidentally, and Kothkopf.
Mr. Nellis. Croft, Polizzi, and Rothkopf?
Mr. Brink. That is right.
Mr. Nellis. Those were the only three?
Mr. Brink. They were the onlv three, yes. The others had sold
out, and then sometime around IVfay, I believe May 15, 1950
Mr. Nellis. Of 1950?
Mr. Brink. Yes, sir.
Mr. Nellis. So all you had remaining in January of the old Cleve-
land syndicate were
Mr. Brink. They were not remaining as of January. That was
December.
Mr. Nellis. I thought you said January.
Mr. Brink. As of January 1, 1951, the deal was consummated
before.
Mr. Nellis. At any rate, all you had left was Rothkopf and
Mr. Brink. Up to 1951.
Mr. Nellis. (continuing). And Croft and Polizzi.
Mr. Brink. Yes, from May
Mr. Nellis. Who negotiated with them?
Mr. Brink. I negotiated with them.
Mr. Nellis. How did you go about it, Mr. Brink?
Mr. Brink. How would you go about any business
Mr. Nellis. Now, don't ask me questions.
Mr. Brink. Well, that is how I went about it.
Mr. Nellis. I am asking you the question, and I want an answer.
How did you go about it?
Mr. Brink. Well, just the same as you go about any business deal.
Mr. Nellis. Tell me precisely how you went about it. Did you call
them by telephone, did you write them letters
Mr. Brink. No.
Mr. Nellis (continuing). Or did you communicate with a repre-
sentative of theirs?
Mr. Brink. I contacted them in Florida when I was in Florida.
Mr. Nellis. Which one was in Florida ?
Mr. Brink. Croft was in Florida, and Rothkopf was in Florida. I
talked to them previously, I talked to them by telephone.
8 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Nellis. In Florida \
.Mi-. Brink. No, in Covington and Cincinnati, mainly Rothkopf, I
called him in and told him I didn't think there was any need for a
partnership for them, and that they were getting in the way.
Mr. Nellis. How much did you pay thorn to get them out (
Mr. Brink. Well, it is a matter of record.
Mr. Nellis. You tell me.
Mr. Brink. Yes.
Mr. Nellis. You tell me what you paid them.
Mr. Brink. Well, I gave them notes.
Air. Nellis. For how much?
Mr. Brink. I gave them notes. Well, I really don't know how
much. It is a matter of record.
Mr. X i i i is. Do you have the records here?
Mr. Brink. Yes; I have the records.
Mr. Nellis. Why don't you refresh your memory? We will take
the time.
Mr. Brink. All right.
Mr. Nellis. Off the record.
(Discussion off the record.)
Mr. Nellis. On the record. What is your answer ?
Mr. Brink. The operation, Senator, as of January 1, 1951, is
strictly a local Kentucky operation. There is no interstate, and there
are no outside partners, and it lias been a number of the same partners
who were local fellows who have been associated with me in the past.
Mr. Nellis. In the gambling business?
Mr. Brink. In the Lookout House.
Mr. Nellis. In the gambling business?
Mr. Brink. The Lookout House is operated as a club, and the
interests are practically the same
Mr. Nellis. Let's be more specific.
Mr. Brink. Let's talk. I am explaining.
The Chairman. Just so I may understand, in other words, what
you are saying now is that that particular phase is strictly intrastate?
Mr. Brink. That is right.
The Chairman. If I understand you correctly*.
Mr. Brink. That is right. It is strictly a local interest. It is not
interstate?
The Ciiair.m.w. It is not interstate?
Mr. Brink. That is correct.
The Chairman. It has to do with operations between or among a
certain number of men in the Lookout House, which relate alone to
the activit ies there, and do not cross State lines?
Mr. Brink. That is correct.
The Chairman. Mr. Nellis.
Mr. Nellis. They don't cross the line from Kentucky to Ohio?
Mr. Brink. That is right.
Mr. Nellis. Mr. Schroeder has no interest in Ohio? That is your
testimony under oath?
Mr. Brink. Sofaraslknow. I know his residence, where he lives.
He is known as coming from Campbell County; he is a Kentuckian. ^
Mr. Nellis. How much money did you pay Rothkopf to get him
out f
ORGANIZED CRIME EN INTERSTATE COMMERCE 9
Mr. Brink. I don't know how to find that in here myself. We
paid him
Mr. Xkllis. Well, approximately.
Mr. Brink. I did have those figures, but I did not bring them up.
I think approximately Rothkopf gol the major interest, around
$12,(io() or $13,000; Polizzi got around $11,000; and then Croft got
about $7,000, in round figures.
Mr. Nellis. Yes. Your impression is that the total was about
$30,000 for the three?
Mr. Brink. The amount of the investment of partnership, it shows
in the record, the partnership investment is $31,771.00, as of January
1. That is the capital account.
This is from our auditor. I don't have the same auditor we had
previously. We had Giesey, who was from Cleveland, and there was
no need to have him, because they were washed out, and I didn't have
any reason to have a Cleveland auditor doing my work, so I have a
local man.
Mr. Xellis. What is his name?
Mr. Brink. Rafalsky, it is on the back there.
Mr. Xkllts. Now, Mr. Brink, what kind of an operation have you
had at the Lookout House starting since January 1. 1951 \
Mr. Brink. The same operations. We gambled until January 23,
when the grand jury went in, and that was the cessation of gambling,
and it is a night club operation now, and I might say that it is a very
poor operation.
Mr. Nellis. Have you lost money since January 23 \
Mr. Brink. Yes ; we have lost money.
Mr. Nellis. So far as you are concerned, are the slot machines
out of there ?
Mr. Brink. There hasn't been any slot machines in Lookout House
since that date in January.
Mr. Nellis. What did you do with the slot machines, Mr. Brink?
Mr. Brink. I really don't know. I didn't have anything to do
with it. I was away at the time, as I testified previously, 1 did not
own the slot machines.
Mr. Xkllis. But where did they go?
Mr. Brink. I don't know.
Mr. Nellis. They just disappeared out of your establishment?
Mr. Brink. Somebody took them away.
Mr. Xellis. Why do you need 10 partners in a losing restaurant
proposition?
Mr. Brink. It Was not losing at the time.
Mr. Xellis. You expected to continue with gambling?
Mr. Brink. We expected to continue with gambling; that is right.
Mr. Xkllis. How many times has the Lookout House been raided,
say, within the last 3 months?
Mr. Brink. Well, I would say it has not been raided, but I would
say they have been there to
The Chairman. On visit- \
Mr. Brink. Yes.
Hr. Xellis. For a check up?
Mr. Brink. I would say they have been there maybe a half-dozen
times, maybe more. I have not been there all the time, so I am not
10 ORGANIZED CRIME IX INTERSTATE COMMERCE
a qualified witness. I would say probably a hundred times — no, I
mean n hal f-dozen times.
Mr. Nellis. You cannot tell about the number of partners you have
in the present opera! ion, as to why you need them?
Mr. Brink. Well
Mr. Nellis. Have you made any moves to buy anybody out?
Mr. Brink. No. I wish they would buy me out, the way it is now.
Mr. Nellis. What is your impression of the general picture of law
enforcement around your communit}'?
Mr. Brink. I think it is good. I think thai Kenton County, I
don't see why anybody should interfere with the operation of Kenton
County. I will be frank with you; it is frankly very clean. There
has been gambling, I will admit, but it was a public sufferance poliry.
The}7 have been elected by a liberal vote and
Mr. NELLIS. In other words, they have been elected by fraud?
Mr. Brink. Xo; I wouldn't say it is fraud.
Mr. Nellis. Let me finish. They campaigned on a promise to
enforce the law; did they not?
Mr. Brink. They promised to enforce the laws; yes.
Mr. Nellis. And they don't enforce the laws.
Mr. Brink. No; 1 would not say that.
Mr. Nellis. What arrangements have you made in the past to keep
operating?
Mr. Brink. There is no arrangement, or there has been no arrange-
ment in the past. I testified to that before.
Mr. Nellis. You don't know of any arrangements ?
Mr. Brink. There are no arrangements.
Mr. Nellis. Did the Cleveland crowd take care of the local police?
Mr. Brink. That I don't know. The Cleveland crowd, as you speak
of them, as I testified before, it was a business arrangement, but there
was never any activity, and I would say there was never any — well,
I just don't know how to say it — they were satisfied with their interest.
It was all like buying stock in a business, the same as I bought stock in
other clubs.
Mr. Nellis. It was a business?
Mr. Brink. That is right. It just happened to be a good business.
Mr. Nellis. I have no further questions, Mr. Chairman.
The Chairman. All right. That will suffice. Thank you. O. K.
Thank yon very much.
Mr. Nellis. Will you leave your records here with Mr. Goddard?
Mr. Brink. Yes. Will you give me a receipt for them?
Mr. Nellis. Yes: that will be done.
Mr. Brink. 1 have it right here. These are very important; these
are current records. We need them right away. We cannot operate
without them.
Mr. Goddard. Let us step outside.
Mr. Nellis. Yes, please, so that we can go on.
The ( 'iivikm an. That is all, then, with this witness.
Mr. Nellis. Kuresman.
The Chairman. Good morning, gentlemen. Mr. Kuresman,
O'Conor is my name. I just want to ask you if you object to being
sworn.
Mr. Kuresman. No, sir.
ORGANIZED CRIME IX INTERSTATE COMMERCE 11
The Chairman. In the presence of the Almighty God. do you swear
that the testimony which you are about to give shall be the truth, the
whole truth, and nothing but the truth?
Mr. KlTRESMAN. I do.
The Chairman. Will you just sit there?
Mr. Daviks. Senator, if there is no objection, both Mr. Goodman, of
Cincinnati, and I. would like to sit in with Mr. Kuresman. He repre-
sents Beverly Hills, and I represent Yorkshire.
The Chairman. May I ask if you gentlemen both represent the
witness?
Mr. Goodman. I do; yes.
The Chairman. Are"both of these gentlemen your attorneys?
Mr. Goodman. 1 represent the witness. I also represent Beverly
Hills Country Club at this hearing.
Mr. Davies represents some of the other clubs that the records have
been subpenaed for, and this witness has been asked to testify con-
cerning those records.
The Chairman. Well, of course, we only have the witness here for
the introduction of the records, and the question arises as to whether
or not counsel should be in during the executive session, when we
exclude other persons when they are not counsel for a particular
witness.
Mr. Goodman. Well, I am counsel for the witness individually.
The Chairman. Of course, you certainly shall be admitted.
Mr. Davies, might I ask as to why you feel you should be present ?
Mr. 1 )avtes. For no particular reason, Senator, except that the Latin
Quarter is being inquired into, and I think Mr. Goodman perhaps can
take care of it as well as I can.
The Chairman. We don't want you to appear to be excluded.
Please understand that. The only thing that I am questioning is, it
might become a matter of precedent in regard to some other matters
that might very well fall in the same general category, and they may
say, "You permitted Davies to appear for such and such a witness,"
and then we would have established the precedent. Personally, I have
no objection to you appearing but I just question whether it might
not open the door to a more serious matter later on.
Mr. Xellis. So long as Mr. Davies does not represent the witness,
I think that it would be better if he were not present in the hearing
room.
Mr. Goodman. I think that would be all right.
The Chairman. Very well.
TESTIMONY OF JACK KURESMAN, CINCINNATI, OHIO, ACCOM-
PANIED BY SOL GOODMAN, ATTORNEY, CINCINNATI, OHIO
The Chairman. Will you give your full name to the reporter,
Counsel \
Mr. Goodman. Sol Goodman, attorney at law, 1016 Union Trust
Building, Cincinnati, Ohio.
The Chairman. We welcome you here, Mr. Goodman, and we are
very glad to have you here and you may feel assured that you may take
part if you feel you should.
Mr. Goodman. Thank you.
The Chairman. Mr. Nellis.
12 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. X i.i lis. Will you give your full name to the reporter, please.
Mr. Ki resman. Jack Kuresman.
Mr. Nellis. Ami your addri ss.
.Mr. Ki resman. L8] 1 Northcott, Bond Hill, Cincinnati.
Mr. Nellis. An' you a certified public accountant?
Mr. Ki resman. No; I am a public accountant \
Mr. Nellis. You have some clients across the river in Kenton and
Campbell ( 'mint ies, Ky., do you not?
Mr. Kuresman. In Kenton and Campbell?
Mr. Ni llis. Yes.
Mr. Kuresman. Yes.
M r. Nellis. Would you name the clubs that you work for out there.
For example, you represent the Latin Quarter, do you not?
Mr. Kuresman. The Latin Quarter, the Yorkshire, and this year
I have beer retained for Loverly Hills Country Club. The Merchants
Club. Are you talking just about clubs?
Mr. Nellis. Yes. Do you have your records with you, Mr. Kures-
man \
Mr. Kuresman. No, I don't. I brought the records of the clubs
that you asked for.
Mr. Nellis. Which records did you bring, Mr. Kuresman, of what
clubs \
Mr. Kuresman. The Beverly Hills Country Club, the Latin Quar-
ter, and also the records of Yorkshire that was brought up here.
Mr. Nellis. In addition to that, you also represent the Merchants
Club?
Mr. Kuresman. Yres, sir.
Mr. Nellis. A re t here any others ?
Mr. Kuresman. I am trying to recollect.
Mr. Nellis. Yres.
Mr. Kuresman. Well, the term "club"
Mr. Nellis. You know, casino operations.
Mr. Kuresman. Well, there is the Blue Grass Amusement Co.
Mr. Nellis. Yes. What is that, Mr. Kuresman?
Mr. Kuresman. That is a group of people who have organized in
1950 as a partnership to operate a casino.
Mr. Nellis. Who are the partners in that, Mr. Kuresman?
Mr. Kuresman. That I don't recall offhand.
Mr. Nellis. What do you mean you don't recall? Who do you
deal with?
Mr. Kuresman. I deal with Mr. Croft on that.
Mr. Nellis. You dealt with John Croft?
Mr. Ki RESMAN. That is right.
Mr. Nellis. And you said that it was set up as a partnership?
Mr. Ki eiesman. That is right.
Mr. Nellis. Did you help set it up?
Mr. Kuresman. Well, we have done wvy little on it. I think that
took place in the latter part of 1950, just before the tax season, and it
would be a fiscal-year operation.
Mr. Nellis. Where did they intend to hold these gambling games?
Mr. K i resman. Well, they were trying to hold them upstairs in the
Yorkshire < Jlub.
Mr. Nellis. In the Yorkshire Club?
Mr. K i i:i 8MAN. Yes.
ORGANIZED CRIME IX INTERSTATE COMMERCE 13
Mr. XV.llis. Now, who besides Croft do you recall might be in on
that«
Mr. Kuresm&n. 1 think it was a combination of the three clubs, the
individuals owning the dubs. I do not know.
Mr. Nellis. Which three clubs?
Mr. Kuresman. it would be the Merchants Club, the Yorkshire,
and the 633 Club.
Mr. Nellis. 1 mighl say, Mr. Chairman, that the lack of memory on
Mr. Kuresman's part is not going to hamper our record because we
have that information.
Now, Mr. Kuresman, generally speaking, what type of information
do these clubs give you when you make out their tax returns?
Mr. Kuresman. They would have a daily sheet showing their
winnings and losses and expenses; the bank roll at the beginning of
the day and the bank roll at the ending of the day, from which we
prepare records for tax-return purposes.
Mr. Xellis. Do you get those sheets every day ?
Mr. Kuresman. No; not every day.
Mr. X ellis. Do you get them every 30 days '.
Mr. Kuresman. At times we get them every 30 days and at other
times during the year either GO or !><) days apart. Sometimes they are
not operating entirely during the year and they would be down.
Mr. Xellis. What means do you use to verify the information which
they give you for tax purpose- \
Mr. Kuresman. We have no means of verifjdng it except as to
the paid bills for expense purposes.
Mr. Xellis. But as to the winnings and losses, you have no means
of verifying that \
Mr. KuresMan. Xo.
Mr. Xellis. And it being a cash business, neces>arily. there is hardly
any means of identifying it; is that right '.
Mr. Kuresman. Yes. In fact, there was an article in the Journal
of Accountancy, prepared by some accountants from Los Angeles, I
believe it is the Xational Journal of Accountancy, writing up gambl-
ing-casino operations, in view of the troubles of the accountant as well
a- the Internal Revenue Department.
Mr. Xellis. Yes: well, now. Mr. Kuresman, so far as you know,
the information that you get on these daily in-and-out sheets is just
what the gamblers themselves tell you what they have done?
Mr. Kuresman. What they put down on the sheet.
Mr. Nellis. Do you consider it part of your duty to the United
States Government and to your profession to make any check to see
whether the figures that you make up in the form of an income-tax
return are accurate \
Mr. Kuresman. The accounting profession operates on assign-
ments, Mr. Xellis. and if we are asked by (Mir assignment to prepare
records for income-tax purposes on records submitted, we do it.
Mr. Nellis. Suppose I were the chief executioner of Murder, inc.
and I gave you some records showing that my organization killed 50
people during the course of a month and received so much for it. and
1 asked you to make up my income-tax return, what would you do
with that \
85277 — 51 — pt. 15 2 •
14 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Kuresman. According to the internal-revenue law you, having
income, would have to file a return and we would sign our name,
"Prepared from information submitted."
Mr. Nellis. You do nothing about it?
Mr. Kuresman. We have no right to do anything about it, under
the law
.Mr. Nellis. So that vou can-
The Chairman, dust a minute. Let him finish.
Mr. (i( odman. Let the witness finish his answer.
Mr. Kuresman (continuing). All people have to report income,
the same as a lawyer, he has no choice of clients, he represents mur-
derer- as well as t hieves or other people.
Mr. Nellis. Your position in quite clear to me. The only ques-
tion I have in mind is what you consider your duty to informing law-
enforcement officials about violations of the law that you know about,
that you come across during the course of your professional practice.
Mr. Kuresman. I do not quite understand your question.
Mr. Nf.llis. All right. Now, in the case of the Latin Quarter, Mr.
Kuresman, we note a large number of checks made payable to you
as agent in very substantia] amounts. For example
Mr. Kuresman. Oh, I can answer that.
Mr. Nellis. Can you ?
Mr. Kuresman. Yes, very clearly. That agent account is for the
purpose of paying their amusement taxes to the State and Federal
departments, as well as to paying their social-security and unemploy-
ment taxes.
They take that money and put it aside each week, as it occurs, as
they collect this money, so as not to interfere with their regular funds
and we pay out, all of the checks are made payable to the Collector of
Internal Revenue or State unemployment fund or to the State amuse-
ment fund.
Mr. Nellis. But the checks are made payable to you ?
Mr. Kuresman. Yes; and we have a special-agent account and from
that account we pay all those taxes.
Mr. Nellis. They are quite sizable figures over a very short period
of time. They are in the four figures; isn't that right?
Mr. Kuresman. That is right; '2'2\/2 percent amusement tax col-
lected on all guest checks at the Latin Quarter every day runs into
quite a sum during the week.
Also there is a social-security withholding for employees every
week.
The Chairman. As I understand it, in order that those funds not
be commingled with the general fund and that they get mixed
Mr. Is i resman. They might lie used for some other purpose.
The (ii \ii:wan (continuing). They are segregated and kept on the
side, so thai they are handled and treated almost as if they were held
in escrow, SO that by being put into your agency account it is then
segregated and remitted to the Federal Government in due course.
Mr. Ki uksman. Yes. The Internal Revenue Department collects it.
We endorse and deposit the checks in the Jack Kuresman, agent, ac-
count, from which we write checks.
Mr. Nellis. Well, J notice there are three accounts here. Jack
Kuresman, agent; Jack Kuresman, auditing; and Jack Kuresman.
Mr. Kuresman. Well, that would probably be my fee.
ORGANIZED CRIME IN INTERSTATE COMMERCE 15
Mr. Nellis. What is auditing? That is your auditing fee?
Mr. Kuresman. I f you can t ell me the sum 1 will be able to answer.
Mr. Nellis. Here is one for $50.
Mr. Kuresman. That is auditing fees.
Mi'. Nellis. And one lor $-215.
Mr. Kuresman. That is an auditing fee.
Mr. Nellis. Here is one at $50, and here is another at $150.
Mr. Kuresman. That is auditing.
Mr. Nellis. And $135. Those are your personal fees?
Mr. Kuhesman. Yes; on a time basis.
Mr. Nellis. Are you paid by the month? Are you retained '.
Mr. Kuresman. Well, we are retained on a time basis; each month
we send them a statement of the time we have consumed for them.
Mr. Nellis. When were you last in the Latin Quarter \
Mr. Kuresman. I was last in the Latin Quarter, I am trying to get
myself straight. This is June — during the month of June.
Mr. Nellis. Did you observe any gambling going on there?
Mr. Kuresman. No; I did not. I was in the dining room.
Mr. Nellis. You did not go in the gambling room?
Mr. Kuresman. No.
Mr. Nellis. Have you ever been in the gambling room?
Mr. Kuresman. Yes.
Mr. Nellis. Is it a pretty big establishment ?
Mr. Kuresman. There is a large room there.
Mr. Nellis. Regular dice tables and chuck-a-luck?
Mr. Kuresman. Tables and side games. Myself, personally, I have
never gambled at a table. I am not interested in that phase of it.
Mr. Nellis. You deal with Mr. Croft, is that right, in connection
with the Blue Grass Amusement Co. ?
Mr. Kuresman. At the outset I did.
Mr. Nellis. In connection with the Yorkshire, too?
Mr. Kuresman. Yes.
Mr. Nellis. And who do you deal with in connection with Beverly
Hills?
Mr. Kuresmax. I have not dealt with anyone yet. We have not
done any work because of the tax season and internal-revenue investi-
gation we had going on.
Mr. Nellis. Who did you deal with when you were retained?
Mr. Kuresman. I think Mr. Croft was there at the time, and he
asked me if I would handle their account for them. There were some
changes to make and they wanted a local man to handle the account.
Mr. Nellis. Have you yourself ever acted in any capacity for these
persons other than as auditor or accountant \
Mr. Kuresman. Not to my knowledge or recollection.
Mr. Nellis. You would know, wouldn't you?
Mr. Kuresman. Well, if you would make your question more
general.
Mr. Nellis. For example, have you ever acted as an incorporator, a
qualifying incorporator, for any of these people?
Mr. Kuresmax. I would have to go back years and I am quite uncer-
tain. The record would show for itself.
Mr. Nellis. Yes. Have you ever been an officer of a company that
held land upon which some of these establishments were built?
16 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Goodman. For the record, are you referring to Kentucky or
anywhere?
Mr. Nellis. These establishments in northern Kentucky, I was re-
ferring to.
Mr. Goodman. I do want to say that I know that Mr. Kuresman
was the officer of a corporal ion in Ohio, and thai is the reason I broughl
that nj>. If you are referring to Kentucky, thai is another thing.
Mr. Nellis. I am referring to northern Kentucky.
Mr. Kuresman. It might have been possible. The records would
have to show. 1 don't recall it offhand. There were only one or
two
Mr. Nellis. 1 have two notations, one that you were the officer of a
company which held property of one of the clubs along Main Street in
Newport.
Mr. Kuresman. Will yon mention the name?
Mr. Nellis. The 633, if my memory serves me correctly.
Mr. Kuresman. 1 had nothing to do with the 633 at any time.
Mr. Nellis. Now about the corporation in Ohio, the one that Mr.
Goodman just mentioned?
Mr. Kuresman. I was an officer in that.
Mr. Nellis. What was that?
Mr. Kuresman. The Osborne Realty Co.
Mr. Nellis. What was the club or enterprise that was on that
realty ?
Mr. Kuresman. The Oak Grove Restaurant.
Mr. Nellis. That was a gambling establishment, too, was it not?
Mr. Kuresman. That is right.
Mr. Nellis. Do you know Chief Gugel at Newport?
Mr. Kuresman. I met him out here.
Mr. Nellis. You just met him?
Mr. Kuresman. Yes.
Mr. Nellis. You are not well acquainted in the local area?
Mr. Kuresman. No, sir.
Mr. Nellis. You perform your work by going across the river, and
checking the books, and then going back to Cincinnati ?
Mr. Kuresman. We go across the river to make a check or examine
or bring over records, or something of that type.
Mr. Nellis. Where do these people file income-tax returns?
Mr. Kuresman. In their places of residence.
Mr. Nellis. I mean, at Louisville, Ky. %
Mr. Kuresman. The clubs in Louisville, and the individual part-
ners in their places of residence.
Mr. Nellis. 1 have no further questions.
The Chairman. Thank you very much, indeed.
Mr. Kuresman. May I ask a question? Senator, was that you
on the elevator wit h me t his morning with your grip?
The Chairman. Yes. Off the record, Mr. Reporter.
( Discussion off the record. |
The Chairman. Back on the record.
Will you call your next witness, please.
Mr. Nellis Our next witness is Mr. Goddard.
The ( Jhairman. Will you raise your right hand and be sworn, Mr.
Goddard.
ORGANIZED CRIME IN UNDERSTATE COMMERCE 17
In the presence of the Almighty God, do you swear that the testi-
mony which you are about to give shall be the truth, the whole truth,
and nothing but the truth?
Mr. Goddard. 1 do.
TESTIMONY OF LAWRENCE CLIFTON GODDARD, WASHINGTON,
D. C.
The Chairman. Will you give us your full name, please?
Mr. Goddard. Lawrence Clifton Goddard.
The Chairman. Mr. Goddard, you are presently attached to the
staff of the Senate Committee Investigating Crime in Interstate Com-
merce, are you not?
Mr. Goddard. Yes, sir.
The Chairman. All right, Mr. Nellis.
Mr. Nellis. Mr. Goddard, you recently visited the Covington-
Newport area in northern Kentucky, did you not \
Mr. Goddard. Yes. I arrived out there the first of June.
Mr. Nellis. Now, can yon tell us the names of the clubs which you
actually visited and wherein you saw gambling taking place?
Mr. Goddard. 1 visited the Beverly Hills Clnb in Campbell County,
Ky. ; the Latin Quarter Club in Campbell County: the Yorkshire Club
in Newport, which is in Campbell County; and the Alexandria Club,
which is in Newport.
The Chairman. That is in Campbell County \
Mr. Goddard. Yes, sir.
The Chairman. The last one, the Alexandria Club.
Mr. Nellis. Now, at the Beverly Hills Club, did you see any
gambling in progress?
Mr. Goddard. Yes.
Mr. Nellis. Briefly and generally, can you describe it ?
Mr. Goddard. On the evening of June 2, which was a Saturday
evening, I went out about 9 : 30 and between, I would say, 10 and 2,
1 was in the gambling casino.
They had about four dice tables in operation. I am positive I saw
two roulette tables and one blackjack table, and there was a table that
they called chuck-a-luck.
The Chairman. What was the total number of people, would you
say, in the room at any one time, the greatest number?
Mr. Goddard. Well, they were milling in and out.
The Chairman. Yes.
Mr. Goddard. Of course, I would estimate that there was possibly
150, at the most.
Mr. Nellis. It was well attended?
Mr. Goddard. Yes.
Mr. Nellis. And it was fairly open I
Mr. Goddard. Yes. The gambling casino is off to the right of the
bar. after you enter the establishment. The first place you go into
is a kind of a corridor, and then you go straight back into the bar.
Mr. Nellis. Yes. You had no trouble getting in \
Mr. Goddard. No, no trouble whatsoever. The double doors were
open, which led back to the gambling casino. I had visited there
right after I came out of the service.
Mr. Nellis. Yes.
18 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Goddard. And at that time the gambling casino was upstairs.
Mi-. Nellis. Now, as to the Latin Quarter, I take it the same situa-
tion obtained. You went in and had no trouble getting to the gam-
bling section?
Mr. Goddard. Xo trouble at all getting in.
The Chairman. When were you there ?
Mr. Goddard. Friday evening, I believe that was the first of June.
Mr. Nellis. Is that a fairly large establishment also?
Mr. ( rODDARD. Yes.
Mr. Nellis. And did they have dice there?
Mr. Goddard. Yes, they had three or four tables of dice, and they
had about two roulette tables.
Mr. Nellis. Would you say that there were as many as a hundred
people playing?
Mr. Goddard. Yes, I would estimate there were approximately a
hundred people.
Mr. Nellis. Now, where is the Alexandria Club — first, where is the
Yorkshire Club?
Mr. Goddard. The Yorkshire Club is located in downtown Newport,
and I believe the address is 518 York Street. I did not see gambling
going on there. I had been informed that there was a door leading
upstairs to the gambling room, and I attempted to get through that
door, and a doorman stopped me and asked me what I was looking for.
I told him that I was looking for the gambling and he said, "We
don't have any gambling here now."
Mr. Nellis. And you heard the testimony of Mr. Kuresman about
the Bl ue Grass Amusement Co., did you not ?
Mr. Goddard. Yes I heard part of it.
Mr. Nellis. Did you know when you went out on your investigation
that a group had gotten together and were intending to use the up-
stairs portion of the Yorkshire bar as a gambling establishment?
Did you know that or is this the first you have heard about it?
Mr. Goddard. This is the first I have heard about it.
The Chairman. Actually, Mr. Goddard, do j^ou know that gambling
has been in operation recently there ?
Mr. Goddard. At the Yorkshire Club?
The Chairman. Yes.
Mr. Goddard. To my own knowledge, no, because I have not seen it.
The Chairman. The only reason I asked that, I understood in re-
sponse to a general question at the outset that you gave four clubs
where you knew gambling was in operation.
Mr. Goddard. Pardon me, then.
Mr. Nellis. You meant to exclude the Yorkshire Club ?
Mr. ( rODDARD. Yes, exclude the Yorkshire Club.
The Chairman. Were there other indications which led you to be-
lieve there was gambling or that gambling might have been in opera-
tion at the time?
Mr. Goddard. Yes. The dining room was decidedly empty.
There were not over five people in the dining room, and the parking
lot across the street, which I was informed was the Yorkshire parking
lot, had several cars there at the time.
Mr. Nellis. How many would you say ?
Mr. Goddard. I would say roughly 12 or 15 cars.
ORGANIZED CRIME IX INTERSTATE COMMERCE. 19
The Chairman. Did you see many people going upstairs where you
were denied admission?
Mr. Goddard. No; actually I did not see anyone either enter or
leave during the time I was there. I only stayed there about, or, 5
or 10 minutes.
Mr. Nellis. So really you don't have any information directly that
it was in operation?
Mr. Goddakd. No, sir; that is very true.
Mr. Nellis. As to the Alexandria Club, you were there, were you
not?
Mr. Goddard. Yes, sir.
Mr. Nellis. And you did observe gambling there?
Mr. Goddard. Yes.
The Chairman. When?
Mr. Goddard. This was on. let me think a minute, it was actually
Wednesday morning, which would be June 5 or G, because it was after
midnight. To be specific, it was after 2 o'clock, because I looked at
my watch and I had been told that they had a 2 o'clock curfew on
the places there in Newport.
They had two tables in the room where the bar wTas, one on each
side of the large door that led into the bar. One was a blackjack
table and the other was a chuck table.
Mr. Nellis. Now, do you have any chips that you picked up at any
of these clubs?
Mr. Goddard. Now, about those chips, yes, I stuck a chip in my
pocket at the Beverly Hills Club and I stuckone in my pocket from
the Latin Quarter, and those were attached to a letter that I sent to
Mr. Moser, and I sent down to get those.
Mr. Nellis. In any event, they are in the committee files ?
Mr. Goddard. Yes, sir.
The Chairman. What number would you say were in the Alexan-
dria, the greatest number?
Mr. Goddard. Senator, there were a large number of people in there.
The Chairman. Just approximately.
Mr. Goddard. Oh, there must have been 250 or more, but they all
were not gambling, because they kept announcing over their speaker
system there that the blackjack table was now open and they were
having difficulty getting people to gather around that particular
table/
The Chairman. The}7 were all in the gambling room ?
Mr. Goddard. It was the barroom also.
Mr. Nellis. Did you see any horse boards at the Beverly Hills,
Latin Quarter, or Alexandria Clubs?
Mr. Goddard. No, sir.
Mr. Nellis. You saw no board there ?
Mr. Goddard. No.
The Chairman. The chips you say you brought, had they been
purchased at the place?
Mr. Goddard. Yes.
The Chairman. And they could have been used there in the gam-
bling operation?
Mr. Goddard. Yes.
The Chairman. Mr. Calm, do you have any questions?
Mr. Cahn. Yes, thank you, Senator.
20 ORGANIZED CRIME IX INTERSTATE COMMERCE
The ( n \h:m w- You may proceed.
Mr. Cahn. Were there outside signs at each of the three casinos
thai you indicated containing gambling operations?
Mr. Goddard. Yes, identifying them as clubs.
Mr. Cahn. At the entrance, both the outside entrance and perhaps
the inner entrances to the rooms where actual gambling operations
were conducted, were there guards \
Mr. ( rODDARD. Yes.
Mr. Cahn. Approximately how many guards at each place, or indi-
viduals who may have fund loned as guards \
Mr. ( \ ».\i;i). 1 will answer il t Ins way. outside of each of the estab-
lishments, of course, the firsi people you run into are parking-lot
attendants. It seems to be the operational procedure that you must
drive up to the door, to the en1 ranee, and allow the attendant to park
your vehicle. Then you go on in. I observed at least two men whom
we shall describe as heavies, that is what they are commonly known
a-, big, burly men. who were at a door that would be more or less the
first entrance, and then the gambling casino itself, which is usually
off to one side from the bar. there would be at least one man standing
immediately outside the door there.
A.S I have stated before, I was stopped by such a person at the York-
shire. At these other places T was not stopped.
Mr. Cahn. So would you say it was your conclusion that any
stranger who just happened to see a sign from the street could gain
admission to any of these clubs?
Mi-. Goddard. Yes.
.Mr. Cahn. Into the gambling operations themselves?
Mr. Goddard. Yes.
Mi-. Cahn. There was no effort to sift anyone and to keep out pos-
sible undesirables \
Mi-. Goddard. I did not see any efforts made to stop anyone, and I
saw several people come and go.
Mr. Cahn. Were most of the individuals seen in the actual gam-
bling rooms men or women {
Mr. Goddard. 1 would say it would be about 60-40, in other words,
abouf <''i) percent men and about 40 percent women, and the women
usually woidd lie found around the roulette tables.
Mr. ( ' \ii x. Were free services provided at these clubs, the way they
are sometimes in some of the eastern establishments that were inves-
tigated by the committee, or was everything strictly on a commercial
basis, in terms of food, entertainment, and so forth, aside from gam-
bling, that is. were there any free attractions given to individuals to
come to the gambling establishment?
Mr. Goddard. No. they had floor shows at the Latin Quarter, the
Beverly Hills, and I did see part of the floor show at the Lookout.
I will say from my observation and opinion that these floor shows
are very good and that they will compare favorably with any any-
where in the country.
They have minimums at the Lai in Quarter and Beverly Hills, to my
knowledge, and I believe they have minimum at the Lookout House,
but at that time I went to see Mr. Brink, and I was not charged any
minimum.
Mr. ( !ahn. I see. Would you say that virt ually any individual who
entered t he three establishments that you visited, which you later saw
ORGANIZED CRIME IX INTERSTATE COMMERCE 21
did contain gambling operations, that any individual who entered
them would, by the nature of the set-up see that gambling was in opera-
tion?
Mr. Goddakd. Now. the answer to that question is that they would
not necessarily see it unless they went there for that purpose, or unless
they asked a waiter or bartender how to gel to the gambling casino,
because they would have heavy curtains over the entrances. That is
pari icularly true in the case of the Latin Quarter.
But it seems that the clientele of those places go there with that in
mind.
Mr. Cahn. Would you say that most of the clientele went there
specifically for that purpose, rather than for food and drink, from your
observation during those nights?
Mr. Good. I would say that the majority of the people who go there
will go to the gambling casino. However, they have quite a number of
people in the dining room. They serve very good food mid they have
very good service and, of course, the floor show, which is a part of it,
is quite an attraction.
Mr. Cahn. Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Cahn. very much.
Mr. Goddard. Could I add this statement, Senator. I believe it
would be of importance.
The Chairman. Yes.
Mr. Goddard. When I went out to the Beverly Hills Club to serve a
subpena for the records there, I took an officer with me who was known,
I mean, the}' knew him, and when he went in with me they immediately
closed the doors to the entrance to the gambling casino and I saw them
turn away a number of people during the time we were there, the door-
man, they turned them away, and then I presumed that they were
telling them to wait until the officer had left the establishment.
The Chairman. Were the games in operation then ?
Mr. Goddard. I didn't go through the door. No, sir; I merely went
in to see Mi'. Meyers, to serve the subpena, but I could see the doors that
led into where I knew the casino was. and they immediately closed it.
I did see that and they kept it closed, and the doorman turned away
people who went to the door.
The Chairman. All right. Thank you.
Mr. Reporter, we would like to have marked for identification the
financial statements having to do with the Beverly Hills Club, the
Yorkshire Club, and the Lookout Club.
(The documents referred to above were marked Exhibits 1, 2, and
3." a nd appear in the appendix on pp. 225, 226, and 227. )
The Chairman. All right, will you bring Mr. Kuresman back in,
please.
FURTHER TESTIMONY OF JACK KURESMAN. ACCOMPANIED BY
SOL GOODMAN, ATTORNEY
Mr. Nellis. Mr. Kuresman, in these records, do you have the 1950
ins and outs for the gambling establishment at the Latin Quarter?
Mr. Kuresman. No ; I do not.
Mr. Nellis. Where are they ?
Mr. Kuresman. They have reclaimed them from me.
Mr. Nellis. The establishment itself?
22 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Kuresman. That is right.
Mr. Nellis. Who reclaimed them?
Mr. Kuresman. I think all the partners from all over claimed all
their records back from me.
Mr. Nellis. Well, who, in fact?
Mr. Ki resman. Well, in fact, I was not in the office the day when
they came in.
Mr. Nellis. Do yon recall the gross receipts for the Latin Quarter
of 1950?
Mr. Ktjresman. No. You have the ledger here.
Mr. Nellis. Would you give Mr. Kuresman his records and let
him identify what he can from them.
Mr. Goddard. This is all of them right here [handing documents
to witness].
Mr. Nellis. All right.
Mr. Kuresman. Well, the sales of food
Mr. Nellis. No ; I am talking about the gambling.
Mr. Kuresman. There are no gambling records in these figures.
These are all dining-room figures.
Mr. Nellis. Where are the gambling figures?
Mr. Kuresman. They have reclaimed them.
Mr. Nellis. Where are your work sheets ?
Mr. Kuresman. The}' have reclaimed them all.
Mr. Nellis. Are you in the habit of giving back your work sheets?
Mr. Kuresman. That is my understanding with the account, all
records that we have belong to them.
Mr. Nellis. Including your own personal work sheets?
Mr. Kuresman. That is right.
Mr. Nellis. That is very unusual ; is it not?
Mr. Kuresman. Well, if it came to a matter of internal revenue, it
would be up to them to produce them.
Mr. Nellis. Mr. Kuresman, would the income-tax returns neces-
sarily reflect the ins and outs, the details of the gambling operations?
Mr. Kuresman. Well, I am trying to picture the return itself now.
It would show the receipts for the entire operation of gambling.
Mr. Nellis. Yes.
The Chairman. Yes. Would you repeat that, please?
Mr. Kuresman. The gross receipts, line 1, would show the receipts
of the operations.
Now, that would be the winnings, less the losses, showing the net
result before expenses.
Mr. Nellis. Well, pardon me, Mr. Chairman. Do you want to
continue?
The Chairman. No; thank you.
Mr. Nellis. You must remember whether the gross receipts just
this year amounted to a certain amount. You filed the return in March
1951; did you not?
Mr. Kuresman. They have a fiscal year ending February 28.
Mr. Nellis. All right. You filed a return for February 28 ?
Mr. Kuresm \ x. A Iter that ; yes.
Mr. Nellis. After that.
Mr. Kuresman. Yes.
Mr. Nellis. You must remember now actually whether it was
$1,000, $10,000, or $50,000.
ORGANIZED CRIME IX INTERSTATE COMMERCE 23
Mr. Kuresman. That is the difficulty in our line of work, to remem-
ber those things. That is not the only client we have. During the
tax season we are under pressure, continuous pressure, and we have
been under pressure with the Internal Revenue Department,
Mr. Nellis. We served the subpena on Mr. Gutterman, of the Lit in
Quarter, who informed us that you had the records of the 1950 gross
receipts of the casino operation.
Mr. Ktjresman. They claimed them back from me.
Mr. Nellis. When?
Mr. Kuresman. After they got their subpenas.
The Chairman. Just recently?
Mr. Koesmax. Yes. We had them in the office for income-tax
examinations at the time.
The Chairman. Well, that strikes me as somewhat strange, that
having been served with a subpena by this committee, they would
undertake to have you surrender to them not only the records that
they had given you but all of your own records which were prepared
by you and for your exclusive use, and ordinarily I would think
that they would have been available to the income-tax people directly
from you, but you turned them back to them.
Mr." Goodman. Senator, just for the record, the subpena was served,
as I understand it. on the Latin Quarter some weeks before there was
any subpena on Mr. Kuresman.
Now, during that time the Latin Quarter, as well as the other*
places, removed their records, believing that they were subpenaed and
had to produce them.
Now, the subpena was directed to the Latin Quarter. The Latin
Quarter is purely a dining-room operation and has nothing to do with
the gambling.
Now, the gambling or casino is a different entity, and the subpena
did not refer to that.
So when Mr. Kuresman was asked to come up, he in turn asked
them to supply the records that was covered by the subpena.
The Chairman. That does not quite cover my point, Mr. Good-
man, and that is that upon notification that this committee was un-
dertaking an inquiry, Mr. Kuresman gave up and put away from
himself and out of our reach, so far as he is concerned, not only their
records, but his own records. Isn't that true, Mr. Kuresman ]
Mr. Kuresman. Sir?
The Chairman. Isn't that true? Is my statement true?
Mr. Kuresman. They have taken everything away from my office.
The Chairman. I was just anxious to know if the statement I
made was true. I did not want to misrepresent the picture. I did
think that I was clear in my understanding that that was so, that
upon this committee issuing its subpena, the operators of the estab-
lishment undertook to take from you, not only the records they had
given you, but also your own records; is that not true?
Mr. Kuresman. They have taken everj'thing.
The Chairman. They have taken everything?
Mr. Kuresman. Yes.
The Chairman. So you surrendered to them your own records as
well as the returns?
Mr. Kuresman. Yes.
24 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Nil i. is. For the record also, I am informed by Mr. Goddard,
who served the subpena, the subpena on the Latin Quarter called
for — it was all inclusive, and it called for records both as to the
food and the casino, and it was served on Mr. Gutterman as repre-
sentative of the Lai in Quarter on June 6.
.Mr. (J man. .Inst for the record, may we have the subpena and
sec whether it doesn't say that it is to the Latin Quarter.
Mr. Xii.i i>. What is the name of the casino operation %
Mr. Ki resman. Riverside Enterprises.
.Mr. Goodman. And the tax return shows the two separations, the
names, and so forth.
The Chairman. Von prepared the return on or about February
28 of this year a fter t lie fiscal year ended '.
Mr. KURESMAN. Yes.
Mr. Nellis. And yon cannot tell us from memory what their gross
receipts were?
Mr. Kuresman. No: because we have been checked by the Internal
Revenue Department for all companies, and we have had lots of
pressure, figures, answering letters, getting our regular tax returns
out, with extensions, because their investigations started in February.
Mr. Nellis. I suggest, Mr. Chairman, that we probably ought to
have the Latin Quarter partners down here with the figures, and that
Mi-. Kuresman remain under subpena and send us by mail as quickly
as possible the information necessary.
The Chairman. Yes. The full name is the Riverside what?
Mr. Ktjresman. The Riverside Enterprises.
The Chairman. And that is the gambling end of it \
Mr. Kuresman. That is right.
The Chairman. The gambling operation?
Mr. Kuresman. That is right.
The Chairman. Were those records returned to them?
Mr. Kuresman. That is right.
The Chairman. Well, Mr. Kuresman, I just don't follow this, if
the Riverside Enterprises was not mentioned, and if, of course, coun-
sel makes it a point that all that was mentioned, all that was mentioned
was Latin Quarter, which is the eating side of it, why then was it
assumed that the Riverside Enterprises was being sought, and why
were their records returned when they were not asked for them?
Mr. Kuresman. All records were returned to them.
The Chairman. Including your own records?
Mr. Kuresman. That is right.
The Chairman. Is it customary for you to deliver or turn back your
own individual professional records?
Mr. Kuresman. If they ask for it in their understanding. Their
understanding is that they have control of their records at all times,
that they belong to t hem.
The Chairman. Did you consider them their records rather than
your records \
Mr. Kuresman. I considered it their records, because of the type
of business I hey were in.
The Chairman. Mr. Nellis.
Mr. Nellis. I do hope, Mr. Chairman, that Mr. Kuresman will fur-
nidi us wit h t hat information.
ORGANIZED CRIME IX INTERSTATE COMMERCE 25
Mr. Goodman. Just so we are specific, what is it you would like to
have?
Mr. Nellis. Gross receipts for 1950, the net income for 1950, and
the expenses for 1950 of the Riverside Enterprises.
Mr. Kuresman. Would a copy of the tax return suffice?
Mr. Nellis. That will do it, if you have that.
The Chairman. Would it not be well to have the other ones of 1950
showing the gambling operations?
Mr. Nellis. Yes.
Mr. Goodman. What was that, Senator?
The Chairman. In addition we would like to have the 1950 returns
of the Enterprises, showing their gambling operations.
Mr. Goodman. Well, now, let's see, by the others, you mean the
other
Mr, Nellis. Those which he represents. You might also include
there the Oak Grove operation in Ohio, if he still represents them.
Do you ?
Mr. Goodman. Was there an operation of Oak Grove in 1950?
Mr. KrjRESMAN, Yes.
Mr. Nellis. We would like to have that, too.
Mr. Goodman. All right.
The Chairman. All right. Thanks very much.
Off the record.
( Discussion off the record.)
The Chairmax. Will you call in all of the people from Campbell
County, please, the officials?
Mr. Nellis. Yes, sir.
(Xine men entered the room.)
The Chairman. Now, gentlemen, so that we might have everybody
identified who is to testify, and also to have identified anyone repre-
senting any of the others' counsel, will you be kind enough to start
and give your full names, your position, and your residences, please.
Mr. Rhoads. I am Malcolm R. Rhoads. city manager of Newport,
Ivy., residence 664 Xelson Place, Newport, Ky.
The Chairmax. Mr. Rhoads, is anyone here representing you as
attorney?
Mr. Rhoads. Xo.
The Chairman. Very good.
Now, sir. will you state your name?
Mr. Warren. I am Fred Warren, city solicitor. Newport, Ky. I
have not been subpenaed, but I have merely come up with the^ city
manager.
The Chairman. Xext.
Mr. Gugel. I am George Gugel, chief of police, Newport, Ky., 2230
Joyce Avenue, that is my home address.
The Chairman. Fine. Xext, please.
Mr. Dhobold. Ray Diebold, sheriff of Campbell County. I reside
at -'124 Thorne Street. Newport, Ky.
The Chairman. All right. Xext. please.
Mr. Eha. My name is Charles Eha. I am city commissioner, Xew-
port, Ky.. 636 Lexington Avenue, Newport, Ky.
The Chairman-. All right. What is your name, sir?
Mr. Wise. William J. Wise, commonwealth attorney.
26 ORGANIZED CRIME IN INTERSTATE COMMERCE
The Chairman. Mr. Wise, would you just indicate to us your
jurisdiction?
Mr. Wish. Campbell County.
The Chairman. Thank you.
Mr. Wise. My address is 908 Grandview Avenue, Bellevue, Ky.
The Chairman. Thank you. Will you give your name, sir?
Mr. Thiem. Jack C. Thiem, police sergeant, Newport, Ky. Home
add less 33 Ohio A venue.
The Chairman. Yes. Next, please.
Mr. Bowen. Wesley Bowen, county attorney, Campbell County,
Ky. I reside at 814 Linden Avenue, Newport,
The Chairman. And your name, sir^
Mr. Winters. James Winters, chief, Campbell County Police. I re-
side at No. 10 Pine Hill Drive, Crestview.
The Chairman. Thank you, gentlemen.
Now, gentlemen, it is customary in regard to all witnesses to have
them sworn, and I am sure there is no objection on your part, is there,
to being sworn collectively ?
Do you gentlemen swear, in the presence of the Almighty God,
that the testimony which you are about to give shall be the truth,
the whole truth, and nothing but the truth?
Mr. Rhoads. I do.
Mr. Warren. I do.
Mr. Gugel. I do.
Mr. Diebold. I do.
Mr. Eha. I do.
Mr. Wise. I do.
Mr. Thiem. I do.
Mr. Bowen. I do.
Mr. Winters. I do.
TESTIMONY OF MALCOLM R. RHOADS (CITY MANAGER, NEWPORT,
KY.); FRED WARREN (CITY SOLICITOR, NEWPORT); GEORGE
GUGEL (CHIEF OF POLICE, NEWPORT) ; RAY DIEBOLD (SHERIFF,
CAMPBELL COUNTY) ; CHARLES EHA (CITY COMMISSIONER, NEW-
PORT) ; WILLIAM J. WISE (COMMONWEALTH OF KENTUCKY AT-
TORNEY); JACK C. THIEM (POLICE SERGEANT, NEWPORT);
WESLEY BOWEN (COUNTY ATTORNEY, CAMPBELL COUNTY);
AND JAMES WINTERS (CHIEF, CAMPBELL COUNTY POLICE)
The Chairman. Now, our inquiry is directed toward conditions in
Campbell County and nearby, with specitic reference to any gambling
operations that have been going on in the recent past, or are in opera-
tion at the present time, and for your information I might state that
there is sworn testimony before the committee to the effect that gam-
bling has been in operation during the present month at the several
locations, including (lie Beverly Hills Club, the Latin Quarter Club,
and the Alexandria Club, and that details have been submitted as to
the open and notorious manner in which those operations have been
conducted.
It is with reference to that specifically, or to related matters, that
the committee desires to ask certain questions.
Mr. Xellis. will you take over?
ORGANIZED CRIME IN INTERSTATE COMMERCE 27
Mr. Nellis. Thank you, Mr. Chairman.
I would like to start with Sheriff Diebold here.
Sheriff, what are your duties under the Kentucky law with respect
to the enforcement of gambling statutes?
Mr. Diebold. My duties are those more or less of a tax collection
officer.
Mr. Xellis. A tax collection officer?
Mr. Diebold. Yes, sir.
Mr. Nellis. Did you take the oath prescribed b}' the constitution of
Kentucky ?
Mr. Diebold. Yes, sir.
Mr. Nellis. Did you swear that you would do all right to the poor
as well as to the rich, and that you will do no wrong to anyone for
gift, reward, or promise, and that you would impartially execute the
duties of your office?
Mr. Diebold. I did, sir.
Mr. Nellis. And that you would faithfully execute the laws of the
State of Kentucky?
Mr. Diebold. I did, sir.
Mr. Nellis. Do you know of any law in the State of Kentucky
which permits gambling?
Mr. Diebold. I do not. •
Mr. Nellis. Why haven't you enforced the law in your county?
Mr. Diebold. I have assisted, to my knowledge, so far as possible.
Mr. Nellis. In what way, specifically ?
Mr. Diebold. Well, one of the first orders of my office was to do the
duties required by the law of the Commonwealth of Kentucky.
Mr. Nellis. But you have the responsibility, do you not?
Mr. Diebold. I do.
Mr. Nellis. Have you ever been inside the Beverly Hills Club ?
Mr. Diebold. I have not.
Mr. Nellis. Have you ever conducted a raid on the Beverly Hills
Club?
Mr. Diebold. I have not myself, personally.
Mr. Nellis. Have you ever been inside the Yorkshire Club?
Mr. Diebold. I have not.
Mr. Nellis. Have you ever conducted a raid on the Yorkshire
Club?
Mr. Diebold. I have not.
Mr. Nellis. Have you ever been in the Latin Quarter Club ?
Mr. Diebold. No, sir; I have not.
The Ciiatrman. Sheriff, let me ask this question, it had, of course,
been made known some time ago that gambling operations were going
on at the club. Have you taken any steps to learn whether those
operations have continued since?
Mr. Diebold. Only through the Honorable Judge Moebus and chief
of the county patrol.
The Chairman. You say only through those people?
Mr. Diebold. Yes, sir.
The Chairman. What steps did you take through those indi-
viduals
Mr. Diebold. The steps that I have taken, sir, was the letter by
the honorable judge, in fact, to me personally. It was a poster in the
paper. I am sorry to have torn this, but it was stuck on the envelope.
28 ORGANIZED CRIME IX INTERSTATE COMMERCE
In turn. I am bringing a copy thai I presented to the chief of police
of the C ity patrol, and this is what was in the paper, and that is
a Copy of the letter that I extended to the chief of police, also, and
I I<>ii. Judge Moebus.
The ( ii \ikm an. Well, now. Sheriff, you present a clipping from
Mr. DlEBOLD. From a newspaper, that was. that was not to me
direct, sir.
The Chairman. The heading of which is "Moebus wants Diebold
to help police county."
Mr. I ) i r.i '.<r,i). That is right.
The Chairman. Why do you produce this?
.Mr. Diebold. Well, you asked me if at any time I have ever been
personally in these places or assisted
The Chairman. No; thai was not my question.
Mr. Diebold. Pardon me.
The Chairman. My question was. what step< have you taken to
learn whether or not gambling lias continued in the clubs to which
reference was made, since it was publicly announced by this com-
mittee that such conditions did prevail?
Mr. Diebold. Only through my deputies, that 1 can answer, that
had been in each place when papers were served through the office.
The Chairman. Have you taken any other steps at all ?
Mr. DlEBCLD. None: only what the county patrol has done in there,
and that I have learned through them.
The Chaerman. Was the county patrOl under your jurisdiction?
Mr. Diebcld. No, sir; it is under the Honorable Judge Moebus.
The Chairman. I was really confining the question to just what
you had done, and have you anything further to add as to what you
have done in order to learn whether gambling was in operation?
Mr. Diebold. I have done nothing, outside of what I heard that
t here wasn'1 any of it at this t ime during the month.
The Chairman. You say you heard there was not any '.
Mr. Diebold. That is right.
The Chairman. Any gambling?
M r. Diebold. That is right.
The Chairman. From whom did you hear that '.
Mr. Diebold. Through the county patrol, or rather. Judge Moebus'
office, that these places were visited, which I think there are three
of in the county.
The Chairman. Are you aware of the fact that there is a statute
which requires the sheriff to visit and inspect dance halls and road-
houses at Least once each month and make a report \
Mr. Diebold. I was not aware of that fact until 1 month ago, when
1 was called in by my attorney, and he informed me in regard to
that, and 1 appeared before the Campbell County Grand Jury, and
when t he foreman of the jury asked me that question
The Chairman. When was that I
Mr. Diebold. Thai was some 3 weeks ago, I think.
The Chairman. And your own counsel had advised you about a
month ago?
Mr. I )ii:r.oi.n. Yes, sir.
The Chaerman. What did you do then, upon being advised that
t h;it was your sworn duty \
Mr. Diebold. Pardon, sir, I did not gel that.
ORGANIZED CRIME IN INTERSTATE COMMERCE 29
The Chairman. What did you do?
Mr. Diebold. I have instructed my deputies that we would get
together on this as soon as I heard from Mr. Moebus, the honorable
judge, that I would, if possible, do that.
The Chairman. Have }tou ever visited any of the places?
Mr. Diebold. Personally, no, sir.
The Chairman. Have any of your deputies, under your orders?
Mr. Diebold. Yes; they have.
The Chairman. Who?
Mi\ Diebold. Well. I have Mr. Fred Schlosser.
The Chairman. When did he visit them?
Mr. Diebold. He was one of my deputies. That I don't know, my
chief deputy being out of town when I left Newport.
The Chairman. You have no records to indicate when?
Mr. Diebold. None whatsoever, because this was just brought up
about a month ago; that is when the grand jury met.
The Chairman. When did the grand jury meet?
Mr. Diebold. Some 3 weeks ago, I think ; is that proper ? I guess
it was the 9th of June.
The Chairman. You yourself have not visited any of the places?
Mr. Diecold. I myself, personally, no, sir; I have not visited any
club. In fact, I have never been in one of the places personally.
Mr. Nellis. How long have you been sheriff?
Mr. Diebold. One year five months and twenty days.
Mr. Nellis. And it took you approximately that long to find out
what your duty was '.
Mr. Diebold. I would not say that.
Mr. Nelljs. You just testified about this, that you found out about
it a month ago.
Mr. Diebold. I was informed about a month ago.
Mr. Nellis. Sheriff, do you consider having a meeting with your
deputies and telling them what to do here, there, and the other places,
is enforcing the law in your county ? Is that how you consider you
can enforce the law ?
Mr. Diebold. There was a meeting with my deputies, and I in-
formed them in regard to visiting these places.
Mr. Nellis. I am talking about a set of facts, which are these clubs
in your county, under your jurisdiction, which have been notoriously
open for years; isn't that right?
Mr. Diebold. That is what I hear. I have not been in them. I
don't know that.
Mr. Nellis. Why don't you go down there and find out? Why do
you think the Commonwealth of Kentucky is paying your salary?
Mr. Diebold. I told you, as operating the office as a tax collector
Mr. Nellis. Well — —
The Chairman. No; let him finish.
Mr. Nellis. I am sorry, sir.
Mr. Diebold (continuing). Which I have been operating under
those conditions, and when asked by the various local or county
patrols, I have assisted, when called upon, because I myself personally
think I have not got the men available to perform the duties that are
required throughout the county.
The Chairman. How many men do you have?
85277—51 — pt. 15 3
30 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. I >IEBOLD. Eight.
The Chairman. Eight?
Mr. Deebold. Yes, sir.
The ( ii am:m \x. Would it take very much for them to make a visit
to this club regularly?
Mr. Diebold. Well, I have four men that I have in the one office
in Newport for the collection of taxes, and two in the office of Alex-
andria, besides serving the courts of the county with one or two more
deputies, at times which I myself personally serve the courts. It is
tlic only county that is operated under the Fayette law of the Common-
wealth.
The Chairman. Do you believe that gambling has been in opera-
tion in the last month at either the Beverly Hills, Latin Quarter, or
Alexandria Clubs?
Mr. Diebold. Not to my knowledge, I do not.
Mr. Nellis. Do you believe it has not been in operation? Would
you swear to that ?
Mr. Deebold. I could not swear to that. I have not seen it.
The Chairman. I am only questioning you as to what you believe
from all t hat you have heard, and from reports that you have received.
Are you of the opinion that gambling has been closed down in your
count}\
Mr. Deebold. My personal belief, I could not really answer that
question, unless I seen it in person, which I have not.
The Chairman. Did you take any steps to look for it or find out?
Mr. Deebold. I have, through the office of the county patrol.
The Chairman. Go ahead.
Mr. Nellis. You consider that your chief job is that of a tax col-
lector, is that correct \
Mr. Diebold. I don't consider that as my chief job. I tried to
inform you gentlemen that this county of Campbell is operated al-
together differently from the other 119 counties in the Commonwealth.
The sheriff receives no fees in Campbell County. It is a straight
salary basis.
Mr. Nellis. Well, let's find out whether you know anything about
law enforcement in your county.
Do you know Maurice Ryan ?
Mr. Deebold. No; I do not.
Mr. Nellis. Do you know Morris Nemmo?
Mr. Deebold. No; I do not.
Mr. Nellis. Do you know Croft, John Croft?
Mr. 1 )n :bold. 1 have heard of him and seen him, I think twice.
Mr. Nellis. Do you know Sam Gutterman?
Mr. Deebold. No; I don't know Sam Gutterman.
Mr. Nellis. Did vou know that right in your own county are a
group of people from Cleveland and Florida, a very sizable gambling
group, and who are racketeers, who were and are partners in some of
the establishments right in your county? Did you know that?
Mr. Deebold. Only from what I have heard and seen.
Mr. \i i.i rs. What effort have you made to find out that the informa-
tion that the Crime Con unit tee found to be true?
Mr. Deebold. Myself, personally. 1 have never been in one of those
places, and \ think they are true; as I told you before, I have not been
in one of those places.
ORGANIZED CRIME IN INTERSTATE COMMERCE 31
The Chairman. Did you stay away from them purposely?
Mr. Diebold. No, sir. I have not been a man to go in those places.
The Chairman. Didn't you consider it your duty to find out what
was going on ?
Mr. Diebold. Probably it is.
Mr. Nellis. What salary do you receive as sheriff ?
Mr. Diebold. Five thousand dollars a year, sir.
The Chairman. Is that your sole source of income ?
Mr. Diebold. Absolutely.
Mr. Nellis. You have no other sources of income?
Mr. Diebold. No, sir.
Mr. Nellis. Have any of the gambling element around your county
or the adjoining counties contributed to your political campaigns?
Mr. Diebold. No, sir.
Mr. Nellis. You don't have any dealings with the gamblers at all ?
Mr. Diebold. No, sir.
Mr. Nellis. Are you in favor of the enforcement of the gambling
laws of your State ?
Mr. Diebold. I am in favor of law and order and enforcement.
Mr. Nellis. You would like to see your community rid of these
racketeers and gamblers?
Mr. Diebold. Yes, sir.
Mr. Nellis. Then why haven't you done something about it, if you
really feel that way ?
Mr. Diebold. Could I say that the head of the county patrol has
taken in, as we would call it, the rural district, and the operation of the
cities was taken care of by the community, which has been enforced, to
my knowledge ?
Mr. Nellis. So that j^our answer is that somebody else has the juris-
diction out in the county, and another person has jurisdiction in the
cities, and you have nothing left to do but collect taxes; is that right?
Mr. Diebold. And assist whenever I am called upon, which I do,
and have done.
Mr. Nellis. How do you think the good people of your community
would feel if they found that their sheriff considers himself a tax
collector and not a law-enforcement officer, according to the law?
Mr. Diebold. As I understand, previous to this, that is what hap-
pened.
Mr. Nellis. I have no further questions.
The Chairman. That is all.
Mr. Nellis. I would like to talk next with the chief of police of the
city, Mr. Gugel.
The Chairman. Very well.
Mr. Nellis. Mr. Gugel, you testified in Cleveland ?
Mr. Gugel. That is right, sir.
The Chairman. Just a minute. It might be well to place this letter
and newspaper clipping that was presented to us by Mr. Diebold in
the record.
(The documents above referred to are identified as exhibit No. 4,
and appear in the appendix on p. 227.)
The Chairman. I am sorry, go ahead.
Mr. Nellis. Mr. Gugel, you testified in Cleveland ?
Mr. Gugel. That is right, sir.
32 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Nellis. Do you recall your testimony there to the effect that
you knew very little about the operation of the clubs in the city, that
you had your deputies go out there every now and then; is that
right?
Mr. Gugel. That is right.
Mr. Nellis. What have you done since the middle of January to
en force the law in the city of Newport?
Mr. Gugel. Well, the first thing I did, I stationed a patrolman
around every place, uniformed men, to see that there was no gam-
bling going on.
Mr. Nellis. Have you been in the Yorkshire Club recently'
Mr. Gugel. No, sir; I have not.
Mr. Nellis. Have you been in the Latin Quarter Club recently?
Mr. Gugel. That is in the county. I don't visit there, though.
Mr. Nellis. You don't visit there?
Mr. Gugel. No, sir.
The Chairman. Mr. Gugel, which of these places, if any, is under
your jurisdiction?
Mr. Gugel.. Sir?
The Chairman. Which of these places?
Mr. Gugel. The Yorkshire Club.
The Chairman. The Yorkshire Club.
Mr. Nellis. And the Merchants Club, too?
]\Ir. Gugel. Yes, sir.
Mr. Nellis. Have you visited there?
Air. Gugel. No, sir.
Mr. Nellis. You have not?
Mr. Gugel. No, sir.
The Chairman. The Alexandria Club, Latin Quarter, and Bev-
erly Hills are not?
Mr. Gugel. Wait. I think it was the 10th or the 8th of this
month, that I, personally, with a sergeant and patrolman, visited the
Merchants Club there on Fourth Street. I had information that
there could be cheating in there, or something like that, and I went
through the place myself.
Mr. Nellis. Have you conducted any raids recently on the wire-
service headquarters in Newport?
Mr. Gugel. There has been a lot of wire service cut down by my
men. I would say, I just can't say the dates or anything, but they
have orders, and they have been, I would say, doing some good work
on it.
Mr. Nellis. Has the city manager made any further charges about
your being derelict in your duty since the last charges?
Mr. Gugel. No, sir.
Mr. Nellis. Do you and the city manager get along very well?
Mr. Gugel. We get along in a business way.
Mr. Nellis. I am talking about law enforcement, not personal social
contacts.
Mr. Gugel. The orders he gives dun I carry out.
Mr. Nellis. What have been his orders to you recently?
Mr. Gugel. Well, on different complaints that he 'gets, he turns
them over to me. and somet hues to the chief of detect ives.
Mr. Nellis. Have you had any occasion to conduct raids on any
operations in your city?
ORGANIZED CRIME IN INTERSTATE COMMERCE 33
Mr. Gugel. Yes; 1 would say since January we have conducted, I
have no records with me, but I would say we have conducted about a
dozen raids. Any information we get we go right on out after it.
Mr. Nellis. Yet you would agree that your city is fairly wide open
right now; is it not?
Mr. Gugel. Is what?
Mr. Nellis. Is fairly wide open right now.
Mr. Gugel. No.
Mr. Nellis. It is not?
Mr. Gugel. No, sir.
Mr. Nellis. Has it changed considerably in the last 3 months?
Mr. Gugel. I will say that it has changed considerably in the last
(5 months.
The Chairman. But it had been fairly wide open?
Mr. Gugel. Sir?
The Chairman. It had been fairly wide open before that ?
Mr. Gugel. I would say not since about the first part of 1950.
The Chairman. It was wide open until then?
Mr. Gugel. Before that.
The Chairman. When you say "wide open," what do you mean by
that '. What was the extent of operation ?
Mr. Gugel. Well, gambling.
Mr. Nellis. In how many places would you say ?
Mr. Gugel. Well, I would say there was a lot of sneak handbooks
around cafes, of which we have about 120 or 122, and then there was
the Flamingo Club and the Merchants Club and the Yorkshire Club.
The Chairman. They were operating wide open ; weren't they ?
Mr. Gugel. I was told that, sir.
Mr. Nellis. Where is the Alexandria Club, Mr. Gugel ?
Mr. Gugel. In the city of Newport.
Mr. Nellis. Would it surprise you to know that we have sworn
testimony to the effect that an individual observed gambling wide open
there on the night of June 5 of this month ?
Mr. Gugel. Well, you say you have sworn testimony?
Mr. Nellis. That is right. We have testimony on the record, under
oath, to the effect that that place was running wide open just a few
weeks ago.
Mr. Gugel. My information that I got about it is the only thing
I can tell you, and that is that they had a "shake the box," I don't
know, a dice game like that, I think for chips, that is all I know, and
I think they called it a 2G game. I never played it.
Mr. Nellis. For your information it was wide open, a blackjack
game and a dice game.
Mr. Gugel. No.
Mr. Nellis. Wait a minute. You don't know. Have vou been
there?
Mr. Gugel. Well, sir, no ; my men go there, and their reports which
I have got there, I will show you. I even have a man stationed there
at different times.
Mr. Nellis. Well, I don't think 3Tour information is very accurate.
Quite apart from that, now, do you know who owns the Alexandria
Club?
Mr. Gugel. Art Dennert.
Mr. Nellis. Do you know who his partner is ?
34 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Gugel. I wouldn't know ; no, sir.
Mr. Nellis. Do you know Louis Levinson, formerly of the Fla-
mingo ( Hub?
Mi. Gugel. I know about Louis. I know those fellows.
Mr. Xi.i.i.is. Have you picked them up recently?
Mr. Gttgel. No ; I have not.
Mr. Nn lis. When was the last time you arrested any gambler
personally?
Mr. Gugel. Personally?
Mr. N Ellis. Yes.
Mr. Gugel. 1 always have the detectives to handle that.
The Chairman. "What is the size of your force?
Mr. Gugel. Sir?
The Chairman. What is the size of your force?
Mi'. Gugel. Forty-five men.
The Chairman. How long have you been in that position?
Mr. Gugel. As chief of police?
The Chairman. Yes.
Mr. Gugel. It was 5 years in February.
The Chairman. Mr." Nellis.
Mr. Nellis. Did you ever make public a letter sent to you by the
former chairman of this Senate committee suggesting that you resign?
Mr. Gugel. I never got no letter.
Mr. Nellis. Didn't you receive a letter?
Mr. Gugel. No, sir.
Mr. Nellis. Are you sure about that?
Mr. Gugel. I would have to go through my papers down there to
look, because if T did, I didn't pay much attention to it.
Mr. Nellis. You did not pay any attention to it?
Mr. Gugel. Well, I am saying, I did not resign.
Mr. Nellis. Is your sole source of income from your salary?
Mr. Gugel. That is right, sir.
Mr. Nellis. What is your salary?
Mr. Gugel. It is around $3,800 a year now. When I was up here
in — or when I was up in Cleveland, it was around $3,600. We got a
small increase.
Mr. Nellis. What is your net worth, Chief Gugel?
Mr. Gugel. Well, your records will show that.
Mr. Nellis. I don't want the records, I want your net worth.
Mr. Gugel. Well, I am saying
Mr. Nellis. What would you say you are worth today?
Mr. Gugel. Well, I have two pieces of property, I would say they
are around, the two of them together, around $15,000, maybe $16,000,
that is all I have. I have got an automobile, a private car.
Mr. Nellis. Do you have any cash anywhere ?
Mr. Gugel. Well, T might have around four or five hundred dollars
in cash for different things that come up.
Mr. Nellis. You estimate your net worth at what, then?
Mr. Gugel. What I told you.
Mr. Nellis. What is it?
Mr. Gugel. I said around $15,000 or $16,000.
Mr. Nellis. Fifteen or sixteen thousand dollars?
Mr. Gugel. Yes, sir.
The Chairman. Those are the only items?
ORGANIZED CRIME IN INTERSTATE COMMERCE 35
Mjr. Gugel. Sir?
Tlie Chairman. Those are the only items constituting your net
worth ?
Mr. Gugel. That is right, sir.
Mr. Xellis. Sheriff Diebold, what is your net worth ?
Mr. Diebold. I have a little cottage that I have owned for 3 years
at 324 Thome Street, that I bought for $5,000. I have $3,150 in Gov-
ernment bonds, and I have, I think, $3,400 in cash.
Mr. Xellis. Do you drive an automobile, sir?
Mr. Diebold. For the office.
Mr. Xellis. Only the official car?
Mr. Diebold. Yes. sir.
The Chairman. Is that right?
Mr. Diebold. Yes, sir; I have two in the office, sir.
The Chairman. Have either of you, Mr. Gugel, first I will ask you,
are you married ?
Mr. Gugel. Yes, sir.
The Chairman. Are there any separate holdings by your wife?
Mr. Gugel. Xo. sir.
The Chairman. Sheriff, how about you?
Mr. Diebold. Xo, sir. The wife has everything that we have be-
tween us.
The Chairman. So that the different items that you have just
enumerated constitute the entire holdings of each and both of you
gentlemen, is that right ?
Mr. Gugel. That is right.
Mr. Diebold. That is right.
Air. Xellis. Do you, or does any member of your family have an
interest in a hotel in California?
Mr. Gugel. I have got a brother out in California.
The Chairman. Does he have a hotel there?
Mr. Gugel. Well, I think they call it a unit building, like an apart-
ment building. He has been out there, oh, 20 or 25 years, I guess.
Mr. Xellis. Do you have any interest in that place ?
Mr. Gugel. Xo.
Mr. Xellis. None at all (
Mr. Gugel. Xo, sir.
Mr. Xellis. Did you ever receive any money from him?
Mr. Gugel. Xo, sir.
Mr. Xellis. From your brother?
Mr. Gugel. Xo, sir.
Mr. Xki.lis. Well, now, are you going to do anything about this
Alexandria Club?
Mr. Gugel. Well, I have been doing it all along. I am going to
keep on.
Mr. Xellis. We have just gotten through telling you that there
were gambling operations going on less than 2 weeks ago. What
are you going to do about it \
Mr. Gugel. Well, Friday, Saturday, and Sunday, I don't know the
dates, I think it was around the 8th, 9th, and 10th, it has been closed
every night by my police.
Mr. Xellis. The last few nights, you mean?
Mr. Gugel. Sir.
Mr. Xellis. The last few nights ?
36 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mi\ Gugel. Yes, and previous to that, Mr. Rhoads, the manager,
has assigned Lieutenant Galluci. He is a police Lieutenant out there
and lie stays out t here.
Mr. Nu.i.is. Mr. Gugel, what did you do with those affidavits or
statements that you offered us in Cleveland concerning the alleged
meeting bet ween you and Mr. Rhoads at which Mr. Rhoads was alleged
to have instructed you to close down some places, and
Mr. Gugel. What did I do with them '.
Mr. Nellis. Yes, sir.
Mr. Gugel. 1 have them in my office.
Mr. Nellis. Would you undertake to mail those by registered mail
when you get back?
Mr. Gugel. I will talk to the legal department before I do anything.
1 won"i say "Yes" and I won't say "No."
Mr. Nellis. You are under subpena, you understand, and the com-
mittee would like to look at those documents. You were supposed to
furnish them at that previous time, and they were not furnished.
Mr. Gugel. No, no, 1 had them up in Cleveland, and Mr. Kefauver
read them and handed them back to me.
Mr. Nellis. "Well, we would like to have them back, and we will
return them to you.
The Chairman. Or a copy of them.
Mr. Nellis. Or a copy.
Mr. Rhoads, you are the city manager?
Mr. Rhoads. That is right.
Mr. Nellis. And you and Mr. Gugel both testified in Cleveland?
Mr. Rhoads. That is correct.
Mr. Nellis. And there was some conflict in your testimony ; do you
recall that ?
Mr. Rhoads. Yes.
Mr. Nellis. What has happened in your community since the
middle of January?
Mr. Rhoads. Of course, the orders are the same, the orders that
have been in effect for more or less 2 years. In all fairness to the
police, I think there has been more cooperation in the last few months
than previously.
The Alexandria Club is the only one that I have had any reports
on, other than, maybe, I believe maybe the Yorkshire was mentioned
also.
Mr. Nellis. Yes.
Mr. Rhoads. Now, in recent months, the information 1 have through
some of our police department is to the effect that on these occasions
there was some or must have been some sneak operations. I don't
think they have attempted to operate other than maybe in the manner
in which it was found by Mr. Goddard at that time.
Mr. Nellis. Do you give orders to the chief of police to pick up
those known gamblers from time to time, and interrogate them, and
find out how they are earning their living '.
Mr. Rhoads. I don't think there have been any orders to pick up
any particular person. They are to keep them under constant sur-
veillance, and certainly my orders have been \w\ definite about
gambling continuously, and it will be continuously in that direction.
ORGANIZED CRIME IX INTERSTATE COMMERCE 37
I don't know whether they have picked up any known gamblers.
Frankly. I don't know too many gamblers, as such. I have uever had
any contact with them.
Mr. Nellis. I understand you eat in the Yorkshire Restaurant
there, do you not, regularly \
Mr. Rhoads. Yes. I have eaten there.
.Mr. Nellis. Have you observed any entrance to a room which
is heavily guarded or under guard?
Mr. Rhoads. No, no. 1 have not. Of course, when T am there, it is
at noon, and some of the lawyers eat there.
Mr. Nellis. You understand, I wTas not questioning where you go
to eat.
Mr. Rhoads. Yes, I realize that.
Mr. Nellis. I wonder whether you observed a doorman there?
Mr. Rhoades. Well. I don't think there has been any doorman,
because I have observed, and I would have been observing it very
carefully, along with the attorneys with me, if there was anything like
that, and I have taken particular notice to it, there has not been any
noticeable attempt to guard any of the entrances.
The Ciiairmax. How about the Alexandria \
Mr. Rhoads. I have not been in the Alexandria Club. However, we
have been very careful in our surveillance of that particular club.
I have even assigned some special police there.
The Chairman. Well, the truth is that it has been operating wide
open this month.
Mr. Rhoads. I don't think that is the case, Senator.
The Chairman. We have sworn testimony to that effect.
Mr. Rhoads. I realize you may have.
The Chairmax. That there were 250 people at one time, with the
operation wide open, and there was no difficulty of anybody walking
in there, and there wasn't any effort made to hide it, it was not hidden
or done surreptitiously.
Mr. Rhoads. 1 am very much surprised if that is the case, because
I have given special instructions to our police, and some of them indi-
vidually, to check that place.
The Chairman. Mr. Xellis.
Mr. Nellis. Did you ever make any statements to representatives of
this committee concerning Mr. Gugel recently?
Mr. Rhoads. I don't know just who comprises the committee.
Mr. Nellis. Well, did you Tell Mr. Goddard that you felt Mr.
Gugel was not doing a good law-enforcement job yet, and that you
were trying to get him out so that you could get somebody in that
would do the job?
Mr. Rhoads. I don't know whether I used those exact words or not.
Frankly, I have not been depending too much on Chief Gugel in the
last few months. Unfortunately 1 have had to, on many occasions, go
to some subordinate and work through them.
Whether my lack of confidence is justified or not, I have not been
able to place the confidence that I should have in Chief Gugel, and
only a week ago Saturday. I believe it was, following the meeting
that I had with Mr. Goddard. in which he informed me about those
two places, which I was rather surprised to hear about, I called in
Chief Gugel before the city commission, and I reported what had been
38 ORGANIZED CRIME IN INTERSTATE COMMERCE
told me, and I asked him to make some personal inspections of those
places, to ascertain whether or not that was true.
The Chairman. Apparently he did not do it from his testimony
here today.
Mr. Rhoads. Those were the instructions T gave, and T also called
in the detective that we have now. a new chief of detectives that I
have just recently appointed under our civil service set-up, and I
called him in and assigned to him some special men, with the specific
instruction thai they check those places, and every place else, to de-
termine whether or not those t hings are continuing.
Those are my most recent inst met ions, I believe.
Idie ( Jhairman. Wha1 has the authority over the chief?
Mr. Rhoads. I do. Senator.
The Chairman. Do you have power to remove him?
Mr. Rhoads. No, I don't. I have power to prefer charges. Senator,
but we operate under a civil service set-up, and I do not have the power
to permanently displace him.
The Chairman. Have you preferred charges against him?
Mr. Rhoads. Yes.
The Chairman. When ?
Mr. Rhoads. They were charges preferred last, I believe it was in
November.
The Chairman. Have they been heard?
Mr. Rhoads. They have been heard, and they are heard before the
city commission.
The Chairman. Was there any action taken on him ?
Mr. Rhoads. Yes', there was a suspension of 28 days, I believe it was,
handed down at that time.
The Chairman. Were the charges for dereliction of duty?
Mr. Rhoads. The charges were for dereliction of duty and insubor-
dination. At the time it was felt that we did not have sufficient proof,
or the type of proof that would stand up in a court of appeals. So
that charge was withdrawn, and the charge of insubordination was
put into effect, and he did serve those 28 days of suspension.
Mr. Nellis. What is the reason for your present lack of confidence
in him ?
Mr. Rhoads. Mr. Nellis, I presume it is just because of lack of con-
fidence, anyway, where someone has been in that position over a period
of years, where those things have been apparently condoned and have
been wide upon, so far as I know, and I suppose it is hard to have
confidence where those things have gone on for so long.
However, I might add this, I have tried to void myself of any
prejudice against Chief Gugel. All I am concerned about is the en-
forcing of the law. If he will do that, that is the only thing I am
requiring of him, and I don't think that is anything other than what
he is required to do under the law.
Mr. Nellis. What is vour salary as city manager?
Mr. Rhoads. Mine is '$7,200.
Mr. Nellis. Do you have any other source of income besides your
salary?
Mr. Rhoads. Yes, I have a small income. I am a practicing attor-
ney, and that is the only source of income I have, other than that.
Mr. Nellis. What is your average yearly income, Mr. Rhoads?
ORGANIZED CRIME IN INTERSTATE COMMERCE 39
Mr. Rhoads. Well, now, let's see. I imagine hist year it ran
around — you are talking about gross income, I presume ?
Mr. Nellis. Yes.
Mr. Rhoads. I think it ran around $2,000 practicing law.
Mr. Neixis. Does your partner, or the person with whom you are
associated, represent any of the gamblers in this area?
Mr. Rhoads. I don't think so, Mr. Nellis. I think at one time
the firm that I have an office in represented the Yorkshire, but I don't
think that has been true since I have been city manager.
Mr. Nellis. That has been two years ?
Mr. Rhoads. Yes. I think at one time they did represent them.
I don't know in what capacity. If I recall, there were maybe one
or two other attorneys that were representing them also.
I don't know just what the arrangement was, because I didn't have
anything to do with that phase of the operation. I was not a mem-
ber of the firm. I simply was an associate there, and I had an office
there.
Mr. Nellis. "Well, the senior member of the firm with whom you
are associated owns a building in Newport, the Finance Building,
does he not ?
Mr. Rhoads. Well, the Newport Finance Corp. owns it, and I think
he is the controlling stockholder there.
Mr. Nellis. And the point is that there are a number of suspicious
operations right in the building, Mr. Rhoads.
Mr. Rhoads. Well, I think possibly that probably is not true just
now. I have been very, very diligent in trying to run that situation
down, to determine whether or not that is true. In fact, I have issued
several special orders and have even stationed men in the building
to observe from day to day in the halls, and we have held numerous
consultations with the telephone company, and we have gotten some
recent cooperation from the telephone company in determining that.
The Chairman. I would like to ask the other gentlemen who are
around the table whether any of them are desirous of making any
statement, either in explanation of existing conditions or conditions
in the recent past, or anything pertinent to that, that might be of in-
terest to he committee.
Mr. Thiem. First of all, there is gambling in the Finance Build-
ing, and there always has been, and there is right now.
The Chairman. Gambling in the Finance Building, you say?
Mr. Warren. I would like to interrupt, and I would like to have
a certified copy of this record, that there is a police record
The Chairman. Just a moment, counsel, please. You will be given
every opportunity to make any statement you care to.
Mr. Warren. I am sorry.
The Chairman. Sergeant Thiem, you say that gambling is in opera-
tion now ?
Mr. Thiem. Yes, sir.
The Chairman. In the Finance Building?
Mr. Thiem. Yes, sir.
The Chairman. To what extent?
Mr. Thiem. Bookies, a commission house.
The Chairman. By bookies — you say there are bookies there?
Mr. Thiem. Yes, sir.
40 ORGANIZED CRIME IN INTERSTATE COMMERCE
Tlic Chairman. Have you undertaken to suppress it or to take
any steps or to bring it to the attention of the officials?
Mr. Tiiikm. Yes, sir. I have.
The Chairman. To what extent?
Mr. Tiiikm. I attempted to swear out a warrant for the police on
a place known as the Bobben Realty Co.
The Chairman. Go ahead.
Mr. Theem. Thai was in May of 1050. I have my book over here.
It was May of 1050. 1 had the city police judge and prosecutor's
office with me, as I was swearing out the warrant, and the prosecutor
excused himself and went into Mr. Bhoads' office, and within a few
minutes Mr. Benton, the owner of that building, came to the prosecu-
tor's office and grabbed me by the arm and pulled me outside and
asked me what 1 was trying to do to him. I told him that I was at-
tempting to raid them, the Bobben Realty Co.
The Chairman. Yes.
Mr. Thiem. He said for me to stall, and I says, "I don't have to
stall, the prosecutor is doing that."
With (lint he ran into the manager's office and after some time I
got my warrant, and I Avent to the Finance Building, and the place
was closed down.
The Chairman. Who told you to stall?
Mr. Thiem. Mr. Benton, the owner of the building.
The Chairman. Who is he?
Mr. Thiem. He is the senior member of Benton, Benton & Ludeki,
the firm that Mr. Rhoads is a member of.
The Chairman. Now, what is your information? You say that
was in 1050?
Mr. Thiem. May of 1050, yes, sir.
The Chairman. What is your information as to the fact that it
has continued up until now?
Mr. Tiiikm. I know it is there. I know Lazoff runs it, and his
partner, whose name is Rosenbaum.
Mr. Nellis. That is the same Rosenbaum who testified before this
committee not long ago?
Mr. Thiem. Yes, sir.
The Chairman. And that is continuing?
Mr. Thiem. Yes, sir, it is continuing today.
The Chairman. Well, now, what have you to say, for example,
with respect to the Alexandria?
Mr. Theem. The Alexandria Club has been operating after hours
under the guise of a restaurant license. The bar, the liquor bar, was
supposed to be closed down. He locks his doors at 2 o'clock, and
nobody can enter, especially the police. Now, in the last few days
the commissioners have passed an ordinance stating that the restau-
rants had to be closed along the bar, wherever the bar may be. Ho
was raided three times in the last 3 nights.
The Chairman. Yes. We have information, sworn testimony, that
on or about the early morning of Wednesday, June 6, that there was
wide-open gambling in operation with about 250 people there.
Mr. Theem. Well, Senator, the 250 people would probably be right,
and if the information I have received through the grapevine is cor-
rect, he is running a "beat-1 he-dealer" game, or 2(5 game. So far as
ORGANIZED CRIME IN INTERSTATE COMMERCE 41
its being wide open, it is not wide open, even to the officers, because
we have tried to get into it.
The Chairman. Well, now, has it been wide open in the last couple
of months would you say?
Mr. Thiem. Never after 2 o'clock.
The Chairman. I am not talking about after 2, I am talking about
before 2.
Mr. Thiem. Yes, sir ; it is wide open, but then there is no game there.
The Chairman. Well, the information we had was that there were
tables in operation.
Mr. Thiem. What type of tables, sir?
The Chairman. Well, the gambling, the ordinary gambling tables.
Mr. Thiem. You mean a dice table?
The Chairman. Dice and blackjack.
Mr. Thiem. That is not a fact, sir.
The Chairman. You don't think that is so?
Mr. Thiem. No, sir; I don't.
Mr. Nellis. You have not been in the place during the time gambling
was in operation?
Mr. Thiem. No. Like I say, they usually started the side games
after 2 o'clock.
The Chairman. Have you been in attendance there to see whether
their operations were going on?
Mr. Thiem. Before 2 o'clock; yes, sir.
The Chairman. Go ahead.
Mr. Thiem. Now, I arrested Mr. Dennert about a week ago, under
the old ordinance which was thrown out of court. The reason I did
that, the mayor of the town said that the present laws were adequate,
and all that it needed was enforcement. I gave it a try and I failed.
The Chairman. It is your opinion that they have been operating
actively after 2 o'clock?
Mr. Thiem. With side games, I don't knowT anything about black-
jack, I know about the 26 game. The 26 game has been used more or
less in the cafes around town, so long as I can remember, and they
were not considered as gambling.
The Chairman. Is there any dice game going on after 2 o'clock I
Mr. Thiem. No, sir; I am pretty sure there has not been. I know
Mr. Dennert quite well and I am sure that I would have an inkling
of it if it was going on.
The Chairman. That is further away, but what is your belief about
Beverly Hills and the Latin Quarter?
Mr. Thiem. They were going right wide open.
The Chairman. And they have been going wide open?
Mr. Thiem. Yes, sir.
The Chairman. We have sworn testimony available to us that on
-Tune 1 and June 2, for example, and other times too — but I am just
taking those specifically — there were large numbers of people in both
the Latin Quarter and Beverly Hills actively engaged in gambling.
Mr. Thiem. Yes, sir; there was.
The Chairman. Go ahead.
Mr. Nellis. Mr. Eha
Mr. Warren. Senator, pardon me.
Mr. Nellis. Oh, do you want to make a statement concerning that?
42 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Warren. I would like to ask the Senator, to get this into the
record, to ask this man, who is a police officer, a sworn officer in the
Commonwealth of Kentuck}', how he can make the categorical state-
ment t hut gambling is going on in a certain place and he knows of it,
and what ho lias done about it since 1950. I would like to get that
in t ho record.
The Chairman. You want that question asked of him?
Mr. Warren. Yes, sir.
The Chairman. I am very glad to ask it. As a matter of fact, I
thought we did ask him that.
Mr. Thiem. You did, sir. Now, may I ask Mr. Warren
The Chairman. No. Just let us have these questions answered one
;it ;i t hue.
Mr. Thiem. May I ask a question of what particular place he is
referring to?
Mr. Warren. You made a categorical statement that gambling
exists at the present time and has existed, in the Finance Building,
and specifically in the Bobben Realty Co. office.
Mr. Thiem. That is right. Now, I know that to be a fact. I at-
tempted to enter that place without a warrant and I could not get in.
Now, when I swore the warrant there in 1950, after some time of
knocking on that door, they answered it. But any other time other
tha n t hat they would not even answer the door for me.
The Chairman. Sergeant, may I ask this : Did you report that epi-
sode and the details of it to your superiors?
Mr. Thiem. I did, to Chief Gugel, and to Judge Maybury of our
police court. Judge Maybury is my witness that Mr. Benton came to
that office and pulled me from the office.
The Chairman. I am referring to reports that you made. Did you
report the details to the chief?
Mr. Thiem. Yes, sir, I did, on this occasion when that happened.
The Chairman. Yes.
Mr. Warren. That still did not answer my question that I want in
the record.
The Chairman. Just a moment, counsel.
Chief Gugel, you gentlemen are all under oath and you have heard
that statement made.
Did the sergeant make that report to you as of that time?
Mr. Gugel. Well, sir
The Chairman. First, I would be obliged if you would answer it
"Yes" or "No," and then you may make any explanatory statement
you desire.
Did he make a report to you?
Mr. Gugel. Yes.
The Chairman. Now, did you want to make some explanation?
Mr. Gugel. No, no, that is all right, sir.
The Chairman. Now, you wanted to say something, did you?
Mr. Warren. What I want brought out on the record is, if he knows
that it exists now, and if he has made any report to anyone respecting
that alleged condition since this original occasion in 1950, he says it is
existing now.
The Chairman. That is right. You have made yourself plain.
You have heard that question asked, just the basis of your informa-
t ion as to the prevalence of it or the fact that it is now going on.
ORGANIZED CRIME IN INTERSTATE COMMERCE 43
Mr. Thiem. Sir, all you have to do is to call the Bobber Realty Co.
by its telephone number advertised in the telephone book, and they
will answer it. You hear the results over the phone.
The Chairman. You have reason to believe that it is in operation,
and that a person can place bets and get results over the phone from
there?
Mr. Tiiiem. Yes, sir.
Mr. Warren. That still did not answer the question.
Mr. Thiem. Through the commission basis.
The Chairman. Sergeant, could I ask you this, Is there any ex-
planation for what you have done or have not done since May of 1950
in connection with that place?
Mr. Thiem. Sir, I didn't try to get any more warrants after that.
The Chairman. In other words, are we to understand that you
have been under the belief since May of 1950 that it would be useless
to try ?
Mr. Thiem. Absolutely, yes, sir. The same thing happened at a
cafe at Seventh and Roberts Street when Officer White swore to a
warrant for a cafe that was called Flagg's Cafe, or Peter's Cafe, and
he came and got me while I was doing traffic at the bridge, and he
asked me to accompany him. We headed for the cafe, and we went
there and found that it was closed.
We had information after that that the secretary to Mr. Rhoads
called the telephone operator and asked for the telephone number of
Peter's Cafe at the time we were on our way toward the cafe.
The Chairman. Mr. Eha, I thought you indicated a desire to say
something; is that right?
Mr. Eha. Yes. I would like to say this, that the city commission,
before our administration, about the middle of 1948, I believe it was,
levied a gambling tax under the guise of an occupational tax. It was
a matter of record that there were approximately 70 handbooks, ap-
proximately 10 clearinghouses that were operating in the city.
The information that I have is that these clearinghouses were oper-
ating under these fictitious names, some of these names Sergeant
Thiem had actually collected the license fee from for the city. An-
other report
Mr. Xellis. Specifically, can you name those places? I mean, you
are making a serious charge.
Mr. Eha. There is one at 313 York Street, that I believe Sergeant
Thiem had collected the license fee on, and it was a matter of record.
I feel that if any officer wanted to do his duty, it was common knowl-
edge in the city that that was a gambling tax.
The Chairman. Have those places remained open?
Mr. Eha. I would like to sa}^ this, that a few months prior to our
administration, when the last administration was defeated and our
election was assured, they repealed this gambling tax so it was not
there when we came in.
It is reputed that the sergeant — no, it is reputed that the city re-
ceived something like $70,000 from this form of taxation.
The Chairman. Well, you need not go into the details of it. We are
aware of that. My point is this, are the places in operation, and have
thev been recently \
44 ORGANIZED CRIME IN INTERSTATE COMMERCE
.Mr. Eha. Not to my knowledge, so far as the Finance Building is
concerned; the city manager has talked to the city commission, and
we have used every efforl we can to weed those places out.
During last winter, during the football season, I had investigated
the Finance Building myself.
The Chairman. All right, Mr. Eha. Have you reason to believe
that the Alexandria Club has been in operation?
Mr. Eha. I have some reports that they were, but they were just
merely rumors.
The Chai km an. What did you do to ascertain the accuracy of them ?
Mr. Eha. I reported my findings to the city manager.
The Chairman. How about — well, of course, these are at differ-
ent points — but how about at Beverly Hills and Latin Quarter, is your
information to the effect that they have been operating or not '.
Mr. Eha. Senator, 1 have no way of knowing whether those places
operate or not. merely what I read in the paper.
May I say this, if I may ask Sergeant Thiem a question
The ('haulm w. Does it have to do with the present situation?
Mr. Eha. The Alexandria Club, Sergeant Thiem, prior to 1950, did
you ever work for Artie Dennert in the form of a bouncer?
Mr. Thiem. No, sir; I did not.
Mr. Eha. Yon know there are reports that you did, that you served
as a special guard.
Mr. Thiem. Sir, if you believed everything that you heard so far
as the public is concerned in our city, you would definitely be out of
your head by this time.
Mr. Nellis. 1 want to talk to the chief of the county police.
Mr. Winters. That is me.
Mr. Xellis. You have jurisdiction over places outside the city of
Newport itself?
Mr. Winters. Yes, sir.
Mr. Xellis. And you have jurisdiction over Beverly Hills?
Mr. Winters. Yes, sir.
Mr. Nellis. And over the Latin Quarter?
Mr. Winters. Yes, sir.
Mr. Nellis. What about other clubs?
Mr. Winters. Well, actually we have jurisdiction over all the clubs
in the county.
Mr. Neli is. Is that right ?
Mr. Winters. Yes, sir: every one.
Mr. X ki.i.ts. What have you done about those places recently; have
you raided them recent ly \
Mr. Winters. Which ones are yon talking about, sir?
Mr. Nellis. Specifically Beverly Hills, where we had information
t hat gambling was running wide open.
Mr. Winters. Yes. sir. One of my patrolman swore to a warrant
early in the month. He came to me and stated on his inspection out
t here — you sec. t hey had a game room upstairs in t he establishment but
now. as 1 understand it, they set up operations on a breakdown basis,
in a new portion of the building, so he came to me and I sent him to
our county attorney. Mr. Bowen, and we had a warrant sworn to, and
they went out and inspected both places. As a matter of fact, we
checked the Latin Quarter also, and we did not find anything.
ORGANIZED CRIME IX INTERSTATE COMMERCE 45
Mr. Nellis. You mean When you went out there you found nothing?
Mr. Winters. That is right.
Mr. Nellis. Yes.
Mr. Winters. I might add this, that I have reason to believe that
there is gambling in both of those establishments.
Mr. Nellis. How did they gel tipped off?
The Chairman. Just a moment. Von say you have reason to believe
that there is?
Mr. AVixters. I have reason to believe.
The Chairman. That they arc in operation now '.
Mr. Winters. Yes, from public talk and sentiment, and whatnot,
but with the limited men we do have, and with the time that we have to
take with regard to other law enforcement, it is very tough for us to
try to break up a large ope rat ion.
The Chairman. How many men do you have?
Mr. Winters. Six men for 508 miles of road alone. Both of those
establishments are in incorporated areas, incidentally, and they have
law enforcement there.
The Chairman. Well, gentlemen, we have reached a point where we
think we will conclude so far as this present hearing is concerned, that
we will conclude the inquiry.
Mr. Rhoads. Senator, there were some statements made that I can-
not let go unchallenged, and if it is at all possible, may I make a state-
ment, because certain things have been said that has cast reflections
upon me that cannot go unanswered. There are some statements that
were made by Sergeant Thiem.
The Chairman. Mr. Rhoads
Mr. Rhoads. And I want to get it on the record.
The Chairman (continuing). You want to deny the accuracy of
them ?
Mr. Rhoads. Why, yes, Senator, and I have, I do have copies here of
orders specifically sent to the chiefs of police directing their attention
directly to that Finance Building.
The Chairman. All right. Now, in order to have that possible, we
will receive those and place them in the record as your exhibits.
(The documents referred to above were marked ""Exhibit No. 5,"
and appear in the appendix on p. 228.)
Mr. Rhoads. Yes. And any statement by Sergeant Thiem to the
effect that our city prosecutor, whom I have the greatest respect for,
made any suggestions or even mentioned to me that there was a
warrant issued, or any attempt made to notify anyone, is actually
absurd.
The Chairman. Well, gentlemen, we must suspend at this time.
Mr. Rhoads. May I make this statement ( I think this is signifi-
cant, that Sergeant Thiem — I am going to make this blunt — is not
sincere, he has never been sincere in his efforts.
Before this commission -was in office, or soon after it was in office,
he even went to some of the commissioners themselves and attempted
to get those fellows to compromise, stating that if they were per-
mitted to remain open that it would be possible for the city to derive
considerable revenue from those sources.
The Chairman. All right. Mr. Rhoads. We will suspend there.
Let me say to each and every one present that the committee is ready
Sr,277— 51— pt. ir> 4
46 ORGANIZED CRIME IX INTERSTATE COMMERCE
and willing to receive any further statements that are to be made, but
in oi-der thai we may have it done deliberately and with due thought
and consideration, we would require them to be in writing.
So anybody who i'eels at all aggrieved, or who feels he desires to
amplify any of the statements made today, may do so if they will
submit to counsel the statement in writing.
Mr. Eha. I have a document here I would like to put in.
The Chairman. That may be made part of the record.
(The document referred to above was marked "Exhibit No. 6.")
Mr. Rhoads. Senator, I would just like to make this statement.
The ('[[airman. Just a minute, Mr. Rhoads.
Mr. Warren. You asked the chief to furnish certain affidavits.
Mr. Xellis. That is right, affidavits which be had.
Mr. Warren. He states that there is one already in part 6 of the
hearings. Senator Kefauver read it into the record.
Mr. Nellis. In that case we will forget it.
Mr. Warren. Is there anything else you want?
Mr. Nellis. No.
The Chairman. Well, that is all, gentlemen.
(Whereupon, at 1 : 25 p. in., the committee adjourned.)
INVESTIGATION OF ORGANIZED CRIME IN INTERSTATE
COMMERCE
MONDAY, JULY 23, 1951
United States Senate,
Subcommittee of the Special Committee To Investigate
Organized Crime in Interstate Commerce,
Washington, D. C.
The subcommittee met, pursuant to adjournment, at 10 a. m., iu
room 318, Senate Office Building, Senator Herbert R. O'Conor (chair-
man) presiding.
Present: Senators O'Conor, Kefauver, and Hunt.
Also present: Downey Rice, associate counsel; George Martin, di-
rector of information.
The Chairman. The hearing will please come to order.
At the outset I should like to refer to the resolution of the full
committee authorizing the chairman of the committee to appoint the
subcommittee to hold this hearing. Pursuant to that resolution, the
chairman has appointed the Senator from Maryland and the Senator
from Tennessee, Mr. Kefauver, to conduct this hearing, with provi-
sion that the attendance of one constitutes a quorum.
We are concerned today with conditions in Kentucky and it will be
remembered that, in the report, in the third interim report filed by
Senator Kefauver, particularly, reference was made to the Kentucky
situation. I read from page 68 of the interim report, which will indi-
cate the reason for the interest of the committee. It reads as follows :
The Cleveland syndicate, however, is resourceful and is ever alert for oppor-
tunities to stay in business. Even prior to the shut-down of the various clubs
in Ohio, plans were made for an extension of syndicate operations into the
wide-open communities of Campbell and Kenton Counties of northern Kentucky.
Again the syndicate ran into local competition in this area. The syndicate and
the local talent operated such gambling enterprises as the Lookout Club, the
Beverly Hills Club, the Yorkshire Club, the Merchants Club, the Flamingo Club,
the Latin Quarter, and the Kentucky Club.
I merely refer to that as the basis of the committee's interest in
order to ascertain whether conditions which were referred to as of the
end of April, what changes, if any, have occurred since.
In that connection, I might also make reference to a communica-
tion which was sent to this committee by the judge of the Kentucky
circuit court, criminal division, Judge Joseph P. Goodenough, on
June 27, in which he forwarded to our committee the report of the
May grand jury, which report was filed on May 7, 1951. The judge,
in forwarding the grand jury report, invited the attention of our com-
mittee to conditions and also invited comments from the committee on
the report as well as on current conditions of gambling in that particu-
47
48 ORGANIZED CRIME IX INTERSTATE COMMERCE
lar area. I mighl say, as has been said before regarding the policy
and procedure, thai in the event that any individuals referred to or
has any accusati* n made againsl him or her, which that individual
i'eels is not well founded or concerning which he or she desires to re-
spond, an opportunity will be given at the earliest possible time to anj
such person who feels aggrieved.
( )nr committee is not interested in matters of a purely local nature.
We are not giving attention to matters that may be involved in local
elections which may be in the offing. That is not our concern and,
strictly business, not our business. So we will attempt to avoid any
unnecessary reference to matters which may be entirely of a local
nature and' may be involved in any election contest, but confine our-
selves to those particular questions which are of interest to the com-
mittee.
We will now proceed, and I will ask our associate counsel, Mr.
Downey Rice, if he will call the first witness.
TESTIMONY OF W. SHARON FLORER, COVINGTON, KY.
The Chairman. Mr. Florer, will you raise your right hand, please?
In the presence of Almighty God, do you swear that the testimony
you give shall be the truth, the whole truth, and nothing but the
truth?
Mr. Florer. I do.
The Chairman. Will you kindly give your full name?
Mr. Florer. W. Sharon Florer.
The Cn aiioiax. And the last name is spelled?
Mr. Florer. F-1-o-r-e-r.
The Chairman. Mr. Florer, your residence?
Mr. Florer. Covington, Ky.
The Chairman. And for what period have you resided there?
Mr. Florer. Since 1927.
The Chairman. What is your business or profession or occupation?
Mr. Flfrfr. In the real estate and insurance business; also execu-
tive secretary of the Kenton County Protestant Association.
The Chairman. Will you describe that association for us, please?
What is it made up of, please?
Mr. Florer. It is comprised of two laymen and the pastor from
e;uh Protestant church in Kenton County. There are 80 Protestant
churches. That would make about 240 members of our general as-
sembly, which meets twice a year. Then we have an executive com-
mittee of officers and churchmen who meet monthly to carry on the
business, and I work with the executive committee.
The Chairman. And are all the members from Kenton County?
Mr. Florer. Our organization is just Kenton County.
The Chairman. Exclusively within Kenton County? That is
true?
Mr. Florer. Yes.
The ( iiaiiiman. Mr. Rice.
Mr. Kick. You say there are in the association some lay members?
Mr. Florer. Yes, sir.
Mr. Kkk. How is that made up?
Mr. Florer. The pastor and two laymen from each church com-
prise the governing assembly of our Protestant association.
ORGANIZED CRIME IX INTERSTATE COMMERCE 49
Mr. Rice. So, of the entire group, a ratio of 2 to 1 of laymen to
churchmen in the organization?
Mr. Florer. Thai is true. It is primarily a lay organization.
Mr. Rice. Are you also a businessman, Mr. Florer ?
Mr. Florer. Yes, sir.
Mr. Rice. What is your line of business?
Mr. Florer. Real estate and insurance.
Mr. Rice. That is a full-time job?
Mr. Florer. Yes, sir. I give considerable time to this work. too.
Mr. Rice. Tell us about the situation down in Kenton County.
You might, for the benefit of the newspapermen and spectators, tell
ns the distinction between Kenton and Campbell Counties and the
geographic set-up in connection with Cincinnati, so we get a picture of
the area.
Mr. Florer. They are adjoining counties, divided by the Licking
River.
Mr. Rice. They are south of the Ohio River ?
Mr. Florer. South of Cincinnati, south of the Ohio River. Kenton
County is on the west side of the Licking and Campbell is on the east
side.
Mr. Rice. If you leave Cincinnati and go across the bridge and turn
right, you are in Kenton?
Mr. Florer. You go across two bridges into Kenton County and
two bridges into Campbell.
Mr. Rice. You turn right into Kenton and left into Campbell?
They are both river towns ?
Mr. Florer. Yes.
Mr. Rice. You are in Kenton County, which is to the right, as you
go south ?
Mr. Florer. Yes. You go over a suspension bridge.
Mr. Rice. What is the main town in Kenton ?
Mr. Florer. Covington.
Mr. Rice. Over in Campbell it is?
Mr. Florer. Newport.
Mr. Rice. You have grand juries from time to time down in Ken-
ton, do you not ?
Mr. Florer. Yes, sir.
Mr. Rice. How often do they run?
Mr. Florer. Three times a year.
Mr. Rice. Three times a year — January, May, and September ?
Mr. Florer. Yes ; January, May, and September.
Mr. Rice. What happens when there is a grand jury in session?
What happens with respect to gambling and vice? Do you know?
Mr. Florer. Well, for years the report was alwajTs made that there
was no gambling in Kenton County. That was our grand jury
report. Following the Howard trial, that generally was not said,
because it was at that time that gambling operations were admitted
and no one denied them any more. As far as the grand jury is con-
cerned, there is very little done about gambling.
Mr. Rice. I do not quite follow you. Howard was a former county
prosecutor ?
Mr. Florer. He was a commonwealth attorney. In 1947 we went
to the United States Federal court with a petition to disbar Mr.
50 ORGANIZED CRIME IX INTERSTATE COMMERCE
Howard for nonfeasance and misfeasance in office. He had been
prosecutor for 20 years.
Mr. Rice. In other words, lie was not doing his duty \
Mr. Florer. He was not doing his duty. In that case he was dis-
barred in the Federal court, However, he died before the appeal got
through the United States Court of Appeals and the decision was
reversed as if nothing happened, because you cannot strike a man's
name from tin record who has passed on.
Mr. Rice. During the time that the grand jurors are not in session,
I take it that they run about a month's time each time, three times a
year?
.Mi-. Florer. Nine days.
Mr. Rice. So for 27 days out of the year they have a shut-down?
.Mr. Florer. That is the custom.
Mr. Rice. How about the rest of the year?
Mr. Florer. Wide open.
Air. Rice. It is wide open? When j7ou say "wide open," tell us
what you mean by that. Do you mind telling us what you mean by
that ? We are a little bit strange about northern Kentucky.
Air. Florer. It means that any stranger can walk into any of these
large casinos and gamble on anything he wants to gamble — race
horses, boards.
Mr. Rice. You say they have, in a casino, race-horse gambling?
Mr. Florer. Oh, yes.
Mr. Rice. That would be in the afternoon ?
Mr. Florer. Yes.
Mr. Rice. They would have a blackboard and regular horse room
with wire service and announcements of the running of the races?
Mr. Florer. That is true. Loud-speaker systems. Then they have
other forms of gambling, too.
Mr. Rice. How about at night? What type of games?
Mr. Florer. That would be craps and roulette and whatever else
they have.
Mr. Rice. In these places, you say they are wide open and any
stranger can walk in off the street. They do not have to have a card
or anything like that?
Mr. Florer. Things are a little different right now. But it has
been wide open. When I mean "wide open," there is nothing to hinder
anyone from going in and gambling on almost anything he wants to
gamble on.
Mr. Rice. Just as if it wasn't against the law?
Mr. Florer. Oh, yes.
Mr. Rice. Was it advertised in the papers out there? Do these
places advertise?
Mr. Florer. They advertise their food, but I haven't noticed their
advertising their gambling.
Mr. Rice. What are some of these places you are talking about,
Mr. Florer?
Mr. Florer. 514 Club. Kentucky Club, Lookout House.
Mr. Rice. The 514 is in Kenton County ?
Mr. Florer. Yes.
Mr. Rice. Is it in the city of Covington?
Mr. Fi/)rer. Yes.
Mr. Rice. How about Kentucky?
ORGANIZED CRIME IX INTERSTATE COMMERCE 51
Mr. Florer. The Kentucky Club is in Covington.
Mr. Rice. That is in the city of Covington as well as in the county?
Mr. Florer. That is true.
Mr. Rice. What was the next one?
Mr. Florer. The Lookout House is in the county.
Mr. Rice. That is not in the city ?
Mr. Florer. That is not.
Mr. Rice. That is out on Dixie Highway ?
Mr. Florer. Yes.
Mr. Rice. How about the Kenton Club?
Mr. Florer. Yes. There is the Press Club.
Mr. Rice. Is the Kenton Club in the city ?
Mr. Florer. Yes. The Press Club is in the city. The Golden Horse-
shoe is in the city. The Turf Club is in Latonia.
Mr. Rice. Are those all in Covington ?
Mr. Florer. Those are in Covington.
Mr. Rice. Lookout is the only one you mentioned that is out in the
county and not in the city ?
Mr. Florer. That is right. That is the big operation in the county.
Mr. Rice. If you know, who is said to be the operator of the Look-
out House, or the operators ?
Mr. Florer. James Brink is considered the operator of the Look-
out House.
Mr. Rice. Wasn't that known as a syndicated operation ? Isn't that
the big one ?
Mr. Florer. That is true.
Mr. Rice. That is the Cleveland syndicate?
Mr. Florer. I suppose it is.
Mr. Rice. Of six or ten men who ran that ? I think there is testi-
mony in the record, Mr. Chairman, of the operators of the Lookout
Club.
Mr. Florer. In the Howard trial we had Mr. Brink on the stand and
he gave us the names of the syndicate members at that time, which
we have a transcript of. If you desire to look that over and see just
whom he named in there as the Northern Kentucky Amusement
Co.
Mr. Rice. You mentioned handbooks and dice games, roulettes
and things like that. How about slot machines ?
Mr. Florer. The slot machines are prevalent all over the county.
At the present time they are not there. However, for years and years,
slot machines were in even delicatessens and the United States Revenue
Department caused a $100 tax to be paid upon slot machines, and
those records are available at the local office of the Revenue Depart-
ment. Annually those records are obtained by the press and published.
Mr. Rice. They print a list of the names of the licensees or the ones
who have paid the tax ?
Mr. Florer. The ones who have paid the tax.
Mr. Rice. And they print those in the paper?
Mr. Florer. Right in the paper.
Mr. Rice. About how many of those taxes are indicated annually,
if you know ?
Mr. Florer. I believe there are about six or seven hundred taxes
paid. We do not know how many slot machines.
52 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. That doesn't indicate how many machines, because one
tax can cover a number of machines.
Mi-. Florer. 1 suppose one receipt would do that. t do not know
just how they operate that, but this one report lias it that there has
been L,500 in the county at one time.
Mr. Kick. Those were against the law, weren't they?
Mr. Florer. Definitely.
Mr. Rice. How does the law enforcement people act to you people
and to the public? How have they acted for the operation of these
things and the publishing in the papers?
Mr. Florer. I would like to tell you some of the things that we have
done to try to get them to do something about it.
Mr. Rice. We would be interested in that.
Mr. Florer. We began our campaign to get law enforcement as
far back as 1946. That was when we started. Not long after that —
which was not long after our organization was formed — the ministers
of all the churches, on January 1", 1947, spoke on the subject of
gambling in the community and the newspapers carried it widely.
Gambling was stressed.
Mr. Rice. When you say, "was stressed," were they for or against it ?
Mr. Florer. Oh, yes ; they were trying to point up the widespread
gambling conditions and make' it public so that the people would
realize what is going on.
Mr. Rice. Pointing out the evils of it then ?
Mr. Florer. That is right. For years and years this thing just
mushroomed without much being said about it, and it was at this
time that we began to call attention of the people to see just what
was taking place in the community.
Mr. Rice. Did you people find that those conditions affected the
county adversely or were they beneficial ? What did the grocerymen
tell you about it?
Mr. Florer. It was interesting to hear the things that were told us
as a result of getting things closed down for a while. One grocery-
man told me that for the first time some grocery bills had been paid
that had never been paid before. On the whole, gambling in Ken-
tucky in Kenton County has caused a lot of stress — distress, I might
say. A larger percentage of the cases that come before the court, the
juvenile court, the county court, I have been told, a large percentage
of the distress there, can be attributed to gambling conditions. The
judge told me that himself while speaking to a group of ministers
just last Sunday.
Mr. Rice. What did he have to say ?
Mr. Florer. How shocking it was the number of cases to come
before him for nonsupport and domestic trouble that can be attributed
to the gambling situation, where husbands lose their pay checks in
slot machines or race horses or something like that.
Mr. Rice. In other words, the gambling losses were contributing to
t he breakdown of the family?
Mi'. Florer. True.
Mr. Rice. Did he give you any figures or percentages of the number
of nonsupport cases thai he said were dyw, to gambling losses in the
count v I
ORGANIZED CRIME IX INTERSTATE COMMERCE 53
Mr. Floker. He gave us a figure of 80 percent of these cases as due
to gambling and excessive drinking, alcoholism. He did not break
them down. That is pretty much something thai noes hand in hand.
Mr. Rice. At least you had an impression that a large percentage
was due to gambling?
Mr. Florer. On May 20, 1947, we testified before the grand jury
ourselves to ask them to do something about it. We offered specific
information.
Mr. Kick. They agreed to testify about actual gambling in the
clubs?
Mr. Florer. Yes. sir. Reverend Conley, Reverend Morrell, Rev-
erend Wilbur, and myself appeared before the May grand jury.
Mr. Rice. What year was that?
Mr. Florer. 1D47. That was in June 1947 when Judge Goodenough
laid down some new rules. He called them newT rules.
Mr. Rice. "Who is Judge Goodenough ?
Mr. Florer. He is the judge of the Kenton circuit court.
Mr. Rice. These new rules were supposed to — Is he the man who
charges the grand jury ?
Mr. Florer. Yes, sir.
He was going to see that all the slot-machine cases brought before
him were tried on a felony charge and that they would go to jail. He
just made that very plain.
Mr. Rice. Before you leave that, I take it then there is a distinction
in the Kentucky statute under which there would be an option so that
the prosecutor could try a case either as a felony
Mr. Florer. True.
Mr. Rice (continuing) . Or as a misdemeanor ?
Mr. Florer. Yes, sir. Setting up and operating is a felony. The
misdemeanor is to permit gambling on the premises. For years prior
to the Howard trial these slot-machine cases were brought in on the
felony charge of setting and operating. On the recommendation of
the commonwealth attorney they were allowed to plead guilty and
reduced the charges to misdemeanor and paid the $200 standard fine.
Mr. Rice. The license fee ?
Mr. Florer. The fee.
Mr. Rice. What is the penalty on a felony case ?
Mr. Florer. That is a stiff penalty. That has a jail sentence.
Mr. Rice. Mandatory jail sentence ?
Mr. Florer. My impression is it is 1 to 3 years.
Mr. Rice. We have a copy of the statute which indicates there is a
mandatory jail sentence.
Mr. Florer. I believe you lose your citizenship.
Mr. Rice. They lose the right to hold office, public office.
Mr. Florer. The rules of the court with regard to slot machines
were never enforced.
Mr. Rice. Before you leave that, I have here the statute with regard
to gambling. It says that the operation of gambling machines as a
game or contrivance calls for confinement in the penitentiary for not
less than 1 or more than 3 years. In addition, the person convicted
shall be deemed infamous after the conviction and he is disqualified
from exercising the right of suffrage and from holding any public
office of trust or honor. That is a stiff sentence.
54 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Florer. I personally feel that the statute ought to be revised to
give wider degrees. That statute needs to be improved. You get a
person before a jury and it is just like throwing the book at him,
on the first offense. All other laws have degrees which work better.
Mr. Rice. Now, then, you started mOving along there in 1947. Then
what happened? What happened after you became aware that the
syndicate had moved in?
Mr. Florer. We were aware all the time that this was a syndicate
operation. It had to be. In February 1948 we began to hammer at
conditions again strongly. Then we ran into some other affairs that
took our attention. There was a wave of selling liquor to juveniles.
Some bad situations developed.
Mr. Kick. Before you go into that, under the so-called new rules,
which were called for by Judge Goodenough, as I understand it, they
were to invoke the felony penalty. Did they ever do that ?
Mr. Florer. Not to my knowledge.
Mr. Rice. Did you check into that ?
Mr. Florer. I checked into that and the only case that I can find on
record where that has been invoked was some time in 1947 in Win-
chester, Ky. There has never been a felony conviction to my knowl-
edge on slot machines or gambling in Kenton County.
Mr. Rice. At least not in Kenton County ?
Mr. Florer. That is true.
Mr. Rice. So the new rules never did go into effect ?
Mr. Florer. No.
Mr. Rice. Because we assume the gambling continued in 1947 and
1948. I think I was out there myself.
Mr. Florer. It was public knowledge that they were operating.
Mr. Rice. So when you found the syndicate had moved in, these
out-of-State people, the big operators, did they increase your cam-
paign ?
Mr. Florer. Yes, sir ; it did. On March 14
Mr. Rice. Of what year ?
Mr. Florer (continuing). 1950, we invited the officials, all the law-
enforcement officials, to a meeting
Just prior to that the Reverend Morrell and I called on these offi-
cials personally to see if we could not appeal to them man to man to
try to do something about this situation. The strange thing was that
these officials never denied the fact that gambling existed. Our prob-
lem was to see where we could help them in getting a better com-
munity, free of this wide-open gambling. So we set up a dinner
meeting with the officials.
Mr. Rice. How did you select officials with whom to meet, Mr.
Florer?
Mr. Florer. We just took all the law-enforcement officials. At
that time James E. Quill was the Commonwealth attorney.
Mr. Rice. Who prosecutes the cases?
Mr. Florer. That is true. We had Judge William Wehrman, the
county judge. We had Sheriff Henry A. Berndt. He is the sheriff
of Kenton County. We had the Covington chief of police, Al Schild.
We had the Kenton County chief of police, Carl Mershon. We also
invited Judge. Goodenough to the meet ing.
The Chairman. You mentioned the name of the other judge. I
wonder whether you would explain the jurisdiction of the judges and
ORGANIZED CRIME IN INTERSTATE COMMERCE OO
whether you had invited Judge Goodenough, which you are about to
relate.
Mr. Florer. There is Judge Wehrman, who is judge of the Kenton
County court. That handles the fiscal matters of the court. It also
hears cases. It is not a court of record. Anything that deals with
felony offenses are transferred or bound over to the grand jury and
go into the circuit court. We have two branches of the circuit court.
Those are the criminal division and the court of equity.
So we invited all these gentlemen to this meeting, including Judge
Goodenough, but Judge ( roodenough stated that he didn't think it was
proper. His own words were, "No judge can with propriety engage
in any discussion concerning matters which may come before him.
for decision."
We were not going to discuss matters to come before him for deci-
sion. We were going to discuss the gambling situation and how we
could work together and cooperate to eliminate it.
We had that meeting and representatives of the daily press were
there.
The Chairman. It was a public meeting?
Mr. Florer. No, sir ; it was not. We invited the press so the public
would be aware of it. At that time there was Mr. Deters of the Times
Star, Mr. Rankin of the Enquirer, and Mr. Carl Sanders of the Post.
Then there were three ministers and three laymen, myself included.
At that meeting there was no denial about the gambling situation
at all. It was a matter of trying to convince these fellows to do some-
thing about it. We discussed this thing for about 3 hours and finally
they agreed to do something about it.
The Chairman. Mr. Florer, can you be a little more specific ? You
state there was little or no denial of it.
Mr. Florer. That is right.
The Chairman. That is negative, of course, and we wonder whether
anything was said definitely as to the existence of gambling at the
meeting.
Mr. Florer. We talked specifically about gambling and the officials
did not deny that there was gambling.
It wasn't a question of our trying to prove to them that gambling
existed in Kenton County.
The Chairman. In a 3-hour meeting, I would assume much was
said. I am wondering whether anything positive was said by the offi-
cials or any agreement expressed by them as to the existence of gam-
bling, if such was done.
Mr. Florer. There was no dissent on the fact that there was gam-
bling and at the end we came up with a statement to which everyone
agreed. All the officials agreed that gambling wa9 going to cease
right then and there.
Here is the statement that they worked on and all agreed to. It
was carried in the press and headlined in the papers that the edict
had been handed down that gambling was to cease.
The Chairman. What is the date of that?
Mr. Florer. March 14, 1950. Still it did not do any good.
The Chairman. You say that statement wa9 agreed upon by them?
Mr. Florer. Yes, sir.
56 ORGANIZED CRIME IN INTERSTATE COMMERCE
The Chairman. What form did their agreement take? Did they
sign it ? Did they assent to it and authorize its publication, or just
what was done?
Mr. Fl( irer. When it came to the point of drawing up the statement
it was decided thai it was very late and all agreed to it. Somebody
made tin1 remark, "I see no reason why we have to sign it. We are all
agreeing to it. You are all in the presence of each other."
It was a very amicable meeting. We thought right then that a new
day \\ as coming. So there was no signing of this, but no one will deny
that this is the statement.
Mr. Chairman. It was then published in the newspapers?
Mr. Florer. Yes.
The Chairman. How long afterward?
Mr. Florer. The next day.
The Chairman. Did it receive wide publicity?
Mr. Florer. Wide publicity.
The Chairman. Following that, was there any exception taken by
any of the officials?
Mr. Florer. None whatever.
The Chairman. So there was no objection raised and apparently
you felt it met with the approval of everybody present?
Mr. Florer. Yes, sir.
Mr. Rice. That meeting took place in March of 1950?
Mr. Florer. Yes, sir.
Mr. Rice. And the upshot of it was that there was an agree-
ment, or at least a lip-service agreement, that the laws would be
enforced from there on out?
Mr. Florer. Yes, sir.
Mr. Rice. Was that reduced to writing?
Mr. Florer. Yes, sir; this is it. Here is where they agreed to
enforce the law.
Mr. Rice. Read us a part in there where they agreed to do that.
Mr. Florer (reading) :
We who have met and conferred concerning commercialized organized
gambling and law enforcement conditions in Kentucky agree to cooperate
fnllhcirtfilly in the enforcement of the law. We agree that commercial or-
ganized gambling must cease throughout the country immediately.
Shall I keep on reading?
Mr. Rice. That will be sufficient to indicate that they did agree
to enforce t he law. That was in March.
I notice here that in September, 1950, some G or 8 months after
that, there was an article in the Kentucky Times Star, Cincinnati
edition, of Monday, September 11, which indicates that Covington
leads the State in the number of slot-machine permits that Coving-
ton people had obtained. Covington has 163 permits so far this
year, that was i950. They go on to list the individuals in Covington
having the permits, 1<»:'> of them, with their names and addresses as
of May L950.
Before I leave that, in connection with it, it is interesting to note
that at one Dixie Highway spot in Kenton County as much as $5,000
was paid lor the operation of 50 slot machines ranging from the
nickel variety to those played with silver dollars. This is all in
1950.
ORGANIZED CRIME IN INTERSTATE COMMERCE 57
Mr. Florer. Later on we offered that in evidence to the grand
j,n'.v-
Mr. Kice. Do yon know what, place that is that they are talking
about?
Mr. Florer. Everyone assumed that is the Lookout House, since
i hat is the only one out there.
Mr. Rice. Mr. Chairman, 1 think we would like to have the
agreement as an exhibit, the agreement of March 1950.
The Chairman. It will be admitted and marked in evidence.
(The agreement referred to was marked "Exhibit No. 7," and
appears in the appendix on p. 228.)
Mr. Kick. And the newspaper article including the list of 16S
slot-machine taxpayers, in September, as part of the record.
(The newspaper article referred to was marked "Exhibit No. 8,"
and appears in the appendix on p. 229.)
Mr. Kick. In addition we have the report of the Interstate and
Foreign Commerce Committee, issued in May of 1950, indicating
that there were wire service racing news tickers in about 100 places
in Covington, in abundance in the Covington area. I do not know
whether we have the count here, but I believe it is a little over a
hundred. It is exactly 111 news service tickers in Covington. Is
that correct ?
Mr. Florer. I think the record will bear that out. I wouldn't have
personal knowledge on that, but everyone opens with a wire in Coving-
ton. That is part of the syndicate operation.
Mr. Rice. I show you the list and ask you to see if you recognize
any of them.
Mr. Florer. You want me to recognize some of these?
Mr. Rice. Read some of these places and tell us what they are doing
now.
Mr. Florer. Here is E. Carr, 627 Scott Street. That is the Ken-
tucky Club.
These are listed according to the names of the individuals. We
know them more by the names of the places.
Here is J. Kappis, 514 Madison. That is the 511 Club.
Mr. Rice. Was that list published in the papers out there ?
Mr. Florer. This list?
Mr. Rice. Yes.
Mr. Florer. No, sir; I do not think it was.
Mr. Rice. Generally throughout the country at the time that report
was issued, the areas picked that up and printed it.
All right, then, we have a picture that in March the law enforce-
ment officials agreed to eliminate the gambling and in May a list of
111 ticker places was published and in September a listing of 163 slot
machine tax permits was published.
Mr. Florer. I can begin right after this parley we had with the
officials and tell you that on May 5, 1950, after we realized our social
action committee of the Kenton Protestant Association, Kenton
County Protestant Association, realized nothing was being done, the
ministers again united in a demand for law enforcement from the
pulpit, and John J. Maloney, the city commissioner of Covington, de-
manded law enforcement.
58 ORGANIZED CRIME IX INTERSTATE COMMERCE
On May 17, Reverend Morrell went before the grand jury and of-
fered specific evidence to the grand jury, but they did not seem to
want it.
Then it was on September 11, 1950, that the slot machine list was
published. 1 mighl say that I do not like to give the impression that
the Protestants are the only organization, the only ones, who are
interested in law enforcement. The Catholic Messenger on Septem-
ber 11 also rapped the situation and has been doing it regularly.
Mr. RlCE. Up until today, 1 take it. at least the people from your
group stand ready and willing to give competent evidence as to the
activities. For instance, didn't you just get a letter from Reverend
Richardson?
Mr. Florer. Yes.
Mr. Rice. What does he say in that letter?
Mr. Florer. I might give you the build-up on that.
Mr. Rice. What year is this?
Mr. Florer. 1951. On January 22, the chairman of the Social Ac-
tion Committee of the Protestant Association, Reverend Albert J.
Conely, wrote a letter to Judge Goodenough and Mr. Quill asking
them — this letter is very important. It gives you some idea of what
we are trying to do. It says to these gentlemen [reading] :
In light of all recent happenings and proceedings concerning gambling in this
community we strongly urge that you call for a full scale grand jury investiga-
tion of gambling activities in Kenton County. This would be the interrogation
of all law enforcement agencies and their entire personnel by the grand jury
which is now in session.
We arc enclosing herewith the September 11, 1950, edition of the Kentucky
Times Star which carries a list of persons and places in Kenton County who
paid the Federal tax on one or more slot machines.
Mr. Rice. Is that the list here?
Mr. Florer. That is true.
This alone should be sufficient information to warrant such action in demanding
a grand jury investigation.
Furthermore, if yon will refer to the records of your court you will find in
Order Book 91, pages ^11 and L'l'J, an order which permanently and perpetually
enjoins and restrains any form of gambling on the premises now occupied by
the Lookout House on the Dixie Highway. We request that you inform us as to
who is responsible for enforcing this injunction.
M r. Rice. So you have had a permanent injunction on record there ?
Mr. Florer. Since 1939.
Mr. Rick. Restraining operations at the Lookout House since 1939.
That was George Xorthcott's injunction?
Mr. Florer. Yes, sir.
Mr. Kick. We have a copy here which describes the Lookout House
in Kenton County, and names the individuals who at that time were
defendants — James Brink, John Rigney, Ed Kerr, and others.
Mr. Florer. Yes. sir.
Mr. Rice. That injunction, so far as you know, is still in force and
effect t here \
Mr. 1 lorer. It still is.
Mr. Rice. What reply did they make to you in connection with that,
Mr. Florer?
Mr. Florer. Judge Goodenough called me and told me that he and
Mr. Quill had talked the matter over.
Mr. Rice. That is the Commonwealth attorney ?
ORGANIZED CRIME E\T INTERSTATE COMMERCE 59
Mr. Florer. Yes.
They agreed that it was the commonwealth attorney's duty to
enforce that injunction.
Mr. Rice. Did you get a repty from Mr. Quill ?
Mr. Florer. We never got a reply from Mr. Quill.
Mr. Rice. What did they agree that it was?
Mr. Florer. They agreed it was Mr. Quill's duty, the Common-
wealth attorney's duty, to enforce that injunction. Mr. Quill called
me up and practically said the same thing. I asked Mr. Quill to give
it to me in writing. I wanted to have something down so I could
take it before the committee. The only thing we got in writing was,
"Come down to my office and I will be glad to talk to you."
So we were unable to get anything in writing.
Mr. Rice. Did you go down to talk to him ?
Mr. Florer. No; we did not. The grand jury went into session on
January 24 following that. That was when two members of our
social action committee went before the grand jury to give them some
information about the situation. All I might point out that they
always would say, "We don't have specific information." They
evidently wanted the name, the address, the place, and the time.
Being novices in the business of trying this thing out, we would
try to say, "You gentlemen should look it up and get the specific
evidence."
But now we realize that it is up to us. So on January 24, Reverend
Darrell C. Richardson and Reverend Albert J. Conley went before
the grand jury.
I have something in Reverend Richardson's handwriting about the
statement he offered to make to the grand jury.
Mr. Rice. He is making that today?
Mr. Florer. That is right.
Mr. Rice. That is a current letter ?
Mr. Florer. Yes
Mr. Rice. Read that, please.
Mr. Florer (reading) :
On January 29, 1951, I received a subpena to appear before the grand jury of
the circuit court of Kenton County. This subpena, no doubt, resulted from my
part in a county-wide movement to expose the taverns and bars which were
exploiting youth and selling intoxicants to minors. This movement has had
considerable coverage in the local papers and had aroused public opinion against
the lack of law enforcement in the county.
I made a personal investigation of about three dozen places in Kenton County
and found an utter disregard of law, which prohibited liquor sales to minors.
I spent 55 minutes testifying before the grand jury. I told them in detail about
dozens of bars, taverns, and cafes that were deliberately seeking teen-age trade
and selling intoxicants to minors in direct violation of the law.
I also read to them an editorial in the October 31, 1950, Kentucky Post, which
brought to public attention the investigations of young Covington businessmen
who, in a single day, found 20 taverns violating the law.
I told the grand jury of seeing slot machines and other gambling in practically
all cafes and bars I visited. I mentioned names and places.
Mr. Rice. He said he had seen them himself i
Mr. Florer. Yes. [Reading:]
I mentioned names and places. I quoted ninny dozens of experiences related
to me by young people themselves. I offered documentary evidence of this.
But the grand jury did not seem interested in having copies. It seemed to me
there was a definite significance in the fact that after I offered the names and
60 ORGANIZED CRIME IX INTERSTATE COMMERCE
places and further offered to Leave copies of my report with the grand jury, that
the Commonwealth attorney and the grand jury did not desire me to name names
or places nor did tliey request copies of specific evidence and charges which I
had made, in my possession.
Il" the circuit judge, Commonwealth attorney, and grand jury had been sin-
cerely interested in law enforcement, they would have found enough facts in the
evidence I furnished them to have brought dozens of indictments.
Mr. Kick. Along that line, were any indictments made by that
grand jury \
Mr. Florer, were any indictments brought in by that grand jury in
connection with gambling? Was anyone prosecuted as a result of that
testimony ?
Mr. Florer. I might refresh my memory here.
The grand jury reported on February -. but I have nothing here to
show that anything was done along this line at all. There may have
been a few indictments, the usual indictments.
Mr. Rice. You take it from the fact that the Reverend Richardson
is writing that letter as of July, 1951, that he did not feel appropriate
action was taken I
Mr. Florer. No. There was no action at all taken along the lines
we were trying to get action.
Mr. Rice. How long is the statute of limitations on gambling, do
you know I In other words, for how far back can they pick up a case
and prosecute?
Mr. Florer. Five years on felonies and 1 year on misdemeanors.
Mr. Rice. Yes, I think it is. I see here that a section of the Ken-
tucky statute of limitations states that prosecution shall be commenced
within 5 years after the commission of the offense or the cause of
action arose. So any testimony going back 5 years could conceivably
result in a prosecution. Is that your interpretation \
Mr. Florer. Yes, sir.
I might say that following this, on February 8, after the grand jury
reported, all the evidence was that gambling was opening up again.
So the social action committee of our Protestant Association again
made another move. They sent a telegram to James E. Quill, Com-
monwealth attorney, Judge Joseph P. Goodenough, Henry A. Berndt,
the sheriff, and Chief Al Schild, Covington police, as well as Carl
Mershon, chief of the county police. It stated :
It is reported on good authority that gambling places in Covington and Kenton
County are scheduled to resume operations. We want to know if you, a law-
enforcement official, sworn to duty, are going to permit this to happen. Further-
more, we would appreciate an official answer to our letter of January 23.
All that we have done has been of no avail.
Mr. Rick. It has been ignored, in other words?
Mr. Florer. Ignored.
Mr. Rice. All right, sir. We have a picture of persons ready, will-
ing, and able to test i fy. apparently able to give good concrete evidence
of operations going on almost up until the present day. certainly with-
in the statutory period, but no evidence of any prosecutions of any
sort, although there is at least a group there interested in bringing that
about.
Has there been any indication of the breakdown of law enforcement
or conniving of law enforcement in connection with some of these
operations; for instance, tips on prospective raids to build up statis-
tics for police action? Has that come to your attention?
ORGANIZED CRIME IN INTERSTATE COMMERCE 61
Mr Florer. There was public attention on one incident not very
long ago when a raid was made. A warrant was sworn out for the
Kentucky Club. .
Mr. Rice. That is in the city of Covington k
Mr. Florer. Yes.
Mr. Rice. What type of club is that? n , .
Mr. Florer. That is the gambling end. Ihe Kentucky Club is
the casino. . , .^ . . ,x *
Mr. Rice. That is the one you mentioned with horse wire in there i
Mr. Florer. Yes. That is 'the big casino.
Mr. Rice. All right, go ahead. m
Mr. Florer. Attorney Stewart Wagner obtained a warrant tor
the arrest of Walsh. ,
Mr. Rice. The operator Walsh. It was a search warrant and an
arrest warrant?
Mr. Florer. Yes.
Here was the way it worked. His client, Harlow, had been there.
He had witnessed gambling activities at the 627 Club. So he had
asked Stewart Wagner to get the warrant. So he went to Judge Ben-
sin crer's office in the Covington Trust Building, two squares from the
Kentucky Club and obtained a warrant from the judge, then Mr.
Wagner wanted to accompany the Officer Ireland.
Mr. Rick. The judge called in and gave the warrant to an officer
til Pl'f '
Mr Florer Yes. They called the police and they sent Officer
Ireland to Judge Bensinger's business office. Then something came
out there that we had really never known before. It indicates some-
thin^ else in the whole sinister operation, namely, that warrants,
search warrants, must first be registered at the city hall m the police
department and then the rule is that they must be served by the
detective bureau. In other words, the man who had the warrant, the
officer who had the warrant, could not go two squares to serve. He had
to first go to city hall, which was a matter of five or six squares, to
o-et it registered, and then go to serve it. .
Mr Rice. Then Officer Ireland had the warrant and said he had to
go to the police headquarters and record it first? Did Mr. W agner
go along with him?
= Mr. Florer. Yes, sir.
Mr. Ricu. Then what happened? r
Mr. Florer. I am just repeating to you Mr. W agner s story.
Mr. Rice. Yes. Go ahead.
Mr. Florer. This is not personal knowledge.
Mr. Rice. He told you, didn't he?
Mr Florer. Yes, sir. In fact, I made notes while he was telling
me this. I have them in my brief rase. I have the time of the whole
thing where he went down to the police department, and he tells me
there was considerable confusion about this thing. When they saw
this warrant for the Kentucky Club, there was a great deal of con-
fusion. Then one of the officers, the chief of detectives, Ceitre, told
him not to leave until he came back.
Mr. Rice. Who told Ceitre >.
Mr. Florer. Ceitre told Ireland, "Don't you leave here until 1
come back."
85277 — 51 — lit. 15 5
62 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rick. Yes, sir.
Mr. Florer. Then Wagner, the attorney, saw Ceitre and Ireland
leave by another door, and the record shows there was a considerable
lapse of time from the time this warrant was issued until the time he
could get it served.
Mr. Rice. Anybody know where Ceitre and Ireland went during
that time?
Mr. Florer. No.
Mr. Rick. They just went out for a while.
Mr. Florer. Then they left.
Mr. Rick. Then they came back and picked up Wagner?
Mr. Florer. Yes.
In the meant ime. Hallow was at the 627 Club.
Mr. Rick. He was the complainant?
Mr. Florer. Yes.
Mr. Kick. We have the complainant in the gambling place. No
one knows he is there?
Mr. Florer. That is right.
Mr. Rice. What happened then in the place?
Mr. Florer. He heard the announcement made that they were going
to be raided.
So everybody was told they would have to get out and the place
would have to be closed up.
So they put the machine in the washroom, the slot machines. This
Hallow saw them put the slot machines in the washroom.
Mr. Rick. Yes.
Mr. Florer. So finally they came up to make the raid.
Mr. Rice. All the customers had left?
Mr. Florer. All the customers were standing on the outside. The
officers went in and stayed in for about 15 minutes and said, "We
didn't see a thing, there is not a thing going on in there."
Mr. Rice. Didn't see anything?
Mr. Florer. No.
Mr. Rice. How long ago was that, Mr. Florer?
Mr. Florer. February 26, 1951.
Mr. Rice. That has happened, I think, since the Cleveland hearings
of the Semite Crime Committee which were held the latter part of
January, which brought out the conditions down in that county?
Mr. Florer. That is true.
Senator Kefauver. What was this date?
Mr. Florer. February 26, 1051.
Senator Kefauver. The Cleveland hearings were the 17th. 18th,
and 19th, in Cleveland.
The Chairman. Of January or February?
Senator Kefauver. Of January 1951.
Mi-. Florer. This newspaper carried the description of the matter
and it gave the lime and factually what happened.
The Chairman. Mr. Florer. from and after February, what has
been the situation generally? lias there been any a ppreciable change
and have condil ions during t he intervening period been similar to those
which you described in the past '.
Mr. Florer. Right after the Cleveland hearing there was consid-
erable caution in the operation and the slot machines, I believe, were
ORGANIZED CRIME IX INTERSTATE COMMERCE Q'd
taken out or covered up. Then things seemed to die away. It looked
like the Kefauver committee was finished with the thing and things
began to open up again.
The Chairman. When did yon observe that? Do you recall about
the date?
Mr. Florer. Let's see.
The Chairman. Just the approximate date.
Mr. Florer. They were operating before the May grand jury
because the headlines after the grand jury recess said:
Gambling again seen in new jury strategy. Slots must stay out, Kenton
jurors say.
They had operated up to the grand jury and dosed for the grand
jury and then opened up again.
Senator Kefauver. Didn't they send out a card saying they were
going to reopen ?
Mr. Florer. That was in Campbell County, referring, I believe, to
the Beverly Hills.
Senator Kefauver. What is the name of this one in Kenton County ?
Mr. Florer. The Kentucky Club and others.
Senator Kefauver. Is it generally known, Mr. Florer, that this is
an out-of-State proposition, owned by a bunch of out-of-State people?
Mr. Florer. We have always been told that this was a local opera-
tion, but this committee has proven that it was not a local operation.
Senator Kefauver. Wasn't it publicized that it was shown in the
Cleveland hearings that this operation was owned by Dalitz, Roth-
kopf, Kleinman, Polizzi, McGinty, Croft, Potter, Myer, Schroeder,
and Brink? Brink was the only local owner of this club. Most of
these people live in Ohio, don't they? They operate in Ohio.
Mr. Florer. Yes, sir.
Senator Kefauver. They also operate at Desert Inn in Las Vegas?
Mr. Florer. Yes, sir.
Senator Kefauver. They have some operations in Florida.
Mr. Florer. Mr. Brink lives in Kenton Count}'.
Senator Kefauver. I believe Mr. Schroeder also lives there,
doesn't he ?
Mr. Florer. I don't know.
Senator Kefauver. Dalitz, Rothkopf, Kleinman, Polizzi, and
McGinty — those are the old May field Road Gang.
Mr. Florer. Just recently we had some warnings from the press
that some members of the Purple Gang were operating in our vicinity.
We haven't been able to check that up.
Senator Kefauver. The secretary, Mr. Giesey, was an auditor in
Cleveland, Ohio. He is the one who keeps all the records. He is the
one who keeps the books and records.
The Chairman. Mr. Florer, following the situation in June, in
the spring, have you knowledge in the recent past as to what has
been the situation concerning gambling?
Mr. Florer. Right now, Senator, things are tight. I doubt if you
could make a bet except maybe off the cuff. I suppose there will
always be that kind. But, as far as I know, none of the casinos ate
in operation.
The Chairman. How long has that situation prevailed?
64 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Florer. Just recently. That is just a new development here.
However, we did have rumors that the Lookout House, you could get
in there if you had the proper identification, but we did not go to
the extent of trying to get in. We have tried to follow up rumors
and tried to be fair with all these officials, and it is not our desire to
persecute them or to feel ill will toward them personally. We just
want a good community and we have tried our best to work with them.
1 think they all understand it is a matter of principle and we are
not gunning for any individual.
Mr. Rice. Yon have received considerable publicity as a result of
your clloits and the efforts of your group in fighting the vice con-
dit ion there. As a result of that, have you yourself ever been threat-
ened with bodily harm or otherwise been the victim of any campaign
against you or against your group that you would like to mention?
Mr. Florer. Of course, 1947 was a very hectic year, and it was
during that year that I received — that was when we were trying Mr.
Howard and it was a long-drawn-out affair— we had subpenaed many
underworld characters. A lot of heat and tension was aroused and
I was receiving many threats over the telephone to the point where
it got so bad that they would call me up at night. They would sound
like crackpots around saloons. It sounded to me like they might
have been drinking a little bit and they thought they should do some-
thing about it, "They cannot do that to these fellows." I never did
attribute those incidents to any of the major men that we talked to.
But I had these calls where they were going to get me. They were
going to run me over. I was being trailed. They were going to get my
youngster. Our house was going to be burned down, and all those
things.
Then it was not too long ago that a very nasty incident happened
where five whisky bottles full of bad stuff and also a lot of — I don't
know how to call — were thrown upon my porch, thrown into my door
and just missed coming into my living room. I never bothered to
say anything about it. I believe this is the first time I have ever even
mentioned it, because I attribute those things to overzealous crackpots.
The Chairman. When was that most recent incident?
Mr. Florer. Just about 3 or 4 months ago.
The Chairman. This present year?
Mr. Florer. Yes. That happened twice.
One took place one week and one the other. I have not been
bothered, on the whole.
In 1047, that was the year when we were new and they tried to
intimidate us, but we have not been bothered at all since then. I feel
complimented that they have not even tried to buy me out.
.Mr. Ktck. Along that line, have there ever been any offers to you
to lay off?
Mr. Florer. Not to me.
Mi-. Kick. How about that hospital? What was the story on that,
Mr. Florer?
Mr. Florer. The Booth Hospital?
.Mr. Florer. Booth Hospital had a campaign, a building-fund drive,
a couple of years ago. They were trying to raise $175,000 and there
was a contribution or a pledge made to Booth Hospital by what they
call the Tavern Owners Association and $52,000 was to be paid
through the slot machines. We found this all out considerably later.
ORGANIZED CRIME IX INTERSTATE COMMERCE 65
$1,500 a month was to be paid on that $52,000 pledge. Of course, it
had no connection with our organization. We had nothing to do with
it. However, we did condemn the action severely. But here is what
happened with the thing.
We were putting our pressure on for law enforcement. Ihe
syndicate tried to get the Booth Hospital to get us to lay off or they
weren't going to pay the $52,000.
Mr. Rice. So the syndicate was taking advantage evidently of the
tavern operators?
Mr. Florer. Yes. The tavern owners made the contribution. That
was the way it was supposed to be. It looked then as if they wanted
us to lav off.
Mr. Rice. Has there ever been another way of checking the
syndicate, the out-of-State mob, with the local operators and con-
necting the two? Did they seem to operate with one another or
cooperate with one another? You have 111 ticker services. Some
would be local boards and some representatives of the out-of-State
mob.
Mr. Florer. I never went into the difference between the local and
out-of-State. because they are evidently so entwined and so coopera-
tive with each other, whatever the deal or set-up is, that all I am
interested in is the effect that it is having on our situation.
Mr. Rice. The effect is it is a smooth-flowing operation without
gang wars between local and out-of-town mobs. They are both able
to arrange the accommodations?
Mr. Florer. We have had no gang wars because the operation is a
very smooth one and a very good one.
The Ciiairmax. Just in that general connection, our own informa-
tion is that for the past 2 years of 1948 and 1040. the gross receipts of
these various operations were almost a million dollars. We are talk-
ing about the Lookout House. It was $927,000 to be exact. The
information is that the net income from it was three hundred and
thirtv-some-thousand dollars. The individual break-down showing
that indicates that Jimmy Brink's wife got $33,800. Then various
incomes were paid to about 10 individuals, ranging from $41,000 at
the top down to $10,000.
Senator Kefauver. That is net income, isn't it ?
The Chairman. Yes ; that is net income, the partnership distribu-
tion. Did you understand that was about the total of the take ?
Mr. Florer. Oh, we had larger figures than that. The middle
figure is what has been published in the papers down there.
The Chairman. Over what period?
Mr. Florer. Ten years ago. Of course, I would have no knowledge,
that would be just common knowledge. That is our Xo. 1 industry
in Covington, here is how it affects you. You talk about this eco-
nomic situation, Mr. Rice.
Mr. Rice. Yes.
Mr. Florer. I want to bring this out to you.
Mr. Rice. All right.
Mr. Fl<»rer. There are two large corporations who were looking at
Covington just recently.
Mr. Rice. For the purpose of locating there ?
66 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Florer. Yes, sir. They came down and made a survey, and
these two outfits would have employed a lot of people and make a
great contribution in the way of large employment.
Mr. Rice. They would have hired hundreds of people?
Mr. FLORER. They would have hired hundreds of people, it was a
large operation and a national operation. They refused to come to
northern Kentucky because of the fact of the wide-open gambling
situation, that it was not conducive to good labor relations, and we
lo>t those two. They would have come to our vicinity. So
Mr. Kice. Did they cite their reasons ?
Mr. Florer. Definitely.
Mr. Rice. Did they say that it would be due to the loss of employed
time?
Mr. Florer. The loss of earnings, and of gambling.
Mi-. Kick. And broken homes i
Mr. Florer. And they said they had enough trouble with keeping
their business, well, operating, with good labor, but when all these
things were in their minds, they realized that it was too difficult.
So it is also affecting the economic life of the community.
The Chairman. Just in that connect ion, Mr. Florer, having referred
to these figures, the partnership distribution which, of course, on the
books would show about a million dollars, with the net distribution
of about $330,000, and with those different apportionments as I men-
tioned, ranging from $41,000 down during that time, was the injunc-
tion outstanding?
Mr. Florer. Since 1939. Since 1939 that injunction has been on
the Lookout House. And there have been many instances where it
should have been enforced, where cases have been brought before the
courts to show that that injunction should be enforced.
The Chairman. Senator Kefauver, do you have any questions?
Senator Kefauver. Is the Colony Club in that county?
Mr. Florer. I don't think so ; no. I don't recognize that name at
all, Senator.
Senator Kefauver. We had testimony in Cleveland showing that
the ownership of several of these clubs, and the operations of them,
was by this Cleveland gang, that is, most of the ownerships — no; I
guess the Colony Club is at Chesapeake, Ohio.
Mr. Rice. It is up in Ohio, Senator.
Senator Kefattver. That is right; but the same fellow, Sam
Schroeder, is in it.
Mr. Florer. Sam Schroeder, I believe, is connected with the Look-
out House.
Senator Kefauver. Yes; and he also was connected with the Colony
Club.
Mr. Rice. And he was also in the Beverly Hills Club.
Senator Kefauver. It looks ns though there might be some resent-
ment about the out-of-State mobsters coming in and taking a tre-
mendous amount of money away from the home people.
Mr. Florer. Resentment from whom?
Senator Kefauver. From the local people.
Mr. Florer. Well, the people are resenting this. It has gotten to
the point where they feel there is no recourse, really, and we are at a
loss to know what to do, or the people are.
ORGANIZED CRIME IX INTERSTATE COMIMERCE 67
I am not speaking for myself. You can hear it from the man on
the street, and he will tell you. they have said to us, first they would
say, "Why don't you do something '." We have t ried to do something,
and finally Ave have done so many things, the idea is that you fellows
are just bucking your heads against a stone wall with no cooperation
from the law-enforcement officials, or any officials.
In fact, there has only been one public officeholder in our count}'
that has made any attempt at law enforcement, and that is Mr. Mo-
loney, the city commissioner.
Senator Kefauver. Do the people know that these fellows have
substantial operations in Michigan. Ohio, and Kentucky, and that
apparently very easily they raised a million and a half dollars to put
into the Desert Inn, and that a big part of their money is coming out
of the people in Kenton and Campbell Counties, Ky. 2 Do they know
that ?
Mr. Florer. Those people who follow the situation are aware of
the widespread connections. Really, it is so widespread that it is
hard to know just whether they are connected with Cleveland, De-
troit. Los Angeles, or Chicago. They do know that the tie-up is with
the national outfit. It has already been proven that it is.
We cannot understand how the local situation develops, whether it
is such harmony in the ranks over there, and we cannot determine
just to what extent the local area profits. We do know that there is a
50-50 take on slot machines. That we have definite evidence of, that
when a slot-machine collector comes around to the slot machines, he
takes 50 percent and gives the other 50 percent to the tavern owner.
Senator Kefauver. The record shows how they are divided. All
the papers would need to do would be to look at the record. It is in
the record. That is how the partnership divides the profits of all of
these clubs between the local people and the members of the larger
syndicate.
Mr. Florer. Will the record show that, how they are divided?
Senator Kefauver. Yes. Mr. Giesey. in testifying at Cleveland,
gave a breakdown of how much each got, as I recall.
Mr. Rice. Xo, Senator; I don't believe it did.
Mr. Florer. Is there any way in which the records would be avail-
able?
Senator Kefauver. Well, I have seen the records. I think Mr. Rice
is going to bring that out today.
Mr. Rice. Yes, sir.
Senator Kefauver. Another thing that seems a little bit bad to
me, and I am sure you have thought about it a great deal, too, and
that is that when there is an occasional raid or an arrest, they prob-
ably get some poor little operator who is a front for this big syndi-
cate.
Mr. Florer. That is right.
Senator Kefauver. Is there any effort to get Kleinman, Tucker,
McGinty, and Rothkopf ?
Mr. Florer. In our. organization we have, of course, been attacking
the local situation at the local level, and we have refused to become
vigilantes and go around and pick up the little fellows :
yVe have been trying to hit at the big places, and these sporadic
raids are always on little saloons, and things like that. We never see
68 ORGANIZED CRIME IN INTERSTATE COMMERCE
very many cases of where they really — well, of course, the officials
arc absolutely refusing to go into the situation at all, and there is
nothing thai can be done about it.
The Chairman. Mr. Florer, throughout the entire period has any
arrest been made of t he big mobsters to whom reference has been made
here this morning?
Mr. Florer. As soon as Sheriff Berndt took office, he conducted a
raid on the 627 Club, and I believe the Kenton Club. That was right
after he took office, and we issued public praise of him, and we
thought that here maybe we were going to have some semblance of
law enforcement. That was right after lie took office. We went down
to talk to him about it.
Of course. 1 cannot say why he made those two raids when every-
thing else was going on as usual, but we were greatly disappointed
in the fact that the sheriff did not continue to raid the big places.
Senator Kefauver. Mi-. Chairman.
The Chairman. Senator Kefauver.
Senator Kefauver. 1 think the record shows that Rothkopf and
Kleininan. although they began operations in the rum-running days,
did serve a short time, taking a rap on an income-tax case back in the
early thirties. The man who made the case against them was this
fellow Giesey and as soon as they got out of jail, they employed Giesey
to be their auditor, and he has been acting as such since.
But as to the other members of the syndicate, Dalitz and Tucker
and McGinty, the record, I believe, shows that they got arrested one
time way back in the late twenties or thirties, but they never have been
convicted of anything, although they flagrantly operate in about
five or six States.
It would seem to me that with these operations going on in Ken-
tucky, that there ought to be some conspiracy statute, so if you could
get one person, then the others are partners in the enterprise, and
Air, Florer. You mean the officials?
Senator Kefauver. Yes; the officials; and they get the money, and
have been getting it for a long time.
Mr. Florer. I believe that the officials are guilty right now of mis-
feasance and nonfeasance. There is no question about that.
Senator Kefauver. They are guilty, certainly, of conspiring with
local people to operate, and they are operating. I cannot see any
reason why, if you can establish the fact that they are operating, and
there doesn't seem to be any doubt about that, they all admit it, why
the big fellows should not be gotten, too.
For your information, Dalitz and Tucker testified before the com-
mittee at Los Angeles at that time, that they were resting over in
Desert Inn, at Los Angeles they testified before the committee that
there isn't any question about their operation. It would be a great
public service if something could lie done about those big-time opera-
tors. That is one of the biggest gangs in the United States, for your
information.
Mr. Florer. Well, we hope that the day will soon come when
we can get somebody to enforce the law. We are at our rope's end
in north Kentucky with the present officials. There is no doubt
about that. Because we have exhausted all efforts now7 to get them
to do something, except to take legal action against these officials, and
ORGANIZED CRIME EST INTERSTATE COMMERCE 69
I suppose that rather than to give up the fight that would have to
be the last act.
Senator Kefauver. I think you will find — and we should check to
make sure that this is true — that on August 18, George S. Robinson,
who at that time was associate counsel to the committee, August 18,
1050, that he probably wrote a letter to either the chief of police or
someone, as to the ones who had racing wire service in Kenton County,
or in the city of Covington, which list was taken from the report of
the McFarland committee, because it was brought out in Cleveland that
on that date, August 18, 1050, he did write a letter to the chief of
police at Newport, Mr. Gugel, in which he listed all of the places that
had wire service, and he asked the chief of police what he was going
to do about it, and how come, and whether he was going to ask for a
report about these operations.
That is set out on page 378 of the Cleveland hearings. Mr. Robin-
son never got any response to that letter. As I remember it, talking
with him he said also that he had sent some law enforcement official
in Covington or in Kenton County a similar list.
You don't know anything about that?
Mr. Florer. I don't know anything about that. But, if it got the
action that we were getting, there wTas nothing done about it. That
shows you that we cannot get any law enforcement in Kenton County.
I will say this, that Judge Goodenough does charge the grand jury
according to the law to investigate gambling, but for some reason
there is no attempt made to get at the matter at all through our grand
juries. Our grand juries are a great mystery to me. I cannot for the
life of me understand how time after time and year after year we
cannot come up with one grand jury that is willing to investigate and
make a thorough and honest investigation.
But we have gotten all kinds of reports that are insults to the pub-
lic intelligence, and the last grand jury report was, to my mind, an
insult to public intelligence, beeause it was called a "noble report,"'
whereas nothing actually was done about it, and the grand jury will
come out, and instead of facts on matters, they come out with recom-
mendations for legalized gambling. They say, "We think it ought
to be legalized."
Senator Kefauver. And they have come out with critical remarks
about this committee?
Mr. Florer. This last report was very critical.
When the May grand jury recessed, there was some oral conversa-
tion between the judge and the jury. They were going to recess until
June 25, they were not going to make their final report, and that con-
versation was very interesting.
When he asked how many of the grand jury thought that the hand-
books ought to close up, too, only three of the grand jurors held up
their hands. It was quite an unusual demonstration of conduct by
a grand jury, and only three of them held up their hands.
So there is another problem. We cannot seem to get a grand jury to
do anything. I don't know how far the control goes in Kenton
County, but it is certainly well enough so that we can get nowhere.
The Chairman. Senator Hunt, do you have any questions?
Senator Hunt. No questions.
The Chairman. All right, Mr. Florer. We are very much obliged
to you.
70 ORGANIZED CRIME IN INTERSTATE COMMERCE
Thank you very much for coming and giving us the benefit of your
information.
Mr. Kick. I wonder if we might retain this chronology.
Mr. Florer. Yes, sir.
Mr. Rice. Thank you.
Mr. Florer. I would like to express to you the sentiment of Kenton
( lounty for the thing you are doing in the Nation.
The Chairman. Thank you very much.
Senator Kefauver. Mr. Chairman, I think it ought to be said that,
of course, the committee has known something about Mr. Poorer for
a long time, and he certainly deserves to he highly commended as a
good citizen who, in the face of terrific odds, is trying to do some-
thing about a bad situation.
Mr. Florer. Thank you, sir.
The Chairman. That certainly expresses our views.
Mr. Florer. Thank you.
The Chairman. Mr. Moloney, please.
Mr. Moloney, we are swearing all witnesses. I suppose you have
no objection.
Mr. Moloney. No.
The Chairman. Will you raise your right hand, please.
In the presence of the Almighty God, do you swear that your testi-
mony shall be the truth, the whole truth and nothing but the truth?
Mr. Moloney. I do.
TESTIMONY OF JOHN J. MOLONEY, COMMISSIONER, CITY OF
COVINGTON, KY.
The Chairman. Kindly give us your full name, please.
Mr. Moloney. John J. Moloney.
The Chairman. Mr. Moloney, what is your residence, please?
Mr. Moloney. 616 East Twenty-first Street, Covington, Ky.
The Chairman. For how long have you lived in Covington ?
Mr. Moloney. I have lived in Kenton County and Covington all
my life.
The Chairman. All your life?
Mr. Moloney. Yes.
The Chairman. And what is your business or profession?
Mr. Moloney. I am connected with the Chesapeake & Ohio Rail-
road, and am also commissioner in the city of Covington.
The Chairman. Commissioner?
Mr. Moloney. That is right.
The Chairman. How long have you been a commissioner in Cov-
ington?
Mi-. Moloney. I took office January 1, 1950.
The Chairman. What year?
Mr. Moloney. 1950.
The Chairman. All right, sir. What is your position wTith the
Chesapeake & Ohio?
Mr. Moloney. Yardmaster.
The Chairman. Yardmaster?
Mi-. Moloney. Yes, sir.
The Chairman. At Covington?
Mr. Moloney. At Cincinnati.
ORGANIZED CRIME IN INTERSTATE COMMERCE 71
The Chairman. At Cincinnati. But, I mean, you are living in
Kentucky, are you not ?
Mr. Moloney. Yes, sir.
The Chairman. All right, Mr. Rice, will you proceed, please.
Mr. Rice. You took office in January of 1950?
Mr. Moloney. That is true.
Mr. Rice. As a city commissioner in Covington?
Mr. Moloney. That is true.
Mr. Rice. How many commissioners are there, Mr. Moloney?
Mr. Moloney. There are four commissioners.
Mr. Rice. Four commissioners?
Mr. Moloxey. Yes, sir.
Mr. Rice. Is there a city management form of government there,
too?
Mr. Moloney. That is true.
Mr. Rice. The commissioners selecting the city manager?
Mr. Moloney. Yes, sir.
Mr. Rice. I take it, then, that the city commissioners more or less
formulate the policy for the city?
Mr. Moloney. Well, the city commission is made up of the mayor,
who is the chief executive officer of the city, and the city commission.
The mayor is also presiding officer of the commission.
Mr. Rice. Then there are five?
Mr. Moloney. That is true.
Mr. Rice. All right, sir. We are interested in this profit-sharing
plan that we have heard something about down there in Covington.
Can you tell us a little bit about how you were approached on the profit-
sharing plan, and what that is?
Mr. Moloney. The first time that I was approached on it, the only
real direct approach I had, I had many approaches, but they were more
or less nebulous and indirect, but the first approach I had was in
February of 1950.
Mr. Rice. You took office in January?
Mr. Moloney. That is true. The first of January. This was prob-
ably in the middle of February. It was after a meeting of the com-
mission. The commission meets on Thursday, so it had to be on a
Thursday in February. I don't know the exact date.
I was approacted by a man, and he asked to see me. It was in the
press room after the meeting, and he asked to see me. We went out
in the hall, and there were no witnesses. He told me of a profit shar-
ing plan they had there, and I asked him what he meant by that. He
said, "Some of the boys share their profits with the men in office,"
and he said they were willing to take me along with that.
I told him that I was not interested. He went on to explain that
it was all right, that if I did not take it I would be blamed for it
anyhow, so there was no sense in turning it down. I still insisted on
not doing it.
The Chairman. Will you keep your voice up ?
Mr. Moloney. Yes. And he said that he would be around any time
I changed my mind. I told him I did not think I would, and the con-
versation ended there.
Mr. Rice. Well, now, you said this individual approached you. Was
he an official, another official ?
Mr. Moloney. Not in the city government, no.
72 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. You knew who it was, though, and you know now ?
Mr. Moloney. Yes; I do.
Mr. Rice. Who was it?
Mr. Moloney. Tate Hageman.
Mr. Rice. Tate Hageman? How do you spell that?
Mr. Moloney. T-a-t-e H-a-g-e-m-a-n.
Mr. Rice. And you say he was another official ?
Mr. Moloney. He is with the State alcoholic board, I believe.
Mr. Rice. What office does he hold ?
Mr. Moloney. I think he is the State representative for Kenton
County.
Mr. Rice. I see, And he said — what did he say about the boys?
Mr. Moloney. The boys, I assume lie was referring to the gambling
interests.
Mr. Rice. Yes. What did he say the boys were doing?
Mr. Moloney. Well, that is what he said, the boys in the gambling,
I am pretty sure he made it specific that it was the gambling interests.
I don't remember the exact wording.
Mr. Rice. That they had a profit sharing plan ?
Mr. Moloney. That is true.
Mr. Rice. And in that plan were included the city officials?
Mr. Moloney. That is true.
Mr. Rice. And that it was about time you started participating in
that?
Mr. Moloney. They were willing to take me into it.
Mr. Rice. You did not get down to talking facts and figures?
Mr. Moloney. No. I don't know how much it was to be. He never
mentioned that.
Mr. Rice. But you got the impression that he was spokesman for a
group?
Mr. Moloney. I would think so, yes. That was my impression.
Mr. Rice. Wei, you immediately became incensed a little bit, and
you didn't go into it ?
Mr. Moloney. I don't know whether you have ever been offered any-
thing of that sort, but I felt rather ashamed that a person would think
T would take it, and I must say that I was not myself, or I might have
found out how much there was in it, how much money would be in-
volved, but I became angry then, and I was very desirous of cutting off
the conversation.
Mr. Rice. You did tell at least one person later on that that con-
vei-ation had taken place, didn't you?
Mr. Moloney. I told several, yes.
The Chairman. To whom did you report it, Mr. Moloney?
Mr. Moloney. I did not report it officially. It was with friends.
One of them was Judge Benzinger, the police court judge.
The Chairman. But I mean, you did make it known to him shortly
afterward?
Mr. Moloney. That is true, without any idea of any official action,
of course, because I had no proof.
The Chairman. Thank you.
Mr. Rice. Well, so it might be clear to us. Mr. Moloney, normally it
would appear that a racket operation would arrange protection from
law-enforcement officers.
ORGANIZED CRIME IX INTERSTATE COMMERCE 73
Mr. Moloney. That is right.
Mr. Kice. Now. you are a city commissioner ?
Mr. Moloney. That is true.
Mr. Rice. And there was an effort made, or an effort being made to
approach you to what they call "put the fix in" with you ?
Mr. Moloney. Yes.
Mr. Rice. Why was that necessary? Why is that necessary in
your town to arrange to have a city commissioner on the side of the
racket interests?
Mr. Moloney. Well, the set-up of the city management form of
government would probably answer that. The commission chooses a
city manager.
Mr. Rice. Yes.
Mr. Moloney. He is the administrative officer of the city.
Mr. Rice. Yes.
Mr. Moloney. The city commission forms the policy. Any change
in policy on the commission could likewise result in a change of policy
enforcement.
Mr. Rice. And that would be felt all the way down the line?
Mr. Moloney. That is true.
Mr. Rice. How about the chief of police and law-enforcement offi-
cials, how are they picked?
Mr. Moloney. Thej^ are selected by the city manager.
Mr. Rice. Yes.
I ' r. Moloney. And-
Mr. Rice. And the city commission controls the city manager \
Mr. Moloney. That is right.
Mr. Rice. So you could work from the top down ?
Mr. Moloney. That is right.
Mr. Rice. I think that is clear.
Have you ever discussed cleaning the town up with your other
commissioners or the mayor ?
Mr. Moloney. Yes. Right after this happened. I did. I had read
of a lot of things that were happening throughout the country in con-
nection with this committee and their investigations, and there were a
lot of newspaper reports, and it seemed to form a pattern that Coving-
ton fit right into.
So I was sure that we were part of that national — or we were part
of that plan that was national in scope. Of course, since that time,
why, this committee has definitely proven that.
Mr. Rice. You felt even then that there were outside syndicates
operating in your county ?
Mr. Moloney. Yes. Well, there, you take strange men in town,
gambling operators of different sorts. The}' were probably small
operators, ma}7be just working in the clubs and things of that sort.
You would hear complaints from people on the street about them.
Of course, I was not in any way connected with any reform move-
ment, but my interest was purely as a city official, to try to do my
sworn duty.
Mr. Rice. All right. Now, then, did you discuss that with the
mayor or other members?
Mr. Moloney. Well, whenever I discussed it with any of the other
members of the board, they would just laugh it off.
Mr. Rice. Well, did you go a little bit further than that one time ?
74 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Moloney. Well, this one time, I remember, I had a statement
prepared to read before the commission, and the mayor was a little bit
late in arriving that day, and I told him
Mi. Rice. You had a statement?
Mr. Moloney. Yes.
Mr. Rice. What was that about?
Mr. Moloney. To close gambling, asking the commission to do so.
Mr. Rice. You were going to take a stand against gambling?
Mi-. Moloney. That is right. And I told the mayor that I was
going to come out against gambling that day. He asked me how I
meant that, and I said, "Here is the statement.'' I gave it to him,
and I was very much incensed by it, and he said that it would put
them all on a spot. He asked me to withhold it. I did withhold it,
but I told him I would come back the next week.
During the week I was approached by several people, and they
asked me, as a first step, not to bring it before the commission, but to
write a letter to the city manager, as the administrative officer, and
have him do it, and I did write that letter.
Mr. Rice. Who is the mayor?
Mr. Moloney. William F. Rolfes.
Mr. Rice. And you say he asked you. not to make that statement?
Mr. Moloney. Yes ; because he said it was putting them all on the
spot, coming out that way.
Mr. Rtce. Putting them on the spot?
Mr. Moloney. Yes.
Mr. Rice. Yes. Did you put the city manager on the spot ?
Mr. Moloney. Yes. I wrote him a letter the following week.
Mr. Rice. And I think we have had ample testimony this morning
from Mr. Florer that nothing happened, in any event, anyway.
Mr. Moloney. Well, something did happen.
Mr. Rice. Something did happen?
Mr. Moloney. Yes. I must say this much for the city manager and
the chief of police, I believe that they did try to carry out that order.
I have the letter here that I wrote, and it merely states
Mr. Rice. You may give us the high spots of it.
The Chairman. First of all, the date.
M r. Moloney. The date of it is May 3, 1950.
The Chairman. Thank you.
Mr. Moloney. I lined up in there :
It is well known that commercialized gambling flourishes in this city without
any interference from our law-enforcement agencies. The local press has re-
peatedly reported various actions of these groups and seems to be of the general
opinion that some branches of government have a working agreement with them.
I propose to offer do proof that these conditions exist — I do not have it.
But it was generally felt that this condition did exist. And I also
state :
Assuming that the condition does exist: No reasonable person could be ex-
pected to believe that the power of the people must be shared with any interests.
As no man can st'vye two masters, so can no one charged with any duty to this
City cany out instructions from Louisville. Cleveland, New York, or any other
city where these interests are reputed to have agents or headquarters, or, for
thai matter, from within our own boundaries — and faithfully serve this city.
So long as these interests operated unmolested, the ugly shadow of corruption
hangs over the bead of every official or officer charged with duties in Covington,
like the sword of Damocles suspended by a fragile hair. We cannot enjoy tk»
ORGANIZED CRIME IX INTERSTATE COMMERCE 75
confidence of our constituents and give tacit approval to syndicated combines
operating in open violation of the law.
I am addressing you as the city manager, anil ask that these interests be given
until Monday, May 8, to get all of their equipment out of the city. After that
date it will be your task to see those Instructions are enforced. Anyone failing
or shirking in your instructions must appear before the commission with formal
charges placed against him. No vacations or leaves should be granted while the
task is being performed.
And that is the general gist of it.
The Chairman. To whom was that addressed ?
Mr. Moloney. To George S. Lyon, city manager, city of Covington,
Ky.
The Chairman. What was the result? Was it acknowledged by
him ?
Mr. Moloney. No; he did not acknowledge the letter, but Monday
morning, why, all gambling prepared to close down. That was the
8th, the date that I had set for it.
I believe the slots stayed out all dav.
Mr. Rice. All day?
Mr. Moloney. All day.
Mr. Rice. Yes.
Mr. Moloney. I am not quite sure. There might have been some
scattered ones, but it was the general opinion that they stayed out for
the entire day. But in the afternoon the larger casinos opened up.
and some of the smaller clubs failed to open, but the grand jury con-
vened not long after that, and, of course, it closed down, but in the
meantime, between the time the grand jury convened and May 8, there
was gambling.
I don't know whether it was on quite as large a scale. There might
have been some people who decided they would not operate. I never
made any investigation. But so far as the general policy of enforce-
ment was concerned there was no change.
Mr. Rice. You don't think it was anything but a token service
there?
Mr. Moloney. That is right.
Mr. Rice. What happened in the afternoon to take the lid off again?
The lid didn't stay on very tight ; did it I
Mr. Moloney. The lid did not stay on. Oh. there are a lot of stories
around that you hear happened. Certain people walked in the court-
house and said, "We can't have anything to do with this." I have
never been able to put my finger on any definite one who did it.
Mr. Rice. Well, there was one thing that interests me a little fur-
ther; back in your testimony, during the week of grace you gave
the mayor this week of grace more or less, before you made the state-
ment, you said that some feelers came to you then, or were you
approached during that week \
Mr. Moloney. No; I was not approached during that week that I
can recall. There may have been some, but it was nothing in the
nat ure of anyone coming to me with any offers.
It was shortly after that, or during that week. I am not quite sure
which, that one man. who was interested in slot machines, Benny
Keyes, came to me and asked me not to do it. He told me that he
would get down on his knees if he thought it would help me decide
not to do it.
76 ORCANIZI.l) CRIME IN INTERSTATE COMMERCE
Mr. Rick. He said he was going to get down on his knees to stop you
from making any statement against the slots?
Mr. Moloney. Yes; but he made no offers at the time.
The Chairman. Did you later have any offers?
Mr. Moloney. Well, they sent someone else who was not involved in
it at all. it was just a friend of mine, to tell me — there was no money
involved in it — and it was that 1 was to have complete control of the
police force, the hiring and firing, and of promotions, that my word
would go, and the same would hold true in the gambling establish-
ments around Coyington.
The Chairman. In other words, if yon relented and let up, that you
would have the appointive power in the police department, and could
appoint anybody else in the gambling establishments (
Mr. Moloney. That is true.
The Chairman. All right. When was that?
Mr. Moloney. I don't know the exact date of that. It was some
time t hat spring.
The Chairman. And by whom?
Mr. Moloney. Well, this Keyes had sent a friend of mine, who is
not involved at all.
The Chairman. The offer actually came from Keyes, are we to
understand?
Mr. M< loney. That is right.
The Chairman. All right. Thank you.
Mr. Rice?
Mr. Hick. How about the time that Policeman Jackson picked up a
slot machine. What was the story on that?
Mr. Moloney. Well, that was while I was running for office. That
was my first attempt at politics.
.Mi-. Rice. That would, then, lie in 1049?
Mr. Moloney. That is true, in the fall of 1949. I don't know the
date. I remember the case, though.
It seems that he raided a slot machine at, oh, let's see, I believe it was
at Seventh and Madison.
Mr. Rick. He raided one machine?
Mr. Moloney. One place; I believe there were two machines there,
I am not sure of that.
Mi-. Rick. Was that at the Madison Grill ?
Mr. Moloney. That is it. I was trying to think of the name. It
was the Madison Grill.
And there was one of the slot-machine men, when he got down to
headquarters, was supposed to have reprimanded him very severely
in front of his superior officer.
Mr. Rick. What do you mean, a slot-machine man \
Mr. Moloney. One of the men connected, in some way connected,
with the servicing of the machine.
Mi-. Rice. Distributing, servicing, and running the machine?
Mr. Moloney. That is right .
Mr. Rick. Who was that fellow?
Mr. Moloney. His name was Cliff Brown. It appeared in the
papers; that is how I found out about it.
Mr. Kick. Cliff Brown?
M r. Moloney. Yes.
Mr. Rice. What did he do to Jackson?
ORGANIZED CRIME IN INTERSTATE COMMERCE 77
Mr. Moloney. He reprimanded him far raiding the slot machine.
It seemed to be a capital offense.
Mr. Rice. He came right into the police station after him?
Mr. Moloney. Yes.
Mr. Rice. Is Brown associated with Jimmy Brink, who took over
the Lookout House? He is. isn't he?
Mr. Moloney. I understand he is from all reports; yes.
Mr. Rice. Part of the big syndicate?
Mr. Moloney. Yes.
Mr. Rice. Do you know whether any convictions resulted from
that slot-machine case?
.Mr. Moloney. I am not sure. I don't remember the disposition
of the case.
Mr. Rice. What became of Jackson?
Mr. Moloney. Well, Jackson was tried for being intoxicated, I
believe, and given a suspension.
Mr. Rice. On that ?
Mr. Moloney. I don't know whether he was intoxicated that time.
Mr. Rice. They said he was intoxicated and didn't know what he
was doing?
Mr. Moloney. That was not the case, the intoxication charge was
entirely separate.
Mr. Rice. I see.
Mr. Moloney. Whether he was supposed to be intoxicated that
night, or whether they picked him up later for that, I don't know.
Mr. Rice. But they got him off the force?
Mr. Moloney. That is right. Well, no; they didn't take him off
the force. He is off the force now. He quit. But at that time he was
suspended.
Mr. Rice. All right, sir. Have you information about what the
payoff amounts to in this profit-sharing plan?
Mr. Moloney. Oh, you hear all sorts of things. I know there are
just general opinions around town.
Mr. Rice. It actually now is down to dollars and cents, isn't it?
Mr. Moloney. I mean
Mr. Rice. What is the story on the protection, the pa}T off, as you
understand it, as a city official?
Mr. Moloney. Well, as you heard among most people, it is gen-
erally believed that a commissioner is supposed to get $100 a week,
the mayor $150, and the detectives
Mr. Rice. Go a little slower. Let me get that. The commissioner
gets what ?
Mr. Moloney. One hundred dollars a week.
Mr. Rice. And you would be one of those ?
Mr. Moloney. Don't say that I got it.
Mr. Rice. Yes; but I mean, you would participate in that, if you
did go along.
Mr. Moloney. Yes. And the mayor is supposed to get $150 a week.
Mr. Rice. Yes.
M r. Moloney. And the detectives are supposed to get $150 a month.
Now, you hear all kinds of other stories. I have never heard any-
thing that sounded plausible on what they paid other people. Of
S.V277— 51 — pt. 15 -6
78 ORGANIZED CRIME IX INTERSTATE COMMERCE
course, it is generally agreed that on the police force there are some
men who received nothing, and so far as my knowledge is concerned,
I have seen no money change hands at any time.
Mr. Kick. How is that money picked up and gathered together for
the profit sharing? Is that on a percentage hasis, or how does that
work 1
.Mr. Moloney. That is the part that proved to me there was a con-
ceited effort. I don't know how it is done, but it has to be that there
is some organization behind it.
Mr. Rice. Were there any rumbles about who the bagman is, who
is the boss that makes the arrangements and advises the participants
as to how much they shall pay?
Mr. Moloney. Well, you hear all kinds of things, but there it noth-
ing you can really put your finger on that would be of any value.
Mr. Rice. It does not appear there was any investigation to really
follow up those rumors that reached you.
Mr. Moloney. No.
Mr. Rice. It has never been satisfactorily explored, so far as you
are concerned?
Mr. Moloney. That is true.
Mr. Rice. Now, then, there was a time when there was a real sub-
stantial figure offered you, w7asn*t there, of $50,000, or something
like that?
Mr. Moloney. That was a nebulous sort of offer.
Mr. Rice. What wTas that ?
Mr. Moloney. I think that wTas more or less of a bait, thrown in
front of me.
Mr. Rice. A $50,000 bait was dragged across your path ?
Mi-. Moloney. Yes. This man there was — there was only really one
direct approach, of course, and that was the one I explained to you.
The rest were through intermediaries.
The Chairman. What led you to believe that $50,000 was the
figure?
Mr. Moloney. That figure was mentioned. But it was done in such
a way that a certain party would payit that I know has absolutely no
interest in it.
The Chairman. Did you believe the $50,000 offer was a valid one I
Mr. Moloney. No; and I don't yet.
The ( 'ii airman. Do yon think he was ready to offer anything at all ?
Mr. Moloney. That may have been. 1 don't think this man has
any part in it at all. He is friendly with a lot of people, and he felt
he could talk me into it, if he started out with that, and if I would take
something, one figure, he would probably bring me down to another.
The Chairman. My point is whether or not you believed he was
there to make an offer, or at least to set in motion something by way
of ;iii oiler, and held the $5<>.0<>() figure out to you to see whether you
would bite \
Mr. Moloney. Thai is the way I feel about it.
Mr. Rice, it was in the nature of a feeler, he was feeling you out?
Mr. Moloney. That is right.
Mr. Rick. Thai would he on t he credit side of the ledger, any money
t li.it would be offered.
Now, how about the other side? Were you ever threatened with
anyl hing, violence or int imidat ion \
ORGANIZED CRIME IN INTERSTATE COMMERCE 79
Mr. Moloney. Oh, yes, quite often, phone calls, letters, all of them
anonymous, of course. I saved two of the letters. That 'was all.
Mr. Rice. You say you did get letters ?
Mr. Moloney. Yes.
Mr. Rice. Handwritten letters?
Mr. Moloney. Yes.
Mr. Rice. What did you do with those?
M r. Moloney. 1 have two of them here. I have never said anything
about them. I would rather that they would not be read, because of
the language used in them.
Mr. Rice. Is it obscene?
Mr. Moloney. Yes.
Mr. Rice. I will present — you have them there, do you not?
Mr. Moloney. Yes.
Mr. Rice. Will you present them to the committee?
Mr. Moloney. Yes, I will.
Mr. Rice. What, in general, was the nature of the communications?
What did it tell you?
Mr. M( >l< »m:v. Well, they were warning me that I had better lay otf,
and things of that sort. One of them actually said I would be shot,
that one letter there does.
Mr. Rice. That you would be shot?
Mr. Moloney. Yes, that my body would be found riddled with
bullets.
Mr. Rice. Did you ever submit those to a law enforcement agency?
Mr. Moloney. No, I never did.
Mr. Rice. What was the reason for that?
Mr. Moloney. Well, I just thought they were crank letters. I was
not afraid of them.
Mr. Rice. Because you had no confidence in the law enforcement
agencies ?
Mr. Moloney. No, I wouldn't say that. I could have turned them
over to the Post Office Department.
Mr. Rice. "This is the last warning. Dead on the street."
Mr. Moloney. That is right.
Mr. Rice. "Leave gambling, if you don't want to live very long."
Well, it looks to me like quite a serious matter, and it might be
that the matter constitutes a Federal violation of sending threatening
communications through the mails, Mr. Moloney.
Mr. Moloney. Yes. I probably should have turned them over to
the Post Office Department.
.Mr. Rice. They are dated 1950.
Mr. Moloney. That one, I believe, was 1951.
Mr. Rice. This is 1950?
Mr. Moloney. Yes, that is true.
Mr. Rice. Shortly after you took office ?
Mr. Moloney. 1 have received no threats of late. I know of none
this year.
Mr. Rice. You say you also had follow-ups on the telephone?
Mr. Moloney. Yes. There were people calling me on the telephone
and made threatening remarks about different things, that I had better
not pass certain corners, or something like that, around certain tin»es.
Mr. Rice. Did you connect the telephone calls with the letters, Mr.
Molonev ?
80 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Moloney. Well, there was nothing really to hang them on.
Mr. Rice. But you did connect the telephone calls with your activi-
t ies against gambling?
Mr. Moloney. That was definitely stated in there, if I didn't Leave
gambling alone.
Mi'. Kick. All right, sir.
Do you have any <|iiestions, Senator?
The Chairman. * gain coining down to the oiler that was made to
you, 1 think in Cincinnati wasn't there some conversation once there?
Mr. Moloney. In regard to this $50,000?
The Chairman. Yes. Did you do anything by way of making
that known to any authorities?
Mr. Moloney. No, no.
The Chairman. Or following that, did you have any conversation
at all with the internal revenue people in regard to any other proposal \
Mi-. Moloney. Well, Senator, it is getting to be quite a joke with
me. People around the clubs that I belong to keep saying, k'Why
don't you take your hundred a week and keep your mouth shut?" A
lot of it is kidding, see.
Mr. Rice. Did you ever take any phase of it up with the Treasury
Department or the Internal Revenue Department \
Mr. Moloney. One time I did. There were some men from the
internal revenue who came around, and in this matter — well, some
people had told me that they had set a fund up for such cases as
mine. "In case you ever want it. it is in a bank account."
Mr. Rice. That is, the gamblers do ?
Mr. Moloney. Yes. I asked if they ever impounded such bank
accounts, to let me know.
The Chairman. In other words, did you think possibly that the
gamblers might actually open an account?
Mr. Moloney. It was possible, yes, to show maybe they had been
paying me, see.
Mr. Rice. I will read this into the record, part of it anyhow ; one
of these letters.
This is a warning. You had hetter not close Covington gambling. You and
your friends will lie dead. Your body will be among the missing. Leave gambling
the way it is. If you don't want to live very long, you so and so, this is the last
warning, dead on the street.
Now, I believe that I would turn that over to the Post Office offi-
cials. Mr. Moloney. I would say that constitutes a right serious mat-
ter. A handwriting examination might determine the identity of the
person who sent it.
.Mr. Moloney. All right.
Mr. Rice. We \\ ill return them to you, of course.
Mr. Moloney. You can turn them over to the Post Office Depart-
ment, i f you care to.
Mr. Rice. All right, sir.
The Chairman. All right. That will suffice. We certainly are
obliged to you for coming and making it known, and unless there is
something else that you know of that would be of interest
Mr. Moloney. Everything is of the same nature. I brought it be-
fore the commission at different times, but I never received a second to
my motion.
ORGANIZED CRIME IX INTERSTATE COMMERCE 81
The Chairman. Nobody every seconded your motion ?
Mr. Moloney. No.
The Chairman. Thank you.
By the way, I am very anxious to have a copy of your statement if
you would not mind leaving it.
Mr. Moloney. Here are all of them.
The Chairman. We would like to have it marked for the record
and we will be glad to return them to you.
(The documents referred to were marked "Exhibit No. 9," and were
returned to the witness after analysis by the committee.)
Mr. Rice. Judge Joseph Goodenough.
The Chairman. Judge Goodenough, all of our witnesses are sworn.
Will you raise your right hand, sir.
Judge Goodenough. Certainly.
The Chairman. In the presence of the Almighty God, do you swear
the testimony you shall gve shall be the truth, the whole truth, and
nothing but the truth ?
Judge GoQfiENOUGH. I do.
TESTIMONY OF HON. JOSEPH P. GOODENOUGH, JUDGE, KENTON
CIRCUIT COURT, COVINGTON, KY.
The Chahiman. Now, Judge, will you give us your full name,
please.
Judge Goodenough. Joseph P. Goodenough.
The Chairman. How do you spell your name?
Judge Goodenough. I wanted you to ask that question. I do not
have a personal card, but here is my political card.
Mr. Rice. In any event, it is spelled G-o-o-d-e-n-o-u-g-h ?
Judge Goodenough. That is right.
The Chairman. Thank you, Judge. And you are judge of the Ken-
ton Circuit Court ?
Judge Goodenough. I am judge of the Kenton Circuit Court,
Senator.
The Chairman. And your residence is in Covington?
Judge Goodenough. No, I live at 7 St. Joseph's Lane, Park Hills,
which is a suburb of Covington.
The Chairman. But your headquarters are in Covington?
Judge Goodenough. Yes. I have a brief statement. May I read it
into the record ?
The Chairman. We will be happy to have you do so.
Judge Goodenough. I voluntarily accepted the invitation of the
Senate Crime Investigating Committee and came here at my own ex-
pense, to defend my own reputation as an individual and as a judge
of the Kenton Circuit Court, and to defend the reputation of the good
citizens of my community.
The Chairman. I apologize to you, Judge. I was busy. I would
like to hear your entire statement. Do you mind starting over again?
Judge Goodenough. All right, Senator.
I voluntarily accepted the invitation of the Senate Crime Investigat-
ing Committee and came here at my own expense, to defend my own
reputation as an individual and as a judge of the Kenton Circuit
Court, and to defend the reputation of the good citizens of my com-
munity.
82 ORGANIZED CRIME IX INTERSTATE COMMERCE
As a public official and as a citizen, I wish to commend this com-
mittee and its individual members for the great work it has performed
since its first hearing in Miami, Fla., in May 1950, in exposing the
sordid story of the filth on America's doorstep. Your work has had
a wholesome effect on the gambling situation in Kenton County, where,
for the first time in many years, gambling has been reduced to a nega-
tive state.
I am in a political campaign for reelection. In all political cam-
paigns much is said to further the cause of one side and another.
Down home, by innuendo, insimiat ions, and reflections, it is being said
by those who want to gain political control that because we have had
a gambling situation in our community all public officials and officers
are corrupt and venal. In testifying before the committee, I speak
for myself and for my own good reputation.
There is a great amount of joy, spiritual and mental, in a clear
conscience. In the world today there is much confusion and dis-
comfort because some are living without God and His commandments
and because some are living under the cloud of a bad conscience. A
corrupt public official could not enjoy a good reputation among
lawyers who practice before his court. A corrupt public official could
not enjoy an excellent record in the court of appeals which reviews
his decisions. A corrupt public official, who is living without God
and under the cloud of a bad conscience, could not address men and
women of religious, educational, fraternal, civic, and PTA asso-
ciations on various subjects, on an average of 78 times a year. A
corrupt public official could not meet and greet hundreds of his
fellow citizens each day of his campaign for reelection.
No, a corrupt public official would not possess that joy, spiritual
and mental, which would permit him to go among his fellow citizens
as I am doing in this campaign, asking them for a vote of confidence.
My conduct as judge is a public record. When I became judge, I
began to feel a new sense of responsibility; a realization that humility
and prayer were as important in my daily work as a knowledge of the
Jaw.
In all my judicial decisions, in all my judicial conduct, I have
always chosen the way of humility and justice and fair play to all.
I would rather go down to ignominious defeat than to win reelection
by spreading false, debase, and uncharitable rumors of a fellow man.
"The mouth that belieth, killeth the soul."
Covington, second largest city in Kentucky, lies on a flood plain
of the Ohio River at the foot of the suburban hills that reach back
to a high plain of the bluegrass. The Licking River separates Cov-
ington from Newport. In this setting, Covington looks like a city
on the Rhine. The impression is heightened by the spires of many
churches that taper up from among compact business buildings.
In the panic of 1873 the genius of Covington flowered. John G.
Carlisle and William Goebel grew to national stature politically.
Bishop Maes inaugurated the construction of beautiful St. Mary's
Cathedral. Frank Duveneck painted murals in it and in our Cov-
ington homes.
Since then Ave have grown and prospered. A few persons are now
engaged in the popular pastime of condemning our community and
ic «it izens. Covington and Kenton County are great places in which
ORGANIZED CRIME IX INTERSTATE COMMERCE 83
to live. We have many churches — of all denominations. Our citizens
are God-fearing, churchgoing people. We are morally sound. We
have excellent schools and two tine hospitals. Our crime rate is low.
The growth of the vicious drug habit among the youth of the Nation
has not visited itself upon our community. I repeat that we are
a morally good community and our citizens are morally healthy.
Yes, we have had occasion to do some bousecleaning of the gambling
situation. No doubt there is room for more cleaning. We never did
have and we do not have hoodlums or gangsters. The assassination
of a community's good name is as debase and as vile as the assassina-
tion of an individual's name. No group of politicians should employ
the condemnation of a good community and its good citizenry as a
political escalator to gain political control.
I would like to make part of my testimony an article in one of our
leading daily papers, of Saturday. July 14 :
Too many persons have been engaged in knocking the city and county and
the whole northern Kentucky area for so long that it is hard to find somebody
with a compliment.
A lot of fallacies are being kicked around; much of false doctrine is being
passed out as sage philosophy. As a place to live. Mason Dixon thinks that
northern Kentucky as a whole -has much to recommend it. Its suburban and
downtown sections ; its homes nestling back in the Kentucky hills ; its people
with their southern hospitable ways; its touch of the South and its touch of the
North intermingling ; its airport, its parks, and friendly people ; its vistas of
beauty and so many places ; its taxes, yes, they are high, but what isn't high
these days and it takes a lot of money to run a first-class city. We could go
on mentioning a long list of attractions. We've liked northern Kentucky and
northern Kentuckians have been kind to us.
The Chairman. Just in connection with one phase of the matter,
of course, I did undertake at the very outset, I don't know whether
you were here or not
Judge Goodenough. Yes, I was, Senator.
The Chairman, (continuing). To indicate that in regard to any
political contest that might be in the offing, that is not of our interest
and strictly speaking not our business.
Judge Goodenough. I made a note on that and I was happy to hear
you say that.
The Chairman. That definitely is our belief, because we do not think
it is our function to intervene in any matter of purely local concern.
Judge Goodenough. Yes. You said, Senator, "Committee not in-
terested in purely local matters ; committee not interested in our local
elections." Thanks to the committee.
The Chairman. That is the way we feel.
Now, Mr. Rice.
Mr. Rice. Where do you live, Judge ?
Judge Goodenough. No. 7 St. Joseph's Lane, Park Hills, which is
a surburb, Mr. Rice, of Covington.
Mr. Rice. That is Kenton County?
Judge Goodenough. That is Kenton County, sir; yes, sir.
Mr. Rice. You are judge of what court ?
Judge Goodenough. Kenton County, sir. That is the Kenton
County Circuit Court, criminal, common law. and equity division.
Mr. Rice. Is that a court of jurisdiction with respect to gaming
cases?
84 ORGANIZED CRIME IN INTERSTATE COMMERCE
Judge Goodexough. No, it is not. The police court and county
court have jurisdiction of the misdemeanors; the circuit court has
jurisdiction also of these misdemeanors and the exclusive jurisdic-
tion of felonies.
Mi-. Rice. So it is concurrent with respect to the magistrate on the
misdemeanors, but it has original jurisdiction for felonies?
Judge Goodexough. Yes.
Mr. Hick. All right, sir. In connection with what court are the
grand juries charged ? The magistrate does not have a grand jury?
Judge Goodexough. No, sir. The circuit court, over which I pre-
side, has that responsibility, and it is my duty to charge these grand
juries.
Mr. Rice. How long have you been in office, Judge?
Judge Goodexough. I was elected a police judge in 1928, and I
first served as a police judge of Covington up to 1940, and began
niv present duties as judge of the Kenton County Circuit Court in
1940, down to the present time, and for the purpose of a few Ken-
tuckians who are here I am a candidate for reelection.
Mr. Rice. In what year?
Judge Goodenough. Right now. I have a speaking engagement
tonight, Mr. Rice, too, in fact, so thanks for letting me get home.
The Chairman'. We did understand that you were anxious to leave
and for that reason we thought we would advance the order of wit-
nesses and have you testify earlier than had been intended.
Judge Goodexough. The election is 2 weeks from last Saturday,
August 4 is our election.
Mr. Bice. How long is your term?
Judge Goodexough. Six years.
Mr. Rice. All right, sir. Going back to January of 1951, certain
hearings of this committee were taking place in Cleveland, and there
testimony was adduced, if I am correct, concerning gaming condi-
tions by the big Cleveland syndicate down in your county.
Thereafter, there was a grand jury, I believe, in May or June of
this year.
Judge Goodexough. Yes, sir; right following your Cleveland
meeting.
Mr. Rice. Yes, sir. Now, did you make any charge to that grand
jury respecting gaming?
Judge Goodenough. Now, that would be January 1951?
Mr. Rice. Any time after January.
Judge Goodexough. Well, our grand jury came on in January 1951.
I have a copy of my instructions to the jury with me.
Mr. Rice. All right, sir.
Judge Goodexough. Shall I read it, sir?
Mr. Rice. If it is not too long, the part respecting gambling.
Judge Goodexough. Here it is. I have it right here. [Reading:]
Ladies and gentlemen of the grand jury, today I wish to discuss with you
various violations of our law which has come to my attention through the
press. I particularly wish to direct your attention in violations of die gambling
statutes of Kentucky which I shall have hereafter rend to you, and ask you to
determine why and how gambling exists in your community.
Perhaps you and I have no direct proof that Slol machines and handbooks
are in existence in Kenton County, but as Intelligent citizens we do know that
they do exist. I wan! you to investigate this condition.
ORGANIZED CRIME IX INTERSTATE COMMERCE 85
You have the power to subpena before you any and all witnesses you desire.
You may subpena any peace officer or private citizen. After you have beard
these witnesses you may return indictments againsl all those whom the evidence
discloses are owning, operating, or setting up slot machines or handbooks in our
county.
Let me warn you that you must not permit your personal dislikes to influence
you. You have sworn that you would perform your duty.
Now, here is the Kentucky law pertaining to this -ambling situation. Let me
read these sections of the statute to you one by one.
And I read the insertion.
Mr. Rice. Before yon leave that, would you read the section per-
taining to the statute of* limitations? Did you read that to them?
Judge Goodenough. No; I did not, sir. My idea of the statute of
limitations is that on misdemeanors it is 1 year and that the felony
section is never outlawed, in my opinion.
Mr. Kick. Well, the stat nte specifically calls for 5 years, does it not?
Judge Goodexough. I think that is for the filing of civil suits, I am
not sure about that.
Mr. Rice. It does not say anything about that.
Judge Goodexough. Let us assume that you are right. You could
be, sir. I am not so sure.
Mr. Rice. I am not going to argue with you, Judge.
Judge Goodenough. No ; I don't know. I am not so clear on that.
I did not read that section, sir. I have the sections that I read here.
Then I continued :
May I emphasize KRS —
that stands for Kentucky Revised Statutes — that noise you just heard
is my speech-making watch, Senator. When I talk too long that
goes off. Pardon me.
Senator Keeauver. Judge, we could use some of them around here.
Judge Goodexough. Sir, maybe I had better emulate your sug-
gestion and not read them.
Senator Kefauver. Well, so far, I just came in, but you seem to be
very brief in getting to the point. But what I suggested was that
some of us Members of the Senate might very well have an alarm watch
to let us know when our time is up.
Judge Goodexough. Sir, in this one paragraph I said :
May I emphasize KRS 46350, which pertains to our best officers who have
knowledge or information of the commission of any of these offenses which I
have read to you or who has knowledge of any person engaging in any of these
violations, and who fails to arrest or cause to be arrested the person offending,
this section provides a penalty for any peace officer who violates this section of
our law and provides for forfeiture of office.
The Chairman. May I ask you what the date of that was.
Judge Goodexough. January 1951.
The Chairman. Thank you.
Mr. Rice. Any particular date in Januaiy, Judge?
Judge Goodexough. My best judgment would be about the third
Monday in January. The date is not on here. About the third Mon-
day in January.
The Chairmax. I think you then mentioned that there was a subse-
quent grand jury in the spring.
Judge Goodenough. May, 1951.
The Chairman. That is right. Now, do you have your charge to the
jury on that occasion with you?
86 ORGANIZED CRIME IX INTERSTATE COMMERCE
Judge Goodenough. I have, sir. Now, I believe that this instruc-
tion was inspired by your Cleveland hearing when I for the first time
heard or observed on television that the syndicate had moved into the
Lookout House.
May 7, 1951. [Reading:]
Dramatic events of the past week have focused the attention of our citizens
upon crime, vice, corruption, and gambling, as they exist in some of our American
communities. The Kefauver investigation of interstate gambling and the re-
port of the committee discloses the crime and corruption which have attached
themselves to our communities.
The Kefauver hearings and the report of the committee to the United States
Senate have aroused the citizens from their lethargies. Politicians, public offi-
cials, peace officers, all of us, are squirming under the harsh spotlight of pub-
licity of these hearings.
From these hearings and the report of the committee we learned many lessons.
We Learned that gansters, mobsters, and gamblers in some cities have set them-
selves up beyond the law. We learned that syndicated gambling has infested
our cities and corrupted our officials and officers. We learned that our own
county lias not been free from tins syndicated gambling. We learned, if we did
not already know, that gambling, vice, crime, and corruption are rampant in
many American cities.
We were shocked to learn that the gambling lords, with their money and influ-
ence, have set themselves up in an invisible government. I know of no other
force in American life that could render such a salutary service as a congres-
sional investigating committee in exposing conditions which are inherently evil.
You and I are primarily interested in Kenton County. We should wrant to
know, however, that this evil has attached itself to our community. According
to the evidence before the Kefauver committee, the Cleveland syndicate had an
interest in one of our local places.
The grand jury of Kenton County reported —
and T do not have the quote with me. hut T believe that the grand jury
reported that they had moved out. [Reading:]
Rumor has it that the syndicate is out of our community. It is my information
that no commercialized gambling has flourished in this place or anv other
of our larger places since the last grand jury. This is something. I am satisfied
that no matter how liberal you are, or I. or any one of us may be. that we
should want to keen our country free from all syndicates with the attending
evils. Our law makes no distinction between a saint and a sinner who promotes
and sets up commercialized gambling.
There is more to it. Shall T finish it ?
TV"" Chatrmaist. If it does not have particular reference to gambling
it will not be necessary.
Judo/e Goodenotjgh. It does. And the report of the executive com-
mittee is expressed in this one sentence:
The key to the solution of the nroblem. Crime is largely a local problem.
This grand iury is the people of K°nton County. You are the representatives
of (.tit- citizens. They speak through you. Tour conduct is their conduct. The
report of the Kefauver committee said that the investigators found a close
financial and personal relationship between law enforcement officials and gam-
bling interests in some northern Kentucky communities.
T know the citizens of Kenton Countv are interested in this. T charge you to
investigate this, to investigate crime, vice, corruption, and gambling. You have
the power of subpena. You may cause any witness to appear before you. You
should invito anv citizen to come before you. If there be any evidence before
you that any officer or official of higher station is being corrupted, return an
indictment.
The Chairman-. That is a very forthright statement, Judge.
Judge Ooodexofott. Thank you. Sennfor.
Senator Kefauver. Did you read it all, sir?
ORGANIZED CRIME IX INTERSTATE COMMERCE 87
Judge Goodenotjgh. Yes; that is all. And Mr. Florer paid me the
compliment — we are personal friends, not politically, however, and
he says that I do charge the grand jury.
Mr. Rice. Did you charge the grand jury with respect to the slot-
machine question ?
Judge Goodenotjgh. Yes, sir. I always read the sections of the
statute. It was obligatory to read all of the gambling sections.
Mr. Rice. Did you invite the attention of the grand jury to the news-
paper published list of the slot machines places?
Judge Goodenotjgh. I don't know what date that was, when one of
our papers carried that. That was given to the grand jury. The
grand jury had that.
Mr. Rice. How do you know that, sir?
Judge Goodenotjgh. Mr. Quill is here. He is here and he will tell
you that.
Air. Rice. What is the story there?
Judge Goodenotjgh. I talked to Mr. Quill about it. I said, "Jimmie,
why wouldn't they indict?" He said, '"That would not be legal evi-
dence, and they so held."
And I will have to concur in that.
Mr. Rice. You mean, arguing purely on the basis of the newspaper
article, they would not indict on that?
Judge Goodenotjgh. That is right. That would be hearsay evi-
dence.
Mr. Rice. Yes, but was there no talk about investigating the matter
further, to see if there could not be competent legal
Judge Goodenotjgh. Sir, your grand jury is in session for 9 days.
You have had the truth here. The proof is that during the grand jury
sessions gambling stopped in Kenton County.
Mr. Rice. Yes, sir. There is no way then of discovering by inves-
tigative means what happened the day before the grand jury went in?
Judge Goodenocgh. Not through the grand jury itself, yes, through
subpena.
Mr. Rice. Has there been any suggestion made to the grand jury
to follow through on that?
Judge Goodenotjgh. Sir, after I charge a grand jury I am not per-
mitted, under the law, to talk to them.
I was called in at the last grand jury to offer my suggestions, coun-
sel and advice, which I readily gave.
Every time I face a grand jury for recommendations, and Senator
Kefauver and I are in total agreement on this, they talk to me about
legalizing, and I throw up my hands. I don't think legalizing it is
the cure.
Mr. Rice. Yes, sir. Well, as a citizen of the State, have you ever
made any effort to bring to the attention of the people what you your-
self knew of violation of the laws?
Judge Goodenotjgh. Yes, generally in these instructions.
Mr. Rice. In a general way?
Judge Goodenotjgh. Yes.
Mr. Rice. But no suggestions as to how to cure it?
Judge Goodenotjgh. I have no positive proof. I am a judge and
I know a lot of people, and I can talk to the minister, the church-
goer and the truck driver, but I avoid the places where law violations
may be.
88 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. You say that you don't have any positive proof.
Judge Goodenough. Of my own knowledge, sir.
Mr. Rice. Yes.
Judge Goodenough. But I have the same proof that any intelli-
gent citizen — and you don'1 have to be intelligent — living down home,
has. sir.
.Mr. Bice. What is that proof?
Judge Goodenough. Wliy. as I state in these charges, I did not
need your committee to tell me that we had a gambling situation in
Covington, Kenton Count)-. We did have it.
Mr. Rice. How long ago?
Judge Goodenot gh. Now, sir — and I would like to clarify the rec-
ord— I think you would be interested in this. In Mr. Florer's testi-
mony, and 1 sat here and listened to it, he gave a sordid picture and
that sordid picture he gave us ceased to exist in January of this year
"when the Lookout House, which is our big casino, where there has
been a crap game, stopped existing as a gambling casino in January,
at the time of the grand jury, and that since the May grand jury of
this year there has been no gambling whatever except spasmodic —
what do they call it — vest-pocket betting.
Mr. Rice. How do you know that, Judge?
Judge Goodenough. Well, sir, I am down there campaigning up
one road, down the street, in the suburbs, and you just sense that there
is no gambling there. I have read it in the paper.
Now, sir, where the police did raid two handbooks, I read that in
the paper. It has been reduced, let us put it that way. They picked
up two handbooks in the last week. I read that in the paper.
Mr. Rice. Before January what was the situation?
Judge Goodenough. Before January everything was open. The
slot machines were up, the handbooks were up, and there was a crap
game at the Lookout House.
Mr. Rice. Had you ever been in that crap game?
Judge Goodenough. I had never been.
Mr. Rice. Had you ever personally witnessed any gambling?
Judge Goodenough. I never have.
Mr. Rice. Are you sure about that ?
Judge Goodenough. I am.
Mr. Rice. Back in your testimony in the Howard case, you were
talking about Orr's. Do you remember being in Orr's place?
Judge Goodenough. I have been in Orr's, but never in any part
where there would be gambling.
Mr. Rice. You say —
From the number of times I ate in Orr's, I would say there was a handbook
in the back room.
Judge Goodenough. Sir, I could say that about 50 places in Kenton
County.
Mr. Rice. Did you ever do anything about it?
Judge Goodenough. Yes, sir; I called it to the attention of the
grand jury.
The Chairman. In other words, from eating in the restaurants,
you would have reason to believe that there was gambling in another
part of the building?
ORGANIZED CRIME IN INTERSTATE COMMERCE 89
Judge Goodenough. Yes, sir. I had no proof. I heard no service.
I saw no tickers. But, sir, you just don't have to be a lawyer or judge
or intelligent to know things that are going on.
Mr. Rice. Back before January you knew that gambling was going
on in the Lookout House ?
Judge Goodenough. Yes, sir.
Mr. Rice. There was no question about that?
Judge Goodenough. That is the same thing, sir. I have never been
in the Lookout House.
Mr. Rice. But you knew there was gambling going on there ?
Judge Goodenough. The same as you would know it in a hundred
places.
Mr. Rice. But if you were to say as a citizen and a judge of the
Kenton County Circuit Court, "I know there has been, I know there is
and has been gambling here," you could say that?
Judge Goodenough. That is right.
Mr. Rice. Now, then, some years ago there was an injunction
handed clown by Judge Northcott.
Judge. Goodenough. Yes, sir, of the Kenton County Circuit Court.
That was back in 1936. The record shows 1939, but it was 1936.
Mr. Rice. That was a permanent injunction?
Judge Goodenough. It is.
Mr. Rice. It refers to the Lookout House ?
Judge Goodenough. No, sir ; it does not. It refers to individuals.
Mr. Rice. Well, described in the petition of proof, it is described
as —
Lookout House and the Schlosser place in Kenton County, more fully described
in the exhibit.
Judge Goodenough. I am familiar with that. I have looked at
it. As Mr. Florer testified, he called it to my attention. I looked
at the record and the injunction is there. It is a permanent injunc-
tion against those named as defendants.
Gambling on the premises described as the Schlosser House, and further —
there is a second feature of it —
enjoining and prohibiting those named defendants from inviting or permitting
or suffering any others to gamble on the premises described.
Mr. Rice. And one of these is James Brink?
Judge Goodenough. One is James Brink.
Mr. Rice. And I think we had some testimony less than a month
ago that James Brink is still involved in the ownership of the Look-
out House.
Judge Goodenough. I think Jimmie Brink, with his wife and
father, is sole owner now. I know that from the press accounts.
Mr. Rice. Don't you think the injunction would lie against Brink
in the Lookout House?
Judge Goodenough. I think it would; yes.
Mr. Rice. How do you account for the fact that that injunction
was not in force? You testified that you knew gambling was going
on and you knew about the injunction, and you knew that Brink was
the operator.
Judge Goodenough. Are you going to charge me with the re-
sponsibility ?
Mr. Rice. No, sir; I am asking you.
90 ORGANIZED CRIME IX INTERSTATE COMMERCE
Judge Goodenough. You mean why?
Mr. Rice. Yes.
Judge Goodenough. I don't know. There are many that could
enforce that injunction, with the right for the defendants to be
heard in court.
Mr. Rice. How do you account for it ?
Judge Goodenough. Well, that document is black from finger-
prints, everybody in the bar looked at it. I finally looked at it for
the ministerial association, and Mr. Florer will tell you, when
they called thai to nay attention, I looked at it. And you want to
askme why. You know. I am in a political campaign.
The lawyer who gave me opposition, Mr. Gregory Hughes, who is
on their committee against me, was one of the lawyers who brought
that suit. Why hasn't he brought it to my attention officially?
Mr. Rice. I see that it issues out of your court, and I thought it
would he particularly interesting to know from you just what the situ-
at ion is.
Judge Goodenough. Sir, I don't know; but why wouldn't Mr.
Hughes enforce it? He is one of the many lawyers who joined with
Mr. Vincent, then the attorney general, who brought that action on
behalf of the Commonwealth of Kentucky.
Now, this gentleman, Mr. Hughes, is a personal friend of mine. He
is a good lawyer, a corporation lawyer. He is one of the lawyers
men! toned in that suit. Why hasn't he brought it up?
Mr. Rice. As for yourself, you just don't know?
Judge Goodenough. Why it has not been, I don't know.
Mr. Rice. You just don't know?
Judge Goodenough. I do not, sir.
Mr. Kick. Well, of course, we are sitting on the other side of the table
as strangers, but it would appear that it would be of particular inter-
est to your court, the Kenton circuit court, from which the injunction
issued, and in which you are the presiding judge, to see that the man-
date of that judicial body was enforced, that it was not flaunted. It
would appear that that would be of particular concern to you.
Judge Goodenouoh. No, Mr. Rice ; I issue thousands of orders, take
in divorce cases, I order husbands to pay $10 a week, and I cannot fol-
low any of them up. I don't follow them up. They come in by affi-
davit for a rule. I f the defendant is in contempt, he is punished.
We give a time for criminal cases. Lawyers get to try their cases,
and civil cases the same way. I don't set the criminal or civil cases.
If anything judicially came to my attention I would have sui sponta
taken action.
Mr. Rice. If what?
Judge Goodenough. I would have taken action immediately.
Mr. Rice. If what?
Judge Goodenough. If anything came into court to call it to my
attent ion.
Mr. Rice. Well, it would seem to me that you certainly could take
judicial notice of the sworn test imony taken in the Cleveland hearings
of t he ojiei at ion of the Lookout House. The testimony of Accountant
Giesey as to the principals involved, the corporate entity involved at
the Lookout House, and the fact that Giesey, the accountant for the
mob there, testified that it was a gaming venture. I don't see what
further proof would be needed.
ORGANIZED CRIME IX INTERSTATE COMMERCE 91
Judge GooDENorcH. Of course, I read all of that in the press, Mr.
Eice, but that would not charge me as a judge with any responsibility
to awaken the injunction.
The Chairman. Judge, there was just one detail that I thought
might be of importance. You indicated that prior to 1951 gambling
operations had been more or less open.
Judge Goodenotjgh. Yes; they were openly notorious.
The Chairman. They were notorious, and then upon the conven-
ing of the grand jury during the time of the functioning, the 9-day
period or so, things were closed down, if I understood you correctly.
Judge Goodenotjgh. That is right; that is right, sir.
The Chairman. And then upon the May term opening, they again
closed down.
Judge Goodenotjgh. That is right.
The Chairman. And so far as I understood you to say they re-
mained closed.
Judge Goodenotjgh. That is right.
The Chairman. The only thing that is left uncovered is what the
situation was between the adjournment of the January term and the
convening of the May term.
Judge Goodenotjgh. My knowledge is that the books came back,
and slot machines, too, but no crap games.
The Chairman. No casino?
Judge Goodenotjgh. Senator, here are my thoughts about it. Your
committee, as I read in my opening statement, has done great work
down home. You must remember that we have had gambling in
Kenton County for many, many years. Up to 1910 we had about six
large casinos that existed within the shadow of the city hall, and these
were handbook clubs — poolrooms they called them in those days, and
they were literally licensed. Now, of course, 1910 was before my time.
They would come into the police court every day and pay a $25 fine.
Your police court docket would show that. Those were in the days
when the poolrooms received telegraphic code results, and that was
announced to the bettors assembled.
In about 1910 they were abolished, and along came the handbook
in a modified form, as we know it today. No service, some telephone
results, and the pav-off was made the next daj\
I believe it was around 1925 or 192G, maybe 1927 or 1928, and that
is when I first came into public life, the handbooks, as we know them
today, came into being.
Now, Senator, we live in a community which is the home of the
old Latonia race track. Most of our people were born on the back
stretch of that race track. "We live within a hundred miles of the
Keeneland race track. We live within 110 miles of Churchill Downs,
the home of the Kentucky Derby, which vies with your great race,
the Preakness.
Now, when you have folks who are born and raised and educated in
an environment like that, you are not going to convert them in 1 day,
but I say to your committee that you have done a good job, and if
these folks will join and help these officials up home, they will do a
better job.
Your committee has focused the attention of our people upon the
sinister situation that has existed elsewhere, and did exist in the Look-
out House with the Cleveland mob.
92 ORGANIZED CRIME IN INTERSTATE COMMERCE
We never had any Costellos or "Greasy Thumb" Guziks in our
community. . ,
Sir, the crime-rate figures, I have them here, show that we are a good
community, as I said in my opening statement, but our people have to
be educated.
Senator Kefauver. What do you call McGmty, Dalitz, and
Rothkopf?
Judge Goodenough. That is a Cleveland group, is it not, Senator i
Senator Kefauver. Yes.
Judge Goodenough. The testimony showed that they had secured
an interest in the Lookout House.
Senator Kefauver. I only bring that up because you say you have
not had any of i hose big-time operators in your community. You have
had them there with you a long time, and so far as I know you have
st ill got t hem. They don't live there.
Judge Goodenough. I thought the tost nnony was, sir, that they had
move out, that they were washed out of there.
Senator Kefauver. Well, I am not sure that that is the case. I think
the testimony
Judge Goodenough. I only know what I read m the press.
Senator Kefauver. As of the time in January 1951, I think they
were still in, according to that testimony. They may have gotten out,
but I doubt it very much.
Judge Goodenough. I thought that was the testimony before you,
that in January 1951 they had gone out.
Senator Kefauver. No, I think they made a substantial amount ol
money in 1950.
Judge Goodenough. No ; I said January 1951, Senator.
Senator Kefauver. I say we know they made a lot of money out of
the place in 1950, as I remember.
Well, of course, I don't know as of right now where they are, as to
whether they are in or not, but don't you have some conspiracy statute
through which you could reach those fellows ?
Judge Goodenough. Sir, they could be indicted on the conspiracy
statute. ,, ,,
Senator Kefauver. Why don't you charge them on that i
Judge Goodenough. Sir, I shall.
Now, Mr. Rice said something to me about presenting some proof,
such as your Cleveland hearing. It would be a hard matter to get
some of those fellows down, unless we got an indictment in our com-
munity. I don't know whether physically they were m our com-
munity. , .1 T\ x' T
Senator Kefauver. Well, I think they stay out at the Desert Inn.
Judge Goodenough. They come in and get their money.
Senator Kefauver. That is sent to them by check.
Mr. Kke. I think at a hearing several weeks ago Brink testified
thai he had, in the very recent past, made some efforts to take oyer
control of the Lookout House, and had made some arrangements with
the other partners to give them notes for their interest that he was
taking over. .,.,,,_„ o Ai
Senator Kefauver. Well, was it not within the last 6 or 8 months
that they have been in operation \
Mr. Kke. Oh, yes.
ORGANIZED CRIME IN INTERSTATE COMMERCE 93
Senator Kefauver. I don't mean thai t hoy have been there per-
sonally. They are two or three degrees removed from there.
Judge, 1 think yon must be interested in hearing the way they
might operate. They were pretty smart and had good legal counsel.
I don't mean good in the moral sense, but technically they have worked
it out pretty well.
They form a corporation or partnership that buys the real estate,
mid then they own the real estate, and there is another outfit that
does the opera t ing, so that when they close up the operation, of course,
these fellows are usually just the owners of the real estate, and
through owning the real estate they get their cut in the gambling
operation. They have two corporations or two partnerships.
May J ask. Mr. Chairman, how is this grand jury selected down
there. Judge? You have nothing to do with the selection,
I take it.
Judge Goodenough. Here is the way that is done, if yon wish to put
that into the record. There are two divisions of our circuit court.
That court is known in Kentucky, the same as in Tennessee, sir, the
Tennessee circuit court, and I presume in Maryland it is the common-
pleas court, isn't it '.
The Chairman. No.
Judge Goodenough. We have two judges, and the two judges ap-
point two jury commissioners, who put a thousand names in a wheel,
and from that wheel, which is a drum, in open court the names of
the grand jurors and the petit jurors are drawn.
Now. just to make an observation
Senator Kefauver. Who selects the names?
Judge Goodenough. The judges, sir. We draw the names for the
grand jury. We draw 24 names.
Senator Kefauver. But who puts the names in the wheel ?
Judge Goodenough. Four individuals.
Senator Kefauver. Who are they '.
Judge Goodenough. To show you how I cooperate with Mr.
Florer
Senator Kefauver. How do you get the names, from the tax
records '.
Judge Goodenough. From the tax records and from the voters' list
of Kentucky.
Senator Kefauver. Who selects the names from the tax record?
Judge Goodenough. The jury commissioners.
Senator Kefauver. How is that constituted?
Judge Goodenough. Sir, they may exercise their discretion under
the instructions of the court, and they may not show any partiality to
one because of his race, color, or creed.
Senator Kefauver. But who appoints the jury commissioners?
Judge Goodenough. The two judges, at the request of the minis-
terial association, we appointed them the first of the year: at their re-
quest I appointed Mr. Arthur Reeves, who is the secretary to the
Masonic Lodge up home — is that right, secretary of the Masonic
Lodge — and they thought if we had a man like Mr. Reeves, who is very,
a very high-class man. we would get better jurors, and I believe we did.
85277 — 51 — pt. 15 7
94 ORGANIZED CRIME EST INTERSTATE COMMERCE
Mr. Rick. In connection with the jury commissioner, do you recall
he is a fellow who then puis the names in the wheel and picks them
out?
Judge Goodenough. Yes, sir; they go into private session, and
nobody is permitted in the room with them. The room is set aside.
Mr. Rice. Do you know a fellow by the name of Butch Wanstratt?
Judge Goodi \<>i ':n. I know Butch Wanstratt; yes, sir.
Mr. Kick. "What business is he in \
Judge Goodenough. Butch Wanstratt has been an invalid, on the
flat of his back for 3, 4. or 5 years, sir. He is the owner of a tavern,
1 believe, but he has been on the flat of his back. sir.
Mr. Rice. Did you ever know he was in the slot-machine business?
Judge Goodenough. 1 never knew that, sir.
Mr. Rice. Are you sure about that ?
Judge Goodenougii. No, I never knew that Butch did. I have
heard rumors about it.
Mr. Rice. Did you ever have an opinion that he was in the slot-
machine business?
Judge Goodenough. I had a guess that he was, but I never had any
knowledge of it.
Mr. Rice. Well, let me refresh your recollection, going back to the
Howard trial, your testimony was, talking about slot machines:
Have you heard that machine is operated?
Answer: I have expressed an opinion that I think Butch Wanstratt had slot
machines there from conversations I had, movements, and people, and noises,
through my senses, I will state the opinion that I am almost sure there have
been slot machines there.
Now, wasn't this same Butch Wanstratt appointed by your court
to select the other jurors ?
Judge Goodenough. Never by me. I think he was selected by
Judge Bryson.
Mr. Rice. When the other judge appointed him, did you protest?
Judge Goodenough. Sir, I was not a judge then. I think Judge
Bryson. who has no criminal jurisdiction, out of friendship for Butch
Wanstratt years ago, when Butch was running a restaurant. I be-
lieve he was a jury commissioner, yes, sir.
Mr. Rick. All right, sir. Now, then, after the awakening, shall we
call it, of a tremendous amount of public reaction and publicity
resulting from the gambling wave in 1950 and 1951, there came a time
when you had a grand jury here very recently, did you not?
Judge Goodenough. The last grand jury, sir. was the Tsl&y grand
jury.
Mi'. Rick. And you sent us a copy of the report under date of June
27, and asked us for comments on the report.
Judge Goodenough. Yes, sir.
Mr. Rick. Now, then, thai was all after there had been a public
pronouncement that at least in 1950 there were 111 wire service ticker
place- in Kenton County, that there were L63 slot machine receipts
for taxes paid on slot machines there, and that there was testimony in
the Cleveland hearings of the committee in January relating to the
operations of the Lookout House as a gambling joint by members of
the Cleveland syndicate, t hey call it. consisting of Brink, Carr, Meyer,
Croft, Schroeder, Rothkopf. Kleinman, Moe Dalitz, Louise Tucker,
ORGANIZED CRIME IN INTERSTATE COMMERCE 95
who I think was the wife of Sam Tucker, and Charles Polizzi, brother
of Big Al, I believe, a Cleveland mobster that
Senator Kefatjver. Mr. Rice, he is no relation. He is sometimes
called his brother, but lie is actually no relation.
Mr. Rice. I am glad that you corrected me, Senator, and that dur-
ing the years 1948 to L949, just in that one place, the gross receipts
aggregated a million dollars, and the net income to these gamblers
was nearly $400,000 right in your county.
Now, then, the report comes along here that you sent us in June
indicating that there were two indictments returned as the result of
the grand jury findings, and one of those was against an individual
named Charles Schilker, which 1 understand was for gambling, and
another against Kay McFabb, which 1 understand was for murder.
You also have a report — well, this seems to be the net result of the
grand jury findings, but you also have a report that you yourself indi-
cated, or at least this was contained in a newspaper report, that you
thought this grand jury had done a noble job.
Judge Goodexougii. Yes, sir; and I want to repeat it before the
committee, and let me tell you why. That grand jury went in in May.
I am not too accurate on my dates. The grand report I read to you
may have had the date on it.
When they came to the end of their 9-day term, they came into open
court and asked me for the privilege of recessing, an unprecedented
thing in Kenton County. I let them recess until June 25, and in that
time you couldn't have bet 5 cents, and that is why that grand jury
did a noble thing for us. It did stop gambling. That was an unprece-
dented thing, Mr. Rice.
The grand jury did a good job on that.
Mr. Rice. Well, I think the testimony has been all along here that
during the time the grand jury was in session gambling was con-
sistently shut down.
Judge Goodenough. They recessed from May to June 25.
Mr. Rice. Then they stopped it for a whole month, didn't they ?
Judge Goodenough. Yes, sir.
Mr. Rice. Are there anv rules against indicting people for what
they did in 1948, 1949, 1950, and 1951 ?
Judge Goodenough. None, no.
Mr. Rice. How do you account for that, then —
Judge Goodenough. Any rules?
Mr. Rice. Yes.
Judge Goodenough. I would not know of any rules.
Mr. Rice. You indicted a man, Schilker, for something, but the
big Cleveland mob that operated this tremendous proposition at the
Lookout House escaped scot free. How do you account for that ?
Judge Goodenough. I have nothing to do with the grand jury. I
charge them, and I read the charge, where I refer to the syndicate
being in there.
Mr. Rice. Do you think they did a noble job on that?
Judge Goodenough. I think they did a noble job in stopping
gambling, and I think you men ought to be proud of that, too.
Mr. Rice. Well, sir, we are not.
Judge Goodenough. Well, sir, I am
Senator Keeauver. I think we are talking about two different
things, isn't that the gist of it?
96 ORGANIZED CRIME IN INTERSTATE COMMERCE
Judge Goodenough. I think there is a misconception.
.Mr. Rice. Now, they say here in their report to you, which you
transmit to us. point No. 9:
Gambling had gone haywire in this county through the syndication of slot
machines. Their reappearance must not be.
Now, do you. have any idea what that means?
Judge Goodenough. Yes, this grand jury was bitterly and violently
opposed to slot machines and they are expressing themselves there.
1 had nothing to do with this report.
Mr. Rice. I understand, but they report to you.
Judge Goodenough. They report that to me, or they did report
that to me, that gambling had gone haywire, and they thought it
should stop. Yes: I think that is an excellent point, its reappear-
ance should not be.
If you read there, when they brought me in the form they wanted
to know how to keep slots out, and I said I will cooperate, I will call
a special grand jury. That promise still goes. That is a duty not
a promise.
Mr. Rice. Well, I think we can conclude that the net result was
that in the future they want no reappearance, although they passively
say there must have been open and widespread notorious gambling
which would presumably be indictable, an indictable offense, but they
have taken no action toward the indictable offense.
Judge Goodenough. I don't know the answer, whether there was
proof or not, but let me tell you what I think. The people of the
Kenton County grand jury, Senators and Mr. Rice, of course, you are
lawyers, but there were 12 men and women on the grand jury which
represents your citizenry. Our people had violently been opposed to
slot machines and that grand jury was.
Now, I think that is what they meant here.
Senator Kefauver. Judge, don't you think it would stop the opera-
tion in the future and teach a few people a lesson if they indicted some
of these people who had been operating 6 or 8 months before?
Judge Goodenough. Perhaps it would, Senator; yes, sir.
Senator Kefauver. Do you know why they did not do that 3
Judge Goodenough. No; I don't. Senator.
Senator Kefauver. As I get the point of the grand jury, about stay-
ing in session and recessing, they would close down things for awhile
and it may still be closed, I don't know, but they did not go back and
dig out the facts as to who the operators were 6 or 8 months before.
Judge Goodenough. I don't know if there was evidence before them
on that, but I think that grand jury was inspired by your committee.
Before your committee hearings I don't think any grand jury would
have had the courage to bring in a report like that, or to ask for any-
thing like that.
Senator Kefauver. Well, we certainly appreciate the compliment
that you have given us.
Judge Goodenough. There is no gambling.
Senator Kefauver. Do you have jurisdiction in Campbell County?
Judge ( rooDENoi on. None whatever, Senator, and that is the reason
I sent that. Senator. I think" when your man. Mr. Goddard, whom
I don't know, sir, came up and investigated, I understood he reported
hack here, so far as Kenton County was concerned, that there was
no gambling going on.
ORGANIZED CRIME IX INTERSTATE COMMERCE 97
Mr. Kick. What gave yon to understand thai \
Judge Goodenotjgh. Some of the men, some of the people who were
here as witnesses told me that.
Mr. Rice. But Mr. Goddard did not tell you thai 1
Judge Goodenotjgh. No; 1 never met him.
Mr. Rice. I think for the record we will say that Mr. Goodards
report was to the contrary.
Judge Goodenotjgh. In Kenton County, sir?
Mr. Rice. He certainly did not say there was no gambling there.
Judge Goodenotjgh. It was told that he looked in the Kentucky
Club and found a sign out
Mr. Rice. Well, we won't belabor that point.
Judge Goodenotjgh. Xo ; mine is hearsay. I never talked to him.
Mr. Rice. Well, sir, you have commended the grand jury, who have
indicated a notion that they might stop gambling in the future. Is it
possible to arrange for a special grand jury down in your county?
Judge Goodenotjgh. Sir. under the law I may call two. maybe three,
but two or three special grand juries a year.
Mr. Rice. Yes, have you ever done that \
Judge Goodenotjgh. I have never done that.
Mr. Rice. Has there ever been a prosecution in your county, under
the felony statute, against gambling?
Judge Goodenotjgh. For gambling, sir?
Mr. Rice. Yes.
Judge GooDEXoroH. Xot to my knowledge, sir; no, sir.
Mr. Rice. Xow, I am just wondering, following Senator Kefauver's
thought that he had hoped, and that he commended the grand jury
along with you for the job of stopping gambling for a month, but he
hoped that it would be possible to inspire a grand jury to look back
a little bit into these operations which occurred during the statutory
period.
Judge Goodenotjgh. I am not so much interested in what has gone
on as I am in keeping gambling out of Kenton County, a- a judge.
Xow. my conduct, of necessity, must be restricted. I am a judge,
sir.
Mr. Rice. You say yon are not interested in what has gone on?
Judge Goodexough. No, sir.
Mr. Rice. Well, suppose there had been four or five kidnapings
down there and the kidnapers say. '"From here on out we are not going
to do it," would you be interested in what is going on ?
Judge Goodenotjgh. Well, sir, you have two different classifications
of crime. You cannot let kidnaping go unnoticed and perhaps you
should not let gambling go unnoticed, but it would be extremely diffi-
cult to get the proof in a gambling situation and not too difficult, in
my judgment, to get the proof in a kidnaping situation. That would
be the work of the grand jury.
Mr. Rice. Well, I think there is ample testimony to establish that
there was gambling at the Lookout House within the statutory period.
I have no further questions.
The Chairman. That is all. Thank you.
Senator Kefacver. Let me ask you this.
Judge Goodexough. Yes. sir.
Senator Kefacver. How long have you been a judge, sir?
Judge Goodex'ough. A circuit court judge, Senator?
98 ORGANIZED CRIME IN INTERSTATE COMMERCE
Senator Kefauver. Yes.
Judge Goodenough. Since 1940.
Senator Kefauver. Is a circuit court judge in Kentucky comparable
to the circuit court or criminal court judge in Tennessee?
Judge Goodenough. The same; yes, sir.
Senator Kefauver. The same jurisdiction?
Judge Goodenough. Yes, sir.
Senator Kefauver. One of our recommendations is in our third
interim report that there be special grand juries called by the State.
I think wo may even recommend, where possible, that the grand jury
be in continuous session, or at least have power to convene at any
time. Is that possible under your constitution?
Judge Goodenough. Our special grand jury can only be in for 3
days. Now, we would have to have the legislature amend that. That
would not be a difficult task, in our legislature, to amend it.
Across the river in Cincinnati, Ohio, the grand jury is in session
cont inuously.
Senator Kefauver. It seems to me that since May 7, wdiatever date
it Avas. until June 26, that by having that recess, that they kept gam-
bling from operating, and that by the same argument if the grand jury
could be in continuous session but, of course, be in recess most of the
time, it would have the same effect.
In other words, it would be there ready to act if something came
up to act upon.
Judge Goodenough. Senator, that is the answer to it, and as I say,
it would not be difficult to have our legislature amend the law so
that our grand jury could be in session, say, for a period of 30, 40,
50, or 00 days, not in actual session but subject to call.
Now, there is the strongest weapon against the existence of gam-
bling in any locality.
Senator Kefauver. How long can a regular grand jury recess over?
Judge ( Goodenough. Sir, this is unprecedented, I would have given
this grand jury all the time they wanted. There was no precedence
for it. I think they could continue indefinitely.
The Chairman. But there is a limit on the number of days they
can be in session?
Judge Goodenough. Nine days.
The Chairman. And special grand juries 3 days?
Judge ( rOODENOUGH. Yes ; 3 days.
The Chairman. There is no limitation in regard to the time they
can be in recess?
Judge Goodenough. Yes
Senator Kefauver. As I understand it, you cannot order the grand
jury to recess, but it must be at their request under the present law.
Judge Goodenough. There is no precedent. I could perhaps tell
thcni to do it, but I did not tell them in this instance. They did it
themselves. They came into court and asked me for the right for
the foreman to speak to me.
Senator Kefauver. What if they should ask on May 7, let's say on
May L6, assuming that is the day they ask for leave to recess over,
suppose t hey ask to recess over until December 31.
.Judge ( rOODENOi on. I would have given it to them.
Senator Kefauver. Could they legally do that?
Judge Goodenough. Yes, sir.
ORGANIZED CRIME IX INTERSTATE COMMERCE 99
Senator Kefauver. That might be the second best answer.
Judge Goodenough. I think you are right, Senator.
The Chairman. All right. Thank you, Judge. We will recess for
1 hour.
(Whereupon, at 1 : 15 p. in., the special committee adjourned, to re-
convene at 2 : 15 p. m.)
AFTERNOON SESSION
The Chairman. The meeting will please come to order.
Mr. Quill, will you raise your right hand, please?
In the presence of Almighty God, do you swear the testimony you
give will be the truth, the whole truth, and nothing but the truth?
Mr. Quill. I do.
TESTIMONY OF JAMES E. QUILL, COMMONWEALTH ATTORNEY,
KENTON COUNTY, KY.
The Chairman. Your full name, please.
Mr. Quill. My name is James E. Quill.
The Chairman. Q-u-i-1-1?
Mr. Quill. Yes, sir, that is right.
The Chairman. Mr. Quill, your position is?
Mr. Quill. I am the Commonwealth attorney in the sixteenth judi-
cial district, which comprises Kenton County.
The Chairman. Is that the entire district?
Mr. Quill. Yes.
The Chairman. So your district is coextensive with Kenton
County ?
Mr. Quill. That is right.
The Chairman. For how long have you occupied that position ?
Mr. Quill. I was elected to an unexpired term in November of
1948 and I took office shortly before the first of 1949.
The Chairman. How long does your term continue ?
Mr. Quill. It is ordinarily a 6-year term, but inasmuch as I ran for
only the unexpired term, I run this year. As a matter of fact, I am
running right now.
The Chairman. So your present term
Mr. Quill. Will expire the 1st of January coming up.
The Chairman. You say you are running now. Are you in the
primaries as of next week, I believe?
Mr. Quill. The first Saturday in August.
The Chairman. That is August 4, 1 believe ?
Mr. Quill. That is right.
The Chairman. All right, Mr. Quill, thank you very much.
Mr. Rice. Mr. Quill, you went into office in 1949?
Mr. Quill. After the November election.
It was in December of 1948, almost the 1st of January 1949, and I
had been in office during 1949, 1950, and so far in 1951.
Mr. Rice. Just prior to that what was your business ?
Mr. Quill. I had been the county attorney of Kenton County for 3
years prior to that.
Mr. Rice. From 1945 on then?
100 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Quill. January 1946 was when it began. Prior to that I had
been a member of the General Assembly of Kentucky for two terms.
Before that a just ice of t he peace.
Mr. Rice. You were a peace officer before thai \ What is the dis-
tinction between the county attorney and the Commonwealth's at-
torney ?
Mi'. Qi hi.. The county attorney takes care of all the business affairs
of the county, the civil affairs. He is also the prosecutor in the county
court, which is the equivalent of a police court, except it is for county-
wide jurisdict ion.
Mr. Rice. On criminal matters?
Mr. Ql ii. i,. Yes.
Mr. Rice. The Commonwealth attorney?
Mr. Quill. Attends the circuit court that takes care of the business
of the Commonwealth, particularly the criminal matters which are
sent to the grand jury or originate somewhere and are sent to the
grand jury. His principal duty is to be the adviser to and of the
grand jury and try whatever indictments are brought by the grand
jury.
Mr. Rice. I think on Judge Goodenough's statement, that there
was more or less concurrent jurisdiction on misdemeanors in connec-
tion with gambling, so on a gambling offense you would probably have
prosecution by right of the Commonwealth attorney or the county
attorney. Could that be right?
Mr. Quill. That could be right. In addition, the county attorney
is supposed to assist the Commonwealth attorney in the circuit-court
prosecutions.
Mr. Rice. Taking a hypothetical case about a gambling violation
that comes to both the attention of the county attorney ami Common-
wealth attorney, how would you feel about deciding where prosecu-
tion would take place?
Mr. Quill. Being the Commonwealth attorney, any case that has
been in the lower court, any criminal matter that has been sent to the
grand jury by a lower court because the lower court would not have
jurisdiction, the Commonwealth attorney then takes over, presents
the matter to the grand jury, draws the indictments, if any, presents
t hem in court, anil tries them.
Mr. Rice. Is it possible to waive some of those back to the county
court or to the county attorney ?
Mr. Quill. The grand jury may return a case to the county court
if they thought a misdemeanor charge was sufficient and it could more
properly be handled there than in the circuit court.
Air. Rice. Does that frequently happen?
Mr. Quill. I would say that it happens on tin' average of about two
cases per grand jury.
Mr. Rick. Have there ever been any prosecut ions brought as a result
of grand-jury action for gambling in recent years under the felony
stat ute \
Mr. Quill. Not to my knowledge.
Mr. Rice. How do you account for that \
Mr. Quill. I couldn't account for it at all in the terms of office of
my predecessor. I do not know why it never happened then. As far
a- my term of office is concerned, there hasn't been a grand jury yet
willing to vote a felony indictment.
ORGANIZED CRIME IX INTERSTATE COMMERCE 101
Mr. Rice. Has the matter been presented to the grand jury by you
calling for such a vote \
Mi-. Quilt,. Certainly.
Mr. Rice. They have ignored it in all those c.ises?
Mr. Quill. That is right.
Mr. Rice. You have been present during the testimony this morn-
ing?
Mr. Quill. Yes,sir. At least a portion of it.
Mr. Rice. Did you hear Judge Goodenough's testimony ?
Mr. Quill. Ye-.
.Mr. Rice. Did you hear Mr. Floret's and Mr. Moloney*- testimony?
Mr. Quill. 1 heard most of Mr. Florer's testimony and all of Mr.
Moloney's testimony.
Mr. Rice. There was some testimony there about a grand jury that-
considered the matter in May and then recessed for a while and then
came on to make a report. Are you familiar with that \
Mr. Quill. Yes.
Mr. Rice. Is it usual that the grand jury makes a report to the pre-
sicTing judge?
Mr. Quill. Yes.
Mr. Rice. Do they do that every time \
Mr. Quill. There are three regular grand juries per year and in
1949 there was three, in 1950 there were three, and so far two this year,
and that would be eight grand juries that I have attended. . Only one
of the eight did not write a formal report.
Mr. Rice. In connection with the last grand jury
Mr. Quill. They are not legally compelled to.
Mr. Rice". I understand that. It is a matter that even the court
does not have to accept if they do make a report. The court need not
necessarily accept the report. I take it the custom is that they do
there.
Mr. Quill. In my time they have invariably.
Mr. Rice. In connection with the writing of the last report, a state-
ment is made here that this report, while written by the Common-
wealth's attorney, James E. Quill at the request of the grand jury,
does that mean, then, that you actually reduced the material to writ-
ing \
Mr. Quill. That is right.
Mr. Rice. How would you work that out with the grand jury?
There are 23 men, are there not ?
Mr. Quill. No, a grand jury is composed of 12 in Kentucky. Nine
of the 12 are required to vote an indictment. When the jury wants
a report written, they just indicate so. To begin with, on this last
one, the judge had instructed the jury to investigate certain matters,
and they attempted to make a report in response to the request that
the court had made of them. That was the main reason and the main
mechanics behind it.
Mr. Rice. They are reporting back to the judge, and they sat down
witli you and asked yon to reduce their thoughts to writing and trans-
mit thos-e to the judge \
Mr. Quill. That is right.
Mr. Rice. You take the position then that you would be very
familiar with the subject matter?
Mr. Quill. I would think so; yes, sir.
102 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. I have the grand jury report which "was filed in open
court June27, 1951. Do you have a copy ?
M r. Quill. Yes. That was the last grand jury.
Mr. Rice. The statement is made here: "Upon our reconvening
June 25, the gambling situation in Kenton County was solved." What
did they mean by thai '.
Mr. Quill. As 1 understood what was meant, it was this: That,
by the device of recess for 2 weeks in May and almost 4 in June,
and by the calling of the law-enforcement officials before the grand
jury prior to the recess, the jury let the officials know that they wanted
the gambling stringently enforced and were recessing for that pur-
pose, to see whether these officials would perform or not. They had
intended, if the officials failed to perform, to vote indictments against
them, but the statement by the jury that the gambling situation was
solved refers to the fact that all during that recess time there was no
gambling of any sort, at least to any great degree throughout the
county.
Incidentally that condition has persevered until today. That con-
dition continued to prevail since the grand jury adjourned until the
present time ?
Mr. Rice. There is no grand jury sitting now ?
Mr. Quill. No, sir.
Mr. Rice. In talking about the solving or the solution to the problem
we are looking into the future.
Mr. Quill. Yes.
Mr. Rice. How about looking into the past as to conditions that
prevailed, openly and notoriously, as Judge Goodenough has indi-
cated ? Has that problem been solved?
Mr. Quill. I wouldn't attempt to say. As far as this last grand
jury was concerned, it was their attitude, as indicated by the report,
that they felt as if they had accomplished a great deal by getting
gambling to stop, and that was the main and the then present con-
sideration.
The Chairman. Mr. Quill, just in that connection, was there no
consideration given by them to the indictment or any action with
regard to what had taken place just in the short while before their
convening ?
Mr. Quill. Oh, yes. They were presented with ample evidence
with regard to that.
The Chairman. Inasmuch as they apparently took you into their
confidence so fully in order that you could write this report, did they
not indicate to you why they did not take affirmative action with
regard to that which had been apparently obvious and notorious, as
the judge has said, in recent months \
Mr. Quill. I would be a little bit in the realm of conjecture if I
answer that, but I do not mind conjecturing if you realize the limita-
tions of that kind of an answer. It seemed to me that the entire jury
felt that those things which had gone on in that county, as the judge
said, for many, many years and for a long, long time, that it would not
have been just and equitable to return an indictment for conduct
that had been acceptable around there during all those years. They
felt the first step that should be made and was made here was to
eliminate present gambling and put all officials on notice and on
ORGANIZED CRIME IX INTERSTATE COMMERCE 103
warning that, if the situation came back as it had been, like it was in
the past, they then expected those officials to be prosecuted.
The Chairman. They were willing to forget all about the past
and wipe the slate clean?
Mr. Quill. I think that expresses it very well.
The Chairman. Do you think they knew of the extent of the gam-
bling operation, for example, in dollars that was shown by the records,
for instance, of Lookout \
Air. Quill. I am sure if they were, they had more knowledge of
it than I had. I didn't hear those figures until coming here today.
The Chairman. On the other hand, Mr. Florer, who is a very in-
telligent man and well-informed individual, although he isn't a public
official, he knew, generally speaking, when I read the figures to him,
enough about them to indicate that it was no surprise to him. If
anything, he thought they were a little bit on the conservative side,
which they may be. What I am trying to say is apparently it wasn't
very much of a mystery because Mr. Florer knew about these, and
these, of course, go up to the million dollars.
Mr. Quill. Yes.
The Chairman. So I am just wondering as to what basis or what
explanation, if any. was given by the grand jury for their willing-
ness to just close out all the past without any action?
Air. Quill. The answer to that, Senator, would be in their report,
what they had to say about conditions. They voted indictments and
voted this report. If it is in there, it meant they wrestled with it
and came up with what they did come up as a satisfactory solution. If
it isn't mentioned in there — and I don't believe it is — it is the other
way.
Mr. Rice. In connection with the grand jury, you have the power
of subpena duces tecum.
Mr. Quill. The grand jury may request the court to issue a sub-
pena (luce- tecum against given defendants.
Mr. Rice. In that way. it would have been a relatively simple mat-
ter to obtain the books of the Lookout House. They have resident
agents residing in Kenton County. Is that true?
Mr. Quill. If you say so. I suppose they do.
Mr. Rice. Don't you know ?
Mr. Quile. No, sir; I don't.
Mr. Rice. You know it is a Kentucky partnership and partners
are residing there ? You know Jimmy Brink ?
Mr. Quill. Yes, sir.
Mr. Rice. He lives there.
Mr. Quill. I believe so.
Mr. Rice. He has been there for a number of years.
Mr. Quill. I believe so.
Mr. Rice. It would be possible to subpena him as a partner with
the books and records?
Mr. Quill. I would say "Yes."
Mr. Rick. Was that ever suggested to the grand jury?
Mr. Quill. Not to my knowledge.
Mr. Rice. How do you account for the lack of interest?
Mr. Quill. I wouldn't attempt to say.
104 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. Don't you feel sonic compulsion that under your term
of office the grand jury investigation into violations of law in the
jurisdiction you control should be successful?
Mr. QT ii. i". I construe it to be my duty to present every criminal
matter to tin- grand jury thai has come to my attention, either through
the lower courts or upon discovery of my own. It is my duty to do
that every t ime they meet. For example, when I went into this office,
I thought a good thing would he to try to nit down on gambling.
There had been SO much of it around there for SO long. Wherever I
found open gambling going on. I would personally lead raids myself.
The only Commonwealth attorney around there that ever did any-
thing like that. I took the position that then it was difficult to
enforce the gambling laws, much more so than now because then' was
very little sympathy for the enforcement of those laws around there.
But what this committee has been able to develop, for example, that
syndication business around the Lookout House, cause people to be-
come highly exercised about tied. By now gambling laws are very
easy to enforce instead of being difficult to enforce.
Mr. Rick. Going back a number of years, it looked like the people
were sufficiently exercised hack in L939, in the thirties, to bring about
an injunction proceeding against the Lookout House, which was a
permanent injunction. It was on the record of the circuit court there
during the entire time you were there. I would say that it looked
like they were exercised for a number of years there.
Mr. Quell. Certainly some of them were. That action was orig-
inally brought by the attorney general, and he is primarily responsible
for its enforcement.
Mi-. Kick. You knew that gambling was going on at the Lookout
House ?
Mr. Quill. I didn't physically and actually see it, but I think
everybody knew there was gambling going on.
Mr. Hick. What position did you take with respect to the injunc-
tion ?
Wait a minute. Before we Leave that, you say you did not physically
know that there was gambling <roina' on.
Mr. Quill. I said that I did not know that since I have been Com-
monwealth attorney there physically was gambling going on there.
I have not been in the Lookout House to see. 1 once shot crap myself,
and I testified in the Howard case and told where I had lost $40.
Mr.KiCE. When was that?
Mr. Quill. At the Lookout House. I went there one night and
wasted my substance to the extent of $40. That was when I was
a member of the general assembly. That was way back when I was
much more foolish, in the early thirties.
Mr. Rice. Was that after the injunction ?
Mr. Quill. Yes. I suppose it would have been after the injunction.
Mr. Rice. When you were in the legislature ?
Mr. Quill. Yes, sir.
Mr. Kick. What years were you in the legislature?
Mr. Quill. L941to L945.
Mr. Kick. It wasn't so long ago.
Mr. Quill. Not too long.
Mr. Kick, [twasn't in the early thirties.
ORGANIZED CHIME IX INTERSTATE COMMERCE 105
Mr. Quill. I am sure it wasn'1 because I only graduated from college
in 1928 and 1 never finished law until after that.
Mr. Rice. You testified in the Howard case thai in li»47 you lost
$40. That was not in the too distant past, then.
Mr. Quill. That is righ t .
Mr. Rice. Can you help us to understand how that could be? Here
you are the county attorney and then the Commonwealth attorney,
having knowledge of an injunction, having knowledge of the State
laws, having knowledge of this tremendous operation at the Lookout,
as it surely must have been by reason of the fact that they handled
over a million dollars in 2 years there, how do you account for those
places continuing- to operat e <
Mr. Quill. You mean only that one place, do you not '. That was
the only one in our county.
Mr. Rice. No.
Mr. Quill. Which were the others ?
Mr. Rice. How about the Kentucky Club, Kenton Club ?
Mr. Quill. They were comparatively small places, 1 think.
Mr. Rice. Did you look at the figures \
Mr. Quill. I was speaking about the size of the places.
Mr. Rice. You know this other one was reasonably big I
Mr. Quill. I am sure of that.
Mr. Rice. And it was run by the out-of-State mob.
Mr. Quill. I don't know about that. I didn't know that until the
committee developed it at the Cleveland hearing.
Mr. Rice. Did you think it wTas (
Mr. Quill. Immediately after the Cleveland hearing information
came out, we had it stopped within 24 hours, and they haven't turned
a wheel since, nor do I intend to let them turn a wheel in the future
while I am holding office.
Mr. Rice. Did this Goose case decision come to your attention ?
Mr. Quill. What case?
Mr. Rice. Goose versus Commonwealth.
Mr. Quill. What do you mean ?
Mr. Rice. It is 305 Kentucky 644. It talks about an injunction
against gambling places. There was a question as to whose responsi-
bility it was to pursue the injunction, to see that it was enforced. It
was a question whether it should be the attorne}- general or the Com-
monwealth attorney.
Mr. Quill. It could well be either, could it not ?
Mr. Rice. Yes. The language says that the attorney general could
join with the Commonwealth attorney or the Commonwealth attorney
would have the power to institute such a proceeding on his own author-
ity independently of the attorney general.
Mr. Quill. That is right. *
Mr. Rice. That would appear from that, then, that the Common-
wealth attorney, which is you, did have the power to institute
proceedings.
Mr. Quill. I think if we had not successfully stopped that operation
there, I would have had to go ahead with that injunction suit, and I
would have done so, but since January there has been nothing to
enjoin the operation of out there.
Mr. Rice. Yes; but for a couple of years while 3^011 were in office
there was an open and flagrant situation going on.
106 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Quill. I was in office during 1949 and 1950. That is 2 years.
Mr. Rice. Yes.
Mr. Quill.. I might toll you that during that time I had to prepare
and present over 500 felony cases to the grand juries that were sitting
dming that time, resulting in 352 indictments, all of which I had to
presenl to the court and either try to take guilty pleas.
.Air. Rice. Are you trying to tell us you were too busy to handle this?
Mr. Quill. No. But I did want you to understand that my work
is not just with gambling. There are other crimes being committed.
During that period of 8 grand juries I have returned and convicted
114 gambling indictments myself.
Mr. Rice. Has any gambler ever gone to jail in your county?
Mr. Quill. Not yet. I answered you too rapidly. Twenty or
twenty-five years ago there could have been a couple of them who went
to jail.
Mr. Rice. At least during your term of office
Mr. Quill. During my -2 years and G months, no, sir. I had a
strange experience there. I brought an indictment against this fellow
Shollker. I brought that under the jail sentence.
Mr. Rice. The felony part ?
Mr. Quill. The day the indictment was returned that night the
man dropped dead of a heart attack.
The Chairman. Was that because it was so unusual ?
Mr. Quill. It apparently was.
Mr. Rice. Maybe this will inspire you to go after some of the big-
time boys that Senator Kefauver spoke about this morning. Here is
the split these people took out of the Lookout House. Jimmie Brink's
wife, $33,860. B. W. Brink, $16,930. Charles V. Carr, $16,935.
Mitchell Mver, $20,858. John Croft, $10,429. Samuel Schroeder,
$39,583. Louis Rothkopf, $41,765. Morris Kleinman, $41,765. Moe
Dalitz, $41,765. Louise K. Tucker, the wife of Samuel Tucker,
$41,765. Charles Polizzi, $33,352.
Those are the shares of the partners of the Lookout House during
the time you were in office.
Mr. Quill. Are those figures available?
Mr. Rice. I think you might use your subpena duces tecum to find
out.
Mr. Quill. We cannot bring witnesses from out of State. Giesey
refused to come when he was asked.
Mr. Rice. This is a partnership. At least Brink resides in your
count y.
Mr. Quill. I think that is right.
Mr. Rick. Wouldn't it be a simple expedient to subpena Brink and
call upon him for the production of the partnership records?
Mr. Quill. I think that could be done.
Mr. Rice. Maybe we can inspire you to return one of these felony
indictments against this mob that operates in Las Vegas, in Florida,
in southern Ohio and in one or two places in Michigan. Definitely
it is an organized big syndicate in the country.
Mr. Quill. I appreciate the fact that you do want to inspire me. I
love the verb, the way you tone it. But I do want to say here that I
have Senator Taft's Republican newspaper here, the Kentucky Times-
Star — I happen to be a Democrat — and they wrote an editorial about
me and said, "Quill's courage deserves praise." I have it here.
ORGANIZED CRIME IN INTERSTATE COMMERCE 107
The}^ say, ''Almost alone Jim Quill has improved law enforcement
in Kenton County."
Mr. Florer's Protestant Action paid me the same compliment. I
have the same clipping from that. I woud like to file this with you,
so you can see that I have attempted to do a reasonably good job, and
I have made progress as the Times-Star said, which has never been
made before.
The Chairman. We will receive it.
(The clippings referred to were marked "Exhibit No. 10" and are on
file with the committee.)
Mr. Rice. Very commendable.
Do you know a man by the name of Lee Morand?
Mr. Quill. Yes. sir. He was the foreman of the last jury.
Mr. Rice. Of this one that made the report ?
Mr. Quill. Yes. Incidentally, he is a legless man.
Mr. Rice. Do you know about his operating a horse book down at the
Saddle Club?
Mr. Quill. Xo, sir. I live near the Saddle Club.
Mr. Rice. You have never heard of that '.
Mr. Quill. That is at the end of Fort Mitchell. Lee Morand is
supposed to run a horse book?
Mr. Rice. I am asking you.
Mr. Quill. Xo, sir.
Mr. Rice. It is down in South Fort Mitchell, Saddle Club?
Mr. Quill. Yes.
Mr. Rice. Who runs the book in the Saddle Club ?
Mr. Quill. I do not know. Do they have a book ?
Mr. Rice. I think the McFarland report indicates they had a news
ticker. What did you do about those 111 wire service horse race
tickers that were published in May of 1950 ?
Mr. Quill. I immediately got hold of them and turned them over
to the chief of county police and the chief of Covington Police De-
partment, likewise I did the same thing with the slot machine list, and
I asked them to investigate and make arrests if there were any
violations.
Mr. Rice. Was anyone prosecuted?
Mr. Quill. Yes, sir. I prosecuted 114 of them.
Mr. Rice. For what ?
Mr. Quill. Gambling indictments.
Mr. Rice. These were the wire service operators?
Mr. Quill. Some of them, yes, where there were handbooks. Others
were slot machines.
Mr. Rice. Have any of them gone to jail?
Mr. Quill. Xo, sir. I told you that once before.
The Chairman. Mr. Quill, you heard the testimony of Mr. Moloney,
did you not, this morning?
Mr. Quill. Yes, sir.
The Chairman. He impresses us as a straightforward and clean-
cut and forthright individual who is rendering service to his com-
munity, holding an important position, of course, with the railroad.
Does that correspond with your opinion of him \
Mr. Quill. I think very highly of John Moloney. He is a candi-
date now for mayor. At least a lot of people think he is going to be. I
108 ORGANIZED CRIME IX INTERSTATE COMMERCE
had John come up to the grand jury on one occasion and I asked him
to tell about the trouble he was having with the city. He told them
there wasn't anything he could do, that it was an administrative prob-
lem with thf city.
The Chairman. His present candidacy, if he were a candidate,
Mould not induce him to perjure himself here, would it \
Mr. Ql hi.. No; I :"" sure lie did not do that.
The Chairman. So whatever facts he brought forth here are his
best judgment '.
.Mr. Quill. Certainly so. And he is a man of good judgment.
The Chairman. Have his previous statements over the period of
time yon have known him been in conformity with what he has said
here today?
Mr. Quill. I would say that all of the statements that John made
today and all the statements that he has made since he has been a city
commissioner have been highly consistent.
The Chairman. What he said before the grand jury was that he
thought there were certain obligations on the part of the city admin-
ist rat ion. wasn't that so?
Mr. Quill, lie said he felt it was an administrative problem of the
city.
The ( 'iiaik.m an. He indicated that there was some knowledge around
that there were certain pay-oil's.
Mi-. Qutll. Yes: 1 heard him say that this morning.
The Chairman. Had yon heard him say that previously '.
Mr. Quill. No, sir.
The Chairman. Had yon ever heard that from anybody else?
Mr. Quill. No, sir.
The Chairman. No indication of that at all?
Mr. Quill. No, sir. 1 was ama/ed to have heard it this morning,
as a matter of fact.
The Chairman. You had never heard anything similar?
Mr. Quill. John's complaint at that time was in connection with an
effort on his part to have the city commissioners indicate to the chief
of police a firm policy under which policy the police would actively
and rigorously enforce the gambling laws, in particular within the
limits of t he city of Covington.
The Chairman. Had yon heard before of the promises or induce-
ment which were held out to him in the event he might change his
attitude?
Mr. Quill. No, sir. This morning was the first I ever heard of
that.
Mr. Rick. You have at hand the grand jury report, the most recent
one, dated June 27, L951 i
Mr. Quill. Yes, sir.
Mr. Rice. You say here that the report which was written by the
commonwealth attorney as requested by the grand jury "contains the
findings and opinions of the grand jury. His views do not uecessarily
coincide."
Is there any place in here where your views do not coincide with
t he views of t lie grand jury?
Mr. <>i ii. i.. \ tier having learned what the committee fell this morn-
ing. I wouldn't let my views coincide with the jury's views about the
committee.
ORGANIZED CHIME EN INTERSTATE COMMERCE 109
Mr. Rice. You do not concur with the commenl madeaboul t lie Sen-
ate committee I
Mr. Quill. As I told you earlier, I think this committee has made
my job tremendously easier than it was last year. Gambling laws are
now easy to enforce within our jurisdiction and we are doing it success-
fully. Eighteen months ago yon could not do it to save your life. You
would walk up Madison Avenue and people would cross the street to
keep from talking to you if you tried to enforce those laws rigorously.
Mr. Kick. It looks' to me that very recently you departed in your
views from those of the jury. This was June -ll when your views do
not necessarily coincide, hut you have taken a stronger position as of
now.
M r. Quill. That is the jury's opinion, and 1 am giving you my per-
sonal position and views now.
.Mi-. Rice. Has your personal position changed recently?
Mr. Quill. I like to think it has been consistent. I tried from the
beginning, when I took office, to enforce the gambling laws against
any open gambling that 1 found, and 1 did not stick my head in the
sand and I did not stay home and not go places to avoid seeing it. I
led raids myself. I have a detective, an investigator, an appointee of
mine, who has the power of arrest. I do not. I took him and went out
and made these raids in an effort to stop the open gambling. "We did
drive it at least behind the hack doors in the early part. Now we
think that, thanks to your help; we are rid of it.
Mr. Rice. Point Xo. 9 interests me again. The statement is made —
Gambling had gone haywire in this county through the syndication of slot
machines. Their reappearance must not be.
What does that mean, ''had gone haywire" \
Mr. Quill. You mean that language is not clear to you \
Mr. Rice. That is right. It is not clear to me.
Mr. Quill. Maybe I used an unfortunate choice of words. I think
what the jury meant was that in the past gambling was way too
powerful, there was way too much, it was overdone, it was entirely
too prevalent. In Kenton County it seemed to be personified and
epitomized chiefly by the presence of slot machines. This grand jury
felt very definitely that those slot machines had been driven out and
they didn't want them to reappear. They wanted them kept out.
They wanted the officials prosecuted if they failed to keep them out.
Mr. Rice. Had you ever heard it said that the word went out to
close down the places during the time that the grand jury went into
session ?
Mr. Quill. Yes, sir. I have heard that said many times.
Mr. Rice. How do you account for that?
Mr. Quill. I cannot.
Mr. Kick. That was just the practice, a custom over the years; is
that the idea ?
Mr. Quill. I said I cannot account for it and I really cannot. I do
not know what that means. I am about it like you are about No. 9
in the jury report.
Mr. Rick. And you make a report here that the cessation that they
are talking about, that gambling is now nonexistent, the cessat ion was
due to the close and vigorous enforcement of the gambling laws by your
law enforcement officials.
s.".L'T7 -51- pt. 15 8
HO ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Quill. That is right.
Mr. Kick. Is there any testimony before the jury about officials
enforcing any laws?
Mr. Qi n.i*. Yes, there were 2 or 3 days of testimony. That jury
called in every law enforcement official in the county and questioned
everyone of them, before and after the recess.
Mr. Rice. But as to practical results of anyone being prosecuted
from 1 he big mob or anyone going to jail, there is nothing there.
Mr. Quill. No, sir ; not yet.
Mr. Rice. Then it says, "At the time of our original convening, the
only gambling in the county was slot machines and handbooks."
Do they concede that there were slot machines and handbooks
operating there?
Mr. Quill. I construe that to be a definite statement of fact; yes,
sir.
Mr. Rice. But no action taken toward those things which they
admit?
Mr. Quill. Yes. You mean the jury did not indict?
Mr. Rice. Yes.
Mr. Quill. That is right. The jury did return some gambling
indictments. This final report could be a little deceptive. Under
17, where we say there are two indictments returned with this report,
one being a handbook indictment, after the jury had been in session
for 7 days, when it started on its recess, it returned some 35 or 40
indictments at that time and there were at least a half dozen gambling
indictments among those I know.
The Chairman. Mr. Quill, you are an experienced prosecuting
officer and a man of wide experience generally, having been in the
legislature and otherwise. It is very apparent that you are quite
conversant with conditions generally and you are a man of ability.
Mr. Quill. Should I be worried about what is coming when you
start out with a compliment?
The Chairman. No. I am asking you for a simple fact, whether
you do not agree with us that widespread gambling activities such as
have been shown here to have existed and are admitted could not
exist without the connivance and the protection of law-enforcement
officials.
Mr. Quill. Well, I would say connivance and protection are two
affirmative actions, are they not ?
The Chairman. Would you say they possibly would be modified
to the extent required without being allowed to do so?
Mr. Quill. I would say permitted or suffered to happen. I know I
tolerated a good bit of it simply because it has been there since I
was born and I knew that was the way the community had grown
and that is what it had all these years. I felt to improve that con-
dition takes not only law enforcement but takes education.
The Chairman. Assuming, for the sake of discussion, that the ex-
tent of operation was as indicated by the testimony here, running up
to a million dollars or more, and that the divisions among the people
whom Senator Kefauver referred to today and in the sums that have
been placed in the record here are accurate, assuming that the extent
of the operations was as great as that, would yon not think it would
have been impossible for them to continue without being tolerated?
Mr. Quill. I think that is a correct statement, Senator.
ORGANIZED CRIME IX INTERSTATE COMMERCE HI
I might say those figures are astounding. We had looked at the
thing and we knew that the Lookout House was there. We knew
where it was. We knew that they had floor shows, that possibly 95
to 98 percent of their business came from across the river, from Cin-
cinnati. We knew they employed a lot of people and that the place
had been there a long time. That was the attitude the people had
toward the place until your committee developed that syndication
idea, and the people in Kenton County decide* 1 they wanted no part
of this Cleveland outfit or any other out-of-town outfit.
The Chairman. Mr. Quill, wouldn't you think also that such wide-
spread gambling operations with a large amount of money being
realized from the operations could easily lead to corruption and to
graft on the part of the police and other enforcement officials ?
Mr. Quill. I certainly think that it could, sir, yes, and maybe in
many cases does.
The Chairman. And do you think it might have possibly existed in
this case?
Mr. Quill. I would certainly say it was within the realm of pos-
sibility.
The Chairman. The only reason I make that statement is because
of this comment in the second paragraph of the letter referring to our
Senate committee. I will read these three sentences. It states:
At that time it was a specific conclusion of the Senate Committee Investigating
Crime in Interstate Commerce that the failure of law-enforcement officials to
enforce the gambling laws was and is the primary reason for the existence of
whatever gambling there was. The Senate committee's statement as to a "close
financial and personal relationship between these law-enforcement officials and
the gambling interests" was unsupported by any facts. It still is unsupported as
to Kenton County. Obviously such a conclusion is based on the cynicism of
the materialists who have long ago forgotten God and His commandments of
justice and charity.
What did you base that on, Mr. Quill ?
Mr. Quill. I should like to say three things about it. First, I
wanted to say when you complimented me in the beginning, you were
sandbagging me, and here it is.
The Chairman. No.
Mr. Quill. Secondly, I would say in regard to that that the jury
had a definite feeling from the reading of the third interim report,
page 68, or somewhere in there, out of which that quote came, that the
way that report was written the evidence offered in support of that
conclusion about Kenton County is a citation of things that went on in
three counties up in Ohio somewhere. So while the topic sentence of
that paragraph refer to Kenton, the proof is absent so far as Kenton
is concerned. Lucas County in Toledo is referred to and two other
counties in Ohio.
That was one of the things that the jury had in mind. That report
which made the statement did not have proof right in it concerning
our local community.
The Chairman. Apparently, though, Mr. Quill, you did not en-
deavor to find out what facts the committee had before you indulged
in this rather severe condemnation of the fact that the committee
members were entirely forgetful of God and His commandments.
Mr. Quill. Of course, the answer to that must be, Senator, that that
report is the jury's report and not mine.
The Chairman. Well, you were the one who wrote it.
112 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Quill. Yes, sir. I so indicated at the bottom.
The Chairman. They were your word-.
Mr.Qi hi- No. A. juror happened to have thought of them.
The Chairman. Which juror? Which one do yon think put those
words in your head '.
Mr. Qi 11.1.. I do not like to tell anything that is confidential or
secret in connection with grand jury work. The jury would criticize
me if 1 would. Also I do not like to deal in personalities.
The Chairman. I would not want yon to disclose any confidential
or secret information, but that is an unusual statement, to accuse a
Senate committee of being composed of people who long ago have
forgotten < rod and His commandments.
Mr. Qx [LL. 1 think so, too.
The Chairman. I was wondering since that is so unusual whether
you would not remember who conceived 1 hat brilliant idea.
Mr. Quill. 1 could. I am sure 1 can find out for you and inform
you if you wish.
Mr. KiCE. There is a statement in there. Mr. Quill, that while the
report voices the majority feeling of the grand jurors, some of the
grand jurors did not favor inclusion of handbooks along with the
prohibit ion of slot machines. Was there an argument in the grand
jury about whether handbooks should be allowed to operate? Was it
discussed that books should be allowed to operate only, but slot
machines be excluded '.
Mr. Quill. At the time the grand jury went into the circuit court
to ask the judge for the recess over the 7-week period, the judge con-
ducted an examination of the jurors and inquired about those various
forms of gambling from the jury. The jury, as I recall it, seemed to
recall slot machines as by far the greatest evil and they were unani-
mous in their attitude toward those. Three jurors felt differently
about belt ing on horse races, handling books.
Mr. Kick, dust for our information, why was there a distinction
made by the jurors that the slot machines were worse than handbooks?
There isn't any question that the Kentucky statutes forbid both types
of operal ion ; is there \
Mr. Quill. That is entirely correct.
Mr. Kick. How did they make that distinction as to the degree of
evil?
Mr. Quill. One of the tilings the judge said this morning can help
to answer that question. Covington was the home of the Latonia
horse racing track. For years they had raced up there and they had
been betting on horses. They think it is a very normal and pleasant
and somet im.es profitable thing to do, to bet on horses.
Mr. Rice. For the bookie.
Mr. (vh ii.n. For themselves. There are some hard-boots down there.
Evidently t he bookies have to make a living.
Mr. Rice. They didn't read the testimony about the man who oper-
ated the book in the adjoining county, Louis Rosenbaum. lie test ified
up here. He was one of those who operated in northern Kentucky.
Mr. Quill. I read about him.
Mr. Rice. The record will bear me out. He Was asked how much
taxes he had paid, income taxes he had paid in L948, and he said two
hundred. He was asked two hundred what, and he said two hundred
ORGANIZED CRIME IX INTERSTATE COMMERCE 113
grand. It looked like a profitable venture for him. 1 cannot conceive
of anybody betting with him making anything out of it. It is difficult
for ns to determine any distinction as to whether slot machines ought
to be excluded and horse books to be permitted when the statute out-
laws them both.
Mr. Qrnx. There is nothing in the law to support such a distinc-
tion and the only way it can be explained and accounted for is what,
at least in my opinion, 1 have attempted to tell yon about the difference
in attitude toward betting on horses and the playing of slot machines.
Mr. Rice. What has become of the wire service down there, Mr.
Quill?
Mr. Quill. 1 do not know. sir. What do you mean?
Mr. Kick. Are there wire tickers down there?
Mr. Quill. Not in Kenton County.
Mr. Rice. How do you know that?
Mr. Quill. Because I have sent my investigator around to check
minutely and daily.
Mr. Rice. To see if he could find them '
Mr. Quill. To bring in the telephone and the defendant to my
office if he finds them.
Mr. Rice. The Western Union tickers. There were 111 in there a
5Tear ago.
Mr. Quill. I am sine there is not one today.
Mr. Rice. Because your investigator tells you so?
Mr. Quill. That is one of the reasons. The horse players will tell
you that they cannot pay on horses.
Mr. Rice. Weren't there two bookies picked up last week?
Mr. Quill. I am sure about one. I read it in the papers as I was
coming here last week.
Mr. Rice. They had wire service.
Mr. Quill. I don't know. They were picked up by the city police.
Mr. Rice. Did you check that \
Mr. Quill. It occurred while I was en route here.
Mr. Rice. We have learned from other prosecutors sometimes a
good technique to determine the extent of the horse hook in an area
is to ask Western Union or the wire service the identity of the ticker
services in your area, which you can do on subpena duces tecum. It
is frequently very enlightening. You can tell then how many major
horse parlors are running in your county.
Mr. Quill. I can see where it would be.
Mr. Rice. Do you know a fellow by the name of Harold Walker?
Mr. Quill. Yes, sir.
Mr. Rice. What business is he in \
Mr. Quill. I do not think he is in any business. I started out
practicing law with him at 10 West Fifth Street. In 1011 Walker
bought a cafe and quit the practice of law and moved uptown. I
couldn't tell you too much about him since them.
Mi1. Rice. Did you ever hear that he stopped practicing law to
get into the wire service business?
Mi'. Quill. Xo, sir: I did not. He owned a cafe there when he
quit practicing law. He bought a cafe at .Ml Madison Avenue.
Mr. Rick. And the wire service was run in the room over the cafe.
Mr. Quill. I think it is 511 Madison. Mr. Rice.
Mr. Rice. The 514 Club?
114 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Quill. That is right. He sold that some time ago to a man
named Kappis, who operates it.
Mr. Rice. The records of the McFarland committee indicate that
there was a ticker there, but I do not know whether it was in his
name or not. He was a representative of the particular service.
He was a former law partner of yours, you say?
Mr. Quill. No. We were associated. We shared the expenses of
a joint office.
The Chairman. That will suffice, Mr. Quill. Thank you very
much.
Mr. Quill. Thank you very much, Senator. I appreciate coming
here. May I go home, if I wish, sir (
The Chairman. Yes.
Mr. Quell. By the way, may I ask you: Is there some way that a
guy can recover his transportation and a little per diem from the
committee?
The Chairman. That will be provided for.
Mr. Berndt, in the presence of Almighty God, do you swear that
the testimony you give shall he the truth, the whole truth, and nothing
but the truth?
Mr. Berndt. I do.
|
TESTIMONY OF HENRY A. BERNDT. SHERIFF, KENTON COUNTY, KY.
The Chairman. Will you kindly give us your full name, please?
Mr. Berndt. Henry A. Berndt, Lakeside Park, Kenton County, Ky.
The Chairman. Your last name is spelled how ?
Mr. Berndt. B-e-r-n-d-t.
The Chairman. What is your position, Mr. Berndt ?
Mr. Berndt. Sheriff of Kenton County.
The Chairman. How long have you been sheriff?
Mr. Berndt. I was sheriff one term before, 1938 to 1941. Then I
have been sheriff last year and this year.
The Chairman. In the period intervening between your first term
and this, what were you ?
Mr. Berndt. I have been in the garage business for 30 years.
The Chairman. In Covington?
Mr. Berndt. Yes.
The Chairman. Mr. Rice.
Mr. Rice. Sheriff, you say you went into office about January 1950,
the last time?
Mr. Berndt. January 1950.
Mr. Rice. You are still in office?
Mr. Berndt. Yes, I am in office now.
Mr. Rice. Are you the chief law-enforcement officer of the county?
Mr. Berndt. I am the chief law-enforcement officer. I am the chief
fire marshal. I am the chief dog catcher. I am the chief tax col-
lector. I guess I have probably 150 duties according to the statute.
Mr. Rice. How many men do you have under you. Sheriff ?
Mr. Berndt. Nine men.
Mr. Rice. You cover the county?
Mr. Bf.rndt. No, we don't. I presume when you say that, you are
talking about law enforcement.
Mr. Rice. Yes.
ORGANIZED CHIME EN INTERSTATE COMMERCE 115
Mr. Berxdt. No ; Ave don't.
Mr. Rice. What part of the county do you cover?
Mr. Berxdt. We have six men who are in the office as tax collectors.
We collect the taxes in our county. I have three men who serve proc-
esses. Right now lam trying to deal with a school board of the county
to get an increase of l1^. percent on the collections of their taxes-
John Shephard, who is the attorney for the school board, tells me that
I cannot use any of my tax-collection money for the operation of my
other department, other than the tax collecting. I have one man on
the writ desk who keeps records of all summons.
Mr. Rice. How many men do you have out checking on violations
of the law other than tax collecting ?
Mr. Berxdt. None.
Mr. Rice. You do not have any men out?
Mr. Berxdt. None.
Mr. Rice. Why is that?
Mr. Berxdt. Because I do not have them. I do not have money to
pay them. According to John Shephard, who is the attorney for the
school board
Mr. Rice. You say you do not have any men to enforce the law ?
Mr. Berxdt. Mr. Claney, my chief deputy, goes out with Mr. Mer-
shon and Mr. Armstrong. Mr. Quill's detective, whenever we can find
time from our tax collecting, and so forth, and so on.
Mr. Rice. Is that your main job, tax collecting?
Mr. Berxdt. That is our main job.
Mr. Rice. When you were sheriff before, back in 1938 to 1941, was
the situation any different with respect to the number of persons?
Mr. Berxdt. It was worse then.
Mr. Rice. Why?
Mr. Berxdt. Because our assessed valuation wasn't there to pay
the men.
Mr. Rice. So you did not have men to enforce the law in 19-11 when
you left ?
Mr. Berxdt. That is right.
Mr. Rice. You ran for office in 1948?
Mr. Berxdt. That is right. No, in 1 949.
Mr. Rice. You ran in 1948 ?
Mr. Berxdt. Ran in 1949.
Mr. Rice. And you took office in 1950. When you ran, did you com-
plain during your candidacy that you would not be able to do your
job?
Mr. Berndt. No, sir; I did not.
Mr. Rice. When you took office in 1950, j'ou knew what you were
getting into?
Mr. Berxdt. That is right.
Mr. Rice. You took an oath of office, didn't you ?
Mr. Berxdt. Yes, sir.
Mr. Rice. You swore to uphold and enforce the laws ?
Mr. Berxdt. Yes, sir. To the best of my ability.
Mr. Rice. To the best of your ability?
Mr. Berxdt. That is right.
Mr. Rice. Anything in the oath about that?
116 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mi. Berndt. The county judge gave it to me. You can read it.
I do do! know just what it says, but to the best of my ability, that
is what I have done. My man, Mr. Claney, has made inspections with
Mr. Mershon, chief of the county police, and Mr. Armstrong.
Mi'. Rice. Let's go real slow. You arc talking about inspections.
Mi-. Bi rndt. That is right.
Mf. Kick. What arc you talking about now?
Mr. Berndt. When Mr. Armstrong, Mr. Quill's detective, and
Mr. Rice. Mi'. Quill's detective?
Mr. Berndt. That is right.
Mi-. Rick. Yes.
Mr. Berndt. And Mr. Mershon, county detective, or the county
police chief and I Carry ( Jlaney.
Mr. Kick. Who is he? Who is Claney?
Mr. Berndt. He is my chief deputy.
Mr. Rice. lie is a deputy sheriff?
Mr. Berndt. That is right.
Mr. Kick. All right.
Mr. Berndt. They have made numerous inspections whenever I
could spare him. Mr. Claney ordinarily works in Judge Good-
enough's court and also works in the tax department with me.
Mr. Kick. He has split duties, then?
Mr. Berndt. That is my trouble right now.
Mr. Kick. What is your trouble?
Mr. Berndt. Well, I have been before the school board during the
last 8 months and I am in hopes of getting back for the 1st, when
they meet again, on Wednesday. T want to try to get more fees, 2%
percent instead of 1 percent of the school taxes.
Mr. Rick. You told us that you made inspections. When did those
inspect ions start that you told us about I What month?
Mr. Berndt. We knocked off the Kentucky Club the first part of
last year, the Kenton Club.
Mr. Kick. Was that as a result of your inspections?
Mr. Berndt. We went up and knocked them off.
Mr. Kick. That was in January L950?
Mr. Berndt. That is right.
Mr. Kick. When did you start inspecting the various clubs?
Mr. Berndt. 1 would say maybe in April. The raid was in March.
We started in April. 1 would presume around that time. I wouldn't
want to say just exactly what time.
The Chairman. Of 1950?
Mr. Berndt. Yes. The same year I went into office.
Mr. Kick. They were closed for 1 or ;> days during that time?
Mr. Berndt. I imagine they were closed longer than that.
Mr. Rice. Lei*- gel down to the inspections. Let's talk about these
inspections. You said you started an inspection procedure. Can you
fix the time you started t hose inspect ions '.
Mr. Berndt. Around April or May.
Mr. Kick. L950?
Mr. Berndt. Yes.
Mr. Kick. What happened in January. February, and March? No
ill-pert ion- \
Mr. Berndt. I told you we raided and took- the Kent ucky Club.
Mr. Kick. Let'- talk about the inspections.
ORGANIZED CRIME EN INTERSTATE COMMERCE 117
Mr. Berndt. I would say there is a month or so that we were organ-
izing the office and getting things sel up. J think the firsl place we
knocked off was the Kenton Club.
Mr. Rice. Let's forge! about the knocking off. Let's talk about the
inspections.
Mr. Berndt. Mr. Claney has gone out with Mr. Mershon and Mr.
Armstrong at various times, whenever I could spare him from the
office.
Mr. Rice. Would that be once a month?
.Mi'. Berndt. Sometimes it would run oftener than that.
Mr. Kick. What would they do ( Would they make a report to you?
Mr. Berxdt. Yes.
Mr. Rice. In writing?
Mr. Berndt. It just came in with one of your yellow pads there
and it would have the date of the inspection and where they were,
like the Lookout House.
Mr. Rice. Yes, like the Lookout House.
Mr. Berxdt. Or the Cabana, the Hillcrest. and all the way out on
the highway.
Mr. Rick. What would the report say, Sheriff?
Mr. Berxdt. That they just found no gambling.
Mr. Rice. Found no gambling \
Mr. Berxdt. No gambling.
Mr. Rice. What would you do with the reports?
Mr. Berndt. Mr. Claney has them in his office.
Mr. Rick. Mr. Claney has them?
Mr. Berxdt. He is my chief deputy. He has them in his desk.
Mr. Rick. Would you look at all the reports?
Mr. Berndt. Yes, sir.
Mr. Rice. Do you have one for every month \
Mr. Berxdt. Xo.
Mr. Rick. Are there any months missing?
Mr. Berndt. Quite a few. From the loth of September until the
15th of April we are quite busy wth our tax collections.
Mr. Rice. So that in some of those months you do not get around,
do you '.
Mr. Berndt. We do not really try to make any attempt at the law
enforcing. Last year I was under Si 75.01 10 bond for collection of taxes.
There is a whole lot of that KRS that says the sheriff should do.
Mr. Rice. Yes, sir.
Mr. Berxdt. You just cannot do all of that. You gentlemen must
realize that.
Mr. Rice. Do the people know that ?
Mr. Berxdt. They should know that.
Mr. Rice. Did you tell them that?
Mi-. Berxdt. I appeared before every grand jury and told them.
Mr. Rice. Told them that you just could not do it?
Mr. Berxdt. Yes, sir. There is not a grand jury that has been in
since I have been in office that I haven't told the same thing.
Mr. Rice. You attribute that to lack of money?
Mr. Berxdt. There is nothing else.
Mr. Rice. Maybe some of that money that is leaving that county
down there, if it stayed there
Mr. Berxdt. We collect 97 percent of our taxes.
118 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. And you have some pretty good collectors who live out
in Nevada named Kleinman and Rothkopf and others.
Mr. Berndt. Until your committee came into the picture, we had
never heard of them.
Mr. Rice. Mr. Quill said they look $4-0 of his and made off with it.
Mr. Berndt. I do not think Mr. Quill said he knew they took it.
Mr. Rice. They were at the Lookout House.
Mr. Berndt. 1 do not think Mr. Quill or any other citizen of Ken-
ton County knew that there was an out-of-town element in the Look-
out House. I am sincere in that.
Mr. Rice. It is too bad they didn't know that because it looks like
nearly a million dollars came out of Kenton County.
Mr. Berndt. Most of that came out of Hamilton County.
Mr. Rice. I am talking about Lookout House. That is in your
county.
Mr. Berndt. I would say 97 to 98 percent of the people who visit
Lookout House are from Hamilton County and from New York and
Cincinnati and San Francisco and all over the country. I thought
you were inferring the money was coming out of Kenton County.
Mr. Rice. Yes.
Mr. Berndt. I say all of their business was out of State.
Mr. Rice. Mr. Quill stated
Mr. Berndt. I believe Mr. Quill would substantiate that.
Mr. Rice. He said he lost $40 out of there.
Mr. Berndt. Maybe he did.
Mr. Rice. He said he did.
Mr. Berndt. I believe I said 97 to 98 percent.
* Mr. Rice. As a matter of fact, you never checked up to find out, so
you really do not know.
Mr. Berndt. I do not know.
Mr. Rice. According to the law, the Kentucky law, it says in section
701 GO that the sheriff or the deputies shall at least once each month
visit and inspect each public place in his county where music is fur-
nished or permitted or where there is a road house or restaurant and
he shall report in writing to the county attorney his conclusions, to-
gether with the name and address of witnesses as to disturbances and
what not. You take the position that you just do not do that?
Mr. Berndt. It also says rooming houses, tourists camps, and the
like.
Mr. Rice. It says road houses, it doesn't say anything about room-
ing houses.
Mr. Berndt. There is something in the statute about rooming houses
also.
Mr. Rice. Or where men and women are furnished rooms for
lodging.
Mr. Berndt. That is right. Go down to the next section of the
statute where it allows him $1,500.
Mr. Rice. I don't see that.
Mi. Berndt. It is in there.
Mi-. Rice. What is the point there?
Mr. Berndt. Let me tell you how that law was passed. There is,
for example, Robinson County with GOO population. Those sheriffs
did not make $25 a week. The Sheriffs Association of Kentucky had
ORGANIZED CRIME EN INTERSTATE COMMERCE 119
that law passed so that they could furnish them $1,500 just to help
make up their salaries. When you refer back, take a look at Jefferson
County and our county. Jefferson has half a million people. Our
county has 125,000. I would have to make approximately 1,800 re-
ports a month before I could claim that, and I would get $1,125.
Mr. Rice. It all adds up to your being unable to do that?
Mr. Berndt. Yes, sir.
Mr. Rice. It was impossible for you to do it before when you were
sheriff?
Mr. Berndt. That wasn't the law then.
Mr. Rice. When you ran for office you knew it was impossible?
Mr. Berndt. Yes, sir.
Mr. Rice. Still you ran for office in a position where you could not
accomplish that?
Mr. Berndt. I couldn't accomplish that.
Mr. Rice. It makes it a violation of law where the sheriff fails to
act or there is an omission either by himself or by the deputy sheriffs,
and they shall be responsible. It goes on to make that a criminal vio-
lation capable of sending you to jail and relieving you of most of
your duties.
Mr. Berndt. No, sir; it doesn't say that.
Mr. Rice. It says the sheriff shall be liable for the acts or omissions
of his deputy.
Mr. Berxdt. That is not in that section of the statute that you were
just talking about. That is in our oath of office. It also says in
there that I am chief fire marshal. I should attend all fires and
make a report on them. It also says I should go out and have cameras
on tripods and measuring rods, and one thing or another, and check
up on all road accidents. With nine men at $200 a month, and you
have to get them to furnish their own automobile, why, that is an im-
possibility. We have an antiquated constitution that needs revision.
I will tell you the truth about the situation of a sheriff in Kentucky.
Mr. Rice. Let me read you this. In section 350, it says :
Any peace officer having knowledge or information of the commission of an
cffense, or who has knowledge of any person aiding or abetting an offense, who
fails to arrest or cause to be arrested immediately the person offending and take
him before the proper court, shall be fined not less than $1,000 and shall be
imprisoned for not less than 6 months and shall forfeit his office.
So, if you were running for an office in 1948 which you knew you
could not conceivably fill
Mr. Berndt. Yes, sir.
Mr. Rice. You were subjecting yourself to the possibility of going
to jail for it.
Mr. Berndt. I do not think I will go to jail for it.
Mr. Rice. You do not think you will. However, if the letter of
the law were strictly adhered to, it would be possible.
Mr. Berndt. If the letter of the law were strictly adhered to, 1
would be furnished enough money to operate my office efficiently and
cover the 50 different sections of the KRS.
Mr. Rice. What is that ?
Mr. Berndt. Kentucky Revised Statutes. There needs to be a
change in that antiquated constitution. We had it up in 1917, to have
it changed, and the people voted it clown. You cannot expect a man
to go out and do all these things.
120 ORGANIZED CRIME IN INTERSTATE COMMERCE
Right now John Shephard is refusing to pay me the extra V/i per-
cent. We will probably go to court about that. I have to get an
answer tomorrow nighl — the 1st, Wednesday night.
Mr. Rice. I think you have a fine position, and you are in some-
what of an embarrassing position by reason of circumstances some-
what beyond your control, hut about which you know.
Mr. Berndt. That is right. I am under a bond of $175,000 for that
dough and I must take care of that. 1 try to serve the courts faith-
fully and honest ly.
The Chairman. Senator Kefauver.
Senator Kefauver. The main thing, then. Sheriff, as to this gam-
bling and what not that goes on, is thai you just do not have the man-
power to do soniet hing about it. Is that your position ?
Mr. Berndt. Senator, that is right.
Senator Kefauver. You know it is going on.
Mr. Berndt. 1 believe that it is.
Senator Kefauver. How many places have been operating in your
county since you have been in?
Mr. Berndt. You mean cafes?
Senator Kefauver. I mean how many of these gambling casinos.
Mr. Berndt. I would say only the one.
The Chairman. The Lookout \
Mr. Berndt. The Lookout House.
Senator Kefauver. We have had evidence about quite a number of
those.
Mr. Berndt. You will find a lot of little places. I don't think there
is any doubt about that.
Senator Kefauver. You knew they were operating pretty well.
Mr. Berndt. Yes; I believe they were operating. I would have to
say that because I have a list. You ordered our commonwealth at-
torney to send it to me.
Mr. Rice. Yes.
Mr. Berndt. I got that list. I knew if they took out a license they
were doing something.
Senator Kefauver. You knew they were operating, but you did not
have the manpower to do anything about it.
Mr. Berndt. I do not think it is fair to pick out one fellow and let
another fellow run.
Senator Kefauver. You want to let them all run '.
Mr. Berndt. No; I want them all to be closed.
Mr. Rice. You hit some of them.
M r. Berndt. I hit the Kentucky Club and the Kenton Club. It took
all afternoon to haul the paraphernalia out of there.
Senator Kefauver. How many people did you arrest?
Mr. Berndt. T think it was just Bud Clark who took the rap.
Senator Kefauver. Someone took the rap?
Mr. Berndt. Either Bud Clark or John Walsh. T do not know
who was the one who took the rap. That was a month or so after I
took office.
Senator Kefauver. Who decides on who is going to take the rap?
Mr. Berndt. I could not tell you that, Senator.
Senator Kefauver. You like someone to take the rap?
Mr. Berndt. Not me. I don't care who takes the rap. We went up
and we took stacks of checks. We mussed them all up.
ORGANIZED CRIME EST INTERSTATE COMMERCE 121
Senator Kefauvek. When did that start up again I
Mr. Berndt. 1 don't know. I bnagine maybe
Senator Kefauver. A couple of weeks after thai \
Mr. Berndt. I wouldn't want to say whether it was 2 weeks or a
month or when.
Senator Kefauvek. Did you go back to get them again?
Mr. Berndt. No; I did not go back to get them again. Here I am
with my tax collections, my serving three courts, serving all sub-
penas and notices. Senator, let me tell you this: Can you imagine
a State where you will drive 76 miles for 18 14 cents to serve a paper?
Senator Kefauvek. You asked for it, Sheriff.
Mr. Berndt. That is right. That is what I am giving them. I serve
papers and serve them well.
Senator Kefauver. Sheriff, how much do you make out of your job ?
Mr. Berndt. $7,200.
Senator Kefauver. Is that a salary?
Mr. Berndt. That is a salary. I have to earn it. I am $3,800 in the
red up to the first of this year. If I do not get this increase from the
schools from 1 to 2% percent, I am going to wind up approximately
$5,000 in the red this year. The State pays me but it takes my fees
and gives 25 percent of them to the county.
Senator Kefauver. You get $7,200, in which event you have to
earn it?
Mr. Berndt. I have to earn it. If I do not make it, then I won't get
money at the end. If I am in the red, and it looks that way for the last
2 years, I do not get any salary. In other words, it is a fee proposition.
Senator Kefauver. I do think that in most places I know about the
law enforcement officers are very greatly underpaid. It is a terrible
situation. In some places they have a police officer or sheriff working
for very, very little and expect to get the type of men that are needed,
with honesty and courage that is required, but, of course, $7,200 is a
pretty good salary.
Mr. Berndt. I cannot pay my men, Senator, more than $200 a
month, but they have to furnish their own automobile. I furnish the
gas, but they pay for their tires and everything else.
Senator Kefauver. Have you ever asked for more money?
Mr. Berndt. I have to ask myself. I am asking the school board for
more money.
Senator Kefauver. Did you ask the county board for it?
Mr. Berndt. They have nothing to do with it. It is a matter of
statute.
Senator Kefauver. Did you ask that the statute be amended ?
Mr. Berndt. The sheriffs' association had a bill passed through the
senate last year whereby we would get more money for serving papers,
but it was lost before it got to the house and they never passed it.
You know that you cannot drive 76 miles for 18*4 cents. It just isn't
in the book. If it is a summons, it is 45 cents, gentlemen. I am talking
about a notice or subpena. If it is a summons it is 45 cents.
Senator Kefauver. I do think. Sheriff, and I am not condoning your
lack of enforcement of the law, since you admit you haven't enforced
the law and the record down there shows that it hasn't been enforced,
but your reasons are that you did not have the manpower, and I have
a feeling you could have done better if you had tried harder. I think
these groups that are interested in law enforcement should make a
122 ORGANIZED CRIME IN INTERSTATE COMMERCE
study of the salary and compensation paid enforcement officers all
over the country and go to bal for them. We have a tabulation of
what their pay is and ill most places an enforcement officer is pitifully
underpaid.
Mr. Berndt. There is no doubt about it.
Senator Kefauver. Sheriff, did you receive a letter from George
Robinson, the associate counsel of this committee?
Mr. Berndt. No, sir.
Mr. Rice. 1 think he sent one to somebody in this county.
Mr. Berndt. In fact, I did not know 1 was supposed to come up here.
Senator Kefauver. 1 do not mean recently. This was about the
wire-service operations.
Mr. Berndt. No, sir; I didn't.
Senator Kefauver. You know about those places?
Mr. Berndt. Which?
Senator Kefauver. The bookie operations.
Mr. Berndt. 1 know about handbooks, but I did not receive any
letter or any Avoid.
Senator Kefauver. Wasn't that in the papers about where all the
handbooks were located \
Mr. Berndt. Those were slot machines.
Senator Kefauver. When the McFarland committee made its re-
port, took this testimony in May of 1950, it had a list of 111 places.
There seems to be four or five pages.
Mr. Berndt. A 1 1 1 what ?
Senator Kefauver. It had addresses of all the places in your county
that had wire service, showing they had handbooks.
Mr. Berndt. I didn't see that.
Senator Kefauver. Did you ever get any of these handbook
operators ?
Mr. Berndt. Kenton Club was the only one.
Senator Kefu \ i:i;. Have you arrested any of these 111 people?
Mr. Berndt. Kenton Club and the 627 Club, which is what we were
talking about. Those are the two biggest in town. I cannot get the
lii I le ones. I got the big ones when I did get them.
Senator Kefauver. You did not bother about the little ones?
Mr. Berndt. I got the big ones.
Senator Kefauver. Do you know any of these big-time operators
who come out of Ohio?
Mr. Berndt. I never heard of them.
Senator Kefauver. Are you sure you have never heard of them?
Mr. Berndt. I do not believe I have.
Senator Kefauver. You never heard of Moe Dalitz, Kleinman,
Rothkopf, McGinty — that quintet?
Mr. Berndt. 1 do not believe there is a person in Kenton County
thai ever hen v<\ of any one of those fellows — -and that takes in everyone.
Senator Kefauver. Sheriff, you must have heard about them after
January.
Mr. Berndt. Yes. I am talking about before your committee ex-
posed them.
Senator Kefauver. You did not know they were operating at all?
Mr. Berndt. Until you people told us.
Senator Kefauver. Have you been on the lookout for them since
then ?
ORGANIZED CRIME IX INTERSTATE COMMERCE 123
Mr. Berndt. No, sir.
Senator Kjefatjver. Why haven't you?
Mr. Berndt! You said on the lookout for them \
Senator Kefauyer. Have you been on the lookout for these big-time
operators ?
Mr. Berndt. I do not believe any of them come to the county. I
wouldn't know one of them and wouldn't know where to start looking
for them. I do not believe any of them were in the county, at least
to my knowledge.
Senator Kefauver. You haven't been out to the Lookout Club to
inquire about it?
Mr. Berndt. Yes ; Mr. Claney, Mr. Mershon, and Mr. Armstrong
have made 15 or 20 inspections there.
Senator Kefauver. But do you know whether they inquired for
Dalitz, Kleinman, McGinty, and Rothkopf, and Polizzi?
Mr. Berndt. No. They looked for gambling paraphernalia.
Senator Kefauver. It seems you are trying to grab the parapher-
nalia and you are not worried about the big fellows. You let the little
fellows take the rap and you do not go after the big fellows.
Mr. Berndt. Until your committee named the big fellows — those
names you mentioned from the Cleveland hearing — as I told you be-
fore. I do not believe anybody in Kenton County ever knew of them,
ever knew they were interested in Lookout House or anything about
it. I really do not think so.
Senator Kefauver. Sheriff, you are paying our committee quite a
tribute, but it has been in articles that these gentlemen of the press
have been writing about the activities of this gang a long time before
we entered the picture. It has been known for a long time that they
operated these places in Kentucky, and it has been printed very
frequently.
Mr. Berndt. Senator. I do not like to differ with you, but I do not
believe that anybody in Kenton County — this is right from the bottom
of my heart and I am under oath—ever heard of any of them until
you exposed them. That is sincere and really I do not think anybody
ever heard of them or knew of them until you exposed them.
Senator Kefauver. How about this fellow Schroeder. Do you
know him ?
Mr. Berndt. I think he is connected with the Beverly Hills.
Senator Kefauver. Who is the front for Lookout Club, Mr. Rice?
Mr. Rice. Jimmy Brink.
Senator Kefauver. Schroeder is not? He is in the other county?
Mr. Rice. No, sir. He is in the Lookout, too.
Senator Kefauver. Do you know Jimmy Brink?
Mr. Berndt. Yes.
Senator Kefauver. Why don't you get him?
Mr. Berndt. I did.
Senator Kefauver. What happened to him? Did he get fined or
go to jail?
Mr. Berndt. They were fined and their equipment all busted up.
Senator Kefauver. How many gamblers have you gotten in jail
since you have been sheriff?
Mr. Berndt. In jail? None in jail.
The Chairman. There was one 25 years ago.
Mr. Berndt. They are indicted and pay fines.
124 ORGANIZED CRIME IX INTERSTATE COMMERCE
Senator Ki.iwi ver. This team of Croft, Myer, Schroeder, in addi-
tion to Jimmy Brink — do you know them?
Mr. Berndt. I wouldn't know any of them.
The Chairman. That is all, Sheriff. Thank you vny nmdi.
Mr. Warren.
TESTIMONY OF FRED M. WARREN, CITY SOLICITOR, NEWPORT, KY.
The Chairman. In the presence of Almighty God, do you swear
the testimony you will give shall he the truth, the whole truth, and
not hing hut the truth?
Mr. Warren. I do.
The Chairman. Your full name, please.
Mr. Warren. Fred M. Warren.
The Chairman. What is your address?
Mr. Warren. My office address is 9 East Fourth Street, city of
Newport. My residence address is 630 East Third Street, Newport.
The Chairman. Your present position is?
Mr. Warren. ( 'it v solicitor for the city of Newport.
The Chairman. For how long have you been city solicitor at New-
port ?
Mr. Warren. Since January 1950.
The Chairman. Did you hold any office prior to that time?
M r. Warren. Not in the city of Newport; no, sir.
The Chairman. Elsewhere in the State of Kentucky?
Mr. Warren. Yes.
The Chairman. What other office?
Mr. Warren. Police judge of the city of Southgate in 1930. That
was before Beverly Hills. Also I was city attorney at Southgate.
The Chairman. Mr. Rice.
Mr. Kick. You have been present during most of the testimony here
today, Mr. Warren?
Mr. Warren. Yes, sir.
Mr. Rice. You are from the county immediately adjacent to the
county that we have been talking about!1 You are from Campbell
County, as distinguished from Kenton County?
Mr. Warren. That is correct.
Mr. Rice. Campbell County is immediately to the east of Kenton
and includes t lie city of Newport, just south of Cincinnal i \
Mr. Warren. Yes, sir.
Mr. Kick. Tell us the names of some of the gambling casinos that
it too
have been operating in your county.
Mr. Warren. What do you mean by their having operated in our
county '.
Mr. Rick. Tn the past the notorious, big casinos.
Mr. Warren. Prior to 1950 there were notorious gambling places
at the Merchants Club, which is L5 East Fourth Street, the Yorkshire
on York Street in Newport. There was the Flamingo (dub, which is
on York Street in New port .
There was also the Alexandria Club on Alexandria Pike in New-
port. There was Beverly Hills Country Club in Southgate.
.Mr. Kick. That is out of the county?
Mr. Warren. That is right.
Mr. Rice. So far all you name are in the city limits.
ORGANIZED GRIME EST INTERSTATE COMMERCE 125
Mr. Warren. The Latin Quarter, on Licking Pike.
Mr. Rice. That is in the county \
Mr. Warren. That is right. Wilders, Ky.
Mr. Rice. You say in 1!)50 they were shut down '.
Mr. Warren. I said that prior to 1950 most of those were in
operation.
Mr. Rice. What happened in 1950?
Mr. Warren. An organization known as NCA, the new Civic Asso-
ciation, was organized in 1949 with the purpose of cleaning up
Newport.
Mr. Rice. In general, who composed that group, Mr. Warren?
Mr. Warren. I cannot say. I do not know.
Mr. Rice. Representative citizens?
Mr. Warren. Right. It was organized when I was not living in
Newport. My residence was Fort Thomas. It was organized by
civic-minded businessmen. They chose a ticket of four outstanding
first-timers in politics to compose a board of commissioners. They
were offered to the electorate of Newport, and for the first time in
the history of Newport that entire slate was elected. They took office
in January 1950, and Mr. Malcolm Rhoads was chosen their city man-
ager. He subsequently offered to me the city solicitorship, which I
accepted.
In March we made a concerted drive to eliminate gambling, pros-
titution, and other vices in the city of Newport and to a large measure
previous gambling that had been condoned was eliminated.
Mr. Rice. Did that group prove to be successful in obtaining some
injunctions?
Mr. Warren. No. They never attempted any.
Mr. Rice. Were there some injunctions granted at one time in con-
nection with Campbell County?
Mr. Warren. Yes, sir.
Mr. Rice. Tell us what those were.
Mr. Warren. I do not have personal knowledge. That was when
I was not home. I was in the service at that time.
Mr. Rice. You were down at Fort Thomas ?
Mr. Warren. No, sir. I was in the service.
Mr. Rice. I see. Go ahead.
Mr. Warren. Injunction proceedings were instituted, I think, in
1942 or 1943. They were started on behalf of the attorney general
by Charles E. Lester, Jr., who was instrumental in having these abate-
ment suits and injunctions commenced in our Campbell circuit court.
Mr. Rice. They were permanent injunctions against some of the
gambling operations similar to the injunction against the Lookout
House ?
Mr. Warren. Yes, sir. There was long litigation that lasted about
a year, during which time, I understand, all gambling was eradicated.
However, after judgment was entered and injunctions had against
many known gamblers they resumed their previous operations and
continued to operate until, as I said, early in 1950.
Mr. Rice. Just by way of background and not with any inference
against you, how is it possible to have injunctions, permanent injunc-
tions granted against these places which once were operating — such
as Beverly Hills, for instance
85277 — 51— pt. 15 9
126 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Warren. No, sir. As I recall it. it was not against any par-
ticular building. It was against the individual.
Mr. Rice. Were these individuals, these principals, later identified
with the Beverly Hills and Yorkshire Clubs and others?
Mr. Warren. Yes, sir.
Mr. Rice. How is it -conceivable that these injunctions can be on
the books and the people continue to operate? It is not reconcilable
ordinarily. That is inconsistent. How do you explain those things
to the people there?
Mr. Warren. It has never been explained, sir.
Mr. Bice. Do the people know about that?
Mr. Warren. Yes. sir.
Mr. Kick. They just leave those things up in the air?
Mr. Warren. Yes. sir. Maybe we are all to blame for that. I
think that any individual could have taken action. It seems to me
that is worthless. We have statutes in Kentuck}^ that prohibit gam-
bling and they in themselves are sufficient, so the injunctions are
superfluous.
Mr. Kick. Well, here we have a mandate of the court, which would
presumably cause the judge who issued it to feel that any person
violating that would be particularly contemptuous of his mandate.
■Mr. Warren. That is right.
Mr. Rice. He might indicate a particular interest, an individual
interest, in seeing that his injunctions were enforced.
Mr. Warren. That is right. In that respect, of course, it is in
addition to the statutory prohibition.
Mr. Rice. Yes. That is just one of those things that is not ex-
plained. Is that the idea ( Do you know what judge it was who
issued those injunctions?
Mr. Warren. It was a special judge. No; I cannot tell you.
M i . Rice. Who is the judge there now?
Mr. Warren. Judge Ray Murphy.
Mr. Rice. He is in the county court?
Mr. Warren. No sir ; he is in the circuit court.
Mr. Rice. In the circuit court?
Mr. Warren. Yes, sir.
Mr. Rice. It was his court from which it was issued?
Mr. Warren. Yes; I think the judge was a party to the suit. If
not. then he on his own motion vacated and a special judge was ap-
pointed. So, Judge Murphy had nothing to do with that action.
Mr. Rice. Does your own office have any jurisdiction over gambling,
Mr. Warren«
Mr. Warren. Yes, sir. Any law-enforcement agency has juris-
diction over gambling.
M r. Rice. What is t he sit uat ion since, well, let's go back to January
of 1951, with respect to the casino gambling within your jurisdiction?
Mr. Warren. So far as I know — and 1 have personally investigated
the matter on numerous occasions, although I am not a law-enforce-
ment officer- in the law department in the city of Newport we have
a city solicitor and a city prosecutor.
Mr. Rice. Yes.
Mr. Warren. The city prosecutor prosecutes all actions in the city
court, the city police court. He also usually prepares the warrant.
ORGANIZED CRIME IN INTERSTATE COMMERCE 127
Now. answering your question specifically, to the best of my knowl-
edge and sincere belief, gambling has been eradicated in the city of
Newport, except for, oh, minor cheating that may go on, which has
been reduced, I would say, to the limit that can be expected in a
community of that size.
.Mr. Kick. Well, I think I will have to go righl along with you. I
think our records will show that our stall member who went out in
that area was stopped when he attempted to go into the Yorkshire
about a month ago. hut did gain access and did gamble in both the
Beverly, I believe, and the Latin Quarter, which are out of the county.
Mr. Warren. Yes, sir.
Mr. Kick. Now the Alexandria, though, I think he said he did a
little gambling in there. That is in the city ; isn't it \
Mr. Warren. Yes, sir.
Mr. Rice. He said as to the Alexandria Club :
Mr. Nellis. As to the Alexandria Club you were there; were you not?
Mr. Goddard. Yes, sir.
Mr. Nellis. And did you observe gambling there?
Mi-. Goddard. Yes.
The Chairman. When?
Mr. (Joddaiid. This was on — let me think a minute — it was actually Wednesday
morning, which would be June 5 or 6, because it was after midnight. To be
specific, it was after 2 o'clock, because I looked at my watch and I have been told
that they had a 2 o'clock curfew in the places.
They had two tables in the room where the bar was, one on each side of the
large door that led into the liar. One was a blackjack table and the other was
a chuck table.
.Mr. Nellis. Now, do you have any chips that you picked up at any of these
clubs?
Mr. Goddard. Now, about those chips, yes ; I stuck a chip in my pocket.
Mr. Warren. Yes, sir. The Alexandria Club is owned and operated
by Harry Dennert, whose attorney is Charles E. Lester, Jr. ; and, as I
said before, the abatement proceedings were instituted back in 1942 or
1943, by Mr. Lester.
Mi-. Rice. Whajt was the first name of Dennert?
Mr. Warren. Harry.
Mr. Rice. Harry ?
Mr. Warren. I am sorry. It is Arthur.
Mr. Rice. Arthur.
Mr. Warren. That is right. That combine, Dennert and Lester,
has been a very severe headache to the administration since we. have
gone into office. While others have cooperated to an extent that when
they found out that we were sincere in our effort to eliminate gambling,
they have practically gone out of business, but Mr. Dennert has habit-
ually and repeatedly defied us in every respect and has done all in their
power to break down the morale and the efforts of the administration.
He is protected, advised, and assisted on all his operations by a very
skillful and shrewd attorney, and we find it very difficult to combat
that combination.
Mr. Rice. You are talking about Mr. Lester, now?
Mr. Warren. Correct.
Mr. Rice. 1 think for the record, Senator Kefauver, Mr. Lester
appeared with Chief Gugel up in Cleveland.
Senator Kefauver. Yes.
Mr. Warren. Now. we have raided the Alexandria Club, if I may
use that word "raid" on several occasions. We passed a special ordi-
128 ORGANIZED CRIME EST INTERSTATE COMMERCE
linnet' which we thought would eliminate, to some extent, his opera-
t ions. Inn thai ordinance was held unconstitutional by out police court
and we are appealing that now.
The city manager has placed in thai business two defectives, who
stay there from LO o'clock al night until lie closes. They just sit there.
That is their whole duty. We hope that we have him whipped. We
don'1 know if we have or not.
Mi-. Rice. How long ago was that, that that occurred, Mr. Warren?
Mr. Warren. In the last, I would say, 6 weeks.
Mr. Kick. That is going on right now?
Mi-. Wakren. Correct.
Mr. RiCE. Two detectives are sitting in the Alexandria Club every
night \
Mr. Warren. Yes, sir.
Mr. Kick. Prior to that time, how do you account for the Alexan-
dria Club operating? Do you think there was any protection there?
Mr. Warren. I have no reason to believe that there has been during
the present administration.
The Chairman. How about in the past?
Mr. Warren. In the past, I think they all were protected to some
extent. That is my opinion. I have no proof of it.
The Chairman. In other words, do you think they could have
operated so openly and so regularly and for such protracted periods
wit hout protection?
Mr. Warren. It would have been impossible to do so.
The Chairman. All right.
Mr. Warren. I thought that when this administration went into
office all that would be necessary to do to close up the places was to
make a sincere statement that gambling is over. However, I found
out that I was too naive, that they met every new move with counter-
forces, and you have to be on your toes all the time.
The Chairman. Mr. Warren, just in that general connection, and
again asking your opinion based on your general knowledge of condi-
tions in that section, are you familiar with the references in the in-
terim report of this committee as to the Kentucky situation, particu-
larly as to the syndicate, the Cleveland syndicate, coming in and the
operation of the various clubs, all of which are named, and I happened
to read them at the outset of today's bearings, I don't know whether
you happened to be here at the time or not
Mr. Warren. No, sir; I was not here, but I think I am familiar with
it.
The Chairman. Do you think, generally speaking, that the com-
ments in the report are well founded and that the conditions alleged to
exist did exist?
Mr. Warren. Yes, sir. I don't think there is any question about
that.
The Chairman. Yes, sir.
Mr. Warren. However, I do not believe they exist now.
The Chairman*. Yes. I was referring to the past. I am glad to
have you give us the benefit of your knowledge as to the previous con-
dit ions and as to the present.
Mr. W \i;i;i.\. Yes. sir.
The Chairman. Did it represent, in the aggregate, quite a sizable
undertaking? Don't you think so?
ORGANIZED CRIME IX INTERSTATE COMMERCE 129
Mr. Warren. Very much so ; yes, sir.
The Chairman. All right. Mr. Warren, we are very much obliged
to you.
Mr. Wise. Mr. William J. Wise?
A Voice. Senator, he just took Judge Murphy some place and said
he would be right back.
(Discussion off the record.)
The Chairman. Very well. Mr. Connor.
Mr. Connor, will you raise your right hand, please.
In the presence of Almighty God. do you swear the testimony you
shall give shall be the truth, the whole truth, and nothing but the
truth?
Mr. Connor. I do.
TESTIMONY OF LEONARD J. CONNOR, SERGEANT AT ARMS OF THE
SENATE OF THE STATE OF KENTUCKY
The Chairman. Now, Mr. Connor, what is your full name, please?
Mr. Connor. Leonard J. Connor.
The Chairman. And what is your address?
Mr. Connor. 2841 Ashland Avenue, Latonia.
The Chairman. Latonia, Ky.
Mr. Connor. Kentucky.
The Chairman. How long have you lived there, Mr. Connor?
Mr. Connor. Since 1937.
The Chairman. Have you any connection with the State or local
government ?
Mr. Connor. I am sergeant at arms of the senate.
The Chairman. You are sergeant at arms of the Senate of the State
of Kentucky ?
Mr. Connor. Yes.
The Chairman. For how long have you been sergeant at arms?
Mr. Connor. Since 1942.
The Chairman. Do you have any other business or occupation?
Mr. Connor. I operate the Turf Club.
The Chairman. You operate the Turf Club ?
Mr. Connor. Yes, sir.
The Chairman. Where is the Turf Club located ?
Mr. Connor. 10 West Southern Avenue in Latonia.
The Chairman. 10 West Southern Avenue, Latonia ?
Mr. Connor. Yes, sir.
The Chairman. And for how long have you been operating the
Turf Club?
Mr. Connor. Since 1937.
The Chairman. 1937 ?
Mr. Connor. Yes.
The Chairman. And. Mr. Connor, have you been operating it con-
tinuously since then?
Mr. Connor. Yes.
The Chairman. All right. Thank you.
I want to ask you if you will please keep your voice up and talk
out loud. Thank you very much, Mr. Connor.
Mr. Rice, will you proceed with the questioning.
130 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rice. You say you have been sergeant at arms of the Kentucky
State Senate?
Mr. Connor. That is right.
Mr. Rick. How long have you been there?
Mr. Connor. Since 1942.
Mr. Rice. And you are still there?
Mr. Connor. Still there.
Mr. Rice. That is 10 years.
Mr. Connor. I am sergeant at arms right now.
Mr. Rice. Yes. Your first name is what?
Mr. Connor. Leonard.
Mr. Rice. Leonard?
Mr. Connor. Yes, L-e-o-n-a-r-d.
Mr. Rice. And where do you live?
Mr. Connor. 2841 Ashland Avenue.
Mr. Rice. Do you have a place of business ?
Mr. Connor. 10 West Southern Avenue, Latonia, the Turf Club.
Mr. Rice. The Turf Club?
Mr. Connor. Yes.
Mr. Rice. What is the Turf Club, Mr. Connor?
Mr. Connor. It is a bar.
Mr. Rice. And it has a liquor license, then ?
Mr. Connor. Yes.
Mr. Rice. What is the type of ownership there, proprietorship or
corporation ?
Mr. Connor. I am the owner.
Mr. Rice. You are the individual owner?
Mr. Connor. Yes.
Mr. Rice. You are the licensee on the liquor license?
Mr. Connor. I am.
Mr. Rice. How much of a place is it?
Mr. Connor. Well, the barroom is 22 by 20 — very small.
Mr. Rice. 22 by 20?
Mr. Connor. Yes, sir.
Mr. Rice. Any other — is it a two-story building?
Mr. Connor. No; single story.
Mr. Rice. It is a one-story building?
Mr. Connor. Yes, sir.
Mr. Rice. Are there any other rooms there besides the barroom?
Mr. Connor. Yes; there is a back room. It is 22 by 40.
Mr. Rice. What goes on in the back room ?
Mr. Connor. I run a handbook.
Mr. Rice. You run a handbook there ?
Mr. Connor. Yes, sir.
Mr. Rice. How long have you been running that handbook, Mr.
Connor?
Mr. Connor. Since about the same time.
Mr. Rice. Since when?
Mr. Connor. 1937, approximately 19:57.
Mr. Rice. That is when the Turf Club started?
Mr. Connor. Yes.
Mr. Rice. And do you run the handbook yourself?
Mr. Connor. Yes, sir.
Mr. Rice. You actually take the bets yourself?
ORGANIZED CRIME IN INTERSTATE COMMERCE 131
Mr. Connor. Well, my brother works it; he does that.
Mr. Rice. What is his name?
Mr. Connor. Frank.
Mr. Rice. Do you have wire service there?
Mr. Connor. Yes.
Mr. Rice. When did you first get your wire service?
Mr. Connor. Oh, 1 think it would be around that time, 1936 or
1937; the exact year I could not tell you.
Mr. Rice. With whom did you do business in getting the wire
service ?
Mr. Connor. W. R. Cullen.
Mr. Rice. Where did you get hold of him?
Mr. Connor. Well, over in Cincinnati, at the Atlas Bank Building,
at that time. I don't know where he is now.
Mr. Rice. Well, have you stopped getting wire service?
Mr. Connor. Now we have ; yes.
Mr. Rice. When did you stop?
Mr. Connor. We have not had any service since Derby Day.
Mr. Rice. Since Derby Day ?
Mr. Connor. Yes, of 1951.
Mr. Rice. What happened then to stop it?
Mr. Connor. The grand jury came in.
Mr. Rice. Well, did the grand jury come over and tell you to stop?
Mr. Connor. No.
Mr. Rice. What caused you to stop ?
Mr. Connor. Just stopped.
Mr. Rice. You didn't just stop; did you?
Mr. Connor. I just stopped.
Mr. Rice. You did it voluntarily ?
Mr. Connor. Yes.
Mr. Rice. Whom did you call up ?
Mr. Connor. Nobody.
Mr. Rice. You were paying for the service?
Mr. Connor. Yes.
Mr. Rice. What did you pay ?
Mr. Connor. $28.60.
Mr. Rice. Whom were you paying that to ?
Mr. Connor. A fellow by the name of "Red," and that is all I know
him by.
The Chairman. How did you arrive at the $28.60 figure?
Mr. Connor. They arrived at that. That is the cost. I don't know
how they arrived at it.
Mr. Rice. They gave you no explanation for that amount?
Mr. Connor. No.
The Chairman. Has it been that much over the whole period ?
Mr. Connor. Just about ; yes, the same thing.
Mr. Rice. What was it when you first started ?
Mr. Connor. I think it was $25.
Mr. Rice. And sometime later it went up to $28.60 a week?
Mr. Connor. Yes.
Mr. Rice. Where does that come from?
Mr. Connor. Where does it come from ?
Mr. Rice. Yes.
Mr. Connor. I don't know. I haven't the slightest idea.
132 ORGANIZED CRIME EN INTERSTATE COMMERCE
Mr. Rice. Does it come in on a ticker?
Mr. Connor. No. I have never seen a ticker in Kenton County in
my life.
Mr. Kick. Do you have, or what did you have, a loud-speaker?
Mr. Con ntor. Yes.
Mr. Kick. You had an audio set-up?
Mr. Connor. Yes, an amplifier.
Mr. Kick. And was that hooked into a telephone?
Mr. Connor. No, sir.
Mr. Kick. Jt was a Western Union Avire that came in?
Mr. Connor. No; no Western Union wire.
Mr. Rice. How does it work?
Mr. Connor. There is some wires; I don't know who put them up.
I suppose the service people put them up.
Mr. Kick. And you have got a loud-speaker \
Mi-. ( o\ ntor. That is right.
Mr. Rice. You paid this fellow "Red" that comes around \
Mr. Connor. That is right.
.Mr. Rice. Do you pay by check?
Mr. Connor. No, in cash.
Mr. Rice. You pay in cash ?
Mr. Connor. Yes.
Mr. Rice. Do you keep books ?
Mr. Connor. Yes.
Mr. Rice. "Who is your bookkeeper ?
Mr. Connor. Me and my wife.
Mr. Rice. You and your wife ?
Mr. Connor. Yes.
Mr. Rice. "Where is your bank account located ?
Mr. Connor. In the First National Bank of Latonia.
Mr. Rice. Is that in your own name?
Mr. Connor. It is.
Mr. Rice. Do you have a checking account ?
Mr. Connor. "Well, very small. I have a checking account there,
yes.
Mr. Rice. That is a checking account ?
Mr. Connor. I have two of them, one for the bar and one personal
account.
Mr. Rice. How about the horsebook checking account ?
Mr. ( '< >n Mil;. I don't have any horsebook checking account.
Mr. Kick. You run that on a cash basis?
Mr. Connor. Yes.
Mr. R ice. Do you have any other bookkeeper besides yourself ?
Mr. Connor. None whatever.
Mr. Rice. Do you make out your own tax returns?
Mr. Connor. No; Morty Ryan does.
Mr. Rice. Who?
Mr. Connor. Morton Ryan.
Mr. Rice. Who is he?
Mr. Connor. A. tax man in Covington.
Mr. Rice. Did Quill ever help you with that?
Mr. ( Ionnor. Never.
Mr. Rice. You are sure about that?
Mr. Connor. I am sure about it. I said "No."
ORGANIZED CRIME IN INTERSTATE COMMERCE 133
Mr. Rice. How about Walker, did you ever have any transactions
with Harold Walker?
Mr. Connor. Never.
Mr. Rice. Did you ever get wire service from him?
Mr. Connor. No.
Mr. Rice. Did you ever hear of him ?
Mr. Connor. Until today, when you said something to Quill about
it, I never knew him. I mean. I never knew about him being in that
business. I thought he was still practicing law.
Mr. Rice. Well, the only person you dickered with was a fellow by
the name of what ?
Mr. Connor. Cullen.
Mr. Rice. How did you get in touch with him?
Mr. Connor. That has been so long ago, 1 really don't remember.
Mr. Rice. Did you go locate him, or did he come around and find
you?
Mr. Connor. I called him up.
Mr. Rice. You called him up?
Mr. Connor. Yes.
Mr. Rice. Somebody else told you where to get him?
Mr. Connor. Yes.
Mr. Rice. And that was at a number in Cincinnati?
Mr. Connor. Yes; in Cincinnati.
Mr. Rice. You made the dicker and got wTire service?
Mr. Connor. I called him up. I don't know whether you would
call it dickering or not.
Mr. Rice. From the time you started with your Mire service way
back in the thirties until Derby time
Mr. Connor. May 5.
Mr. Rice (continuing). May 5 of 1951, were there any interrup-
tions in the service ?
Mr. Connor. What do you mean by "interruptions"?
Mr. Rice. Well, did you have it all the time ?
Mr. Connor. Oh, yes ; I think — not all the time.
The Chairman. Not when the grand jury was in session?
Mr. Connor. We did not have it then. Is that what you meant %
The Chairman. Yes.
Mr. Connor. We don't have it during grand jury time.
Mr. Rice. You don't have it during grand jury time. Well, how
does that work?
Mr. Connor. I don't know.
Mr. Rice. You are in the business. You know.
Mr. Connor. Well, we just quit. We just quit work. No one ever
told me to quit or to start.
The Chairman. Well, did you notify the news service people?
Mr. Connor. Well, no. I think it was taken for granted.
The Chairman. The news service people and all the fellows in the
bookie business, they took it for granted that when the grand jury was
in session they were out, and they stopped?
Mr. Connor. Yes.
The Chairman. And then when the grand jury adjourned, every-
body resumed operations ?
Mr. Connor. Yes ; several days later.
134 ORGANIZED CRIME IN INTERSTATE COMMERCE
The Chairman. You would allow just a few days, and then you
would go back to normal operations ?
Mr. Connor. That is right.
The Chairman. How many days did thej^ stay out after the grand
jury was out?
Mr. Connor. "Well, sometimes 3 or 4 days, sometimes a week.
The Chairman. How would you notify the news service people
about that ?
Mr. Connor. Well, rumors, I suppose. They turned it on. All
you had to do was to turn the button on, you just turn your speaker
on to see if it is on, and if it is there, it is there.
The Chairman. Would the other fellows in the bookie business do
the same thing ?
Mr. Connor. Well, I suppose so.
The Chairman. So far as you know ?
Mr. Connor. So far as I know. I don't know anything about it.
The Chairman. Were all of your operations over that 14-year
period— was it from 1937 to 1951?
Mr. Connor. 1937. I am sure that is the correct date.
The Chairman. Were they all across to Cincinnati ?
Mr. Connor. Well, now, Senator, I don't know where it comes from.
The Chairman. Well, you negotiated with them.
Mr. Connor. Yes ; at a Cincinnati phone number, but I have never
seen the office at all. I have never seen it in my life.
The Chairman. But you are reasonably sure it is not in Newport?
Mr. Connor. I would not make a statement there, because I don't
know. I really do not know where it is.
The Chairman. You communicated with Cincinnati in order to
get the service ?
Mr. Connor. Yes ; but that was a long time ago.
Mr. Rice. You got it and have been paying $25 or $28.60 a week to
Cincinnati, so far as you know ?
Mr. Connor. That is right.
The Chairman. All right.
Mr. Rice. During that grand jury time, that there is a shut-down on
the wire service, do you pay for the service during that time ?
Mr. Connor. No.
Mr. Rice. That is an automatic understanding, too ?
Mr. Connor. That is right.
Mr. Rice. I notice, according to the McFarland report, that you
are a subscriber to the service from the Ace Research Service of
Newport. Did you ever hear of them ?
Mr. Connor. Ace Research?
Mr. Rice. Yes. And they in turn get it from Cleveland, from
"Mushy" Wexler's outfit.
M v. ( '(in.ni r. I never heard of the name Ace.
Mr. Rice. You say you turn a button on?
Mr. Connor. You turn a loudspeaker on.
Mr. R:ce. Suppose you miss a race, and you didn't hear very
well, and you want to call and check (lie results.
Mr. Connor. You call somebody else in the bookie business. It
is much easier.
Mi-. Rice. You call another bookie?
Mi-. Connor. Yes.
ORGANIZED CRIME EN INTERSTATE COMMERCE 135
Mr. Eice. Suppose you get an interruption of service, or a break-
down, or something goes wrong with your receiver, then whom do
you call ?
Mr. Connor. If something went wrong with the receiver, 1 would
call Hemlock— these boy.s named Biedenhorn. They have nothing to
do with the service.
Mr. Rice. What is their name?
Mr. Connor. They call them the Radio Twins.
Mr. Rice. The Radio Twins?
Mr. Connor. Yes.
Mr. Rice. "What are their names?
Mr. Connor. I think the name is Biedenhorn.
The Chairman. You merely call them to repair it?
Mr. Connor. Yes, but one time, I think there was only one time
that I ever had to have them fix it. A tube blow out. All he is is a
radio man. He has nothing to do with the book, bar, or anything.
He has a radio shop.
Mr. Rice. All this time haven't you had a technical breakdown
between the transmitter and your receiver there?
Mr. Connor. No, I never have.
Mr. Rice. And if you miss a race, you call another bookie?
Mr. Connor. That is the way I do.
Mr. Rice. Who do you call?
Mr. Connor. Well, I have the numbers. I don't intend to men-
tion any names, who they are. I don't know who I have been talk-
ing to.
Mr. Rice. Where do you keep the numbers?
Mr. Connor. At the place.
The Chairman. Were there many of them \
Mr. Connor. Now. I always called one or two. There are dif-
ferent fellows you can call.
The Chairman. You would call one out of a number ?
Mr. Connor. I don't know who I was talking to.
Mr. Rice. You had the utmost confidence in what they would
tell you, that it would be right \
Mr. Connor. Yes, but that happened very seldom.
Mr. Rice. Wouldn't it be possible to call Newport or Cincinnati and
find out ?
Mr. Connor. I don't even know a number in Newport to call.
Mr. Rice. Do you take any telephone action?
Mr. Connor. Well, very little, very little.
Mr. Rice. What percentage of your business would you say you
took over the telephone ?
Mr. Connor. Well, it would be — it would not be 1 percent.
Mr. Rice. And 99 percent were people who went to the back room %
Mr. Connor. That is right. And not too much of that.
Mr. Rice. You did not hold everything; you laid off some of your
action, did you not ?
Mr. Connor. Well, some of the big business I did.
Mr. Rice. Some of the big business ?
Mr. Connor. Yes.
Mr. Rice. Who would you lay it off with ?
136 ORGANIZED CRIME IN" INTERSTATE COMMERCE
Mr. Connor. Sometimes I would give it to my brother, and he would
go to different places to bet it. I don't know where he would take it.
1 never did have big action. Mine is a small place.
Mr. Rigs. Well, the smaller you have, the more you lay off.
Mr. Connor. It isn't that small.
Mr. Rice. Did you ever lay any off to Louis Rosenbaum — "Rosey"?
Mr. Connor. I never seen the man in my life.
Mr. Rick. A lot of people did not see him, but they talked to him.
Mr. Connor. No.
Mr. Rick. Did you ever lay. oil' anything out of State?
Mr. Connor. No.
Mr. Rice. You are sure about it?
Mr. Connor. I am sure about it.
Mr. Rice. You never laid any off in Cincinnati?
Mr. Connor. Never did in my life.
Mr. Rice. You laid off to whom did you say?
Mr. Connor. I did not say. My brother would take it.
Mr. Rice. It is your operation, now, let's level here.
Mr. Connor. He works for me.
Mr. Rice. So you knew who he was laying it off to ?
Mr. Connor. It was-— —
Mr. Rice. It was a mystery to you ?
Mr. Connor. All I wanted to be sure was that I would be on the bet.
Mr. Rice. Who decided when you were going to lay off something?
Mr. Connor. Me.
Mr. Rice. You made the decision ?
Mr. Connor. I made the decision.
Mr. Rice. Now, you say, or you would say, '"Lay off so much of
this bet"?
Mr. Connor. He wouldn't necessarily know it was lay-off. I might
tell him to bet me $5 or $10 on this horse.
Mr. Rice. How would he do that, by telephone?
Mr. Connor. No.
Mr. Rice. He would walk out with it?
Mr. Connor. I didn't have any accounts with anybody. There is
no bookmaker that I know that I could even bet with. You have
to have money up, and I don't have an account.
Mr. Rice. He would take the money and go some other place and
bet it?
Mr. Connor. Yes.
Mr. Rick. And actually lay the bet?
Mr. Connor. That is right.
Mr. Rick. What odds did you pay?
Mr. Connor. What odds?
Mr. Rice. Yes.
Mr. Connor. Thirty to one.
Mr. Rice. How much ?
Mr. Cox nor. Thirty.
Mr. Rick. Thirty for win?
Mr. Connor. Thirty — twelve — six.
Mr. Rice. Thirty, twelve, and six?
Mr. Connor. Yes.
Mr. Rick. Now, did you also have some slot machines in there?
Mr. Connor. I had four of them.
ORGANIZED CRIME IN INTERSTATE COMMERCE 137
Mr. Rice. Four machines?
Mr. Connor. Yes.
Mr. Rice. What became of those?
M r. Connor. Well, they are out now.
Mr. Rick. Well
The Chairman. Everything is closed down?
Mr. Connor. Everything is closed down.
Mr. Rice. What type of machines were they?
Mr. Connor. Two nickels, a dime, and a quarter.
Mr. Rkk. Where did you get them '.
Mr. Connor. 1 bought them at Sicking Bros, in Cincinnati.
Mr. Rkk. At Sicking Bros.?
Mr. Connor. Yes.
Mr. Rice. Do you know what type of machines they were ?
Mr. Connor. No.
Mr. Rice. Whether they were Mills or Jennings?
Mr. Connor. I think they were Mills.
Mr. Rice. They were Mills ?
Mr. Connor. Yes.
Mr. Rice. And they came from Chicago. Did you buy them out-
right or buy a part of them ?
Mr. Connor. I bought them outright.
Mr. Rice. How much did you pay for them, do you know ?
Mr. Connor. I don't remember.
Mr. Rick. A long time ago \
Mr. Connor. A long time ago.
Mr. Rice. You have been paying a Federal tax on them since?
Mr. Connor. That is right.
Mr. Rice. Now, then, it was possible to buy them from Sicking
Bros. What year was that, approximately?
Mr. Connor. Well, I would say around 1940, maybe 1940 and 1941.
Mr. Rice. You didn't deal with any syndicate boys on that ?
Mr. Connor. No.
Mr. Rice. You bought them outright and installed them and kept
them up ever since ?
Mr. Connor. That is right.
Mr. Rice. Did they ever need service ?
Mr. Connor. Yes.
Mr. Rice. Who services them?
Mr. Connor. I do.
Mr. Rice. Yourself?
Mr. Connor. Yes.
Mr. Rice. Do you service any other machines ?
Mr. Connor. No.
Mr. Rice. Just your own ?
Mr. Connor. Yes.
Mr. Rice. All right, sir. What became of the machines?
Mr. Connor. I have got them at home.
Mr. Rice. You have them at home ?
Mr. Connor. Yes.
Mr. Rice. In your house?
Mr. Cox'xor. Yes.
Mr. Rice. Whereabouts?
Mr. Connor. 2841 Ashland Avenue.
138 ORGANIZED CRIME EST INTERSTATE COMMERCE
Mi'. Rice. What part of your house?
Mr. Connor. In the cellar.
Mr. Rick. Why did you put them in your cellar?
Mr. Connor. Well, because I was not using them. I wanted them
out of the place.
Mr. Kick. When did you move them?
Mr. Connor. Oh, I don't know. Maybe it was June, sometime ;_
June.
Mr. Rice. Of this year?
Mr. Connor. Of this year.
Mr. Rice. Just a mouth ago?
Mr. Connor. Around a month ago.
Mr. Rice. What are you going to do with them?
Mr. Connor. I don't know.
Mr. Rice. Are you going to keep them?
Mr. Connor. I intend to.
Mr. Rice. Are you going to open up again ?
Mr. Connor. I don't know.
Mr. Rice. You may ?
Mr. Connor. I don't know.
Mr. Rice. But it is possible you might, then ?
Mr. Connor. Well, I don't know how possible it is.
Mr. Rice. You don't know that you are going to open?
Mr. Connor. I don't know whether I am or whether I am not.
Mr. Rice. You have not made up your mind, have you?
Mr. Connor. I have not made up my mind.
Mr. Rice. Yes.
The Chairman. Or some other people have not made up their
minds ?
Mr. Connor. Well, I will put it this way, I have not made up my
mind.
Mr. Rice. Are you waiting for any word to help }rou make up your
mind?
Mr. Connor. No.
Mr. Rice. What are you waiting for?
Mr. Connor. WTell, I don't know what I am waiting for. I am
just waiting.
Mr. Rice. Just waiting?
Mr. Connor. Just waiting.
Mr. Rice. Now, then, you had four machines and a horse book?
Mr. Connor. Yes.
Mr. Rice. Plow many employees did you have in the horse book, just
you and your brother?
Mr. Connor. Yes — no; I had another brother to mark the board,
a younger brother — two brothers.
Mr. Rice. You kept a blackboard?
Mr. Connor. No ; just sheets, not a blackboard.
Mr. Rice. The wall charts?
Mr. Connor. Wall sheets.
Mr. Rice. Where did you get those?
Mr. ( JoNNOB. This fellow "Red" brings them.
Mr. Rick. The same fellow who collects for the wire service?
Mr. ( (..wok. No; it is not. It is another boy. I don't know what
111 is boy's name is.
ORGANIZED CRIME IN INTERSTATE COMMERCE 139
Mr. Rice. It is just a boy that comes around ?
Mr. Connor. Yes.
Mr. Rice. "What do you call him?
Mr. Connor. I don't call him anything. I ami very seldom ever
there when he comes. He comes in the morning.
Mr. Rice. What do you pay him for the wall charts?
Mr. Connor. I think they cost around sis a week. It is all accord-
ing to how many tracks are running. It varies.
ft ' i . Rice. Yes. You say you pay this fellow in cash, then ?
Mr. Connor. Yes.
Mr. Rice. What is the total gross expense? Take the year 1950,
you ran all year in 1950, didn't you, with no interruptions, except for
the 7 days when (he grand jury was in session?
Mr. Connor. I don't remember.
Mr. Rice. You don't remember?
Mr. Connor. I don't remember.
Mr. Rice. It wTas just last year.
Mr. Connor. I know, but I still don't remember whether there was
any interruption.
Mr. Rice. You didn't have any arrests or shut-down or anything
like that ? It was a normal year, wasn't it?
Mr. Connor. I believe it was ; yes.
Mr. Rice. What wTas your gross expense ?
Mr. Connor. I would not know.
Mr. Rice. Of the operation?
Mr. Connor. I would not know.
Mr. Rice. Do you keep separate books on your gambling operation ?
Mr. Connor. Yes.
Mr. Rice. And do you keep separate books on the slots and separate
books on the horses ?
Mr. Connor. Yes.
Mr. Rice. Do you take any other type of action, numbers, or policy?
Mr. Connor. No.
Mr. Rice. Just horses?
Mr. Connor. Yes.
Mr. Rice. You don't have any table games in your Turf Club?
Mr. Connor. Yes — I do not.
Mr. Rice. Are you sure of that ?
Mr. Connor. Very sure.
Mr. Rice. And no crap table ?
Mr. Connor. No.
Mr. Rice. Dice?
Mr. Connor. No.
Mr. Rice. Cards?
Mr. Connor. No.
Mr. Rice. Did you ever have a card game in there?
Mr. Connor. Never — oh, we play pinochle; yes.
Mr. Rice. It was not a house game ?
Mr. Connor. No.
Mr. Rice. In 1950, what did it cost you for your news service and
your scratch sheets and your other expenses to run the business?
Mr. Connor. I would not know offhand.
Mr. Rice. Well, you keep the books ?
Mr. Connor. I have not got them with me.
140 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Kick. You can tell us within a reasonable amount.
Mr. Connor. You could figure that the service would be $28.60 a
week.
The Chairman. Was that more or less a general price?
Mr. Connor. I believe it is. 1 really don't know.
The Chairman. It is very evident that you were in touch with other
bookmakers.
Mr. Connor. I never did ask them.
The Chairman. I thought it would be just a matter of conversa-
tion, as to whet her you would be interested to find out whether }7ou
were paying more or less than they.
Mr. Connor. Well, it didn't seem like too much, so I never did ask
;ui\ body.
Mr. Kick. So far as you know, it was a general price?
Mr. Connor. That is right.
Mr. Kick. Well, I think. Senator, that most of the investigation
established thai the average price across the country is $40 a week.
However, it is interesting to note in connection with Kenton County
that there were 111 tickers going there at one time, and that $28 a week
would aggregate something better than $3,000 a week to the local dis-
tributor of the wire service.
The Chairman. Yes. •
Mr. Kick. Well, give us the gross figures on your business, Mr. Con-
nor— do they call you Duke?
Mr. Connor. That is right.
Mr. Kick. Duke Connor?
Mr. Coxxor. That is right.
Mr. Rick. What was your over-all income in 1950?
Mr. Connor. I don't know. I didn't bring any of that material with
me.
Mr. Kick. What is the closest you can come to it ?
Mr. Connor. 1950 was very slow, so far as I am concerned.
M r. Kice. How close can you come ? $50,000 ?
Mr. Connor. In the bookie business?
Mr. Rice. In books and slots.
Mr. Connor. You mean the business I took in ?
Mr. Rick. Yes.
Mr. Connor. No.
The ( Jhairman. Including the slot machines?
Mr. Connor. No: it would not be that much.
Mr. Kick. Well, how much would it he \
•Mr. Connor. The bar runs $33,000 or $34,000 a year.
Mr. Kick. Gross?
Mi-. Coxxor. Gross.
Mr. Kick. What do you net on that?
Mr. Connor. 1 think I netted last year about, I think around $6,500
on the bar. I think that is what it was.
Mr. Kick. That is a reasonable percentage.
Mr. Connor. As I say, I don't remember. I don't think it is fail-
to ask me those questions.
Mr. Rice. We are not pinning you down to nickels and dimes, but
you are :i busi iiessman. and you are certainly accountable, within a rea-
sonable degree of certainty, as to the amount of business you did.
ORGANIZED CRIME IX INTERSTATE COMMERCE 141
Mr. Coxxor. That is the bar, and my book last year, I didift make
any money with it at all.
Mr. Eke. How much did you handle?
Mr. Connor. Well, I wouldn't know.
Mr. Rice. "Well, approximately?
Mr. Coxxor. "Well
Mr. Rice. You keep books on it ; don't you ?
Mr. Coxxor. Oh, yes.
Mr. Rice. How do you keep your books? Do you keep them daily?
Mr. Coxxor. Yes; my business, I write about $225 a day. I would
write that much.
Mr. Rice. You would accept bets in that amount ?
Mr. Coxxor. Surely.
Mr. Rice. Around $225 a day?
Mr. Coxxor. Yes ; it is very small.
Mr. Rice. And you would run 6 days ?
Mr. Coxxor. Yes. Say $1,300 a week. "We might write that. That
may be high and it may be a little low ; I don't know.
Mr. Rice. All right, sir. On that you say you made absolutely
nothing '.
Mr. Coxxor. That is right.
Mr. Rice. And you did not pay taxes on a dime ?
Mr. Coxxor. Oh, I paid taxes, yes, sir, on my machines and the
book, because I remember the book lost. I think it is the first time
since I have been in it that my book lost. The business was awfully
slow. I don't remember what was left.
Mr. Rice. How about the year before?
Mr. Coxxor. I don't remember.
Mr. Rice. You made money \
Mr. Conxor. Yes, I made money.
Mr. Rice. Approximately how much did you make?
Mr. Connor. I would not attempt to answer it, because it is too long
ago.
Mr. Rice. That is 2 years ago.
Mr. Coxxor. I don't remember.
Mr. Rice. You could not come within $10,000?
Mr. Coxxor. Sure, I could come within $10,000.
Mr. Rice. See how close you would come.
Mr. Coxxor. I would say it would be less than that, $10,000.
Mr. Rice. Then you would say you made something less than
$10,000?
Mr. Connor. Yes.
Mr. Rice. "Was it more than $5,000 ?
Mr. Connor. I would say it would be more than $5,000, yes.
Mr. Rice. Do you make more from gambling than from the bar?
Mr. Coxxor. Yes.
Mr. Rice. That is, usually?
Mr. Coxxor. Usually I do.
Mr. Rice. You pay Federal taxes, income, and always have paid
Federal income taxes?
Mr. Coxxor. Yes.
Mr. Rice. What do you put in your Federal tax return to cover this
gambling?
85277—51 — pt. 15 10
142 ORGANIZED CRIME EST INTERSTATE COMMERCE
Mr. Connor. I have a separate notation there with my return, just
exact ly what it is.
Mr. Kick. What do you call it?
Mr. Connor. 1 just call it ''the book, the slots and the bar."
Mr. Kick. Income from book and slots?
Mr. Connor. Yes.
Mr. Rice. Do you pay a State tax?
Mr. Connor. Sure.
Mr. Rice. Income tax ?
Mr. Connor. Yes.
Mr. Rice. And do yon put that in your State tax return, too?
Mr. Connor. Not on the State tax return, no.
Mr. Rice. What do you put there?
Mr. Connor. Just income.
Mr. Rice. You just put income?
Mr. Connor. Yes, from other business.
Mr. Rice. You call it "other business" ?
M r. ( Jonnob. I think that is the way Morton Ryan puts it.
Mr. Rice. Who does ?
Mr. Connor. Morty Ryan.
Mr. Rice. And you tell him what it is, though ?
Mr. Connor. Oh, yes, I bring it all down there.
Mr. Rice. Yes. Now, then, on your slot machines, you did not lose
any money on those, did you ?
Mr. Connor. No.
Mr. Rice. What is the most you have ever made in a year from
those?
Mr. Connor. I don't know. I would have to look it up.
Mr. Rice. Well, within $5,000, what is the closest?
Mr. Connor. Well, sometimes it will go $6,000, maybe $7,000 a year.
Mr. Rice. $6,000 or $7,000?
Mr. Connor. Yes.
Mr. Rice. In 1950 you did not lose anything on those, did you?
Mr. Connor. No.
Mr. Rice. How much did you make on those ?
Mr. Connor. I don't remember. I would say it would be about
$5,000 or $6,000, whatever the record shows.
Mr. Rice. Were those in front of the bar ?
Mr. Connor. Oh, no, in the back.
Mr. Rice. Front and back ?
Mr. Connor. No, never in the front.
Mr. Rice. Always in the back?
Mr. Connor. Always in the back.
Mr. Rice. Are those arranged to pay any percentage ?
Mr. Connor. You cannot do that.
Mr. Rice. You cannot do that ?
Mr. Connor. You hear people say that they can, but that cannot be
done.
Mr. Rice. AVell, you can put pins in to keep the jackpot from hit-
ting, can't you ?
M r. ( '< i\ nor. I would not know how to do that.
M r. Rice. You have heard of that ?
Mr. Connor. I never was in the habit of stealing.
ORGANIZED CRIME EST INTERSTATE COMMERCE 143
Mr. Rice. You say that you service your own machines. You know
how to get into them, don't you ?
Mr. Connor. Oh, yes, sure, but that would be stealing.
Mr. Rice. That would be stealing ?
Mr. Connor. Yes.
Mr. Rice. There is no question ?
Mr. Connor. In my opinion, there is no question about that, that
is right.
Mr. Rice. How much property do you own, real estate ?
Mr. Connor. I own the place I am in, one building next door, and
I own my home.
Mr. Rice. You own your home and business building next door?
Mr. Connor. Yes.
Mr. Rice. What is in there ?
Mr. Connor. There is a garage. It is a storage room. The garage
man died, and there is a television place, appliances place in the front.
Mr. Rice. A commercial store ?
Mr. Connor. Yes.
Mr. Rice. You own that, your own place, and your home ?
Mr. Connor. Yes.
Mr. Rice. But no other real property ?
Mr. Connor. No.
Mr. Rice. What do you estimate your net worth to be ?
Mr. Connor. Well, I never did estimate it, to be frank with you.
Mr. Rice. Think about it a little bit and estimate it now.
Mr. Connor. ( No answer. )
Mr. Rice. What would you sell out for, everything you own ?
Mr. Connor. I never gave it any thought.
Mr. Rice. Think about it now.
Mr. Connor. I don't think I have got time to think about it.
Mr. Rice. Just take time. Take a drink of water to think about it.
Mr. Connor. I don't want a drink of water, and I don't think I
could estimate it. I would have to have somebody help me, when it
comes to the evaluation of property. It went up since I bought it.
My house cost $9,000 when I built it. I suppose it would be worth a
lot more.
Mr. Rice. What would you sell it for ?
Mr. Connor. I never gave it any thought. I don't intend to sell it.
Mr. Rice. $9,000, so that is worth probably $18,000 or $20,000 now,
isn't it?
Mr. Connor. I don't know that it would be that much.
Mr. Rice. How about your Turf Club, what would you say the
value of that is?
Mr. Connor. The building is nothing. I would say it would be
worth $8,000.
Mr. Rice. Would you sell it for $8,000?
Mr. Connor. No. I would be selling myself out of business.
Mr. Rice. Well, what would you sell it for?
Mr. Connor. Well, I don't know what I would sell it for. I would
sell it for as much as I could get.
Mr. Rice. Would you take $10,000?
Mr. Connor. No, I don't think I would take $10,000 for the build-
ing and business. I have been there a long time. I have got a nice
business. That is, it was a good business.
144 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rick. What happened?
Mr. Connor. Well, for one thing, there is not much money around
there lately, due to the high prices, people are going broke in the
grocery stores. They are busted before they come in my place.
Mr. Rice. Did you hear Mr. Florer testify this morning and say
that they were being paid, the grocers were being paid on their bills
for the first time?
Mr. Connor. Yes, I heard Mr. Florer testify. Could I go back to
Mr. Florer's testimony and add a little to what he omitted?
The Chairman. Yes.
Mr. Connor. Could I?
Mv. Rice. Yes.
Mr. Connor. He made mention about two business firms that re-
fused to enter into Kenton County on account of gambling. He did
not mention who they were, and I doubt very much — well, he failed to
add that Stanley Stuart, who is the president of the Stuart Iron
Works, the largest business we have in Kenton County, I think it was
a week ago had a big article in the paper that this Kenton County
Creed organization, or whatever they call themselves — anyway, that
this organization was going to use that as political bait in this
campaign to blame the gamblers and politicians for running them out.
He had a big article in the paper the other day, prohibiting them
from using that, They had already started using it.
I think I can get you a clipping of that here, if you would want it.
Would you like to see it?
Mr. Rice. I infer that is one of these companies he talked about,
this company you speak about?
Mr. Connor. No, I don't know whether it was one of them. He
mentioned two moving in.
Mr. Rice. This is a company moving out.
Mr. Connor. But Stanley Stuart definitely said that the Kenton
County — here it is, if you would like to look at it,
Mr. Rice. Who sent that up to you ?
Mr. Connor. My wife had it, I think.
Mr. Rice (reading) :
Politics and Gambling Not Involved
Stanley Stuart declared neither gambling nor politics was involved in the pro-
posed move of plant from city.
I think that is plain enough.
Mr. Connor. He had a much elaborate statement in the Post, which
is not as vicious a newspaper as that outfit.
Mr. Rice. He sets forth other reasons why they are moving.
Mr. ( Jonnor. They are just getting larger.
Mr. Rice. Now, sir, you say you had the building next door, too.
What do you think is the value of that building?
M i . ( '< »nn< >r. Well, I gave $15,000 for it.
> I r. Rice. How long ago was that ?
Mr. ( Jonnor. T think about 3 years ago, 3%. I think I bought it in
April. I don't know whether it was 3 or 4 years ago.
Mr. Rice. Now, then, always owned the Turf Club alone, or did
you have a partner \
Mr. Connor. I had a partner.
Mr. Rice. Who is that?
ORGANIZED CRIME EN INTERSTATE COMMERCE 145
Mr. Connor. Lee Connersman.
Mr. Rice. Lee Fred Connersman?
Mr. Connor. No, Lee Connersman.
Mr. Kkk. And you acquired his interest?
Mr. Connor. Thai is right.
Mr. Kick. When he died \
Mr. Connor. That is right.
Mr. Kick. Who handled the acquision of that interest for you?
Mr. Connor. Well, Jimmy Quill handled Lee's estate. He settled
the estate.
Mr. Kick. That is the man who testified here today, Quill?
Mr. Connor. That is right.
Mr. Rice. And that was a gambling interest there then, wasn't
there ?
Mr. Connor. That is right. "We were partners.
Mr. Rice. Have you ever gotten locked up down there ?
Mr. Connor. No.
Mr. Rice. How do you account for that ?
Mr. Connor. Well, I don't think I have to account for it. I was
never locked up. I was never arrested in my life.
Mr. Rice. Your operation was against the law, was it not?
Mr. Connor. It probably is, in some people's mind — according to
the law, it is.
Mr. Rice. According to the law it is?
Mr. Connor. Yes, but you have to get caught first.
Mr. Rice. Yes.
Mr. Connor. I have doors there, and it is secluded, it is very quiet,
and small, as I stated before.
Mr. Rice. Are you sort of selective about your customers there?
Mir. Connor. Well, yes, put it that way.
Mr. Rice. How do you select which customers you take bets from?
Mr. Connor. I just don't select them.
Mr. Rice. Tell us about how you figure out which ones you are
going to take bets from ?
Mr. Connor. Anybody that is in there, I will take a bet from him.
Mr. Rice. Anybody that comes in ?
Mr. Connor. Sure.
Mr. Rice. Anyone of the public that walks in ?
Mr. Connor. That is right.
Mr. Rice. And the public walks in the back room ?
Mr. Connor. Yes.
Mr. Rice. And you always have ?
Mr. Connor. I didn't say that the door was locked.
Mr. Rice. Suppose a man with a badge walked in there ? Did that
ever happen?
Mr. Connor. Yes, it did happen.
Mr. Rice. What happened then?
Mr. Connor. Well, we got arrested, but I was not there. It was
my brother. They took him down.
Mr. Rice. Who arrested him?
Mr. Connor. I think it was — I just don't remember who it was —
I think it was LeRoy All.
Mr. Rice. Was it a county officer \
Mr. Connor. No; city.
146 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Kick. It was a city officer?
Mr. Connor. Yes.
Mr. Rick. He paid a fine?
Mr. Connor. Yes.
Mr. Rick. And went right back operating?
Mr. Connor. Yes.
Mr. Rice. Did they take the machines?
Mr. Connor. There weren't there. Theywereout.
Mr. Rick. Oh ! How did that happen?
Mr. Connor. Well. 1 don't know.
Mr. Rick. Did you get tipped off?
Mr. Connor. No.
Mr. Rice. Are you sure?
Mr. ( on noi:. Sure.
Mr. Rick. Where were the machines?
Mr. Connor. We may not have had them at that time.
Mr. Rick. You mean ■
Mr. Connor. You see, I was there before 1940, and I think I got
those machines around 1940. This may have been before that,
Mr. Rice. You have not been bothered since the machines were in
in 1940?
Mr. Connor. No.
Mr. Rick. Did you ever pay any protection money?
Mr. Connor. Never paid a nickel in my life.
Mr. Rice. Have any law-enforcement officers ever been in there
since 1940 \
Mr. Connor. Any law-enforcement officers? Not during the day.
Mr. Rice. Any time the slot machines were there.
Mr. Connor. They may have been there in the evening, but if they
did, they did not go in the back.
Mr. Rice. Well, now, when a law-enforcement officer came in there,
what did he do ?
Mr. Connor. Well, I would be at the bar. He may have a drink.
They would not be on duty, probably some of the city police.
Mr. Rick. On official business, no law-enforcement officer ever came
in there \
Mr. Connor. No.
Mr. Rick. How far is the bar from the back room?
Mr. Connor. Well, it adjoins. I have three leather doors there.
I open them up at night for a sitting room at night.
Mr. Rick. Yes.
Mr. Connor. It is really all one.
Mr. Rice. Yes.
Mr. Connor. Well, now, during the day I close the doors.
Mr. Rice. Yes; you close the doors during the day.
Mr. Connor. Yes.
Mr. Rice. Are these one-armed bandits, these slot machines?
Mr. Connor. Yes.
Mr. Rice. Are they one-armed bandits?
Mr. ( Ionnor. Yes.
Mr. Rice. They are not consoles?
Ml'. ( ON NOR. No.
Mr. Rice. When you pull the handle down the wheels spin?
Mr. Connor. That is right.
ORGANIZED CRIME EN INTERSTATE COMMERCE 147
Mr. Rice. Can't you hear the wheels in the bar?
Mr. Connor. No, it is pretty far back. I have got them back.
They are pretty hard to see. They have never been in the front since
I have had them.
Mr. Rice. In any event, you never had a raid other than this one
before 1940?
Mr. Connor. No.
Mr. Rice. You are not running a horse book now ?
Mr. Connor. No, sir.
Mr. Rice. Do you know Jimmy Brink?
Mr. Connor. Well, I know Jimmy to see; yes. I don't know him
very well.
Mr. Rice. Did you ever transact any business with Brink?
Mr. Connor. No, sir.
Mr. Rice. Do you lay off any bets with Brink ?
Mr. Connor. No, sir. I don't think he ever booked.
Mr. Rice. He never booked ?
Mr. Connor. I don't think he does.
Mr. Rice. There is some testimony that he had a book.
Mr. Connor. I did not think he did.
Mr. Rice. I didn't think so, either. How about Wanstratt?
Mr. Connor. Oh, I know Butch, yes ; but he has been sick. 1 have
not seen Butch Wanstratt in about 6 years. Never knew him real well.
Mr. Rice. Did you ever transact any business with him ?
Mr. Connor. Never.
Mr. Rice. He was a slot-machine man, wasn't he ?
Mr. Connor. There were rumors to that effect. Butch never did
get around much. He was a crippled fellow.
Mr. Rice. What club was John Walsh connected with ?
Mr. Connor. John Walsh?
Mr. Rice. Yes.
Mr. Connor. I think he was with the Kentucky Club.
Mr. Rice. Did you lay off any money to the Kentucky Club ?
Mr. Connor. No.
Mr. Rice. Do you know a John Berrencamp ?
Mr. Connor. John Berrencamp?
Mr. Rice. Yes.
Mr. Connor. He is my brother-in-law.
Mr. Rice. He is your wife's brother ?
Mr. Connor. Yes.
Mr. Rice. What business is he in ?
Mr. Connor. Well, he was in the contracting business years ago.
He more or less retired. He is building a house now, but he has more
or less retired. He has been sick.
Mr. Rice. Did he ever serve as foreman of any grand jury there?
Mr. Connor. Yes; he served as a foreman in, well, let's see, these
years get by me pretty quick ; I think it was around 1946 or 1947.
Mr. Rice. Yes. I think that grand jury made a report that they
could not find any gambling or anything. It was what you would call
a whitewash report.
Mr. Connor. I don't remember what the whitewash business is.
Mr. Rice. Well, the business you are in is probably a mystery to him.
Mr. Connor. Well
Mr. Rice. He has never been in the back room, I suppose ?
148 ORGANIZED CRIME EN INTERSTATE COMMERCE
Mr. Connor. No, John doesn't bet on the races. I don't think John
ever seen a horse race. He doesn't play any slot machines. No, John
wouldn't know. If John said that, yon can bet it is the truth.
Mr. Kick. So your testimony here today would be a complete sur-
prise to him, wouldn't it '.
Mr. Connor. I don't know. With his name being mentioned in it?
Mr. Rick. No, the fact you say you say you are a bookie, and that you
had slot machines.
M r. ( \>x. \<>r. No ; he knows I book, John does, yes.
Mr. Rice. He knew it then, too, didn't he?
Mr. Connor. I was not booking then. We were closed up. I think
that was during the Howard trial.
Mr. Rice. It was two days before the Howard investigation that
they returned their whitewash report.
Mr. Connor. We were closed.
Mr. Kick. So then he could go in and tell the grand jury and act as
foreman of the grand jury in the utmost good faith and state that
during the time that grand jury was in session, he could then say that
he doesn't know anything about gambling?
Mr. Connor. I believe you would have to ask John about that.
Mr. Rice. That is what you are having us to understand ?
Mr. Connor. Well, John is a very high-class fellow, and as a matter
of fact, I don't think John ever did a wrong thing in his life; and if
you are intimating that he did do anything wrong, I think you are
making a mistake.
Mr. Rick. It is purely a question of curiosity about a man acting as
foreman of a grand jury who was your brother-in-law and must rea-
sonably have know that you operated slot machines, how he could be
part of a grand jury that made a whitewash report that nothing wTas
going on.
Mr. Connor. Of course, as I said
Mr. Rice. Beg pardon?
Mr. Connor. As I have said, you would have to consult John about
that. I don't know.
Senator Kefauver. Maybe he didn't know his brother-in-law very
well.
Mr. Connor. Yes, he knows me very well.
Senator Kefauver. Well, I was only trying to help you out, sir.
You are out of the bookmaking business now ?
Mr. Connor. Yes, sir.
Senator Kefauver. Do you plan to go back in?
Mr. Connor. I have not gave it any thought, Senator.
Senator Kefauver. How long have you been out?
Mr. Connor. Since May 5.
Senator Kefauver. How did you happen to go out?
Mr. Connor. When the grand jury went in.
Senator Kjefs.uver. Has it been the custom to just sort of close up
during the t ime the grand jury heat is on?
Mr. Connor. That is right.
Senator Kefauver. That, frankly, is the situation, isn't it?
Mr. Connok. That is right.
Senator Kefauver. That has to do with gambling, bookmaking,
and everything else?
ORGANIZED CRIME LNT INTERSTATE COMMERCE 149
Mr. Connor. Well, what do you mean by everything else, Senator?
Senator Kefauver. Well, I mean slot machines, bookmaking,
gambling.
Mr. Connor. Yes; but it lias been publicized a lot bigger than it
really is, though.
Senator Kefauver. But that is the custom of that?
Mr. Connor. I can assure you of that.
Senator Kefauver. To close up during the time the grand jury is
in session and open up afterwards
Mr. Connor. Thai is right.
Senator Kefauver. But the grand jury never seems to be interested
in going back and indicting anybody for what happened prior to the
time they met, do they \
Mr. Connor. Well, I don't recall them doing it. I don't know
whether they can do it or not. I am no lawyer. I don't know whether
it is in their power or not.
Senator Kefauver. They are only interested during the time they
are in session ?
Mr. Connor. Apparently.
Senator Kefauver. I think that is a fair statement.
Mr. Rice. Did you ever serve on a grand jury?
Mr. Connor. No, sir.
Senator Kefauver. All right. Is there anything else?
Mr. Rice. Do you have any official job in the county ?
Mr. Connor. Yes; I am the election commissioner.
Mr. Rice. You are an election commissioner?
Mr. Connor. Yes.
Mr. Rice. In the State you are sergeant at arms in the senate ?
Mr. Connor. Yes.
Mr. Rice. And you are also an election commissioner?
Mr. Conncr. Yes.
Mr. Rice. What is the function of an election commissioner?
Mr. Connor. We count the votes on election night.
Mr. Rice. You count the votes?
Mr. Connor. I supervise the counting.
Mr. Rice. Is that a machine count?
Mr. Connor. No.
Mr. Rice. It is a personal count ?
Mr. Connor. Yes.
Senator Kefauver. How many of you are on the election com-
mission?
Mr. Connor. There is the sheriff, by virtue of his office, and the
Republican representative. Rich, and me as a Democrat.
Senator Kefauver. Three of you ?
Mr. Connor. Yes.
Senator Kefauver. You are the chairman, I take it ?
Mr. Connor. No; I believe the sheriff is.
Senator Kefauver. The sheriff is the chairman?
Mr. Connor. I believe he is. I am not the chairman, that I
know of.
Senator Kefauver. How much do you get paid for that?
Mr. Connor. We get $100.
Senator Kefauver. A hundred dollars a year?
Mr. Connor. A hundred dollars an election.
150 ORGANIZED CRIME IN INTERSTATE COMMERCE
Senator Kefauver. How many elections are there in a year?
Mr. Connor. There are sometimes three.
Senator Kefauver. And yon select the people who will hold the
elections?
Mr. Connor. No. Yon mean the people that will work in the
polls?
Senator Kifauyer. Yes.
Mr. Connor. No.
Senator Kefauver. Well, the commission does, doesn't it?
Mr. Connor. No; the sheriff does that, and the secretary.
Senator Kefauver. Well, what I mean is, the commission itself, it
is the duty of the commission to select the people who hold the
elections (
Mr. Connor. No ; I don't think so ; at least we don't do it.
Senator Kefauver. Anyway, yon let the sheriff do that?
Mr. Connor. It comes out of the sheriff's office, the people that
he works into the polls, the clerk and the sheriff.
Senator Kefauver. And yon have charge of counting the votes
after the election is over?
Mr. Connor. That is right.
Senator Kefauver. Have you personally anything to do with the
counting, some of it?
Mr. Connor. No; they have, I think they have around, I forget
how many, hut around 60.
Senator Kefauver. Do you help select the people who count the
votes?
Mr. Connor. Yes.
Senator Kefauver. And you certify the election in the various
precincts ?
Mr. Connor. To the State.
Senator Kefauver. To the secretary of State?
Mr. Connor. To the State.
Senator KefatjVer. Is that correct?
Mr. Connor. That is right.
Senator Kefauver. What do you think about being on the elec-
tion commission ? Do you think a person in the bookie business ought
to be on that ?
Mr. Connor. I think so.
Senator Kefauver. You think it is all right?
Mi-. Connor. I think it is perfectly all right. I see nothing wrong
witli it.
Senator Kefauver. You don't think you would be interested in
giving the fellow who did not enforce the law a break in the election?
Mr. Connor. Well, if you are insinuating that I may
Senator Kefauver. I am not insinuating anything.
Mr. Connor (continuing). That I may be dishonest
Senator Kefauver. No; what other people might think about it.
Mr. Connor. I don't know what other people think. Apparently
they think it is all right.
Senator Kefauver. Yon mean they all know you are in the bookie
business and that you are on the election commission?
Mr. Connor. Yes, sir.
Senator Kefauver. Howt do you get on the election commission?
Mr. Connor. The Democratic executive committee appoints you.
ORGANIZED CRIME EN INTERSTATE COMMERCE 151
Senator Kefatjver. Who appointed you?
Mr. Connor. Well, the members <>f the commission, Newman Arm-
strong is a member, and Boyd Elliott, and, well, the sheriff is a mem-
ber, too, by virtue of his office.
Senator Kefatjver. That is just ex officio?
Mr. Connor. Yes; and Harry Claney.
Senator Kefauver. This fellow Armstrong, is he a county detec-
tive?
Mr. Connor. He is chairman of the Democratic executive board.
Senator Kefauver. Is he a county detective '.
Mr. Connor. Yes, sir.
Senator Keeauver. All right. That is all.
Mr. Rice. Thank you.
Senator Kefatjver. Mr. Wise, will you come around, sir.
Mr. Wise. Yes, sir.
Senator Kefatjver. Mr. Wise, have you been sworn %
Mr. Wise. No.
Senator Kefatjver. Will you swear the testimony that you are about
to give shall be the truth, the whole truth, and nothing but the truth,
so help you God ?
Mr. Wise. Yes.
TESTIMONY OF WILLIAM J. WISE, ATTORNEY FOR THE
COMMONWEALTH OF KENTUCKY
Mr. Wise. Officer, may I have a glass of water, please?
Senator Kefatjver. Yes; bring him a glass of water.
You are Mr. William J. Wise?
Mr. Wise. That is right.
Senator Kefatjver. Where do you live, Mr. Wise '.
Mr. Wise. Bellevue, Ky.
Senator Kefauver. That is in Campbell County?
Mr. Wise. That is right.
Senator Kefauver. What is your business?
Mr. AVise. I am attorney, Commonwealth attorney.
Senator Kefauver. You mean that is one of the State's attorneys?
Mr. Wise. That is right.
Senator Kefauver. Is that for Campbell County?
Mr. Wise. My district coincides with Campbell County.
Senator Kefauver. Are you the assistant or are you the chief
attorney ?
Mr. Wise. Well, I am the attorney. I have no assistant.
Senator Kefauver. You have no assistant \
Mr. Wise. The county attorney is the statutory assistant, but he is
an elected officer, so for all practical purposes I have no assistants.
Senator Kefauver. So you have the responsibility and sole duty
for prosecuting cases in the Commonwealth as attorney for Camp-
bell County?
Mr. Wise. That is right.
Senator Kefauver. All right, Mr. Rice, will you ask the witness
questions, please?
Mr. Rice. You say you also practice law, Mr. Wise?
Mr. Wise. Yes, sir.
Mr. Rice. In a separate office?
152 ORGANIZED CHIME IX INTERSTATE COMMERCE
Mr. Wise. Yes, sir.
.Mi. Kick. It is not necessary to utilize your entire time in the office
of commonwealth attorney?
Mr. Wise. Well, it depends. It depends upon circumstances and
sessions of court.
Mr. Rice. There arc no requirements by reason of policy or statute?
Mr. Wise. No. The statute only requires me to represent the Com-
monwealth in matters coming to trial before the circuit court.
Mr. Kick. I think we heard this morning from the Commonwealth
attorney of Kenton Count v.
My. Wise. Mr. Quill.
Mr. Kick. Yes. And he gave us a good notion of the jurisdiction.
Mr. Wise. That is right.
Mr. Rice. How long have you been in that office?
Mr. Wise. About 8 years, almost nine, eight and a half or eight
and three-quarters.
Senator Kefauver. How much are you paid '. And how did you net
in?
Mr. Wise. How did I get in what \
Sena t of Kefauver. In your office.
Mr. Wise. 1 got in the office — originally I was appointed to fill
a vacancy occasioned by the death of my predecessor, by the Gov-
ernor, and I served until the next election, at which time I was can-'
didate for the unexpired term, and then I was candidate for elec-
tion for the full term, and I was elected.
Senator Kefauver. How long is it for?
Mr. Wise. Six years, and the election is up this year. As a matter
of fact, we have a primary in less than 2 weeks from now.
Senator Kefauver. How much is the compensation?
Mr. Wise. The compensation is now $7,200. However, you have
to earn it in that the major portion of it is paid out of tines assessed
in the county court as well as in the circuit court and the magistrate's
court within the county.
Senator Kefauver. If the fines amount to $7,200 you get that
amount, and if they don't amount to that, you don't get it?
Mr. Wise. That 'is right.
Senator Kefauver. But you cannot get any more than $7,200?
Mr. Wise. That is right.
Senator Kefauver. Let's get to the meat in the coconut.
Mr. Rice. All right, sir. You have heard a lot about gambling,
I suppose, in Campbell County.
Mr. Wise. Yes, sir. Since I was a child.
Mr. Rice. Today you heard that, and I think it has been indicated
here that a great number of slot machines paid taxes in the county.
That is, a great number of, I think Duke Connor explained it, the
audio wire service coining into the bookie joints, that he himself had
operated ahorse book and slot-machine enterprise, and that there were
some injunction suits brought some years ago against certain of the
notorious operators, and there had been testimony before the Senate
Crime Committee of the operation of a considerable magnitude, such
as Beverly Hills, run by the out-of-State mobs for a number of years
at great profit.
How do you account for all of that taking place in your county?
ORGANIZED CRIME IN INTERSTATE COMMERCE 153
Mr. Wise. Well, sir, I suppose it was just like Topsy, it just grew
up. It has been in existence long before I appealed on the political
scene, and I suppose it has existed by sufferance; at least that is my
opinion.
Senator Kefauver. Yes.
Mr. Kick. Despite the State laws to the contrary '.
Mr. Wise. That is right.
Mr. Rice. You know that that situation prevailed, or you knew that
that situation prevailed when you took office (
Mr. Wise. I was generally aware of it. I was aware of it since
I was old enough to know that there were such things as horse races.
Mr. Rice. Well, now, how about these money wheels and dice games
and things like that ? Did that always take place there ?
Mr. Wise. Well, I have only general information on that. I think
to a great extent that that is so.
Mr. Rice. Yes. Well, now, you say you have some general infor-
mation about those things. Did you ever feel compelled to inform
yourself a little bit better about what was going on there \
Mr. Wise. What do you mean to inform myself a little better?
Mr. Rice. Well, for instance, through a grand jury, or through
inquiry and instigation by officers assigned to you, or by the issuance
of subpenas or other processes to interested people in these operations,
to determine the extent of these enterprises, and the individuals re-
sponsible for them.
Mr. Wise. Whenever there was a grand jury, every matter coining
before the grand jury was fully explored, and even matters which did
not come in the form of a case, if information came to the grand jury
it was explored as fully as possible. I have taken the position since I
have been the Commonwealth attorney that any case coming before the
grand jury would be explored to the fullest extent, and where the
evidence justified indictments were returned and they were presented
in court.
Mr. Rice. Yes, sir. Did you ever take it upon yourself to suggest
to the grand jury that they might like to go a little further than just
what is produced before them and go into and look into these things
a little bit?
Mr. Wise. I have told every grand jury since I have been in office
that they had that prerogative, and I have urged them to seek informa-
tion from any source available to them.
Mr. Rice. Did you tell them who you thought was running Beverly
iiiiis?
Mr. Wise. I mentioned places by names because at no time was I
fully cognizant of the exact ownership.
Mr. Rice. You did not know that ?
Mr. Wise. That is right.
Mr. Rice. Did you suggest it might be a (rood idea to find out ?
Mr. Wise. I suggested that they could investigate that place and
other places mentioned by name.
Mr. Rice. As a result of that you had no indictments returned \
Mr. Wise. That is right, sir. Well, no: I won't say that. There
have been indictments returned over the years I have been in office.
Mr. Rice. But not against anyone connected with Beverly Hills?
Mr. Wise. Yes, sir.
Mr. Rice. Who would that be?
154 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Wise. If I am not mistaken, it was Sam Tucker.
Mr. Rice. You have had an indictment against Sam Tucker?
Mr. Wise. Yes, sir.
Mr. Kick. What became of that?
Mr. Wise. Well, it went to trial before a jury.
Mr. Kick. How Ioiijx ago was that?
Mr. Wise. ( )h, I don't know. 1 think, roughly, I would guess it was
l'.'ll. L945, or thereabouts.
Mr. Rice. Before you came in office?
Mi-. Wise. No; I was in office (hen.
Mr. Rice. Did you prosecute the case?
Mr. Wise. Yes, sir.
Mr. Rice. What became of it?
Mr. Wise. He was acquitted.
Mr. Rice. By a jury?
Mr. Wise. By the jury.
Mr. Kick. Was he charged with a felony count?
Mr. Wise. He was charged with a felony count.
Mr. Rice. You are quite sure about Sam Tucker?
Mr. Wise. Yes.
Mr. Rice. How about the others that were in the operation?
Mr. Wise. Which others?
Mr. Rice. Well, his partners. He was not alone, was he?
Mr. Wise. Well, I cannot be sure, but it seems to me that he and
someone else was named in the indictment, that they were the only
two whose names came before the jury which returned the indict-
ment. He was entitled to severance, and he went to trial after the
jury returned the verdict of not guilty, I think that was the outcome
of it, There was a plea offered to a misdemeanor which I recom-
mended to the court.
Mr. Rice. Yes.
Mr. Wise. That is on behalf of his codefendant.
Mr. Rice. Yes. How did that affect him?
Mr. Wise. I am not positive of that. That is my best recollection.
Mr. Rice. How did that affect his plea?
Mr. Wise. How did it affect his plea?
Mr. Rice. Sam Tucker's.
Mr. Wise. I don't understand you.
Mr. Rice. You suggested that he
Mr. Wise. Sam went to trial.
Mr. Rice. lie went to trial on a felony count.
Mr. Wise. Yes, and he was acquitted.
Mr. Kick. And he had a codefendant who was charged with a
felony.
Mr. Wise. But who offered to plead a misdemeanor, and in the
light of the acquittal I recommended that the court accept it, and
the court did.
Mr. Rice. He paid a fine?
Mr. Wise. Yes. sir.
Mr. Kick. lias there been any subsequent prosecution?
Mr. Wise. Of them?
Mr. Rice. Yes.
Mr. Wise. I am not sure. There may have been a misdemeanor
prosecution, but I would not be sure about it.
ORGANIZED CRIME IN INTERSTATE COMMERCE 155
Mr. Rice. Tucker, at least, denied that there was any.
Mr. Wise. Well, that is my best recollection on it; I think it was
Sam Tucker.
Mr. Rice. That did not stop it any ; did it ?
Mr. Wise. Apparently not.
Mr. Rice. Let's see what the record shows. In 1948 and 1949 the
Beverly, the partners, handled gross receipts of nearly a million dol-
lars, $975,000 to be exact, and the net income to them for the 2 years
was $426,199. That is what they admitted on their own books, and
the partnership distribution was broken down this way :
Your friend Sam Tucker, $44,019; Moe Dalitz, alias Davis, $44,019;
Louis Rothkopf, $44,019; Morris Kleinman, $44,019; Charles Polizzi,
$32,014; T. J. McGinty, $34,301; John Croft, $26,583; Harry Potter,
$20,008; Mitchell Meyer. SI 7,150; Samuel Schroeder, $54,024; Marion
Brink, wife of Jimmy Brink, drew down $40,017.
In addition to that money, Sam Tucker, whom you have just men-
tioned, drew down $10,000 a year salary from 1945 to i948, and
Mitchell Meyer, Meyer and Harry Potter, were paid salaries of $3,900
each for 1948, and $4,110 each for 1949.
The operation also conducted bingo, presumably for the purpose
of drawing customers into the place, and showed that the money
wheels took in $70,000; chuck, $17,000; blackjack, $51,000; craps and
others, $244,000.
These are net figures now. And the slot machines took in $69,000.
It would seem that those figures add up to a right sizable sort of an
operation for one place in your county. It would look like it would
certainly merit grand jury inquiry further than has been indicated
in the record here today.
Do you have anything you want to say about that ?
Mr. Wise. The only thing I can say is that the figures are to me
fabulous, and the names of the individuals you have mentioned I have
never heard before.
Mr. Rice. They are out-of-State syndicate men ; aren't they ? They
are out-of-State men ?
Mr. Wise. That is what I understand as the result of the inquiry
of this committee.
Mr. Rice. When that money is paid to them, it goes out of your
community.
Mr. Wise. Where it goes, sir, I wouldn't know.
Mr. Rice. Well, the record indicates that is their share, and if you
say they are out-of-State
Mr. Wise. I don't say it. I suppose they are. The committee says
they are.
Mr. Rice. There isn't any question about it.
Mr. Wise. And actually, sir, I have not heard the names of those
individuals until they were revealed as the result of this inquiry of
the committee.
Mr. Rice. That was in January of 1951.
Mr. Wise. That is right.
Mr. Rice. Or approximately there. There has been no action,
though, looking toward indictment of those individuals?
Mr. Wise. Well, there was an indictment returned against an indi-
vidual who testified before the committee by the name of Rosenbaum.
156 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rice. Oh, is that so?
Mr. Wise. That is right.
Mr. Rice. I am interested in that.
Mr. Wise. And the case was set for trial, I believe, somewhere be-
tween the 20th and the ii7th of June. And, of course, it was necessary
to have someone who heard the testimony come into our court and
testify that he had made that as an extrajudicial admission against
interest.
Mr. Rice. Yes.
Mr. Wise. And it happened that the reporters who had taken the
testimony were engaged in the MacArthur hearings, and they were
not available.
So, as a consequence of their being unavailable, the case was re-
manded, and will probably be called for trial at the fall term of court.
Mr. Rice. Did you make any effort to get hold of a staff member,
Mr. Wise?
Mr. Wise. Of the committee?
Mr. Rice. Yes.
Mr. Wise. No, because I rather thought that the man that took the
testimony down could testify that this was an actual transcript. He
took it down and he transcribed the notes, and it appeared to me
that he was the best witness. The time was rather short in which to
make these arrangements, because by the rules of the court our court
adjourns for the summer on the 1st of July.
Mr. Rice. Just by way of suggestion, in an adjoining county here
within the past week, there has been a trial similar to that resulting
from testimony taken before the committee, and the county attorney
there did use a staff member as distinguished from a reporter, and
the judge accepted that testimony for the record. If you have any
further difficulty, I might suggest that you do that.
Mr. Wise. Frankly, that had not occurred to me. I thought that
the men engaged on the committee were so well occupied that they
would not want to come to Newport.
Mr. Rice. They always have time to come out there.
Mr. Wise. Maybe we might invite them in the fall.
Mi-. Rice. Well, now, do you think that those figures there were a
little bit fabulous?
Mr. Wise. They seem to be-.
Mr. Rice. You have no reason to doubt them ?
Mr. Wise. I don't doubt them ; I don't doubt them.
Mr. Rice. Here is one a little closer to home. The Yorkshire, this
is right down in Newport. Beverly is a little outside.
Mr. Wise. It is in the city of Southgate.
Mr. Rice. The Yorkshire?
Mr. Wise. No, Beverly.
Mr. Rice. Hut here is one right at your doorstep there, for the 2
years of 1948 and 1949 the Yorkshire handled gross receipts of
si .f>26.000. From that there was a gross profit of $614,000, and a net
income of $427,597.
This is also a partnership operation. These partners, it is very
interesting to see what their proceeds are:
Maurice Ryan or Maury Ryan of Fort Thomas, Ky., $30,018; Fred
Ilallain of B'ellevue, Ky., $47,662. Do you know any of these people?
ORGANIZED CRIME EST INTERSTATE COMMERCE 157
Mr. Wise. Yes; I know Fred Hallam and I know Kyan, just to say
"Hello" to.
Mr. Rice. And then Morris Nemmo, Fort Thomas, Ky., $30,493.
Mr. Wise. I don't know him.
Mr. Rice. Did you ever bring any of them in before the grand jury?
Mr. Wise. Yes, sir.
Mr. Rice. You did ?
Mr. Wise. Yes, sir.
Mr. Rice. Did you talk about these things?
Mr. Wise. Yes, sir.
Mr. Rice. Did they disclose any figures to you ?
Mr. Wise. No, no; that is, after all, I think that you recognize that
you cannot make a man testify against himself before a grand jury.
Mr. Rice. But you can ask him.
Mr. Wise. But the Yorkshire operation was indicted at least three
times during my tenure.
Mr. Rice. For a felony ?
Mr. Wise. No; they were indicted on what we call a high mis-
demeanor. It provided a jail sentence of a year and a fine of from
$2,000 to $5,000.
Mr. Rice. Do you know what section that is of the statute?
Mr. Wise. Offhand, sir, I could not tell you.
Mr. Rice. But it is high misdemeanor?
Mr. Wise. That is what we commonly call it, because the penalty is
rather high as compared with an ordinary misdemeanor.
Mr. Rice. What years were those?
Mr. Wise. Well, if I am not mistaken, the last time they were
indicted was this year, early in the year, or the latter part of 1950.
Mr. Rice. Have there been any convictions?
Mr. Wise. No.
Mr. Rice. They did not take any pleas, then ?
Mr. Wise. In the past I think that somebody, some arrests growing
out of the Yorkshire, did take a plea. But the last time there was a
matter of an unwarranted search that arose. That was the question
on which the case went off. Previously the case went off on a trial,
went to a jury.
Mr. Rice. Now, let's see, some of these other partners, Robert Ber-
gan of Fort Thomas.
Mr. Wise. I don't know him.
Mr. Rice. $24,121 ; Sam Gutterman of Cincinnati, $10,496.
Mr. Wise. I don't know him.
Mr. Rice. A. R. Masterson, Fort Thomas, Ky., $17,493. Is that
Fred Masterson or Red Masterson?
Mr. Wise. Yes; they call him '-Red."
Mr. Rice. Have you ever had him in ?
Mr. Wise. Yes; he has been indicted, I would say, several times
in my tenure.
Mr. Rice. Did he disclose who his other partners were?
Mr. Wise. No, sir.
Mr. Rice. He has never gone to jail as a result of that?
Mr. Wise. He has always made bond.
Mr. Rice. There have been none of these go to jail?
Mr. Wise. No, sir.
85277— 51— pt. 15—11
158 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rice. E. R. Lowe, Tuscon, Ariz., $17,41)3; Jimmy Brink, Fort
Mitchell, $17,493.
Claude Hines, Fort Mitchell. $17,493; George Bregel of Melbourne
and I take it his wife Freda Bregel of Melbourne, Ky., took $10,023
and $1,470, which together would add up to $17,493, that some of
the <it her partners shared in.
Alfred Goltsman of Cleveland. We have seen his name appear in
several other syndicates.
Mr. Wise. What is the name?
Mr. Rick. Goltsman, G-o-l-t-s-m-a-n.
Mi-. Wise. I never heard of him.
Mr. Rice. His name appears in several other syndicate operations.
He is from Cleveland, $20,992; George Gordon of Cleveland, $20,992;
Samuel Tucker, again the fellow that was in Beverly Hills and several
others, Southgate, $20,992; Ruby Kolad, Cleveland, $20,992; Abe
Schneider of Cincinnati, $34,987; John Croft, Cincinnati, $33,092;
George Bear, Detroit, Mich., $24,296.
Now, that is a pretty sizable operation.
Mr. Wise. Much more sizable than any of us thought or could
have imagined.
Mr. Rice. Did you ever call any of the wheel dealers or dice dealers
or any of the employees in there?
Mr. Wise. There have been occasions when some of the employees
have been called.
Mr. Rice. They are subject to arrest under the common gambling
statute; aren't they?
Mr. Wise. That is right.
Mr. Rice. Were any of them arrested for that ?
Mr. Wise. I could not say. I could not say. I think that probably
some of them have been, but I don't know.
Mr. Rice. Well, you would have known if you had explored the rec-
ord of the club, or any of these clubs, to determine the extent of the
operation of the participants, to get down to the meat of it.
Mr. Wise. Well, the records of the clubs just have not been avail-
able. There have been instances of the evidence of gaming coming be-
fore the grand jury, and indictments were returned. Now, you know
as a lawyer that you cannot seize the defendant and bring him in as on
cross-examination.
Mr. Rick. I would say certainly you could compel the production
of records from any one of the partners or from the person who kept
t he records — or have you ever tried it ?
Mr. Wise. No, sir, because I don't agree with you. If a man is ar-
rested and charged with a crime, I don't think under the laws of our
Slate that I can make him produce his records which would incrimin-
ate him, any more than I could put him on cross-examination.
Senator Kefauver. What Mr. Rice is talking about, if you go out
and get .John Doe, the bookkeeper, and have him bring in the records,
you are not worried about John Doe: you are thinking about these
big fellows whom the records will show to be in the operation.
Mr. WlSE. Senator, that has happened in some instances where we
have bad some employees of those that 1 have sought to have an in-
dictment returned against, and they have, and I think properly so,
refused t<> testify before a grand jury, on the ground that it would
tend to incriminate them.
ORGANIZED CRIME IX INTERSTATE COMMERCE 159
Senator Kefauver. Can't you give the clerk, John Doe, the little
fellow, immunity ? Can't you grant him immunity \
Mr. Wise. Well that, of course, is rather indeterminate. I have
done it in some instances.
Senator Kefauver. Well, if you really wanted to get Dalitz and
Klelnman and Rothkopf, and this outfit, they have to have records of
their operations. Wouldn't it be worth while giving some little fellow
immunity in order to get him to bring in the records?
Mr. Rice. There is an immunity statute in Kentucky.
Senator Kefauver. Yes; I know there is in Kentucky. Don't you
think that might be worth while?
Mr. Wise. It might be ; it might be.
Senator Kefauver. I mean, as it is, sir, you are not getting anybody.
Mr. Rice. Well, for instance, Mrs. Moore down there testified be-
fore the committee that she kept the books for the Yorkshire Club and
told about keeping the minute books and all the other records as to
who was who, who the principals were, who she reported to, what
hours she worked. She gave the names of all the individuals men-
tioned. She seemed to be a very capable witness.
Mr. Wise. Yes; I am acquainted with that. She testified, I would
say, within the past 6 weeks.
Mr. Rice. But she has always been there.
Mr. Wise. Well, if you want the truth, I did not know of Mrs. Moore
until she came to Washington 5 or 6 weeks ago.
Mr. Rice. Have you had a grand jury since then?
Mr. Wise. No, sir.
Mr. Rice. Do you have any intention of submitting matters brought
out recently to any subsequent grand jury?
Mr. Wise. If matters reach the quality of legal evidence, I certainly
shall. I did it in the Rosenbaum case, because there was a corrobora-
tion in that case required by our statute. You see, we have got a statute
to the effect that a man cannot be convicted upon his own testimony
alone, whether it be an admission against interest or a confession. It is
similar to statutes they have in some other States. There has to be
corroboration and there happened to have been a raid upon the local
headquarters shortly before he appeared before the committee.
Now, there is a fellow I never heard about until the time he testified
at the committee. I daresay that there were only a handful of people
in the whole community who were aware of his existence, It is easy
for a man to hide away in a back office.
Senator Kefauver. He had a big business. He was the Northern
Kentucky Hospitalization Insurance Co.
Mr. Wise. Apparently so from the phone book. Apparently from
the phone book. But I understand his office was right small, in back
of the building on the second floor.
Mr. Rice. I think he testified that he paid something like $15,000
in telephone bills.
Mr. Wise. He must have kept the phones hot.
Mi-. Rice. I think in a year's time that was.
Mr. Wise. Yes, I think so. I have the clipping from the news-
paper, or the clippings, and I have them in the file..
Mr. Rice. You say yon had some corroborating evidence in the
Rosenbaum case?
160 ORGANIZED CRIME EX INTERSTATE COMMERCE
Mr. Wise. Yes, sir.
Mr. Rice. What did that consist of?
Mr. Wise. The police of the city of Newport raided his office in
Newport.
Mr. Rice. Did they have a warrant?
Mr. Wise. I believe there was a search warrant in that case. They
went up and found some records and some phones and some subordi-
nates, and then shortly after that it was that he appeared before the
committee and testified that that was his place of operation.
Now, of course, the physical fact of the raid, I thought at any rate
from a legal point of view, offered the corroborating evidence of his
admission against interest at the committee hearing.
Mr. Rice. Do you think it would be possible to get some corrobo-
rating evidence that there was gambling at either the Yorkshire or
Beverly ?
Mr. Wise. It is possible, sir, yes ; it is possible.
Senator Kefauver. Well, it is not within our province to tell you
how to do your job down there, but it is quite apparent that there is
a lot of room for improvement, Mr. Wise. Do you have anything
else? You are an intelligent man. I think you can find ways of
getting it done.
Mr. Rice. I have no further questions.
Senator Kefauver. Is there anything you want to add, Mr. Wise?
Mr. Wise. The only thing I would say is this, that the Common-
wealth attorney is not a police officer. He does not have the power
of arrest. I try all my cases alone and it just is not within the realm
of feasibility for me to run around at night seeking evidence and to
be in a courtroom during the day and prepare cases and review evi-
dence and things of that sort.
Senator Kefauver. Mr. Wise, the trouble is that we run into that
same thing all the way around. The sheriff says it is not feasible
for him, he does not have the money nor the time ; the grand jury does
not meet very long, and it just recommends legalized gambling when
it does meet ; and it is not feasible for you.
So it looks like somebody is going to have to take the initiative
and I cannot imagine anybody better than the Commonwealth at-
torney.
Mr. Wise. Well, sir ; I don't want to quarrel with your opinion
Senator Kefauver. You are the fellow who knows the legal tech-
nique of getting evidence; you are the man who presents the cases;
and I should think getting a few of these big fellows might improve
the situation down there a great deal.
Mr. Wise. It might.
Senator Kefauver. You have got a conspiracy statute and you
can get them back into your jurisdiction if you can get the genesis
of the case proven. I would think that would be a great way for
you to make a name for yourself down there.
Mr. Wise. That is probably so, but what you have to bear in mind
is that the revelations of the committee with regard to these out-
of-town incidents have occurred in recent months.
Senator Kefauver. A whole lot can be done between January 18
and July, what is this, the 23d.
Mr. Rice. Yes, sir. Excuse me, sir, I did not mean to interrupt
you.
ORGANIZED CRIME EX INTERSTATE COMMERCE 161
Mr. "Wise. I propose going on and pointing ont that we don't have
a conspiracy statute that applies to a case like that. Our conspiracy
statute would be the common law of conspiracy. It is a misdemeanor.
Now, it is questionable and highly doubtful that there could be expedi-
tion had on a misdemeanor. We have a statute "banding together
and conspiring for the purpose of committing a felony," but that
statute encompasses the presence of the party within the Common-
wealth of the commission of the conspiracy, and apparently from
the findings of the committee, if the conspiracy occurred outside the
confines of the State, it poses a legal problem which can possibly
be resolved one way or the other.
Senator Kefauver. Well, the operation was inside the State of
Kentucky, and in any event, there is nothing like trying, is there?
Mr. Wise. That is right, and we started off with the Rosenbaum
case as the result of this inquiry.
Mr. Rice. Well, you have heard Duke Connor.
Mr. Wise. He is back in the other county.
Mr. Rice. Oh, he is back in the other place.
Mr. Wise. Is that all, sir?
Senator Kefauver. That is all, thank you.
Senator Kefauver. Now, Chief Gugel. We had the chief up in
Cleveland.
Mr. Gugel. You had me here in Washington, too.
Senator Kefauver. Yes. Will you come around, sir.
Mr. Gugel. Yes, sir.
Senator Kefauver. Do }tou swear that the testimony you give will
be the whole truth, so help you God? •
Mr. Gugel. Yes, sir.
TESTIMONY OF GEORGE GUGEL, CHIEF OF POLICE, NEWPORT, KY.
Senator Kefauver. Mr. Rice.
Mr. Rice. What is your full name, sir?
Mr. Gugel. George Gugel.
Mr. Rice. Is that G-u-g-e-1?
Mr. Gugel. That is right, sir.
Mr. Rice. You are the chief of police in Newport?
Mr. Gugel. Yes, sir.
Mr. Rice. In Campbell County ?
Mr. Gugel. Yes, sir.
Mr. Rice. How long have you been chief?
Mr. Gugel. Well, since 1946 I have been chief of police.
Mr. Rice. Since 1946 ?
Mr. Gugel. That is right.
Mr. Rice. You were elected, were you ?
Mr. Gugel. No.
Mr. Rice. You were selected by the commission ?
Mr. Gugel. No ; it is a civil service deal in the police department.
You go up from the ranks.
Senator Kefauver. For the record, let it be noted that Mr. Gugel
testified in Cleveland before this committee on January 18 and 19,
I believe.
Mr. Gugel. That is right, sir.
162 ORGAXIZED CRIME EN INTERSTATE COMMERCE
Senator Kefauver. And the testimony is in the record. We don't
want to cover the same ground.
Mr. Gugel. And I testified up here about a month ago, also.
Senator Kefauver. What we want to know is what you have been
doing about these matters since all this was brought to your attention
back in January, Chief.
Mr. Gttgel. It is still being endeavored to get rid of all the gambling.
Senator Kefauveu. I know, but what specifically have you done?
Mr. Gugel. Still issuing orders to my subordinates.
Senator Kefauver. I know, but what is the result of those orders?
Mr. Gugel. We had a lot of raids.
Senator Kefauver. Who all has been arrested, and who has been
convicted '.
Mr. Gugel. I have those records with me. We just had a raid the
other night. One of my sergeants made a raid as late as Monday
morning.
Senator Kefauver. Now, we brought out in Cincinnati that you
got this list from Mr. George Robinson about all of the wire service
places. That was called to your attention in Cleveland. Have you
closed up those places yet?
Mr. Gugel. We have been checking them all.
Senator Kefauver. You have been checking them all?
Mr. Gugel. Yes.
Senator Kefauver. How many of them have you closed up ?
Mr. Gugel. Well, I have got a chief of detectives, and he has been
very active. They have been raiding places as we go along.
Senator Kefauver. Let's get which ones have been raided. Here is
the list. Can you show us — I mean, if I hand you the list, would you
know the ones that have been closed up?
Mr. Gugel. Since last month ?
Senator Kefauver. Well, you had not done anything about it in
January.
Mr. Gugel. We have been doing something about it every day, so
far as that goes.
Senator Kefauver. I know, but since January, since this was called
to your attention, can you tell us which of these places have been
closed up ?
Mr. Gugel. Well, I would have to see them, unless you want to read
them to me.
Senator Kefauver. No [handing book to witness].
Mr. Gugel. Well, this 313 York Street was raided.
Senator Kefauver. Who did you get there and what happened?
Mr. Gugel. I haven't my records with me on that.
Senator Kefauver. You don't have your records?
M r. ( ictgel. But there was an arrest made.
Now, Seventh and Saratoga was raided. In other words, I can go
through here and tell you — Fogel, at Fourth and York, that is the
Finance Building
Senator Kefauver. Well, as I remember there were about 60 places
here, ami you don't have your records with you to show what has
happened?
Mr. Gugel. No, all I have got is my record from my men, every
dav. what they reported in tome.
ORGANIZED CRIME IX INTERSTATE COMMERCE 163
Senator Kefauver. How would it be if you were to go through
your records when you go home and send us a report? That is what
we asked for in this letter back in August of 1950, about what the
situation in connection with these places was. Would you give us
a report on that?
Mr. Gugel. Well, sir, I can do that. I can get my stenographer to
go through there.
Senator Kefauver. We never got a reply to this letter. It was
addressed to you but we never got a reply to it. It was addressed to
you on August 18, 1950. Mr. Robinson says in the last paragraph :
I would appreciate it if you would furnish the Special Committee to In-
vestigate Organized Crime in Interstate Commerce with all the information you
have or may he able to develop regarding the owners and operators of the Ace
Research Service, the activities in which the above-listed persons are engaged,
and the efforts being made by the police department to investigate the activities
of these people to determine the nature of their operations, as well as any other
pertinent information.
Now, I believe you said you turned that letter over to somebody else
and thought maybe they would answer it.
Mr. Gugel. I turned it over to my secretary.
Senator Kefauver. Well would you mind ever giving us a reply
to the letter, as to what has been done with these places ?
Mr. Gugel. Well, I will check with her and have it sent in.
Senator Kefauver. Well, we would appreciate a reply. You don't
have the records here to tell us, and if you could check them off one
by one and let us know just what the situation about them is, we would
appreciate it.
All right, Mr. Rice, do you have anything else?
Mr. Rice. Yes, sir. Where is the Ace Research Co. that serves
these people in Newport ?
Mr. Gugel. It is in the 600 block there on York Street.
Mr. Rice. 627 \
Mr. Gugel. That could be the number.
Mr. Rice. Who runs that outfit there?
Mr. Gugel. Well, according to my information, a man by the name
of Gerding.
Mr. Rue. What is his name \
Mr. Gugel. Gerding, G-e-r-d-i-n-g.
Mr. Rice. What is his first name \
Mr. Gugel. Claude.
Mr. Rice. Claude Gerding?
Mr. Gugel. Yes, sir.
Mr Rice. He runs the Ace Research I
Mr. Gugel. Yes, sir.
Mr. Rice. What is up in that office?
Mr. Gugel. I wouldn't know.
Mr. Rice. Did you ever take a look ?
Mr. Gugel. Well, my detectives went up there on instructions from
me, and they failed to find anything.
Mr. Rice. They failed to find anything?
Mr. Gugel. That is right, sir.
Mr. Rice. They are servicing 111 subscribers out there. As a mat-
ter of fact, that was just over in Covington, and they have sixty-some
in Newport, and all of them were being serviced out of there. Who
was the detective you sent down there?
164 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Gugel. Well, within the last month or maybe 40 days we have
checked it two or three different times. Detective Chief Leroy
Fredericks. He is my new chief of detectives. He checked it and
failed to find anything.
Mr. Rice. He did not find anything?
Mr. Gugel. That is right.
Mr. Rice. Are you in a position now to say they are not servicing
anybody ?
Mr. Gugel. Well, I will say that to my knowledge I would not
know whether they are.
Mr. Rice. Did you ever call Gerding and talk to him ?
Mr. Gugel. No. I sent the detectives up there, sir.
Mr. Rice. Did they find out where he got the service?
Mr. Gugel. No.
Mr. Rice. Now, about when was it that these detectives went up
there ?
Mr. Gugel. As late as 10 days ago I had Detective Collins go up
there. Fredericks was on his vacation. They had been on their
vacation.
Mr. Rice. When was the first time that you sent the detectives up
there ?
Mr. Gugel. Well, right after the Cleveland deal up there, I came
back, and it was about in the latter part of January I sent them up
there.
Mr. Rice. That was in January, then ?
Mr. Gugel. Yes, sir, and then here about, oh, I will say a month
ago, when I was up here in Washington, I was informed that he was
still operating, and I sent the detectives up there then.
Mr. Rice. Every time you testify before the committee you send
them up there, is that the idea ?
Mr. Gugel. Well, sir, any time I have any information on it, I do.
Mr. Rice. What happened back in August, a year ago? You got
a letter there setting forth these places running in August a year ago.
What did you do then?
Mr. Gugel. Well, I testified up befere the committee in Cleveland
that I turned the letter over to Detective Chief Donnelly, who since
has retired, and he handled it.
Mr. Rice. Did you check up on Donnelly to see what he did?
Mr. Gugel. His report was nothing.
Mr. Rice. His report was nothing?
Mr. Gugel. Nothing up there.
Mr. Rice. I will agree with that.
Senator Kefauver. Well, when did he retire, Mr. Gugel?
Mr. Gugel. He retired, sir, I think it has been 2 months ago. I
don't remember too well. But he was off for maybe 2 or 3 months
before that, sick, and then he retired when his sick leave was up.
Mr. Rice. Then who took his place ?
Mr. Gugel. Leroy Fredericks.
Senator Kefauver. Did you turn this letter over to Mr. Fredericks?
Mr. Gugel. Donnelly had all that.
Senator Kefauver. You couldn't get it back from Donnelly?
Mr. Gugel. You remember up in Cleveland, I said he was handling:
it. I let him take care of it.
ORGANIZED CRIME IN INTERSTATE COMMERCE 165
Senator Kefauver. Well, Mr. Gugel, you just don't want to do very
much about this, do you?
Mr. Gugel. Well, I will do my part about it.
Senator Kefauver. Sir ?
(No answer.)
Senator Kefauver. I mean, you are not very anxious to do much
about closing up these places, are you ?
Mr. Gugel. Well, sir, here is the proposition : I have those detectives
now, I have got eight detectives, and I turn it over to them, and they
are the men who will do the work. I am in the office.
Senator Kefauver. I mean, you are the chief law-enforcement of-
ficer, aren't you ?
Mr. Gugel. I am the chief of police; yes.
Senator Kefauver. You give your full time to it?
Mr. Gugel. Yes, sir.
Senator Kefauver. And these detectives report to you every day
about what they find ?
Mr. Gugel. Yes, sir. I have my reports there from my detectives,
right there in the folder (indicating.)
Senator Kefauver. Well, how about this big club, what is the name
of it?
Mr. Rice. The Yorkshire and the Alexandria has been running in
the last month.
Senator Kefauver. Is the Alexandria running now ?
Mr. Gugel. I would say no.
Senator Kefauver. Why do you say that ?
Mr. Gugel. I said the same thing a month ago, they were not run-
ning.
Senator Kefauver. After that one of our investigators went in and
found it running.
Mr. Gugel. That was before this last trip up, I was up here, I think,
around the 18th 'or the 19th of June.
Senator Kef auver. All right. Do you have any thing else ?
Mr. Rice. That is all.
Senator Kefauver. That is all. Thank you, sir. You may go.
Mr. Gugel. Can I have this book [indicating] ?
Mr. Rice. You can get a copy of that by writing in to the Superin-
tendent of Documents.
Senator Kefauver. We will send you one. Mr. Rice, will you see
that the chief is sent one ?
Mr. Rice. Yes.
Senator Kefauver. That is my personal one. I have to keep that.
Mr. Gugel. I am sorry.
Senator Kefauver. Now, we have the chief of police of somewhere
else.
Mr. Rice. Mr. Rhoads is here.
Senator Kefauver. How are you, Mr. Rhoads? Glad to see you
again.
Now, before we have Mr. Rhoads testify, there is some other chief
of police that I saw outside here. Who is that, Chief Schild of Cov-
ington, and you are from Newport, Mr. Rhoads?
Mr. Rhoads. That is right.
Senator Kefauver. What other witnesses are there here?
Mr. Rice. Somebody said that Judge Murphy was ill, I believe.
166 ORGANIZED CRIME ENT INTERSTATE COMMERCE
Senator Kefattver. No, I understand that Judge Murphy is sitting
right over here.
Judge Murphy. Yes, sir.
Senator Kkfauyfjr. Well, Mr. Rhoads, will you raise your right
hand?
Do you swear that the testimony you give shall be the truth, the
whole truth, and nothing but the truth, so help you God?
Mr. Rhoads. I do.
TESTIMONY OF MALCOLM REET RHOADS, CITY MANAGER,
NEWPORT, KY.
Senator Kefattver. You testified at length before the committee at
Cleveland?
Mr. Rhoads. T did, Senator.
Senator Kefattver. And you told us at that time about the efforts
of the city manager, that you had been trying to get put into operation
to get better law enforcement there in Newport, and that you became
city manager in January 1950 ; is that correct?
Mr. Rhoads. That is right.
Senator Kefattver. What has happened since you testified in
Cleveland?
Mr. Rhoads. Senator, I think for the most part since that time it
has been a matter of mopping up for all practical purposes. The
large-scale operations have been terminated. There had been some
cheating efforts. There was one mentioned a month or so ago in the
hearing here, the Alexandria Club, which is in Newport.
I think one of the investigators, Mr. Goddard, had found some op-
erations there, and that is the one that Mr. Warren referred to just
an hour or so ago.
In view of the fact that we have had quite a bit of difficulty there,
they seemed to be able to cheat within 30 minutes after the police
visited them, and in viewr of that I have stationed detectives in that
building to stay there until they close, from 10 o'clock in the evening
on.
I think that one now is definitely terminated, the gambling activities.
Senator Kefattver. What right do you have to place detectives
there ? I thought that Mr. Gugel was the chief of police.
Mr. Rhoads. He is, Senator; but unfortunately 1 cannot depend
upon the head of that department to do the job that I want done.
Senator Kefattver. You mean that these eight detectives he has,
or these eight policemen lie has, would not do the job?
Mr. Rhoads. They have not done it as I would like to have it done.
Senator Kefauver. So you got a detective on your own, or two.
Mr. Rhoads. No; I have been working through that particular
group under the city manager act, Senator, and I am in charge of
the safety department. I do have control of that department.
Senator Kefattver. Do you have charge of the appointment of Mr.
Gugel as chief of police, or did you ?
Mr. Rhoads. No; I did not have anything to do with that.
Senator Kefattver. Who appointed him?
Mr. Rhoads. That appointment was made by the previous city
manager, and his appointment was based upon an examination that
was held, given by the civil-service board.
ORGANIZED CRIME EN INTERSTATE COMMERCE 167
Senator Kefauver. Have any charges been filed against Mr. Gugel?
Mr. Riioads. Yes; I think in the hearing in Cleveland we referred
to the charges that were preferred against Chief Gugel some time
last December, and a suspension of 28 days was given him at that
time.
Senator Kefauver. Then there was an agreement to do better;
wasn't that the situation ?
Mr. Riioads. Yes.
Senator Kefauver. Do you think that things have been better since
then ?
Mr. Rhoads. Yes; I do, Senator, in all fairness to the police depart-
ment. I think we do have some members on the police department
who are anxious and willing, once they know that you are sincere to
do a good job, and I have been able to now determine who those men
are, and 1 have used those men to do the job that we have done.
Senator Kefauver. Mr. Rice, do you have any questions?
Mr. Rice. Yes. I think Mr. Rhoads would probably want to
comment on some testimony that Mr. Thiem, the sergeant on the
police department there, gave to this committee. He appeared here
and testified a month ago as follows:
First of all —
he is talking about gambling in the Finance Building, and Thiem
says :
First of all, there is gambling in the Finance Building, and there always
has been, and there is right now.
The Chairman. Gambling in the Finance Building, you say?
And then I will delete a little bit.
The Chairman. To what extent?
Mr. Thiem. Bookies ; a commission house.
The Chairman. By bookies — you say there are bookies there?
Mr. Thiem. Yes, sir.
The Chairman. Have you undertaken to suppress it or to take any steps, or
to bring it to the attention of the officials?
Mr. Thiem. Yes. sir ; I have.
The Chairman. To what extent?
Mr. Thiem. I attempted to swear out a warrant for the police on a place
known as the Bobben Realty Co.
The Chairman. Go ahead.
Mr. Thiem. That was in May of 1950. I have my book over here. It was
May of 1950. I had the city police judge in the prosecutor's office with me, as
I was swearing out the warrant, and the prosecutor excused himself and went
into Mr. Rhoads' office, and within a few minutes Mr. Benton, the owner of that
building, came to the prosecutor's office and grabbed me by the arm and pulled
me outside and asked me what I was trying to do to him. I told him that I was
attempting to raid them, the Bobben Realty Co.
The Chairman. Yes.
Mr. Thiem. He said for me to stall, and I says, "I don't have to stall, the
prosecutor is doing that."
With that he ran into the manager's office and after some time I got my
warrant, and I went to the Finance Building and the place was closed down.
The Chairman. Who told you to stall?
Mr. Thiem. Mr. Benton, the owner of the building.
The Chairman. Who is he?
Mr. Thiem. He is the senior member of Benton, Benton & Ludeki, the firm
that Mr. Rhoads is a member of.
Now, you are the city manager, and you are a member of the firm,
and a man says it looked like they were trying to stall in the Finance
Buildinsr.
]68 ORGANIZED CRIME EN" INTERSTATE COMMERCE
Mr. Rhoads. Well, in the first place, I am not a member of the firm.
I am merely an associate there, and have been since I began to practice
law in 1945.
Mr. Rice. Yes. That is for the purpose of expenses.
Mr. Rhoads. That is right, and I still maintain an office in that
particular building, and I am convinced, as I am sure you are, that
there was some sort of a tip-off on that particular occasion. I have
not been able to determine just how the tip-off was made. I believe
that there was a tip-off.
However, any insinuation that Mr. Mullencamp, who is an ap-
pointee of mine, who was picked on the basis of his being one of the
finest and most outstanding young lawyers, and a man of very high
integrity, and his whole family is of the same caliber, any reference
to that, that he would be any party to that sort of thing, is ridiculous,
and I think that any reputable citizen in the county would recognize
that as being absurd. I don't recall just how the incident occurred,
because it was over a year ago.
Mr. Rice. May of 1950.
Mr. Rhoads. Yes.
Mr. Rice. Did you have any talk with them at that time about this?
Mr. Rhoads. No ; I did not have any talk, and he did not report any
incident like that to me at that time, and if he had any knowledge
of that sort of thing, he should have reported it at that particular
time, but he did not.
Mr. Rice. Do you have any interest in the Bobben Realty Co. ?
Mr. Rhoads. I do not. The only interest I have in them is to get
them out of there, and I have.
Mr. Rice. What sort of an outfit was it ?
Mr. Riioads. So far as I have been able to determine, it was what
we call a clearinghouse. It was located in the building. We had a
lot of difficulty.
Mr. Rice. A bookie commission outfit?
Mr. Rhoads. I presume that is what it is. Frankly, I don't know
too much about how they operate, but it certainly was not, in my
opinion, any legitimate business.
Mr. Rice. Who owns the Finance Building?
Mr. Rhoads. It is owned by the Newport Finance Corp.
Mr. Rice. You had a raid down there last week and arrested two
men and a woman?
Mr. Rhoads. Yes ; that is right. I have assigned a special patrolman
to myself to look into some of those operations that I felt were still
in effect, and I sent him to this particular place upon some information
given to me that there might be one there, and he went over and raided
it. We also have been able to terminate the Bobben Realty Co.
Mr. Rice. That is out of business now?
Mr. Rhoads. That is out of business. They tried to move to another
location, and someone informed me of their moving, and I got in
my car and found where they were moving in at another location. I
then obtained the services of a patrol officer, a boy that I can depend
on, and I had him to go in while they were moving, and caught them
in operation.
Mr. Rice. And were they prosecuted?
ORGANIZED CRIME IX INTERSTATE COMMERCE 169
Mr. Rhoads. They have been processed through the police court,
and it has been submitted to the court. There has not been any
decision made on it.
Mr. Rice. Who were the individuals charged, Mr. Rhoads?
Mr. Rhoads. There are two fellows by the name of Lasoff, I believe
one they call by — they call them both by nicknames — one they call
Big Pork}r, and another one they call Little Porky. I don't know
what their first names are.
Mr. Rice. They have been arrested ?
Mr. Rhoads. Yes ; they were arrested at that time.
Mr. Rice. Who is prosecuting them ?
Mr. Rhoads. The city prosecutor.
Mr. Rice. What is his name ?
Mr. Rhoads. George Mullencamp.
Mr. Rice. Yes. Now, in your position as city manager, have you
ever heard of the share-the-profit plan, or did you just hear about it
this morning?
Mr. Rhoads. Well, I don't know whether they term it that in my
locality or not, but when you are in public office there, you must have
heard some of those things, because the histoiy of that county has
been that of wide-open gambling.
Mr. Rice. Your county, I am talking about.
Mr. Rhoads. Yes; I am talking about Campbell County and, of
course, including Newport.
Mr. Rice. In connection with that have you ever been approached
by anyone to share the profits ?
Mr. Rhoads. I don't know whether you would call it an approach
or not. I have had suggestions made that there could be a lot of
money made. However, I don't believe that very many would take
the liberty to approach me about it.
Mr. Rice. What sort of approach did you get? Be a little more
specific about it.
Mr. Rhoads. Well, the first time that I was ever approached was by
an anonymous telephone call, and I could not
Mr. Rice. Was that right after you became city manager?
Mr. Rhoads. That was right after, it wasn't more than probably a
week or two after becoming city7 manager, that I received the call,
and this particular person went ahead to say that if I would let things
alone, that they would be willing to pay a thousand dollars a week
for letting them operate.
Senator Kefauver. They would pay 3rou that?
Mr. Rhoads. Yes, yes; but I never could establish the identity of
the person making the call.
Mr. Rice. Did it sound like a bona fide offer to you?
Mr. Rhoads. I don't know whether it was or not, because subse-
quently then there were some remarks made which substantiated that
figure, which made me think maybe it must have been.
Mr. Rice. For instance ?
Mr. Rhoads. Well, I had a visitor who came to my office on one
occasion, and just told me he knew that that much money would be
paid.
Mr. Rice. Was he a racket fellow ?
170 ORGANIZED CRIME EN INTERSTATE COMMERCE
Mr. Rhoads. No. This particular person was not in the rackets,
and I don't know, and I cannot establish the direct connection. I
wish I could.
Mr. Hick. I take it you turned down the telephone offer.
Mr. Rhoads. I tinned it down; yes. I turned down the offer.
Mr. Rice. There was no follow-up outside of this feeler you had
later on?
Mr. Rhoads. Except then began the second phase of their attempts.
I have observed about three phases of this sort of thing. The first
phase of it is an attempt to buy what they want; failing to do that, the
next step is to harass and to bluff and try to push you around.
Mr. Rice. How did they do that?
Mr. Rhoads. They do that by calling your home and threatening
your family and, well, in my case, I lived in the adjoining county of
Fort Thomas, and the city manager before my time lived there. In
fact, the city manager of Covington lived in Fort Mitchell. Those are
the residential sections of that particular area, and my family were
there, and my children were in school there, and I was pretty well
established.
The law in Kentucky requires you to live in the city, and then some
of the members of the police department had a meeting at this Ser-
geant Thiem's house, and they signed a petition and sent it to the at-
torney general, asking that he require me to move into the city, with
the idea in mind, in my opinion, that I would possibly resign before I
would move in.
I did not take it too seriously at first, but I then learned that actually
they were going to take some action, and I went to the attorney gen-
eral's home and determined that they were going to do it.
Then I did establish a residence in Newport, and subsequently had
to sell my house and move into Newport. Then, of course, there were
those telephone calls.
Mr. Rice. Had your predecessor lived in Newport ?
Mr. Rhoads. Pie had lived in Newport — no; he had lived in Fort
Thomas.
Mr. Rice. They did not bother him ?
Mr. Rhoads. Not my predecessor, it was the one before the one pre-
ceding me that lived in Fort Thomas, and they didn't — well, I won't
say they didn't bother him, because they did do a whole lot of the same
thing, although they did not carry it that far. I might add that this
was a man of very high integrity that was there, and he told me that
they possibly would do that to me, and they did.
Mr. Rice. What other way did they bother you, Mr. Rhoads?
Mr. Rhoads. Well, at the time of the hearing of Mr. Gugel, they put
me on trial instead of Mr. Gugel. They tried to do everything they
could to embarrass me in a public hearing, knowing quite well that
the commissioners were not jurists, and were a quasi- judicial body,
probably without power of contempt, and they abused their privilege
before that commission.
Personal matters were brought into the trial of the hearing, things
that were so obviously attempts to intimidate, that it was very ob-
vious.
Mr. Rice. Did you get any letters like this [indicating], threatening
letters of any kind?
Mr. Rhoads. Yes ; I did get letters.
ORGANIZED CRIME EN INTERSTATE COMMERCE 171
Mr. Rice. Did you get
Mr. Riioads. However, I don't remember having any where there
was any threatened violence. They call you all sort of names. Most of
the threats you have are by phone. Most of them were too wise to
put a statement like that in writing.
Mr. Rice. What did they tell you over the phone? What would
be a sample conversation ?
Mr. Riioads. They call you up, they call you all sorts of names, and
they will say, "If you don't pull off, such and such is going to happen."
Mr. Rice. Do they say to pull off a specific place?
Mr. Riioads. No; I don't recall ever hearing them mention any
particular place. "If you don't lay off gambling, one of your chil-
dren will be run over in the street." Things of that sort.
Of course, you finally get to the point where you don't pay too much
attention to it yourself, but it certainly is not very conducive to fam-
ily domestic tranquility. After all, it is terrible to have your family
torn up like that, just because a fellow is trying to do his duty.
I have gone through, I guess, about as much as any man could have
in the last 2 years.
Mr. Rice. Would they sometimes call your wife?
Mr. Riioads. Yes. They would call her, and I have had them call
me at midnight and say, "Well, now, if you don't let these places
open up" — I remember one lady said that she had three children, and
she was going to bring them over and leave them on my doorstep,
because her husband was out of work, and I was responsible for him
being out of work, so I was going to have to take care of them, and
things of that sort.
I might add, too, Senator, I am not at all in accord with some of
the statements that have been made here today, relative to the atti-
tude of the public in that area toward gambling.
Senator Kefauver. Well, you tell us about what you think of it.
Mr. Riioads. I think that the people have never been given an
opportunity to express themselves regarding it. Until this particular
administration in Newport took over 2 years ago, in my opinion, it
never has — or there never has been a sincere effort made to clean up
that community. People have just gotten to the point where they
felt, "What is the use, one group is as bad as another."
And when there is a temporary shut-down the attitude is, "Well,
as soon as they get things worked out, they will open up."
I am sure when we were in for a while people had their tongues in
their cheeks, but I think now they are definitely convinced.
That is the second phase of it, and the last one and the most vicious
of all is the smear campaign that they put on, to try to discredit
you in the eyes of the good people of the community.
However, I think they waited too late to start with us, because I
think what we have done speaks so loud that they would not be able to
hear what they say. That is exactly the way they proceed.
Senator Kefauver. What is the smear campaign? What do you
mean?
Mr. Rhoads. Any kind of a rumor they can start. This attempt
here to infer that there was a tip-off made in a raid. That is the type
of thing to reflect on your integrity.
172 ORGANIZED CRIME IN INTERSTATE COMMERCE
I remember on one occasion, Senator, when Gugel's trial was in
progress they brought a woman in and stood her up in front of where
I was testifying, and asked me if I knew her.
Now, she never opened her mouth at any time. But the insinuation
was there. I have tried to find out where she is and who she is. I
have even had detectives trying to locate her, and when we proceeded
with the hearings, I prepared to have a warrant issued for her, to
have her charged with perjury, if she said anything, but she never
showed up and, of course, they never intended for her to show up.
But at the same time it was an attempt to infer that there was some-
thing involved there.
That is the type of things they will stoop to.
Senator Kefauver. Who brought the woman in?
Mr. Rhoads. The attorney for Chief Gugel, who, by the way, is the
attorney for this Dennert group, the Alexandria group, Lester, Charles
Lester.
Senator Kefauver. He is the same attorney that represents the
gamblers ?
Mr. Rhoads. Oh, yes ; yes.
Senator Kefauver. Are there any other things like that you want
to tell us about ?
Mr. Rhoads. The only thing is, Senator, at the last hearing I was
very much disappointed, because I had felt so strongly and keenly
and said so so many times before, so many groups, as to what this
particular group had done to help us. We have been, however, in
effect, for our program — we had been working on our program more
than a year when this movement started. However, I felt that you
and your committee had given us a great deal of help, and I think
3'ou have built an attitude now that has taken hold.
There was some mention made that probably no officials in northern
Kentucky, or in the northern Kentucky area, were without contamina-
tion, or something to that effect, and I don't know just what was said,
and I don't think it was made in the hearing, but it was later made
by counsel, and it disturbed us greatly.
Senator Kefauver. If any statement like that was made, I want
to here and now say that it was not representing the views of the
committee, and it might have been an inadvertence of some counsel,
because we certainly don't mean to castigate all the officials of the
counties of northern Kentucky.
Mr. Rhoads. I am sure that you don't.
Senator Kefauver. Our experience everywhere is that there are
many good officials, and some places have more good ones than other
places, as you very well know. But I think in the report we said that
there were tie-ups between some officials and some operators.
Mr. Rhoads. And I think you're absolutely right, Senator.
Senator Kefauver. And I think you saw our report and you take
no exception to that?
Mr. Rhoads. I take no exception to it. I don't believe that con-
dit ions could possibly have been like they were and I have been there
for 18 years, and I even taught in school there.
Senator Kefauver. You have been in public life long enough as
a city manager to know that where there is open gambling, and every-
body knows about it, it is in the papers, they even advertise in the
ORGANIZED CRIME IN INTERSTATE COMMERCE 173
papers in Cincinnati, and reports are made that the law enforce-
ment officials are hound to know about it, and they really go after
them, if they do they can clean them up, can't they ?
Mr. Rhoads. You can, and, Senator, I do want to say this, that I
have no personal feeling toward Chief Gugel. I am not concerned
about who is chief of police. If he will do the job that ought to be
done there, he can stay as long as he wants to, so far as I am con-
cerned. I am not interested in anybody's scalp, so long as they do
their job.
There is one thing I think probably you might be interested in
knowing and that is that we are now taking some new steps toward
trying to clean up the wire service. We passed an ordinance requir-
ing the Western Union Telegraph Co. to give us a plat showing their
installations, and we have just recently received that plat.
Now, it is our intention to have their officials, someone there, to
identify their wires, and those wires that are not theirs and are
on the city streets without any permits, and we are going to cut
them and we feel as though that will cut off most of the service. It
is better and it will probably be easier than trying to run them out
of every little back room some place, and I think that definitely will
stop it, and stop even the cheating operations.
Senator Kefauver. Well, how about this Ace Research Service at
617 York Street. Is that the central point of dissemination?
Mr. Rhoads. Senator, I think they have moved from there. I don't
know where they are. I have not been able to locate them. They are
not in that particular location at present, but I think they have moved
their location some place else. I am not sure where it is.
However, upon information from Cleveland I did determine that
this periodical distributing corporation in Cincinnati, which was re-
ferred to today by someone, is being operated by a man by the name
of Cullen, is where the service is coming from. I took it up with
the city manager of Cincinnati and he conducted an investigation. In
fact, they went to the office and they were not able to find a ticker
service, or what ever they use to get the information over, but it is defi-
nitely and has been located in Cincinnati.
Senator Kefauver. Do you have anything else, Mr. Rice ?
Mr. Rice. No, sir.
Senator Kefauver. Well, Mr. Rhoads, I hope you will keep up
your effort.
Judge Murphy, will you come around.
Mr. Gugel. Senator O'Conor asked me at the last meeting to bring
a letter which I had, or to send him the letter.
Senator Kefauver. Mr. Rhoads, this may concern you, so you had
better come around.
Mr. Rhoads. Yes; I will.
FURTHER TESTIMONY OF GEORGE GUGEL, CHIEF OF POLICE,
NEWPORT, KY.
Mr. Gugel. That is what it is, you heard it, but Senator O'Conor
said he would like to have this, so I had a photostatic copy made of it,
and I have the letter here.
Would you want me to read it and file it ?
85277— 51— pt. 15 12
174 ORGANIZED CRIME IN INTERSTATE COMMERCE
Senator Kefatjver. Sure, read it. What is it?
Mr. Gugel. This is dated February L5, 11)50, at 4 p. m. [Keading:]
At 4 p. m., February 14, 1950, 1 visited Manager Rhoads' office
Senator K kfai vi:u. This is a letter addressed to whom ?
Mr. Gugel. The letter I had — the letter is not addressed to any-
body. But Senator ( KConor asked me about it and said that he would
like to have it, and I failed to send it up here, but I wanted to bring
it up here today and I wanted to present it.
Senator Kkfaivkk. All right. The letter is already in the record
at page 384 of the hearings in Cleveland.
Mr. ( hjGEii. It is?
Senator Kefatjver. Yes, on January 18.
Mr. ( Jugel. But Senator O'Conor was not there. At the last meet-
ing he was here, though.
Senator Kkfaivkk. But at Cleveland, Ohio, you presented this at
the time you testified.
Mr. Gugel. Well, Mr. Xellis talked to Senator O'Conor, and they
wanted a copy.
Senator Kefatjver. Senator O'Conor was not here. The letter
begins :
4 p. m., February 15, 1950, I visited Manager Rhoads' office —
Is that the way it starts ?
Mr. ( rUGEL. That is right, sir.
Senator Kefatjver. It is the same. However, we may as well get
the issue out here and see what it is about, since it has been brought
up in the hearing.
Mr. Gugel. I brought it along for Senator O'Conor.
Senator Kefatjver. The matter was fully gone into at this hearing
in Cleveland, at which Senator O'Conor was not present, and this
statement was read and Mr. Rhoads testified in explanation of it.
Mr. Gugel. I see.
Senator Kefauver. Now, if you want to go over the same thing-
Mr. Gugel. Well, it is all right
Senator Kefauver. If you want to go over this, it is all right, but
without reading the letter state what the substance is.
Mr. Gugel. Well, if you don't want to listen to it — I brought it up
for Senator O'Conor.
Senator Kefatjver. Well, now, listen, let it be filed and it will be
given to Senator O'Conor. He apparently was not aware of the fact
that it was already in the record.
Mr. Gugel. That is what I thought.
Senator Kefatjver. The substance of it was that Manager Rhoads
was not interested in the Merchants Club at 15 East Fourth Street,
or the Yorkshire Club at 518 York Street, and the only place he was
interested in, or places, were those operated by Arthur Dennert, which
are the Flamingo Club at 63 York Street, the Glenn Rendezvous at
928 Memphis Street, and the Club Alexandria at 2124 Monmouth
Street, because Dennert was the only operator who filed suit in the
court concerning his assessments of personal property.
Detective Chief Donley asked the manager, uYou mean to tell me
you do not want these other places stopped?" and the manager said
"No."
ORGANIZED CRIME IN INTERSTATE COMMERCE 175
Detective Donley asked this question two or three times and the manager's
answer was the same, "No. I am not interested in any of the places outside of
the dinner clubs."
That is the substance of what we are talking about?
Mr. Gugel. That is it.
Senator Kefauyer. Is there anything else you wish to state about
that?
Mr. Gugel. No, sir.
Senator Kefauyer. All right. Will you sit over here just a minute.
Mr. Gugel. Yes.
FURTHER TESTIMONY OF MALCOLM REET RHOADS, CITY MAN-
AGER, NEWPORT, KY.
Senator Kefauyer. Mr. Rhoads, since the matter has been brought
into this hearing, you are, of course, familiar with this letter?
Mr. Rhoads. Yes ; I am familiar with it, Senator.
Senator Kefauver. Tell us about it again so there cannot be any
misunderst anding.
Mr. Rhoads. Yes. I do want to make that very clear, that early
In the part of the year
Senator Kefauver. Of 1950 ?
Mr. Rhoads. Of 1950;
Senator Kefauver. Yes.
Mr. Rhoads. Attorney Lester filed some 41 or 42 tax suits which
they were protesting the amount of the assessment that was placed
on the personal property, and I called the detectives, I think — I have
forgotten whether the chief was present at that time or not — and I
told them to go to those places mentioned and to take an inventory
of all the personal property there.
I made it very clear where they wTere to go and to take an inventory.
They came back, stalled around, and acted as if they did not know
what they were supposed to do, and asked me about, oh, I don't know,
but I think they mentioned probably the Yorkshire and also the Mer-
chants Club, and I told them to go back and do exactly what I had
asked them to do.
Now, to prove the insincerity of a statement like that
Senator Kefauver. You mean then that you were talking about
.going and making this inventory, that those were the places you were
interested in, in connection with that matter ?
Mr. Rhoads. Yes, in connection with the protest they filed regard-
ing their assessment. That is exactly right. There was no mention
of gambling or anything else.
Senator Kefauver. You were not talking about gambling and law
violations ?
Mr. Rhoads. Xo, that cannot enter into it at all. The Merchants
Club, I ordered a raid on personally, and the Yorkshire also.
Senator Kefauver. Those are the ones that they inferred you were
not interested in connection with their criminal operations?
Mr. Rhoads. That is right.
Senator Kefauver. Did you personally order a raid on the York-
shire Club ?
Mr. Rhoads. Yes, I did.
Senator Kefauver. When was that?
176 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rhoads. I am not sure but it must have been sometime in the
fall of 1950.
Senator Kefauver. Did you order a raid on the Merchants Club?
Mr. Rhoads. Yes. In fact, most of the places that were raided
1 had to give a special order to raid them.
Senator Kefauver. Do you have anything else you want to say
about them?
Mr. Rhoads. Well, there is something, and I almost omitted it,
that I think you would be interested in.
When we came into the office we found that the city had been taxing
and licensing these handbooks and gambling casinos and actually they
were issuing licenses for them in the form of a brokerage license.
I have here a list of the places in Newport and the addresses that
were licensed by the city.
Mr. Rice. What year is that, Mr. Rhoads?
Mr. Rhoads. This is in the year of 1949.
Senator Kefauver. Chief Gugel, we will make this letter an exhibit
to this hearing, because I think it should be in this hearing also.
Mr. Gugel,. O. K.
Senator Kefauver. That is, a photostatic copy of the letter.
Mr. Gugel. Yes, sir.
Senator Kefauver. Let this be exhibit No. 11, please.
9 (The document referred to was marked "Exhibit No. 11" and may
be found in the appendix on p. 235.)
Senator Kefauver. And we will mark this as an exhibit to your
testimony, if that is all right.
Mr. Rhoads. Yes.
Senator Kefauver. And then, this document that you are sub-
mitting, Mr. Rhoads, we will make that as an exhibit to your testi-
mony, if that is all right with you.
Mr. Rhoads. Yes, certainly.
Senator Kefauver. It will be marked as "Exhibit No. 12" of your
testimony.
Mr. Rhoads. All right.
(The document referred to above was marked "Exhibit No. 12,"
and appears in the appendix on p. 236.)
Mr. Rhoads. I see one place where they paid as much as $8,090
license to operate. That was based on a sales, or rather, a payroll
tax part of that.
The ordinary handbook, as it indicates here paid $250.
Mr. Rick. What place is that you are talking about?
Mr. Rhoads. The one I am talking about, the $8,090, was the York-
shire.
Mr. Rice. What do they call that, brokerage?
Mr. Rhoads. That one was based on a payroll tax, if they got up
to a certain size they paid on a payroll tax, and the smaller ones paid
a Hat fee.
Senator KeFx\uver. What are they paying to do?
Mr. Rhoads. To operate a bookie, I suppose. They were licensed
to do it.
Senator Kefauver. What does the license say it is for?
Mr. Rhoads. For brokerage. They call it a brokerage license. I
think I counted about a hundred names here, or 101, maybe.
ORGANIZED CRIME EST INTERSTATE COMMERCE 177
Mr. Rice. How much did they charge the Yorkshire Club?
Mr. Rhoads. Well, the Yorkshire Club, they charged $8,090.40.
Mr. Rice. For a brokerage license?
Mr. Rhoads. That was in lieu of their brokerage license. That
is your payroll tax.
Mr. Rice. What became of that money ?
Mr. Rhoads. That went into the city fund, in the general fund in the
city treasury.
Mr. Rice. Yes.
Senator Kefauver. All right, That has been filed as exhibit No.
12 to your testimony.
Mr. Rice. Do you recognize any other gambling places on there?
Mr. Rhoads. Yes; I see the Glenn Rendezvous on here, and I see
the Club Flamingo on here, and the Merchants Club.
Mr. Rice. How about the Alexandria ?
Mr. Rhoads. I think it is on here ; yes.
Mr. Rice. How much did they pay ?
Mr. Rhoads. $572.76 — but they only paid $500 of it, however. I see
there was a balance. The amount they were to have paid was $572.76.
Mr. Rice. W'ere there any other large amounts like the Yorkshire ?
Mr. Rhoads. I think those I read off are the only large ones. There
are several $500 licenses here, and I understand that was for clearing-
houses. They distinguished between a clearinghouse and a bookie.
Mr. Rice. What was the other price paid \
Mr. Rhoads. $500 was paid by the clearinghouse for a brokerage
license, and $250 was paid by bookies. It amounted to $50,109.99.
Senator Kefauver. What year was that?
Mr. Rhoads. That was 1949. This, however, is no longer in effect.
Mr. Rice. What happened in 1950 ?
Mr. Rhoads. Well, in 1950, of course, we did not tolerate a thing
like that. I cannot see any difference between a city and an individual
taking graft.
Mr. Rice. Did the question come up in 1950 of whether that should
be corrected or not ?
Mr. Rhoads. No. This was repealed immediately before the old
administration left.
Mr. Rice. I see.
Mr. Rhoads. With the idea, I suppose, that we could not operate
if they did, and we operated in the black without this money coming in.
Senator Kefauver. Isn't the situation better since the places have
been closed down, so that people have more money to spend in the
stores ?
Mr. Rhoads. I feel that is sure. At first there was a question in the
minds of some of the businessmen that they had been sold a bill of
goods, and a lot of them felt possibly that was a part of the community
that could not be dispensed with and, in fact, we had a petition pre-
sented to the board protesting our action by reputable businessmen.
Now, some of those, some of those businessmen have come to me
privately and even some of them at that time called me up and said,
"So and so was here, and I put my name on their petition," and told me
not to pay any attention to it. I have had several come to me since
that time and tell me that it hasn't hurt their business.
The bank accounts will justify that.
178 ORGANIZED CRIME EN INTERSTATE COMMERCE
There is another point that is important. We had not been able to-
develop northern Kentucky as it should develop industry. As a mem-
ber of the industrial committee of the State chamber, I was told
pointedly by some very good friends of mine that the reason why
northern Kentucky had not developed industrially as it should have
was because they hesitated to come into a community where the econ-
omy was so unsound as that of northern Kentucky.
Senator Kefauver. You told about two industries you lost because
of the gambling conditions.
Mr. Rhoads. Well, I think that was someone else who referred to it.
I do know this, that we are having more inquiries now, and we have
had more inquiries in the last 2 years than we have had in many years
regarding the location of industries in our particular area. Every
week I have someone representing industry in there looking for a
location, and they are very frank to say that if conditions continue
as they are now they will be glad to come into that area. We hope to
extend it to the entire county.
Senator Kefauver. Well, I was much impressed by what you said
in Cleveland, and they tell us that now — this is what you said — "They
tell us that now children are drinking milk that didn't drink milk
before, they are buying more groceries; business generally has im-
proved instead of declined since this has taken place."
Mr. Rhoads. Yes; and the dairyman who said that signed a peti-
tion against what we were doing, and then came back later and made
that statement.
Senator Kefauver. That is what you said at the hearing.
Mr. Rhoads. Yes; the same man that made that statement was the
man who protested against it.
Senator Kefauver. And you were asked the question : "How about
juvenile delinquency?"
Mr. Rhoads. Senator, we have fewer arrests in the city of New-
port now sometimes for a month than at times in the past had been in
police court on a Monday morning. It has made just that much
difference.
Senator Kefauver. How much do you say, what difference do you
think? Can you put it at a percentage?
Mr. Rhoads. I did have some figures, but I don't have them with
me, and they are not up to date. But, for instance, I remember one
month, I think it was about 3 months ago, I don't know which month
it was but I think there were 32 arrests made for that entire month,
and the chief can tell you more about that than I can because he
signs the reports and sends them up.
Senator Kefauver. How did that compare with the same month
preceding it ?
Mr. Rhoads. The month before was not very much larger, but it
certainly compares very favorably with the report of 2 or 3 years ago.
Senator Kefauver. So there has been a definite decline?
Mr. Rhoads. A definite decline, that is true.
Senator Kefauver. And that bugaboo about the majority of the
people wanting wide-open gambling, et cetera, what is your opinion
about that ?
Mr. Rhoads. Well, the best answer to that, Senator, is that they
protested 2 years ago to the point that they went out and elected. l>y
a tremendous majority, four fine, outstanding businessmen to office.
ORGANIZED CRIME EN INTERSTATE COMMERCE 179
Now, the same thing is taking hold in Kenton County. They have
formed an organization over there to do the same tiling, and they have
extended it county-wide. They have appointed the Campbell County
Civic Association* and they have selected candidates for law-enforce-
ment officers. I might say that I am one of the candidates for Com-
monwealth attorney that is sponsored by that group.
Senator Kefauver. So, as Senator Tobey would say, you think there
is an aroused public interest ?
Mr. Rhoads. I think there is an aroused public interest and it has
expressed itself very forcibly in the city of Newport.
Senator Kefauver. All right.
Now, Mr. Rhoads, I am going to risk taking a shot at sizing a man
up. In my opinion, there have been some things brought against you
here, but you look to me like an honest, forthright man, and I believe
you are conscientiously and correspondingly trying to do a good job.
I hope I am never proven wrong.
Mr. Riioads. Thank you, Senator. I am sure that you won't be.
Senator Kefauver. I wish I could say that about Chief Gugel, but
I cannot.
Mr. Rice. Our next witness will be Judge Murphy.
Senator Kefauver. Will you raise your right hand and be sworn,
please?
Judge Murphy. Yes.
Senator Kefauver. Do you swear the testimony you shall give shall
be the truth, so help you God?
Judge Murphy. I do.
TESTIMONY OF HON. RAY L. MURPHY, JUJDGE, CAMPBELL COUNTY
CIRCUIT COURT
Senator Kefauver. Now, Judge Murphy, you are the circuit-court
judge of the criminal division for Campbell County, is that correct?
.) udge Murphy. No, sir ; it is not, Senator. I am circuit-court judge
of Campbell County. That is the seventeenth judicial district. "We
don't have any divisions.
Senator Kefauver. The criminal division? You don't have any
divisions?
Judge Murphy. No divisions.
Senator Kefauver. How long have you been judge?
Judge Murphy. Eleven years, June 10 past.
Senator Kefauver. Judge, you have issued a number of injunc-
tions and have tried to get some of these operators. Do you want to
give us a general statement about what you have done, what the situa-
tion is?
Judge Murphy. Senator, I did not issue any injunction or injunc-
tions against any individual or individual operating any of these
establishments.
In 1943 Hubert Meredith, the attorney general of Kentucky at that
time, instituted an action on behalf of the Commonwealth against a
number of alleged gambling operators and nearly every public official
in the county, asking the court to grant a permanent injunction against
the operators and the officials.
I was out of town when that suit was filed. The temporary injunc-
tion was issued by Judge Newell, who at that time was circuit judge
180 ORGANIZED CRIME IN INTERSTATE COMMERCE
of the nineteenth judicial district, which was an adjoining district
to my district.
When I arrived back home after this suit had been instituted, and
the preliminary orders had been issued by Judge Newell, I proceeded
to issue several orders with reference to the custody of certain property
which had been seized, pursuant to preliminary orders that had been
issued by Judge Newell.
The attorney general then made a request of me that I vacate the
bench, and I declined to vacate the bench. The attorney general
named me as a defendant.
After the amended petition was filed, Attorney General Meredith
filed an action in the Court of Appeals of Kentucky to prohibit me
from sitting in the case. I contended at the time that the amended
petition had not been filed in good faith. It was contested in the
Court of Appeals of Kentucky, and the court of appeals granted a
permanent writ of prohibition which took me out of the case.
Subsequent thereto — oh, within 2 months' time — I was dismissed
out of the case as a defendent. So, I did not sit in the case. I did not
enter any orders except the two preliminary orders, which bore little
or no significance.
Senator Kefauver. Well, what were the grounds for keeping you
■out of the case?
Judge Murphy. Apparently they did not have any evidence on
which to put me in the case in the beginning.
Senator Kefauver. Well, I mean, I thought they had removed you
from hearing the case. Is that what you are talking about '.
Judge Murphy. If I have not made myself clear, Senator
Senator Kefauver. I am afraid you have not made yourself clear.
Judge Murphy (continuing). When the suit was originally filed,
I was absent from the district.
Senator Kefauver. What was the nature of this suit?
Judge Murphy. It was an injunction action instituted by the Com-
monwealth of Kentucky on relation of Hubert Meredith, the attorney
general of Kentucky.
Senator Kefauver. It was based on evidence against a number of
people allegedly operating illegally?
Judge Murphy. Allegedly operating gaming establishments, and
the officials
Mr. Rice. What clubs were they connected with, Judge ?
Judge Murphy. Well, I think the name of Beverly Hills was men-
tioned, and the name of Yorkshire was mentioned, and the name of
the Glenn Rendezvous and the Merchants Club.
Mr. Rice. The major establishments in the county?
Judge Murphy. Yes.
Senator Kefauver. Was it alleged also that it was issued against
certain public officials, including you — on the grounds of what?
Judge Murphy. Originally, I was not included in the action, but
in the amended petition I was made a defendant, and it was alleged
in the amended petition that I had knowledge of these establishments
and that I had, by visiting the establishments, given to the operators
the implied assurance that they need not worry about me. I am trying
to recall the language used in the amended petition, in substance.
Senator Kefauver. This order was issued, the injunctions were
issued, by a visiting judge ; is that right ?
ORGANIZED CRIME EX" EXTERSTATE COMMERCE 181
Judge Murphy. Yes, sir. When I was disqualified, the chief justice
of the court of appeals appointed John L. Vest as special judge.
Now, I might say that he remained in the case for approximately 3
or 4 months, for some time, I am not sure about the exact length of
time, and then he disqualified himself, and another special judge was
appointed, and he remained in the case and he did sign and enter the
final judgment in the case. I have a copy of that judgment.
Senator Kefauver. Well, anyway, the judgment dismissed you as
one of the defendants ?
Judge Murphy. No; the judgment, Senator — not that — I was dis-
missed before the judgment had been entered. I was dismissed by
motion of the attorney general. I was taken out of the case.
Senator Kefauver. Let us see a copy of the judgment.
Judge Murphy. Yes, sir.
♦Senator Kefauver. The motion of the attorney general dismissing
you, on what grounds was that made ?
Judge Murphy. He did not give any reason for it.
Senator Kefauver. Well, did you file an answer saying that this
allegation was not true, that you knew something about the opera-
tions ?
Judge Murphy. Oh, yes ; oh, yes ; I am certain we filed an answer.
Senator Kefauver. Is this the judgment?
Judge Murphy. That is the judgment, in the injunction suit, the
final judgment that was entered.
Senator Kefauver. Is this an original paper?
Judge Murphy. No, sir ; it is not.
Senator Kefauver. It is a certified copy ?
Judge Murphy. The original judgment is with the court records,
of course.
Senator Kefauver. May we have this?
Judge Murphy. Yes ; I brought it for this purpose.
Senator Kefauver. We will not have it copied into the record
because it is long, but it will be made exhibit No. 13.
(The document referred to above was marked "Exhibit No. 13"
and is on file with the committee.)
Senator Kefauver. Mr. Rice, do you want to ask the witness any
questions ?
Mr. Rice. Yes. Judge, you charge grand juries from time to time?
Judge Murphy. Yes, sir.
Mr. Rice. Your grand jury sits what, three times a year?
Judge Murphy. Four times a year. Three times in Newport, and
one grand jury a year in Alexandria, which is a dual, one of the dual
county seats in our county.
Mr. Rice. Do you reduce your charge to writing like Judge Good-
enough does ?
Judge Murphy. Mr. Rice, for the most part, I would say "Yes.'T
However, I have here perhaps 20 or 30 written pages that have been
made over a period of years, but there have been times when I used
the previous charge as a pattern rather than rewriting each charge.
I use the previous charge as a pattern in that case.
Mr. Rice. I am wondering if in any of those charges, particularly
in recent months, you have made reference to the testimony that was
adduced before the Senate Crime Committee in the Cleveland hearing
182 ORGANIZED CRIME IN INTERSTATE COMMERCE
in January, or the published list of receipts for Federal taxes paid on
slot machines in Campbell County, or to the published list of wire-
service drops in the county. 1 think in those cases, numbering nearly
a hundred, and a great number of slot-machine receipts, which would
seem to be prima facie evidence, that there was open and widespread
gambling together with the acknowledgement of open and notorious
gambling at the Yorkshire and Beverly Hills, as indicated from the
testimony of Mr. (iiesey in Cleveland that was published in the paper.
Have you brought that to the attention of the grand juries in recent
months?
Judge Murphy. It seems to me, Mr. Rice — I am not absolutely sure
about this, but it seems to me that 1 did make reference to the investi-
gation that had been conducted in Cleveland, just a couple of weeks
prior to the empaneling of the February grand jury, which is em-
paneled in February.
I repeatedly informed my grand juries that they should investigate
all types of law violations, and I have placed practicular stress on
gaming violations with the admonition to the jury to make a thorough
and comprehensive investigation of not only gaming but of all its
ramifications; the investigation to encompass the relation of any
public official with the tolerance or sufferance of gaming.
I have specifically instructed grand juries to consider the published
list of slot-machine licenses, relating to our community carrying, as
I recall, the name of the licensee and the amount paid in Federal
licenses and, of course, the number of machines that were licensed.
That has been referred to grand juries repeatedly by me.
Mr. Rice. Yes, sir, and did you
Senator Kefauver. Well, Mr. Rice, I wonder if he has a copy of his
last written charge there.
Judge Mtjrfhy. I don't think I have, Senator. I have got, as I
said before, I have used many of these charges as patterns in charging
grand juries, and I have many copies here. Here is one for June
1043, and there is one for October 1948.
Senator Kefauver. Let us see the one from October 1948. Is that
the last one ?
Judge Murphy. Yes, sir. It augments — I use this just as an aug-
mentation to some previous charges that I had used as a pattern. It
touches upon a matter that I Avanted to specifically call to the grand
jury's attention.
Mr. Rice. Do you ever recall inviting their attention to the statute
of limitations?
Judge Murphy. No, sir; I don"t believe that I have ever made ref-
erence to the statute of limitations to the grand jury.
Mr. Rice. Well, your interpretation is that it is 5 years in connec-
tion with gaming; is that correct?
Judge Murphy. I would want to look at the statute, Mr. Rice, be-
fore I advanced an opinion, but I believe that there is a 5-year limita-
tion on certain phases of gambling, and if I am not mistaken I believe
there is a 1-year limitation on other phases of gambling activity which
constitutes, of course, violations of the law, as all gaming does.
Senator Kefauver. I think the reason, Judge Murphy, that Mr.
Rice asked that question is because we have an unusual situation, in
that one grand jury, at least, only considers what happens to be going
on at the time the grand jury is in session, and they do not seem to
•ORGANIZED CRIME EN INTERSTATE COMMERCE 183
■consider it of special importance looking into things that had hap-
pened within the period of limitation prior thereto, particularly in
regard to gambling and gaming.
Mr. Rice. Well, to follow that up, in our investigation of organized
■crime in interstate commerce, we find that the big Cleveland syndicate
seems to have operated openly and notoriously in the Newport area
during a time in which it would seem to me that they would be in-
dicted, but in interrogating some of the members of the syndicate we
failed to find they had ever been particularly concerned about law en-
forcement or the grand jury. They had never been bothered, they
had never been arrested; they never had been tried for any offense.
I have not asked you, but I take it there have been no indictments
returned by the grand juries, following your charge, which would in
any wray disturb the big syndicate. Isn't that true?
Judge Murphy. I don't know if they were disturbed or not, but
apparently that is true, Mr. Rice. They were not disturbed or per-
turbed by any grand jury action. I think that evidently is the record.
Senator Kefauver. What have your grand juries done in Campbell
County, Judge Murphy? Have they brought in any indictments re-
cently against any of these gamblers or operators?
Judge Murphy. What do you mean by "recently", Senator?
Senator Kefauver. I mean, February when you charged the grand
jury last.
Judge Murphy. I believe there were several indictments returned.
1 know there were several indictments returned. I cannot recall the
names of the individuals or the establishments, either by the February
grand jury or the last May grand jury that was empaneled just a
couple of months ago.
Senator Kefauver. This October 1948 charge seems to deal with
specific things which you don't talk about in generalities in that
charge.
Judge Murphy. Well, of course, Senator, maybe I can look at it
and-
Senator Kefauver. In other words, I don't find any request that
they look into the violation of the gaming laws.
Judge Murphy. Well, I would say, Senator, that so much of the
•charge that was given in October of 1948 was a repetition of charges
made by me to every grand jury.
It is incumbent, under the law, that the circuit court judge charge
specificially with reference to gaming violations, and those sections
are read verbatim to the jury. I have never failed at any time to follow
the law in specifically referring to a gaming violation or gaming viola-
tions.
Mr. Rice. Those grand juries make a report in Campbell County,
do they not? We have had some reports from Kenton County. Do
the grand juries in Campbell County make a report?
Judge Murphy. Yes, sir, they do.
Mr. Rice. What becomes of those?
Judge Murphy. They are filed with the clerk of the court.
Mr. Rice. And they make a record of the indictments returned if
any?
Judge Murphy. Yes, sir.
Mr. Rice. Have there ever been any felony indictments for gam-
bling in Campbell County returned, to your knowledge?
184 ORGANIZED CRIME EST INTERSTATE COMMERCE
Judge Murphy. Yes, sir, there have been.
Mr. Kick. Have there been any convictions following that?
Judge Mi Ri'iiY. No, sir, there have not.
Mr. Rice. It has never been necessary for anyone to sentence anyone
to jail?
Judge Murphy. The jury never gave me an opportunity.
Senator Kefauver. AA hat is your trouble down there? Do you want
to tell us about it ?
Mr. Rice. Well, here is one thing that is a little inconsistent. In
Judge Murphy's court the injunctions were issued, which would seem
to indicate that at least in some circles there was no sympathy for the
gaming operations, but I think it is safe to say that subsequent to the
issuance of those permanent injunctions, gambling was open and no-
torious, as witness the handling of several million dollars in a 2-year
period, under which you could not help but know, because it was a
public proposition, and yet there seems to have been no effort made
to follow up and enforce the mandate of the court, which would seem
to be contemptuous that these places operated after the injunction.
Would you say you were not in sympathy with those injunctions?
Judge Murphy. No, I would not say that I was not in sympathy
with the injunctions, but I would say the converse, that I was, and I
am in sympathy with the injunctions, Mr. Rice, but the injunction is
not applicable, it is against the individual, and there has never been
brought to my attention any factual basis or matter upon which a
court would be justified in moving sui sponta on its own motion, and
there has not been any affidavit filed in support of a motion by any-
body that any individual who had been enjoined by the court be
brought before the court as a contemner.
Now, if that did happen, if some person was brought before me, as
judge of the Campbell Circuit Court and charged writh being in con-
tempt of that permanent injunction, I would feel constrained to vacate
the bench because I would be permanently prohibited from sitting in
the case as a trial judge, and I would feel that it might appear im-
proper for me to sit in this phase of the case or the phase of the case
as represented by an action for contempt against a defendant who
had been enjoined.
Mr. Rice. In other words, it is more or less of a nullity, so far as
you are concerned now ?
Judge Murphy. It is what ?
Mr. Rice. A nullity.
Judge Murphy. The injunction ?
Mr. Rice. Yes.
Judge Murphy. Mr. Rice, if you want my candid opinion about it,
I think the judgment is as full of holes as a piece of Swiss cheese.
Mr. Rice. Well, it adds up to the same thing, then?
Judge Murphy. Yes.
Senator Kefauver. What is the idea of having to get an injunction
to keep people from violating the law? It looks as though the law
itself would be a sufficient injunction.
Judge Murphy. I agree with you, Senator, and I will say that
that is
Senator Kefauver. I can see this difference, that in one case they
are violating the law, and in the other case they are violating the law
ORGANIZED CRIME EST INTERSTATE COMMERCE 185
plus a mandate of the court, which would give the court something
to act upon.
Judge Murphy. Yes, sir.
Senator Kefauver. I notice there is an injunction against John
Croft in this decree that you gave me. This was back in 1944.
Mr. Rice. Croft appears in Yorkshire for the years 1948 and 1949,
as drawing down $33,000. He also appears in the Beverly Hills as a
partner for the years 1948 and 1949, drawing down an additional
$26,000.
It looks like even though the injunction is in personam against
John Croft, he has been a little bit active there, to the extent of
better than $50,000.
Senator Kefauver. How would somebody go about getting this in-
junction enforced against John Croft?
Judge Murphy. There would have to be a motion filed, and in sup-
port of the motion an affidavit that Croft, who was permanently en-
joined by that decree, had violated the provisions of the decree, and he
should be hailed into court and show cause why he should not be pun-
ished for contempt of court.
Now, the limit of punishment, in my opinion, that would be a civil
contempt, and the limit of punishment in a criminal contempt is 30
hours in jail and $30 fine, unless you empanel a jury and let the jury
fix. the punishment, and that is probably what would be done in the
case.
Senator Kefauver. I notice here, Judge, that the proceedings
against Lee B. Keslar, who was the sheriff of Campbell County — no,
it says John Croft, Samuel Tucker, and Samuel Schroeder, which
have not been heard by the court, are held in abeyance until the action
by the court of appeals — do you know what action the court of appeals
took?
Judge Murphy. Of course, Senator, I was not the judge in the case
and I cannot remember what that relates to. The reference in the
decree
Senator Kefauver. There seems to be two injunctions against John
Croft, one of which was appealed from.
Well, do you have anything else, Mr. Rice?
Mr. Rice. Well
Senator Kefauver. I was going to ask you, what is the trouble,
Judge, or what has been the trouble ?
Judge Murphy. You mean with the juries?
Senator Kefauver. With this matter generally. Apparently the
grand juries haven't done anything about it substantially, I mean,
these big operations have been going on and they have gotten some
of the little fellows, but they never seem to get the big fellows. What
do you think the trouble is?
Judge Murphy. Well, Senator, I am afraid I could not give you a
full and comprehensive answer to that' question. I don't know.
They talk about the community being a liberal community. Per-
haps that is the answer. I don't know.
Of course, I have said on many occasions that there is a difference
between liberalism and license.
Senator Kefauver. I should think that would be true.
Judge Murphy. Yes. I know that I instruct the grand juries.
Of course, I don't have an}' right to go into the grand jury room and
186 ORGANIZED CRIME IN INTERSTATE COMMERCE
demand that the grand jury return indictments on felonies, or de-
mand that they ignore cases, or charges, or that they return indict-
ments for misdemeanors. It is up to the grand jury, and that is
the only answer I can make to your question, Senator.
Senator Kefauver. Do they close down during the time your grand
juries are in session.
Judge Murphy. That has been advert ised by the press. They have,
on occasions, printed stories that with the impaneling of the grand
jury there would be a cessation of gaming activities.
Senator Kefauver. Well, earlier, Judge, Judge Goodenough testi-
fied that his grand jury was recessed over for about 6 weeks and
that during that time the places were closed up in his county, or it
had that effect. Do you think that might be one of the answers,
to keep the grand jury in constant session, or rather, so it could be
available for session at any time, or to recess it over for a long period
of time I
Judge Murphy. It might be, Senator, but. of course, you can recess
a grand jury — but you cannot recess a grand jury beyond the date,
for the succeeding grand jury to be impaneled.
You might work it out on a time basis, to recess it periodically, and
let the jury remain in session 2 days, recess it for a month, come back
and remain in session two more days, and recess it again for a period
of time to encompass the period of time existing between the two
grand juries. That might be possible.
I think the more feasible and practical thing to do would be to have-
the legislature revise the law so that the grand jury could be an operat-
ing unit 365 days out of the year.
Mr. Rice. I think a Federal grand jury can run 18 months.
Judge Murphy. I don't dispute that. I know they have a more-
effective set-up in the Federal juries.
Senator Kefauver. I think Illinois had a 30-day limit on their
grand juries, and I believe that they succeeded in getting a bill passed
in their last legislature to enable them to have longer sessions.
Judge Murphy. Yes.
Mr. Rice. Yes, that is so.
Senator Kefauver. Do you have anything else, Mr. Rice?
Mr. Rice. I have no questions, sir.
Senator Kefauver. Judge, do you have anything else you want
to say \
Judge Murphy. No, sir, I don't think so.
Senator Kefauver. All right. Thank you very much, sir.
Now. ( Jhief- here is the chief.
( Jhief, will you raise your right hand and be swTorn.
Do you swear the testimony you shall give will be the truth, the-
whole t ruth, and nothing but the truth, so help you God?
Mr. Schii.i). I do.
TESTIMONY OF ALFRED S. SCHILD, CHIEF OF POLICE,
COVINGTON, KY.
Senator Kefauver. Chief, Senator O'Oonor has been conducting
these hearings, so I am not familiar with just the exact matters I
want you to testify about, but you arc the chief of police for Coving-
ton, are you not?
ORGANIZED CRIME EN INTERSTATE COMMERCE 187
Mr. Schild. Yes, sir.
Senator Kefauver. What is your full name?
Mr. Schild. Alfred Schild.
Senator Kefauver. But you pronounce it "S-h-i-e-1-d"?
Mr. Schild. Yes, sir. There is no "e" in it.
Senator Kefauver. How long have you been chief of police of
Covington?
Mr. Schild. I have been chief of police about 12 years, and I have
been on the department 38.
Senator Kefauver. Plow are you appointed ?
Mr. Schild. Civil-service examination.
Senator Kefauver. Then the city commission and the mayor make
the appointment from an eligible list?
Mr. Schild. Yes, sir.
Senator Kefauver. How old are you, Chief?
Mr. Schild. Sixty-eight.
Senator Kefauver. And how much are you paid ?
Mr. Schild. Forty-three hundred dollars a year.
Senator Kefauver. How large a town is Covington, by the way?
Mr. Schild. Sixty-two thousand.
Senator Kefauver. Well, you ought to be paid more than that, but
that is not a matter which we are here for. How much of a force do
you have ?
Mr. Schild. Seventy-two men.
Senator Kefauver. And you have charge of the law enforcement
for the city of Covington ?
Mr. Schild. Yes, sir.
Senator Kefauver. Mr. Rice, what operations do we have in
Covington ?
Mr. Rice. Yes, sir, we have the Kentucky Club, the Kenton Club,
the 514, and I think the Kentucky is also known as the (J-JT, isn't that
right ?
Mr. Schild. That is right.
Mr. Rice. That is John Walsh's place ?
Mr. Schild. John who \
Mr. Rice. John Walsh.
Mr. Schild. I don't think that John Walsh runs that.
Mr. Rice. Who runs the Kentucky Club X
Mr. Schild. I think the Carr brothers.
Mr. Rice. But Walsh is involved there some way or other, isn't he
manager or something?
Mr. Schild. No; I don't think he is.
Mr. Rice. What place does he have?
Mr. Schild. John Walsh?
Mr. Rice. Yes.
Mr. Schild. He was manager down there at one time, but I don't
think he is there any more.
Mr. Rice. He was there at one time?
Mr. Schild. Yes. sir. He was ai one time. yes. sir.
Mi-. Rice. Then yon have Ray Sargossa and John Paine.
Mf. Schild. One of them is at Third and Court, and the other
is on East Fifth Street.
Mr. Rice. What soil of places do they run?
Mr. Schild. One runs a cafe, the other runs a drug store.
188 ORGANIZED CRIME IN INTERSTATE COMMERCE
,\lr. Rice. Don't they run the 514 Club?
Mr. Schild. No, sir.
Mr. Rice. Then, Senator, we had in the neighborhood of 100 wire
service drops.
Senator Kefatjver. One hundred and eleven, I think.
Mr. Rice. One hundred and eleven in the county. He is just chief
of police of the city — oh, they are all right in Covington, that is
right, 111 of those, and a great many slot-machine tax receipts,
Federal tax receipts.
We arc wondering, Chief, about what steps you have taken toward
locating the source of the wire service information in Covington.
Have you run that down to see where it is coming from?
Mr. Schied. We are trying to run it down. There is the chief of
detectives and his men who have been working on it.
Mr. Rice. That is the man under you?
Mr. Sciiild. Yes, sir.
Mr. Rice. When did he start doing that?
Mr. Sciiild. He is working on it for some time.
Mr. Rice. What do you mean by that.
Mr. Sciiild. Well, for the last 4 or 5 months.
Mr. Rice. About the time the information came out in the papers
about Cleveland?
Mr. Schild. That is right.
Mr. Rice. How about
Senator Kefatjver. What has he done in those 4 or 5 months ?
Mr. Schild. Sir?
Senator Kefacver. What has he done in those 4 or 5 months?
Mr. Schild. We have been checking on it, trying to find out where
it come from. The last information I got, what do they call it, it was
a service located in Cincinnati.
Mr. Rice. Yes, sir.
Mr Schild. Yes.
..i. .. Well, now, in May of last year the McFarland committee
report av a? released for public consumption and it had listed all those
places in Covington.
Mr. Schild. Yes, sir.
Mr. Rice. Did you learn about that?
Mr. Schild. Yes, sir.
Mr. Rice. W7ere there any steps taken ? That was over a year ago.
Mr. Schild. You mean in the gambling places ?
Mr. Rice. Yes.
Mr. Schild. Yes, sir ; there have been some arrests made.
Mr. Rice. Yes; but how about the wire service? Did you start to
run it down then ?
Mr. Schild. They were trying to run it down. I don't know
whether they can go any place with it or not, whether we are liable
to do that.
Mr. Rice. You don't know whether you are or not?
Mr. Schild. No, sir.
Mr. Rice. You mentioned a minute ago that you started back about
4 or 5 months ago, in January.
Mr. Schild. That is right.
Mr. Rice. This was over a year ago, when this was published. You
didn't do anything at that time?
ORGANIZED CRIME IN INTERSTATE COMMERCE 189
Mr. Schild. No. . . .
Mr. Rice. What precipitated your going into action this time,
Chief? , . .
Mr. Schild. They were speaking about this wire service, and we
were trying to locate whether it was in Covington, Newport, or Cin-
cinnati, and we seemed to find out that it was located some place in
Cincinnati, but not definitely where that is, where they give out the
information. I don't know how they operate it, I am not familiar
with that.
Mr. Rice. Have you familiarized yourself with that operation now?
Mr. Schild. No, sir.
Mr. Rice. You are not doing that?
Mr. Schild. No, sir.
Mr. Rice. Do you intend to let that continue to operate in Cov-
ington ?
Mr. Schild. No, sir; not exactly. I have the chief of detectives
and his men working on the case.
Mr. Rice. They are familiarizing themselves with it?
Mr. Schild. Yes, sir.
Mr. Rice. What do they tell you they have done?
Mr. Schild. I get reports every morning, they go through the dif-
ferent places, we have the list where there is gambling, and they
bring in the reports, "No gambling found/' There are reports every
morning.
Mr. Rice. They bring them in one right after the other, "No gam-
bling found" ?
Mr. Schild. Yes, sir.
Mr. Rice. I take it, then, that you have not arrested anyone?
Mr. Schild. Yes. They have brought in some.
Senator Kefauver. How many have they arrested ?
Mr. Schild. Well, now, let's see, really I don't kow just how many
because I have not been working full time since April. I was in the
hospital twice and confined to my home for a number of weeks The
last time they were up here I was in the hospital. I
Air. Rice. You have been chief for how long?
Mr. Schild. Twelve years.
Mr. Rice. Twelve years?
Mr, Schild. Yes.
Mr. Rice. Did you ever know of a gambler to go to jail in the
time you have been chief?
Mr. Schild. No ; I have not.
Mr. Rice. There has not been a single gambler go to jail during
your term ?
Mr. Schild. They might have gone to jail long enough to make
bond to get out.
Mr. Rice. How do you account for that, Chief I
Mr. Schild. Well, I really couldn't tell you.
Mr. Rice. Because you don't make cases?
Mr. Schild. Well, they make the cases. We had some cases re-
versed on us.
Mr. Rice. After the men were sentenced to jail?
Mr. Schild. No; not exactly. We had cases where two of the de-
tectives went to a place on Fifth Street, a place named Schmidt's, and
85277— 51— pt. 15 13
190 ORGANIZED CRIME IN INTERSTATE COMMERCE
they wenl into the side entrance, placed their hands on the fence,.
and they could look in the window, see the sheets, and see the stuff
on the wall, and they went around the front entrance, broke in the
door and arrested them for running a handbook. They were dis-
missed on the grounds of illegal entry to gain evidence,
Mr. Rice. They should have gone down and gotten a search war-
rant on the strength of what they had seen; isn't that what the judge
said?
Mr. Schild. Yes. We did that in another case, Your Honor.
Mr. Rick. 1 >id you get a conviction in that case?
Mr. Schild. No, sir.
Mr. Rick. They threw that one out, too ?
Mr. Schild. Yes. sir.
Mr. Rick. On different grounds ?
Mr. Schild. No; there was gambling, it was Nineteenth and Madi-
son, they went into a cafe up there and the officers heard slot machines,
or the sound of slot machines, in the back room, and they went down
and procured a search warrant, and came back with that, and it was
thrown out with the understanding that they trespassed illegally to
obtain evidence.
Mr. Rick. In the first place, they trespassed illegally ?
Mr. Schild. Yes, sir.
Mr. Rice. Now, then, there was a $75,000 robbery at the Kentucky
Club last November, wasn't there?
Mr. Schild. That is the report ; yes, sir.
Mr. Rice. What was that all about?
Mr. Schild. I could not say what it was about.
Mr. Rice. Who runs that Kentucky Club ?
Mr. Schild. I don't know who really runs it, whether it is the Carr
brothers or who runs it.
Mr. Rice. Was Walsh down there then ?
Mr. Schild. I could not say.
Mr. Rice. Who got stuck up? You investigated the case, didn't
you?
Mr. Schild. No. sir; I did not.
Mr. Rick. Didn't your department doit?
Mr. Schild. Yes ; my department did it ; yes, sir.
Mr. Rick. What is the story? It was a right good-sized robbery.
Mr. Schild. I don't recall the names of the fellows that were there.
Mr. Rick. What were the circumstances, as best you can remember
them?
Mr. Schild. There were some fellows hanging around the place all
evening, and when the last fellow went out, the other fellows came in
and they had guns and stuck up the four or five fellows who were in
there.
Mr. Rice. You mean the operators of the gambling place got stuck
up?
Mr. Schild. It was the fellows in the room.
Mr. Rice. And these other gunmen came along and took their
money away from them '.
Mr. Schild. That is what they did.
Mr. Rice. Did anybody get caught for that?
Mr. Schild. No, sir. We had two or three suspects. I went down
to Louisville where they had one young fellow arrested down there,,
ORGANIZED CRIME IN INTERSTATE COMMERCE 191
and they couldn't identify him. They have been unable to identify
anyone so far.
Mr. Rice. Who was stuck up? Who was trying to identify these
people ?
Mr. Schild. I just don't recall their names right now. I don't
recall their names.
Mr. Rice. How did you find out about the case?
Mr. Schild. There was a report made on it.
Mr. Rice. Who made it?
Mr. Schild. The detecitves.
Mr. Rice. Oh, the detectives were not stuck up. Somebody must
have notified the detectives.
Mr. Schild. Well, that was at night, and who called at the office,
I don't know. There was a telephone call.
Mr. Rice. You went down to Louisville on it?
Mr. Schild. Yes, sir. That was several weeks later.
Mr. Rice. Yes. What did you do down at Louisville?
Mr. Schild. I took the bartender along, I don't know what his
name is, but they brought this young fellow in and he couldn't identify
him, he said it was not the fellow.
Mr. Rice. Was the bartender stuck up?
Mr. Schild. He was in the place at the time when these fellows were
in before the stick-up.
Mr. Rice. Wasn't it Carr who made the report of the robbery ?
Mr. Schild. I could not say.
Mr. Rice. Would you say it was not ?
Mr. Schild. I would not say because I don't recall.
Mr. Rice. You wouldn't say either way?
Mr. Schild. I don't recall.
Mr. Rice. Have you ever been down to Louisville any other time?
Mr. Schild. Quite a few times; yes, sir.
Mr. Rice. What do you do down in Louisville?
Mr. Schild. Well, I was president of the Kentucky7 Peace Officers
Association. I was State president of the Elks, and I made my trips
down there.
Mr. Rice. In connection with the Peace Officers Association and
the Elks, and this time with the bartender, is that it?
Mr. Schild. Yes, sir.
Mr. Rice. Did you make trips down there for any other reason?
Mr. Schild. Xo, sir.
Mr. Rice. Do you pay your own expenses when you go down?
Mr. Schild. No, sir.
Mr. Rice. Who pays your expenses?
Mr. Schild. I have what they call script issued by the Kentucky
Peace Officers Association. Sometimes I drive.
Mr. Rice. What is this script all about that you are talking about?
Mr. Schild. They have magazines for advertising purposes, the
Kentucky Peace Officers Association.
Mr. Rice. Yes.
Mr. Schild. And they issue script in payment for that advertising
that they have in the magazine.
Mr. Rice. Who issues the script ?
Mr. Schild. The L. & N. Railroad.
Mr. Rice. They issue the script?
192 ORGAJNTIZED CRIME IN INTERSTATE COMMERCE
Mr. Sciiild. Yes.
Mr. Rice. And that pays for the advertisement?
Mr. Schild. Yes; and it is good for transportation on the L. & N.
Railroad. There are coupons, and they tear them off, whatever the
fare would amount to.
Mr. Kick. Well, now, let me see if I get that straight. Now, the
L. & N. Kail road issues script, and they use the script to pay for the
advertisement in the peace officers' magazine.
Mr. Sciiild. Yes.
Mr. Rice. Oh, then I see, a peace officer comes along and gives the
script back to them and travels on the railroad ; is that it?
Mr. Sciiild. Yes ; that is it. They get transportation for that script.
Mr. Rice. Who else advertises in the peace officers' magazine?
Mr. Sciiild. They have plenty of them.
Mr. Rice. The Kentucky Club advertised, didn't they?
Mr. Sciiild. I think they did.
Mr. Rice. And the Kenton Club advertised?
Mr. Schild. Yes, sir.
Mr. Rice. And the 514 Club?
Mr. Sciiild. I am almost positive.
Mr. Rice. And the Lookout House?
Mr. Sciiild. I don't know about that.
Mr. Rice. Are you sure about that?
Mr. Sciiild. I don't know about that.
Mr. Rice. How about the Beverly?
Mr. Schild. Beverly Hills, no. I don't think they do. That is in
Campbell County.
Mr. Rice. These are the ones in your county that advertise?
Mr. Schild. Yes. sir.
Mr. Rice. Are there any other gambling clubs that advertise there?
Mr. Schild. No, sir ; not as I know of.
Mr. Rice. Did you solicit the advertising for them ?
Mr. Schild. No, sir ; I did not.
Mr. Rice. Do these gambling clubs pay for it in script ?
Mr. Schild. No, sir.
Mr. Rice. They paid in Yankee dollars, didn't they ?
Mr. Schild. I guess they did.
Senator Keauver. You are the president of the club?
Mr. Schild. I am not the solicitor for the ads in the magazine.
Senator Kefatjver. But as president, why would you let gambling
outfits advertise in a peace law-enforcement officers' magazine?
Mr. Schild. They advertise as a cafe.
Senator Kefatjver. But you know they are not a cafe, don't you?
Mr. Schild. They serve drinks there and they serve dinners.
Senator Kefatjver. But you know what else they do.
Mr. Schild. No, sir. I could not swear to it.
Senator Kefatjver. You have had a lot of people tell you, though,
haven't you?
.Mr. Sciiild. Yes, they tell you that, yes, sir.
Senator Kefatjver. But you think it is all right for a peace officers'
enforcement magazine, a law-enforcement magazine, to take advertise-
ments from gamblers? Do you think that is all right '.
Mr. Schild. Well, I don't know. They don't advertise as gamblers.
ORGANIZED CRIME ENT INTERSTATE COMMERCE 193
Senator Kefauver. I know, but then tliey are gamblers, that is what
they are getting the people for, they are not interested in getting
people out there to eat, they want them to get out to gamble.
Mr. Schild. "Well, they advertise in other magazines, too, not only
the peace officers' magazine.
Senator Kefauver. Yes, and they advertise in the papers over in
Cincinnati, don't they, but you are supposed to be the one to go after
them.
(No response.)
Senator Kefauver. All right. Excuse me, Mr. Rice.
Mr. Rice. Well, what is the business of the Kentucky Club, so far
as you know ?
Mr. Schild. What is their business?
Mr. Rice. Yes.
Mr. Schild. Why, they have a bar and they serve meals.
Mr. Rice. What would' they be doing with $75,000 in there? They
certainly don't serve $75,000 worth of bar and meals, do they?
Mr. Schild. That is something I could not say, what they were
doing with that much.
Mr. Rice. That is a mystery to you?
Mr. Schild. Yes, sir.
Mr. Rice. Did your suspicions as an officer, or did your curiosity
ever impel you to take a look to see what they might be doing with that
amount of money in there ?
Air. Schild. No, but I have often thought whether there was $75,000
taken or not.
Mr. Rice. Well, did you check to find out whether mavbe it was
more than $75,000 ?
Mr. Schild. No, sir, I did not.
Mr. Rice. Do you doubt there was that much \
Mr. Schild. Well, I don't know. Sometimes I do. They cannot
identify anybody and I don't know what it would be about, whether
they really lost that money or had it insured or what, you cannot tell.
Mr. Rice. You did not go down there and check up, did you, and
take a look in the back room and see roulette wheels, and things like
that?
Mr. Schild. No, sir.
Senator Kefauver. Where were these people when they got the
$75,000?
Mr. Schild. In the back room.
Senator Kefauver. Is that the gambling room ?
Mr. Schild. I have never been in there.
Senator Kefauver. Well, what did your men tell you ?
Mr. Schild. It was in the back room.
Senator Kefauver. What is in the back room ?
Mr. Schild. I don't know what is back there.
Senator Kefauver. What did the report show ?
Mr. Schild. They showed that they went into the back room, and
that is where they got the money. The}' had an office in the back
some place, alongside the back room, and they had some kind of
meeting or something, and they had the money on the table when the
fellows got it out.
Senator Kefauver. Yes.
194 ORGANIZED CRIME EN" INTERSTATE COMMERCE
Mr. Schild. It was on the table or in the safe, or something, they
were counting it.
Senator Kefauver. "What time of day was it?
Mr. Schild. One-thirty in the morning.
Senator Kefauver. They would not be serving meals at that time;
would they I
Mr. Schild. Not at one-thirty; they are not serving meals.
Senator Kefauver. What do yon think they were doing?
Mr. Schild. I don't know, counting up their receipts, they could
have been doing that.
Senator Kefauver. It looks like they would serve supper there,
and if they had, that they would have counted up their receipts earlier
than that.
Mr. Schild. They close up at 1 o'clock.
Mr. Rice. That was the biggest robbery you ever had in your town;
■wasn't it?
Mi-. Schild. T think it was.
Mr. Rice. Didn't you take a personal interest enough to find out
what the hold-up was about?
Mr. Schild. No, sir. We had men working on the case, the chief
of detectives was working on the case.
Mr. Rice. Well, it looked as though the largest robbery that ever
occurred in town would merit the attention of the chief; wouldn't it?
Mr. Schild. I don't see where I should investigate the cases, when
you have the men working for you ; you men are in the same fix, you
men don't go out and investigate. You have your men working under
you.
Mr. Rice. You don't know us very well.
Senator Kefauver. We get reports, too.
Mr. Schild. Well, I know you do.
Mr. Rtce. How about the 514 Club, Chief, who runs that?
Mr. Schild. Kapis.
Mr. Rice. Who?
Mr. Schild. K-a-p-i-s, I think it is.
Mr. Rice. What is his first name?
Mr. Schild. Jimmie.
Mr. RrcE. Jimmie. Has he always run that?
Mr. Schild. No. I think he has had it about 4 or 5 years.
Mr. Rtce. What were Ray and Jerry in there?
Mr. Schild. They were not in there, as I know of.
Mr. Rice. They were never in there?
Mr. Schild. No, sir; not as I know of.
Mr. Rice. You have been in there, haven't you?
Mr. Schild. In the 514 Club?
Mr. Kick. Yes.
M r. Schild. Yes, sir.
Mr. Rice. You have never seen Ray or Jerry in there?
Mr. Schild. No, sir.
Mr. Rice. Are you sure about that?
Mr. Schild. Yes, sir.
Mr. Rice. Where have you seen them ?
Mr. Schild. Ray has a place on Fifth Street.
Mr. Rice. What is the name of that place?
Mr. Schild. Ray's Cafe.
ORGANIZED CRIME IN INTERSTATE COMMERCE 195
Mr. Rice. How about Jerry ?
Mr. Sciiild. Jerry has a drug store, and he also has a soda fountain
at Third and Court in Covington.
Mr. Rice. You have never seen them in the 514 Club?
Mr. Sciiild. No, sir; not to my knowledge have I seen them in
there.
Mr. Rtck. "Weren't they also involved in the P and S Novelty Co.?
Mr. Sciiild. Yes.
Mr. Rice. What business is that?
Mr. Sciiild. They have these pinball machines.
Mr. Rice. And slot machines?
Mr. Sciiild. I don't think they do.
Mr. Rice. Didn't you read that newspaper clipping?
Mr. Schild. Which one ?
Mr. Rice. The one that was in the paper about all the slot machine
taxes.
Mr. Schild. I don't ever recall their names being in there.
Mr. Rice. What did you do about those places that were mentioned
in the paper, the slot machines that were listed there?
Mr. Schild. As I told you before, we had the detectives go around
and check on them. Some arrests were made, not very many.
Mr. Rice. They didn't find many, did they ?
Mr. Schild. No, sir.
Mr. Rice. Did they confiscate the machines ?
Mr. Schild. Yes, sir.
Mr. Rice. What did you do with those?
Mr. Schild. We sent them up to the grand jury, after that they go
to the circuit court, and then it goes to the sheriff, and he has charge
of them.
Mr. Rice. Did he break them up ?
Mr. Schild. I could not say that. They are out of our hands after
they leave the police court.
Mr. Rice. Do you remember some testimony today about a tip-off
on a gambling raid?
Mr. Schild. No, I don't.
Mr. Rice. Wasn't that in connection with the Kentucky Club?
Mr. Schild. I don't know. I didn't hear about it.
Mr. Rice. The testimony about Officer Ireland, I believe, who had
to go down and get the warrant registered, and then someone else
went out the side door, and the first thing you know, all the people
were swarming out of the place. You were here today when that was
given, weren't you.
Mr. Schild. I did not hear that today. I heard about it.
Mr. Rice. When did you hear that?
Mr. Schild. Right after it happened up there.
Mr. Rice. What do you have to say about that?
Mr. Schild. I don't know. That is something that is hard to say.
Mr. Rice. Did you conduct any investigation as to how they got
tipped off?
Mr. Schild. We tried to find out who tipped them off. It seemed
like the press beat them up there that day.
Mr. Rice. Beg pardon?
Mr. Sciiild. It seemed like the press beat them up there that day.
196 ORGANIZED CRIME IX INTERSTATE COMMERCE
Senator Kefauver. What do 3'ou mean the press beat them up?
Mr. S« ii i i.D. With their photographers, for pictures of the place.
They got there before the police did.
Senator Kr.r.u \ii;. The press got there before the police?
Mr. Schild. Yes, sir.
Senator Kefauver. Well, does thai speak well for the press, or
what happened \
Mr. Schild. I don't know whether it speaks well of them. Some-
body worked fast.
Senator Kefauver. Somebody tipped off not only the operators but
tin' press, too?
.Mr. S< irii.n. They must have done that, yes, sir.
Mr. Rice. "Well, is it true. then, that when a warrant is issued, even
though the gambling establishment ma}7 be only two blocks from the
place of issuance of the warrant, that it is a rule of the department
thai the officer has to bring the warrant down and register it \
Mr. Schild. No, they bring it down to the police department.
Mr. Bice. Why do they do it ?
Mr. Schild. I don't know why. That has been the rule for years
and years, they come down and hand it over to the detective depart-
ment, and then make the raid.
Mr. Rice. It would appear from the testimony in the record that
thai caused an abortive raid, and possibly might consider doing some-
thing about revising your policy or rule so that the officer could take
a warrant and go right to the gaming place and locate the perpetra-
tors of the crime, without any chance of a tip-off.
Mr. Schild. Well, if it is a uniformed officer, yes, you might send
him up there, but the detectives, as a rule, take care of those cases,
because they have had to prepare the case.
Mr. Rice. I think the testimony was that Mr. Wagner had gone
down and sworn out the warrant.
Mr. Schild. Mr. who?
Mr. Rice. Mr. Wagner, the lawyer.
Mr. Schild. Oh, yes.
Mr. Rice. He had gone down and sworn out the warrant before the
judge, and the warrant was issued to an officer named Ireland.
Mr. Schild. He is a detective.
Mi-. Rice. Instead of going immediately to the Kentucky Club,
Ireland went five blocks to the police department, where he conferred
with another officer, who went out the side door, and about a half hour
later they then went down, and the complainant, who had been in-
side of the gambling establishment all of the time, said that they had
been tipped off in the meantime, and everyone ran out of the place,,
and they took the slot machines and put them in the storeroom and
destroyed all the evidence and waited for the officers to come in.
Mr. Schild. Did you say a half hour?
Mr. Rice. Yes.
Mr. Schild. No; I don't think so.
Mr. Rkk. Well, I will not quibble with you about it. I am just tell-
ing you that it appeared that that was an unusual practice there,
and in that particular case, anyhow, it worked so that justice did not
prevail.
Mr. Schild. Well, I don't think it took that officer that long to get
there, or the officers, a half hour.
ORGANIZED CRIME IN INTERSTATE COMMERCE 197
Mr. Rice. In any event, there was a tip-off?
Mr. Schild. Someone must have tipped them off, and the judge's
office is quite a distance from the police office.
Mr. Rice. All right, sir.
Senator Kefauver. Now, how about all these places, have you got
them closed up now ?
Mr. Sciiild. I am almost positive they are all closed up.
Senator Kefauver. You are almost positive?
Mr. Schild. Yes; Saturday they got two handbooks, and I think
they picked up one more.
Senator Kefauver. How about Roth-kopf, Kleinman, Dalitz, and
McGinty, do you see them around there?
Mr. Schild. No, sir.
Senator Kefauver. Do you know them I
Mr. Schild. The only time I have heard of them, Mr. Kefauver,
is when I was at Cleveland in the hearing there, and I heard their
names mentioned, and I seen it in the papers, and that is all I know
about it. I don't think I ever saw one of them fellows. I wouldn't
know them.
Senator Kefauver. You are a pretty good friend of John Rigney?
Mr. Schild. Well, I know John Rigney.
Senator Kefauver. Is he a friend of yours '.
Mr. Schild. Well, I guess you coidd call him a friend.
Senator Kefauver. What business is he in '. Is he a slot-machine
operator ?
Mr. Schild. He is out on a farm.
Senator Kefauver. Has he got a slot-machine syndicate?
Mr. Schild. I don't know whether he has or not ; no sir.
Senator Kefauver. How about Jimmy Brink '.
Mr. Schild. The same way. I know Jimmy Brink.
Senator Kefauver. And John Walsh?
Mr. Schild. John Walsh, I know him.
Senator Kefauver. They operate the Kentucky Club, don't they?
Mr. Schild. Well, now, I don't know. I could not prove that,
whether they operate it or not.
Senator Kefauver. Did you ever try to find out whether they do
or not?
Mr. Schild. No, sir.
Senator Kefauver. Even after the testimony in Cleveland, didn't
you try to find that out ?
Mr. Schild. No, sir.
Senator Kefauver. That was brought up there, that they did oper-
ate the Kentucky Club wasn't it, Jimmy Brink?
Mr. Schild. I could not say whether it was brought up. I was not
in the hearing there. I was there at that case. I was summoned,
but I never did get on the stand to testify or anything else.
Senator Kefauver. How about this, did you get a letter setting
up the names and addresses of all of these wire-service places ?
Mr. Schild. Yes, sir.
Senator Kefauver. From Mr. George Robinson?
Mr. Schild. Oh, you mean where they were?
Senator Kefauver. Yes.
Mr. Schild. No, sir. I did not get that, no sir.
198 ORGANIZED CRIME EST INTERSTATE COMMERCE
Senator Kefattver. What was it you got?
Mr. S( -1111.1). 1 got information about these wire services, as I told
you before.
Senator Kefattver. Didn't our committee write you a letter?
Mr. Sciiild. No, sir. If they did I did not get that.
Senator Kefattver. How many of those are still operating?
Mr. Schild. Well, I could not say that. I don't think there are
any of them operating. I am not positive.
Senator Kefattver. Is there anything else, Mr. Rice?
Mr. Rice. I don't think so, sir.
Senator Kefattver. All right, Chief. That is all. Thank you.
Mr. Schild. Thank you.
Senator Kefattver. Mr. Hageman will be our next witness. Will
you come forward, Mr. Hageman, and raise your right hand, please?
Do you swear the testimony you give shall be the truth, the whole
truth, and nothing but the truth, so help you God?
Mr. Hageman. I do.
TESTIMONY OF THEO HAGEMAN, FIELD AGENT, KENTUCKY
STATE ALCOHOL BOARD
Senator Kefattver. Mr. Rice, will you take over the questioning of
this witness, please?
Mr. Rice. Yes, sir. What is your name, sir?
Mr. Hageman. Theo Hageman.
Mr. Rice. Do they call you by another name ?
Mr. Hageman. I have a nickname of "Tate."
Mr. Rice. What is your job, Mr. Hageman?
Mr. Hageman. Field agent for the Kentucky State Alcohol Board.
Mr. Rice. How long have you been there ?
Mr. Hageman. I have been there for, well, 3 or 4 years.
Mr. Rice. Don't you know the exact time?
Mr. Hageman. Well, it will be 4 years at the end of this year; 3
years and 7 or 8 months, whatever it is.
Mr. Rice. And you live where?
Mr. Hageman. I live in Kenton County.
Mr. Rice. In Covington?
Mr. Hageman. Out in the county.
Mr. Rice. What is your address ?
Mr. Hageman. Buttermilk Pike.
Mr. Rice. Were you formerly the city manager of the city of Cov-
ington ?
Mr. Hageman. Yes, sir.
Mr. Rice. When was that?
Mr. Hageman. That was in from 191 1 to 1947.
Mr. RrcE. Do you live in Crescent Springs?
Mr. Hageman. Yes; Buttermilk Pike is Crescent Springs.
Mr. Rice. And your post-office address is what?
Mr. Hageman. Erlanger, Route 4.
Mr. Rice. In what town ?
Mr. Hageman. Erlanger, Route 4, Buttermilk Pike.
Mr. Rice. What is Crescent Springs?
Mr. Hageman. It is a little community there, unincorporated, that
is close by there.
ORGANIZED CRIME EN" ENTERSTATE COMMERCE 199
Mr. Rice. Now, in connection with your job as an ABC num. what
are your duties ?
Mr. Hageman. To enforce and administer the alcohol beverage
control law.
Mr. Rice. To enforce and administer the alcohol beverage control
law \
Mr. Hageman. Yes.
Mr. Rice. And that is in what area ?
Mr. Hageman. I have six counties that I take care of in northern
Kentucky.
Mr. Rice. Do you have Campbell and Kenton Counties?
Mr. Hageman. I have Kenton County.
Mr. Rice. You have Kenton Count x '.
Mr. Hageman. I have Kenton, Pendleton, Grant, Boone, Galla-
tin, and Carroll.
Mr. Rice. You have been acting as such for the last 3 or 4 years?
Mr. Hageman. Yes, sir.
Mr. RrrE. Is a violation of the ABC law one which would result
in revocation of license — is it a violation of the ABC law to operate
a gaming establishment in connection with a liquor license?
Mr. Hageman. Xo, sir.
Mr. Rice. It is not ?
Mi-. Hageman. No, sir.
Mr. Rice. Suppose a gambling establishment were operated in
connection with the license, what would happen ?
Mr. Hageman. There would nothing happen. There is nothing
in the law that prohibits gaming on the premises of licensees, either
beer or whisky.
Mr. Rice. It is perfectly all right for the licensee to violate another
law of the State, so far as the ABC is concerned ?
Mr. Hageman. So far as my position is concerned ?
Mr. Rice. So far as your position is concerned ?
Mr. Hageman. Yes, sir; as the administration of the alcoholic
beverage control law in those counties.
Mr. Rice. Well, what would be your position with respect to a
licensee who was operating a gaming establishment, would you
recommend a continuance of his license?
Mr. Hageman. I might answer that better this way, if you will
permit me to, sir.
Mr. Rice. Go ahead.
Mr. Hageman. My chief job is to investigate applicants for beer
and whisky licenses, and on those applications, each of them, the
beer and whisky, whether it be for a solicitor, a distiller, a brewery,
or a distributor or distillery, on those retail beer and liquor accounts
they have a question Xo. 26, I believe it is, asking the question if you
have any gambling or gambling devices on the premises. That ques-
tion is asked.
Mr. Rice. Yes. Why is that? Why do they ask that ?
Mr. Hageman. I don't know why they ask it. They ask it. And
I can tell you that they almost answer that 100 percent in the affirm-
ative, that they do have.
Mr. Rice. That they do have ?
Mr. Hageman. Yes, sir.
200 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. And despite that, they issue the license?
Mr. Hageman. Thai is right.
Mf. Rkk. Es thai license renewable ?
Mr. Hageman. Each year, July 1.
Mr. Kick. And they ask the question again?
Mr. 1 [ageman. Each year, yes, sir, the same thing.
Mr. Kick. Have you ever examined Duke Connor's application?
Mr. Hageman. No, sir. His has always keen a renewal. We have
nothing to do with renewals, when they lirst apply we make a field
report and investigate thai applicant, but when they are renewals
they just send them in themselves and t hey are accepted by the Board.
Mr. Rice. The field examiner does not look at those?
Mr. Hageman. Not on renewals.
Mr. Kick. You just take the new ones?
Mr. Hageman. All the new ones.
Mr. Kick. And you are quite certain thai the State alcoholic bev-
erage control board is not the least hit concerned with gambling on
premises where there are liquor licenses issued \
Mr. Hageman. That is not our duty. We are not instructed to
interfere with them, and have not been doing so.
Mr. Kick. You just don't interfere \
Mr. Hageman. That is right.
Senator Kefauver. Let me ask you this, and see if I have got some-
thing straight. You said this question No. 28 — is that the question?
Mr. Hageman. Xo. 20. 1 believe.
Mr. Rick. Xo. 26?
Mr. Hageman. Yes, sir.
Senator Kefauver. That question is there, and almost 100 percent
of the applicants answer that in the affirmative?
Mr. Hageman. Yes, sir.
Senator Kefauver. You really don't, mean that, do you?
Mr. Hageman. Yes, sir, I do mean it.
Senator Kefauver. You don't mean that everybody that has a
liquor license is substantially in the gambling business?
Mr. Hageman. Well, they may be in some form or other. I don't
know. But this I do know, if they have that, tliey will answer that
question, if they have gambling, on there. I will put it that way,
if they have gambling of any kind, they will answer that question
in the affirmal ive.
Senator Kefauver. You think it is way up in the high percentages,
90 or 95 percent. that they do have some kind of gaming?
Mr. Hageman. Well, you may not be too far oil'.
Senator Kefauver. I am trying to get it down a little bit. You
said 100 percent.
Mr. Hageman. Well, let's say 80 percent.
Senator Kefauver. So gambling and ABC licensing go along to-
gether pretty well?
Mr. Hageman. That is right.
Senator Ki r\i ver. All right, Mr. Kice.
Mr. Kick. What would the license be suspended for? Xaine some
of t lie violations?
Mr. Hageman. Oh, many things. Selling after hours; selling on
Sunday.
ORGANIZED CRIME IN INTERSTATE COMMERCE 201
Mr. Kick. What are the after hours \ What are the hour- \
Mr. IIagkmax. It depends on the community. For instance, the
city of Covington has a 1 o'clock closing law, 1 a. in. closing law.
Air. Rice. How about Kenton County \
Mr. Hageman. Kenton County has a 2 o'clock closing law. That
is outside the city.
Mr. Rice. And ( Jampbell County you do not cover?
Mr. Hageman. I have another man covers Campbell.
Mr. Rice. Well, now. it would not be suspended for having slot
machines, would it '.
Mr. Hageman. They have done it, if there is another charge in
there, and if they have found gambling on the premises, whether it be
slot machines, or anything else, why, they include that in the charge of
disorder, but they never do that for gambling on the premises alone.
Mr. Rice. They would charge them with disorder?
Mr. Hageman. What a disorder — they use that expression.
Mr. Rice. Do the}7 consider slot machines a disorder?
Mr. Hageman. Well, not too often they have not — but they have.
Mr. Rice. Xow, you understand we are in a position of being a little
bit uninformed here. On the one hand you say they don't care about
gambling?
Mr. IIagkmax. In other words, we are not instructed as field agents
to be out here hunting for gamblers, any more than we are instructed
to hunt for someone speeding in an automobile on the highways.
Mr. Rice. Of course not, but when you run into it, such as at
Duke Connor's — admits he has been booking and has slot machines
running along with his liquor license — what do you do then?
Mr. Hageman. You don't do anything. I haven't seen it there.
to begin with.
Mr. Rice. How do you reconcile it with the record of suspensions
here by the ABC Board in northern Kentucky ? The Twin Oaks
County Club in Covington. 5 days' suspension, charged with slots.
Mr. Hageman. They were convicted in the local court, and it came
about over a fight the}7 had there, a tight out at that particular place.
and the police went in there, and I understood they took their slot ma-
chines.
Mr. Rice. Who suspended them ?
Mr. Hageman. The State alcohol beverage control board.
Mr. Rice. What did they suspend them for?
Mr. Hageman. I did not see the record.
Mr. Rice. According to the record it said, "Slots." It does not say
anything about disorderly. You then have the Kentucky Club, 627
Scott Street, 5 days' suspension, slots, February 28, 1951.
Mr. Hageman. I have nothing to do with that. That is done from
Frankfort.
When that conviction came about, there was a guilt}7 plea in the
local court by them, and the State Department probably cited them
down there.
Mr. Rice. So the ABC Board is very definitely interested, then, if
there is a gambling operation running in connection with the licenses?
Mr. Hageman. The only time I found them interested in it was
when there was a local conviction.
202 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rice. Well now, I see here the Fill-in Cafe, Bellevue, Ky., slots,
5 days' suspension.
Then there is August J. Schultz, slots, 5 days' suspension.
Then the Silver Dollar, Dayton, same thing, 5 days for slots.
Mr. Hageman. Yes, sir, those are over in the other county, but that
is probably true.
Sir. Rice. In any event, you, as the ABC man, do not bring it to the
attention of the Board if you run into gambling violations, do you?
Mr. Hageman. No, sir, I have not.
Mr. Rice. How about as a citzien of the State, do you bring it to the
attention of any law-enforcement agents, these violations of the gam-
bling laws that come to your attention?
Mr. Hageman. No, sir ; I do not.
Mr. Rtce. Do you know of any ?
Mr. Hageman. No, sir.
Mr. Rice. You have never been in a place where they have had
gambling ?
Mr. Hageman. Oh, maybe around where there is a bookie.
Mr. Rice. For instance ?
Mr. Hageman. Oh, I don't know, just in passing, I may have heard
the service, or something, in there. I was not back in there.
Mr. Rice. You would hear the wire service and would know there
was a bookie there ?
Mr. Hageman. That is right. One place I might have frequented
is a place on the highway.
Mr. Rice. Have you ever been in Duke Connor's place?
Mr. Hageman. No, sir.
Mr. Rice. You have never been in his place ?
Mr. Hageman. I have been in there.
Mr. Rice. Have you ever been in the Lookout House?
Mr. Hageman. Never in there, other than in the dining room.
Mr. Rice. You have never been in the gambling rooms?
Mr. Hageman. No, sir.
Mr. Rice. How about Beverly Hills ?
Mr. Hageman. No, sir.
Mr. Rice. You were never in there ?
Mr. Hageman. No, sir.
Mr. Hick. You were never in there at all?
Mr. Hageman. I might have been in there 5, 6, or 7 years ago, more
other than in the dining room.
Mr. Rice. You have not been in there for anything in the last 5 or 6
years?
Mr. Hageman. No, sir.
Mr. Rice. How about the Kentucky Club ?
Mr. Hageman. Never been in there.
Mr. Rice. You have never been in there?
Mr. Hageman. I was in the bar one time.
Mr. Rice. In where?
Mr. Hageman. In the bar, in the front room at the bar.
Mr. Rice. Well, now, in connection with your duties as an investi-
gator, aren't you required to go around and look at these bars from
time to time?
Mr. Hageman. You are bringing in Kenton County. I do that upon
complajnts of the local authorities in those rural counties.
ORGANIZED CRIME IN INTERSTATE COMMERCE 203
Mr. Rice. How about Carroll's Bar?
Mr. Hageman. Maybe once since he has been in there, and he has
been there 7 or 8 years.
Mr. Rice. Is there any gambling in there?
Mr. Hageman. Not that I saw.
Mr. Rice. How about the Town House ?
Mr. Hageman. No, sir.
Mr. Rice. Never been in there ?
Mr. Hageman. I may have been there once.
Mr. Rice. You have been in there once?
Mr. Hageman. I have been in there once, a year or two ago.
Mr. Rice. You never saw any gambling there?
Mr. Hageman. No, sir.
Mr. Rice. How about the 514 Club?
Mr. Hageman. No, sir ; I have never been in there.
Mr. Rice. Are you active in political campaigns?
Mr. Hageman. Yes, sir.
Mr. Rice. Do you collect campaign funds ?
Mr. Hageman. I did in one campaign. I was named finance chair-
man, and I handled the funds.
Mr. Rice. What campaign was that?
Mr. Hageman. That was last year's senatorial race.
Mr. Rice. For State senator or United States Senator ?
Mr. Hageman. United States Senator.
Mr. Rice. In connection with that you collected campaign funds
from liquor license holders, did you ?
Mi-. Hageman. If they desired to make a contribution.
Mr. Rice. How much would you sa}^ you realized in contributions
from liquor license holders that you have handled yourself ?
Mr. Hageman. Oh, I don't know.
Mr. Rice. Approximately ?
Mr. Hageman. I couldn't tell you. Maybe in that race probably
as much as seven or eight thousand dollars ; $7,500, along in there.
Mr. Rice. How many licensees would be involved in that?
Mr. Hageman. Oh, about, maybe, I don't know how many. If it
came from licensees, probably say twenty, maybe twenty-five, I don't
know.
Mr. Rice. Can you remember any of them?
Mr. Hagemax. Well, I remember some of them; some of them
I can't.
Mr. Rice. Was Duke Connor one of them ?
Mr. Hageman. No, sir.
Mr. Rice. Well, name one.
Mr. Hageman. Well, a fellow by the name of Sam Burns.
Mr. Rice. What is his place ?
Mr. Hagemax. He has a place down in the city of Covington;
he has a colored night club down there.
Mr. Rice. What is that, the Araby ?
Mr. Hagemax. Yes.
Mr. Rice. How much did he contribute?
Mr. I Cageman. I think lie gave $100.
Mr. Rice. That would not help much toward the six or seven
thousand.
Mr. Hagemax. No : that was not it.
204 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rick. Who was the biggest contributor?
(No response.)
Mr. Rick. Boggie Burns, did you get him?
Mr. Hageman. No, sir.
Mr. Rick. Who was the biggest contributor of the bunch?
Mr. Hageman. T don't think anybody gave over $400.
Mi-. Rick. Your addition is bad, then.
Mr. Hageman. Well, we got it from many other sources; different
friends came in there.
Mr. Rice. I asked you as to liquor licensees, and you said six or
seven thousand dollars from 20.
Mr. Hageman. No; I did not say that. You asked me how many
were liquor licensees, and I understood you to say that, and I said
twenty or twenty-five may have been liquor licensees.
Mr. Rice. Who was the biggest contributor of the liquor licensees?
Mr. Hageman. I think a fellow named Jack Schwartz.
Mr. Rick. What is his place?
Mr. Hageman. He has a place at the end of the C. & O. bridge.
Mr. Rice. What is the name of it ?
Mr. Hageman. The Bridge Cafe.
Mr. Rice. Did you collect anything from Jimmy Brink?
Mr. Hageman. Xo, sir.
Mr. Rice. Do you know Jimmy Brink?
Mr. Hageman. Yes, sir.
Mr. Rice. What business is he in?
Mr. Hageman. He is reported to own the Lookout House, so far
as I know.
Mr. Rice. That is a gambling establishment, or was. was it not?
Mr. Hageman. That has been the common knowledge of it.
Mr. Rice. Did you ever collect anything from him?
Mr. Hageman. Not from him.
Mr. Rick. Did you ever receive any money from him, for any
reason?
Mr. Hageman. He has made contributions — you are talking about
this past campaign here?
Mr. Rice. Anything.
Mr. Hageman. He has helped in other campaigns, where he has
made contributions when I was not the finance chairman; yes, I know
he has made some.
Mr. Rice. Did he ever give you money for anything except cam-
paign contributions?
Mr. Hageman. No, sir.
Mr. Rick. Are you sure about that?
Mr. Hageman. Positive.
Mr. Kick. He never paid you any protection money?
Mr. Hageman. No, sir; why should he?
Mr. Rick. You might know. How about Cliff Brown, do you know
him \
Mr. Hageman. Yes, sir.
Mr. Rick. Who is he?
Mr. Hageman. Well, he is a fellow they call Brownie, I guess that
is the one you mean.
Mr. Rice. What business is he in ?
ORGANIZED CRIME IN INTERSTATE COMAIERCE 205-
Mr. Hageman. I think he has a connection in the slot-machine
business.
Mr. Rice. Yes, that is right, C. W. Brown. Did you ever collect
any money from him '.
Mr. Hagemax. No, sir.
Air. Rice. Are you sure about that?
Mr. Hagkman. Yes, sir.
Mr. Rice. What was this Gun Club outing here that you had your
picture taken at ? [Indicating.]
Mr. Hageman. That has been several years ago. I was out there
at that outing.
Mr. Rice. What was the reason for that? Was that a political
outing ?
Mr. Hageman. They have it every year. They had it this past
Saturday night this year. They have it every year. That is one I
happened to attend.
Mr. Rick. Are you sure 3011 never collected any money from him?
Mr. Hageman. No, sir.
Mr. Rice. You are not sure?
Mr. IIagemax. I did not collect any from him.
Mr. Rice. How much is your house worth. Mr. Hageman?
Mr. Hageman. It cost me $23,960.
Mr. Rice. In what year?
Mr. Hageman. 1948.
Mr. Rice. What would you take for it?
Mr. Hagemax. Well, I had not thought about it.
Mr. Rice. Well, think about it.
Mr. Hagemax. Well
Senator Kefatjver. Well, the thing is how much do you have in it ?
I don't think that the increase in value is particularly relevant.
Mr. Rice. Would you sell it for $25,000 ?
Mr. Hagemax. No, sir.
Mr. Rice. Would you sell it for $30,000?
Mr. Hagemax. I would consider it; ves, sir.
Mr. Rich. Would you take an offer of $30,000?
Mr. Hageman. Yes.
Mr. Rice. Is there anything against it I
Mr. Hagemax. No, sir.
Mr. Rice. Do you own any other property ?
Mr. Hagemax. No, sir.
Mr. Rice. Where do you bank?
Mr. Hageman. In the Citizens National Bank at Covington.
Mr. Rice. Is that a checking account ?
Mr. Hagemax. Yes. sir.
Mr. Rice. In the Citizens Bank ?
Mr. Hagemax. Yes, sir.
Mr. Rice. Do you have any other bank accounts?
Mr. Hagemax. I have; in the First Federal I have a small account.
Mr. Rice. Where is that located \
Mr. Hagemax. In Covington.
Mr. Rice. Do you have any other bank accounts?
Mr. Hagemax! No, sir.
Mr. Rice. Do you have any bank accounts outside of the State?
85277— 51— pt. 15 14
206 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Hageman. No, sir.
Mr. Rice. Do you have a safety-deposit box?
Mr. Hageman. Yes, sir.
Mr. Rice. Where is that located?
Mr. Hageman. That is in the First National Bank of Covington.
Mr. Rice. That is a different bank now?
Mr. Hageman. That is right. Now, my office is in there, and I had
my safety box at the Latonia Bank, and when I moved out to the coun-
try I moved it down to this bank.
Mr. Rice. You don't have an account there?
Mr. Hageman. I have an automobile account there, where I pay
my automobile expenses out of. I get an expense account with the
State, and I put my automobile expense check in there. It is my
automobile account.
Mr. Rice. Now, do you have a safe in your home?
Mr. Hageman. No, sir.
Mr. Rice. Do you keep any money around the house?
Mr. Hageman. Oh, I may have six or seven hundred dollars there,
between that and in my pockets.
Mr. Rice. You don't have a strong box in your home?
Mr. Hageman. No, sir.
Mr. Rice. Do you own more than one car?
Mr. Hageman. Which?
Mr. Rue. Do you own more than one car?
Mr. Hageman.' I have a f 948 and a 1951.
Mr. Rice. A 1948 what?
Mr. Hageman. Pontiac.
Mr. Kick. And a 1951 what?
Mr. Hageman. Pontiac.
Mr. Rice. You have both a 1948 and a 1951 Pontiac?
Mr. Hageman. Yes, sir.
Mr. Rice. Do you have any stocks?
Mr. Hageman. No, sir.
Mr. Rice. Bonds ?
Mr. Hageman. Yes, sir.
Mr. Rice. Government bonds?
Mr. Hageman. Yes, sir.
Mr. Rice. Do you have any bonds besides Government bonds ?
Mr. Hageman. I have $2,000 worth of other than Government
bonds.
Mr. Rice. What bonds are those?
Mr. Hageman. Those are some American Legion bonds in Latonia.
Mr. Rice. Do you have any other property?
Mr. Hageman. No, sir.
Mr. Rice. What is your salary I
Mr. Hageman. $-3,840.
Senator Kefauver. $3,800 a year?
Mr. Hageman. Yes, sir.
Senator Kefauver. Do you have an expense account?
Mr. Hageman. Yes, sir; it runs about $115 to $135 a month.
Senator Kefauver. Just actual expenses?
Mr. Hageman. Yes; they give you 7 cents a mile and whatever
expenses you incur when you travel.
Senator Kefauver. What do you figure you are worth?
ORGANIZED CRIME IN INTERSTATE COMMERCE 207
Mr. Hageman. Well. I would say $40,000.
Senator Kefauver. Did you make it all out of this job?
Mr. Hageman. No, sir. I had two houses that I sold when I bought
this house.
Mr. Rice. Did you inherit those?
Mr. Hageman. No, sir. I was in business from 1920 to 1935, in
the general merchandise business out in Crescent Springs for 15 years.
Mr. Rice. What is the highest income you ever reported in 1 year?
Mr. Hageman. Oh. probably — oh, I don't know.
Mr. Rice. What was your good year; what was the best year in
your life ?
Mr. Hageman. I would say about $13,000, $14,000, something like
that.
Mr. Rice. Did you pay a tax on that much?
Mr. Hageman. I sure did.
Mr. Rice. What year was that, do you know ?
Mr. Hageman. 1948, 1 believe.
Mr. Rice. 1948 8
Mr. Hageman. I believe.
Mr. Rice. Well now, in 1948 you were the ABC agent, were you
not?
Mr. Hageman. That is right.
Mr. Rice. In 1948?
Mr. Hageman. Yes, sir.
Mr. Rice. And your salary was how much ?
Mr. Hageman. $3,840.
Mr. Rice. What was your other income from?
Mr. Hageman. Well, I sold one of the houses, and I had a capital
gain on that. That was part of it.
Mr. Rice. That was not income from earnings; that was capital
gain.
Mr. Hageman. I mean, in the report I had to answer for 50 percent
of the capital gain.
Mr. Rice. What was the biggest year you had of income from
earnings, other than capital gain?
Mr. Hageman. Four years as city manager at $5,000 each year.
Mr. Rice. That was your top salary, wasn't it?
Mr. Hageman. Yes, sir.
Mr. Rice. You never made more than that in a year?
Mr. Hageman. That is right.
Mr. Rice. Do you know Rothkopf ?
Mr. Hageman. Never heard of him until I read about him in
the paper.
Mr. Rice. Do you know Croft and Jimmy Brink \
Mr. Hageman. I don't know Croft. I know Jimmy Brink.
Mr. Rice. Did you make any reports about gambling operations,
where you have seen gambling and slot machines when you sent your
reports in ?
Mr. Hageman. No. sir. I might state this, if you will permit me
to, Senator, in the alcohol beverage control department we have 26
men covering 120 counties, and you see how possible, or how impossi-
ble it would be for you to be out here enforcing all the laws of the
208 ORGANIZED CRIME IN INTERSTATE COMMERCE
State of Kentucky with 26 men in this same area that we cover, where
there arc probably 200 law-enforcing officers in the area that I cover.
Senator Kefauver. How long were you city manager ?
Mr. Hageman. Fouryears.
Senator Kefa i \ i.i;. That was of Newport or Covington ?
Mr. Hageman. Covington.
Senator Ki.i \u \ er. What was your last year (
Mr. Hageman. L947.
Senator Kefauver. Who succeeded you ?
Mr. I [ageman. A Mr. Lyon.
Senator Kefauver. Is he there now ?
Mr. 1 [ageman. No; they have a Mr. Abbott there.
Senator Kefauver. Do you have anything else?
Mr. Rice. Yes, sir.
(Mr. Iv ice conferring with Senator Kefauver. )
Senator Kefauver. Mr. Uice just called my attention to the fact —
I did not remember it — that this morning Commissioner Moloney
stated that you approached him, I believe, as he was leaving this first
city commission meeting, and asked him if he did not want to get into
tli is profit-sharing plan, meaning, as he understood it, that he would
get part of the prolits from the gambling operations if they were not
molested.
Did you hear his testimony ?
Mr. Hageman. Yes, sir.
Senator Kefauver. Do you want to say anything about that \
Mr. Hageman. Yes, sir; I certainly do. 1 think that was one of the
dirtiest, blackest political lies ever told to anyone. I have not spoken
six words to John Moloney in my life.
Senator Kefauver. In other words, you deny it ?
Mr. Hageman. Yes.
Senator Kefauver. What was the conversation about ?
Mr. I Iageman. I had no conversation with him.
Senator Kefauver. It seems strange that just out of the blue he-
should tell us that.
Mr. I [ageman. I can tell you where it all comes about. It has been
back since the days that Senator Clements ran for Governor, with the
Kentucky Times-Star opposing anything I was for. They have been
against dements for Governor, and against him for Senator, and in
this campaign now again they are against us. John Moloney was
against me in 1949 when "I ran for sheriff and I would be a fine man
to go to one of my enemies to make a proposition with him, if I was
in such a business as that.
Senator Kefauver. So you deny that you said anything to him
at all?
Mr. Hageman. Absolutely; I never talked to the man in my life,
the way he testified 1 talked with him by himself, I never talked to
t he man one time in my life.
Senator Kefauver. Has there been any other testimony here con-
cerning that, or concerning you, that you want to have anything
to say about \
Mr. Hageman. No; I don't think so.
Mr. Kick. Would you say that you did not talk to him at all follow-
ing a commissioners meeting:?
ORGANIZED CRIME IN INTERSTATE COMMERCE 209
Mr. Hageman. Yes, sir; I certainly did not. 1 saw him in the press-
room a time or two, that we had in there. They were having some
drinks in the pressroom, and I may have seen him in there.
-Mr. Kick. What were you doing up there '.
Mr. Hageman. I am down there quite often in the courthouse.
Mr. Rice. What doing?
Mr. Hageman. Just visiting the press boys, and so forth. I have
a right to walk in the courthouse, if I please.
Mr. Rice. Sure. I was just curious.
Mr. Hageman. They may have a little party, and the time or two I
saw him there. 1 want to say this, that I don't think he was fit to be
talked to.
Senator Kefauver. What do you mean by that?
Mr. Hageman. When they were taking in the drinks they had set
up there.
Senator Kefauver. They don't do that right after the commission
meetings, do they \
[ Mr. Hageman laughing.]
Senator Kefauver. He said he left the commission room and went
in some outer room.
Mr. Hageman. The pressroom, and they are in the pressroom there,
and you can go in any day in the week and somebody is always pre-
senting a bottle or two of whisky. I am not complaining about that.
Mr. Rice. Was this nighttime or daytime?
Mr. Hageman. Daytime is when the pressroom is open. It is not
•open at night.
Mr. Rice. This meeting you spoke about, was that in the daytime?
Mr. Hageman. What meeting?
Mr. Rice. The one you are talking about.
Mr. Hagemax. I never talked to him; I never talked to him no
time.
Mr. Rice. You said you saw him in the pressroom.
Mr. Hageman. I saw him down there, but I did not talk to him.
I saw him down there several times.
Mr. Rice. That was in the daytime?
Mr. Hagemax. Daytime, yes, sir.
Mr. Rice. Did you say you ran for sheriff at one time?
Mr. Hageman. Yes, sir, 1949. I ran twice.
Mr. Rice. Were you successful?
Mr. Hagemax. No, sir.
Mr. Rice. When was the other time?
Mr. Hageman. Four years before that, 1949, so it would be about
1945.
Mr. Rice. How much did you spend in your last campaign for
sheriff?
Mr. Hageman. Which one?
Mr. Rice. 1949?
Mr. Hagemax. In 1949?
Mr. Rice. Yes.
Mr. Hagemax. Oh, I don't know; I guess five or six thousand
dollars.
Mr. Rice. Did you make a report of that?
Mr. Hagemax. Yes, sir.
Mr. Rice. And that is all you spent?
210 ORGAXIZED CRIME IN INTERSTATE COMMERCE
Mr. Hageman. Yes, sir.
Mr. Kick. Are you sure about that \
M v. HaGEMAN. Yes. sir.
Mr. Rice. Docs that include
Mr. HageMan. Maybe others might have spent something for me,
but I mean what I spent myself.
Mr. Rice. What do you figure was the total that was spent, not only
by yourself, but others for you?
Mr. Hageman. I wouldn't have no idea.
Mr. Rice. What would your best guess be?
Mr. Hageman. I wouldn't have any idea.
Mr. Rice. Well, if people spend money for you
Mr. Hageman. Well, if they go around the taverns and buy drinks
for you. they may have set up some precinct workers, I just don't know.
Mr. Rice. How much did the other campaign cost?
Mr. Hageman. Which campaign?
Mr. Kick. The one 4 years before that?
Mr. Hageman. Oh, I guess in the same neighborhood. I don't
know, t hat is 10 years ago; I don't recall.
Senator Kefauver. Who beat you for sheriff this last time?
Mr. Hageman. Mr. Berndt, the sheriff that was here.
Senator Kefauver. Have we had his testimony I
Mr. Rice. Yes.
Senator Kefauver. Do you have anything else?
Mr. Rice. No.
Senator Kjefauver. That is all, sir. Thank you. Well, have we
heard all the witnesses?
Mr. Rice. We have two more.
Senator Kepatjver. Well, do you gentlemen want to testify tonight,
or would you rather wait until tomorrow?
Mr. Diebold. I would like to get back tonight, Senator.
Mr. Eha. I am sure that my testimony won't take too long, Senator.
Senator Kefauver. All right, sir, you come around, Mr. Diebold.
Will you raise your right hand, please?
Do you swear the testimony you shall give shall be the truth, the
whole truth, and nothing but the truth, so help you God?
Mr. Diebold. I do.
TESTIMONY OF RAY DIEBOLD, SHERIFF, CAMPBELL COUNTY, KY.
Senator Kefauver. All right. Mr. Rice, you may proceed.
Mr. Rice. How do you spell your name ?
Mr. Diebold. D-i-e-b-o-l-d, Ray Diebold.
Mr. Rice. Where do you live, sir ?
Mr. Diebold. I live at 324 Thornton Street, Newport, Ky., Camp-
bell County.
Mr. Rice. What is your job?
Mr. Diebold. Sheriff of Campbell County.
Mr. Rtce. How long have you been sheriff?
Mr. Diebold. One year, six months, and twenty-three days.
Senator Kefauver. Are you the sheriff who beat the witness that
was testifying just before you?
Mr. Diebold. No, sir, he is from Kenton County.
ORGANIZED CRIME IN INTERSTATE COMMERCE 211
Mr. Rice. Who did you run against ?
Mr. Diebold. A man by the name of Paul Bard.
Mr. Rice. In your campaign, what did you have to say about
gambling?
Mr. Diebold. What did I have to say about gambling?
Mr. Rice. Yes, sir.
Mr. Diebold. I said nothing about gambling.
Mr. Rice. That question did not come up in the campaign?
Mr. Diebold. No, sir, it did not.
Senator Kefauver. Weren't you running on a liberal platform,
Sheriff?
Mr. Diebold. I would not say that, Senator, I just run on my own.
Senator Kefauver. You did not have any particular political
philosophy?
Mr. Diebold. No, sir; I am not very good at making speech*'-, and
therefore I did not make any.
Mr. Rice. What did you do before you became sheriff?
Mr. Diebold. I was a good will man for the Hudepohl Brewery Co.
in Cincinnati for 15 years.
Mr. Rice. What kind of man?
Mr. Diebold. A good-will man for that company.
Mr. Rice. For who?
Mr. Diebold. For the Hudepohl Brewery Co.
Mr. Rice. What does a good-will man do ?
Mr. Diebold. He visits cafes, and so forth, stimulates business, and
at that time, and, of course, this is all done away with now, if they
needed any faucets or spigots, and so forth
Mr. Rice. You would take care of that ?
Mr. Diebold. Yes, sir. I would leave an order the next morning
when I would go back to the brewery.
Mr. Rice. You did not have any law-enforcement experience before
you ran for sheriff?
Mr. Diebold. No, sir ; I did not.
Mr. Rice. Are you familiar with the laws of the State ? You are -T
are you not ?
Mr. Diebold. I am, since I have been up at the last meeting.
Mr. Rice. When was that?
Mr. Diebold. Just a month ago.
Mr. Rice. About a month ago ?
Mr. Diebold. Yes.
Mr. Rice. You went into office in January 1950 ?
Mr. Diebold. That is true.
Mr. Rice. When you went in, didn't you study the laws ?
Mr. Diebold. I did.
Mr. Rice. Were there any of them you missed ?
Mr. Diebold. Yes ; I think I did miss one.
Mr. Rice. Which one did you miss ?
Mr. Diebold. In regard to contacting these places personallv.
Mr. Rice. That is section 701.60 ?
Mr. Diebold. Yes, sir.
Mr. Rice. It reads something like this, that the sheriff or his dep-
uty
Mr. Diebold. I beg your pardon. The sheriff, they told me at the
previous investigation.
212 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Kick. What did they tell you ?
Mr. Diebold. Senator ( )'Conor told me the sheriff.
Mr. Rice. Didn't you check the law ?
Mr. I >i i.r.t >ld. I checked the law and found different.
Mr. Kick. You found something that Senator O'Conor told you
was wrong?
\1 1 . I >eebold. Senator O'Conor told me I should personally contact
these places in the county.
Mr. Kick. Maybe we can straighten that out. I don't think you
wanted to cast any aspersions on Senator O'Conor, but here is prob-
ably what he said
Mr. Diebold. No ; I certainly don't want to do that.
Mr. Rice (continuing). He probably read you the section of the
statute which says that: "The sheriff or deputy shall at least once
each month visit each place."
And he probably also read you the section which said the sheriff
shall be liable for the acts or omissions of his deputies.
Mr. Diebold. No, he did not read that.
Mr. Rice. In other words, you are responsible for your men.
Mr. Diebold. Yes, I realize that.
Mr. Rice. You still take issue with Senator O'Conor about what
he told you, do you ?
Mr. Diebold. Oh, I don't hold nothing against Senator O'Conor.
Don't get me wrong. It may be that I misunderstood him, but I
looked up the law since then.
Mr. Rice. What do you find the law to be now ?
Mr. Diebold. That I am supposed to visit, and be compensated in
the amount of $1,500, which I have not been, per year.
Mr. Rice. To check these places and make a report?
Mr. Diebold. As the fiscal court would not allow me any money to
investigate.
Mr. Rice. And you are now doing that ?
Mr. Diebold. Yes, sir, and I have a copy from the time I left here
of the places that I visited, from the 22d of June to July 1, and I filed
a copy with Mr. Grauman, the circuit court clerk.
Mr. Rice. Have you been out to the Beverly Club ?
Mr. Diebold. Yes, sir. I think it is marked two or three times.
Mr. Kick. What did you find out there?
Mr. Diebold. Nothing, sir.
Mr. Rice. Nothing?
Mr. Diebold. No, sir.
Mr. Rice. Not even the place?
Mr. Diebold. Oh, I found the place, yes, sir.
Mr. Rice. Were there any people in it?
Mr. Diebold. I think there were about 40 or 50 eating dinner. It
was around 12: 15.
Senator Keeauver. Twelve-fifteen in the daytime?
Mr. Diebold. Night, sir.
Senator Keeauver. In the nighttime?
Mr. Diebold. Yes, sir.
Mr. Rice. Did they have a floor show ?
Mr. Diebold. Yes, sir.
Mr. Rice. Now, did you watch the floor show ?
ORGANIZED CRIME IX INTERSTATE COMMERCE 213
Mr. Diebold. Xo, sir.
Mr. Rice. Did you see any slot machines there?
Mr. Diebold. I did not, no, sir.
Mr. Rice. Did you look for them?
Mr. Diebold. Yes, sir.
Mr. Rice. Did you look in the side room?.
Mr. Diebold. Yes.
Mr. Rice. Did you look upstairs?
Mr. Diebold. Yes, sir.
Mr. Rice. All through it?
Mr. Diebold. Yes. sir, personally.
Mr. Rick. Now, then, I see where you went down to the Bobben
Realty Co., or someone did.
Mr. Diebold. Yes, sir.
Mr. Rice. And what did they find down there, or what did you
find down there ?
Mr. Diebold. I found nothing in there, sir.
Mr. Rice. "Well, there was testimony just a few minutes ago
Mr. Diebold. That place was closed up, I think, then.
Mr. Rice (continuing). That they arrested two people there, in
the Finance Building.
Mr. Diebold. That is right, sir.
Mr. Rice. "What was it ? "Where they running or closed ?
Mr. Diebold. They are closed.
Mr. Rice. As a matter of fact, you have not been able to find any-
thing, have you?
Mr. Diebold. No, sir, and you have the record, and it is sworn to.
Mr. Rice. You think that law is probably a mighty good thing,
then, don't j'ou ?
Mr. Diebold. I do.
Mr. Rice. Xow, then, you went in in 1950 ?
Mr. Diebold. Yes, sir.
Mr. Rice. 1950 was a right good-sized operation out there at
Beverly Hills, wasn't it?
Mr. Diebold. That I don't know. I was not in there.
Mr. Rice. You did not check it, then ?
Mr. Diebold. Xo, sir. I had not been up there until the time I
made this survey.
Mr. Rice. You had not considered that your duty ?
Mr. Diebold. Xo, I would not say that, sir.
Mr. Rice. How do you account for this tremendous operation at
Beverly in 1950, running without your knowledge — or was it with-
out your knowledge ?
Mr. Diebold. I didn't know it. I was not in there, sir. The only
time that I was in there in 1950 is when I took some orphans up there,
it was around Christinas time in 1950, in the afternoon, and they put
on a show for them, and they gave them ice cream and candy. That
was the only time that I was in Beverly Hills.
Mr. Rice. Did you see slot machines when you were up there then ?
Mr. Diebold. Xo, sir.
Mr. Rice. Did you go in that side room ?
Mr. Diebold. Yes, sir, I did, because I went right through the front
door, there were probably 30 or 40 machines that had taken the orphans
up there.
214 ORGANIZED CRIME IN INTERSTATE COMMERCE-
Mr. Kick. Several thousand dollars were extracted from the pub-
lic in 1950 in Beverly Hills through gambling. You didn't know
anything about thai I
Mr. Diebold. No, sir; I did not, because I had not been in there.
I cannot say.
Mr. Rice. Did you concern yourself at all with gambling in the
county up until last month?
Mr. Diebold. Yes, sir; I did. That was my first orders when I
took office in 1950, to my deputies, that if they found any, to bring
them in.
Mr. Rice. And did they find any ?
Mr. Diebold.. No, sir; not at that time, and at the same time I had
made three or four trips with Judge Moebus.
Mr. Rice. You made some trips ?
Mr. Diebold. Yes.
Mr. Rice. Where did you travel to?
Mr. Diebold. To the White Villa, the 19 Club, and The Rainbow.
Mr. Rice. How about the Yorkshire?
Mr. Diebold. No, sir ; I was not in the Yorkshire with him.
Mr. Rice. Did you go in the Kentucky Club?
Mr. Diebold. The Kentucky Club?
.Mr. Rice. Yes.
Mr. Diebold. I don't know where that is.
Mr. Rice. Did you go in the Kenton?
Mr. Diebold. No.
Mr. Rice. That is over in the other county, isn't it ?
Had anyone ever been arrested by you or your deputies for gambling
since you have been in office?
Mr. Diebold. Has anybody been?
Mr. Rice. Yes.
Mr. Diebold. No, sir.
Mr. Rice. Would you say there has been no gambling in the county
since you have taken office?
Mr. Diebold. No, sir, I wouldn't say that.
Mr. Rice. How do you reconcile that? Here you have taken an
oath here, a big oath of office, to enforce the laws, and you say you
knew there was gambling, and yet neither you nor your deputies did
anything about it.
Mr. Diebold. I think I made a statement when I was here before,
that I was under the impression that the law enforcement office was
the county, properly, and each city officer took care of his own locality.
I made that statement, I think, when I was here before, sir.
Senator Kefauver. You mean you did not know until June
Mr. Diebold. No. I had known it previous to that, Senator, be-
cause I was informed by my attorney.
Senator Kefauver. But you did not know until recently that you
had anything to do with gambling?
Mr. i )ii:i'.(»i,i). Not to make a survey, as they have told me, sir.
Mr. Rice. Did anybody tell you about section 435, or rather, 436,
talking about peace officers, where it says:
Any peace officer having knowledge or information of the commission of
the offense of setting up or carrying on —
ORGANIZED CRIME EST INTERSTATE COMMERCE 215
and it mentions gambling games —
where money may be won or lost, or who has knowledge of any person aiding
or abetting in the offense, who fails to arrest or cause to be arrested immediately
the person offending, and taken before the proper courts, shall be fined not
less than $1.0(10. and imprisoned for not less than 6 nor more than 12 months,
and shall forfeit his office.
In other words, you as a peace officer bad informal ion, and failed
to act, and if that were so yon were supposed to go to jail -and forfeit
your office and be fined.
Mr. Diebold. That was not read to me here.
Mr. Rice. Is this the firsl time you have heard about that one?
Mr. Diebold. No, no. 1 have found out different.
Mr. Rice. So that now you are going to be very diligent about
these places, aren't you ?
Mr. Diebold. I have been, and there is my report, sir.
Senator Kefauvek. June 22 to July 1 this year.
Mr. Diebold. Yes, sir.
Senator Kepauver. How much do you get paid. Sheriff?
Mr. Diebold. $5,000 a year; sir.
Mr. Kefauver. Are you going to make it? — well, is that a flat
salary ?
Mr. Diebold. This is the only county in Kentucky that has a
straight salary for the sheriff. All the other counties are fees. I
get no fees.
Senator Kefauver. You don't get anything for making this re-
port?
Mr. Diebold. It doesn't look like that, it doesn't look like I will.
I am supposed to be paid by the State $1,500, but there was nothing
set down below about it, and I guess I will just have to go on my
own and make it.
Senator Kefauver. That is in addition to the $5,000 ?
Mr. Diebold. It is supposed to be. I think there is a note in the
KRS that the sheriff is supposed to get $1,500 extra a year.
Senator Kefauver. Let's see, what are the big places operating
in this county ?
Mr. Diebold. In Campbell County?
Senator Kefauver. Yes.
Mr. Diebold. There is the Merchants Club.
Senator Kefauver. And Club Flamingo?
Mr. Diebold. And the Yorkshire Club. The Club Flamingo is
closed.
Senator Kefauver. The Club Alexandria ?
Mr. Diebold. Yes.
Senator Kefauver. And the Latin Quarter?
Mr. Diebold. The Latin Quarter and Beverly Hills.
Senator Kefauver. You didn't knowT they were pretty big gambling
places ?
Mr. Diebold. Sir, I was not in them. I had not been in those places.
Senator Kefauver. No; but did you ask around to find out? You
could have done that, couldn't you? You are a good- will man. You
know how to find out those things.
Mr. Diebold. Well, they used only premium beer in those places, and
I had no occasion to go in.
Senator Kefauver. They only used what?
216 ORGANIZED CRIME EST INTERSTATE COMMERCE
Mr. Diebold. Premium beer.
Senator Kefauver. What kind of beer was it you sold?
Mr. Diebold. Hudepohl' Brewing Co., Cincinnati, Ohio.
Senator Kefauver. Didn't you get around and try to sell them, when
you were their good-will man ?
Mr. Diebold. No, sir; because they wouldn't handle anything but
a premium beer.
Senator Kefauver. How did you know that ? Did you talk to them
about it ?
Mr. Diebold. I talked to the man that purchased for those places.
Senator Kefauver. You talked about that to them ?
Mr. Diebold. Several years previous to the time I quit.
Senator Kefauver. Well, now, who did you talk with when you
went around to these clubs?
Mr. Diebold. The purchasing agent.
Senator Kefauver. Do you remember who they were?
Mr. Diebold. Well, there was one fellow at Beverly Hills by the
name of Mike. I don't know whether he is there yet or not, but you
would see them in the morning.
Senator Kefauver. You would see them in the morning?
Mr. Diebold. Yes. You contacted them in the morning.
Senator Kefauver. Did you see those advertisements in the Cin-
cinnati papers about "Come out and have a good time"? And every-
body understood that meant to come out and gamble ?
Mr. Diebold. Come out and gamble? I didn't see that.
Senator Kefauver. You did not see that?
Mr. Diebold. "Come out and gamble"? No, sir.
Senator Kefauver. Do you mean that, since January 1950, neither
you nor your deputies have arrested anybody in Campbell County for
gambling ?
Mr. Diebold. No ; not from one of those places, because my men do
mostly the serving of papers. Maybe we will have a warrant for
that place, and that is the way we serve and get them.
Senator Kefauver. But you have been there a year and a half, and
no arrests whatsoever have been made for gambling?
Mr. Dierold. I told you I was with Judge Moebus, and we went
out on that several times, and he, after June or July of 1950, then
wouldn't come over to my office to get any of my men, but continued
himself with the county patrol.
Senator Kefauver. Sheriff, we had here, some time back, cards that
were put out by the Beverly Club saying that they were going to
reopen their casino on May 1.
Mr. Diebold. Of this year?
Senator Kefauver. Yes. They got closed down, I think, about
the time we had a hearing in Cleveland, and they distributed cards
all around and put them up on telephone poles that they were going
1<> reopen on May 1. Did you ever see any of those cards?
Mr. Diebold. No, sir; I never seen any of those cards.
Senator Kr.iwi \ in. Yon never saw them \
Mr. Diebold. No, sir.
Senator Kefauver. Well, it is very remarkable.
Do you have anything else, Mr. Uice?
Mr. Rice. I am curious as to whether the good will men had an
organization of any kind, an association or anything like that.
ORGANIZED CRIME IN INTERSTATE COMMERCE 217
Mr. Diebold. An organization?
Mr. Eice. Yes.
Mr. Diebold. No.
Mr. Rice. Well, Frank Costello, up in New York, and down in
New Orleans, there was testimony that Frank Costello was a good
will man for the Beverly Club, and T think for House of Lords Scotch.
Mr. Diebold. I was not that kind of a good-will man, Mr. Rice.
No. I was furnished a car, as I stated, and I went to the various
cafes and taverns, and walked in there. At that time we could buy
beer for whoever was in there, but then the law came along and stopped
that for the breweries. We could not buy any more beer or drinks
for any of the customers in the place.
Senator Kefauver. Sheriff, you are not really much interested in
this gambling deal?
Mr. Diebold. I am, sir. What do you think I done that for [indi-
cating] ?
Senator Kefauver. Well, you said you were going to get $1,500.
Mr. Diebold. Well, I didn't get it.
Senator Kefauver. Are you going to keep on doing it?
Mr. Diebold. Yes, sir. You will get a report between the 1st and
10th of the month, whether I get paid or not. I will assure you that
I will do it. That is cooperation.
Senator Kefauver. If you would go into some of these back rooms
of these places, you may see something.
Mr. Diebold. I do go in there, Senator. When I walk in there,
I walk in, and I made them myself, because I would have 6 nights
until 2 o'clock. That is closing time.
Senator Kefauver. Do you want us to keep this list?
Mr. Diebold. Yes, sir ; I have a copy for my files, and the original
is in Mr. Grauman's office.
Senator Kefauver. All right. Is there anything else?
Mr. Rice. I think we have one more witness.
Senator Kefauver. Thank you, Sheriff.
Mr. Diebold. Thank you.
Mr. Rice. Mr. Eha.
Senator Kefauver. Will you raise your right hand?
Do you swear that the testimony you are about to give shall be the
truth, the whole truth, and nothing but the truth, so help you God \
Mr. Eha. I do.
TESTIMONY OF CHARLES J. EHA, CITY COMMISSIONER,
NEWPORT, KY.
Senator Kefauver. Will you take over the questioning, Mr. Rice,
please ?
Mr. Rice. Yes.
How do you spell your name, sir?
Mr. Eha. E-h-a.
Mr. Rice. And that is Charles J. ?
Mr. Eha. That is right.
Mr. Rice. Where do you live?
Mr. Eha. 636 Lexington Avenue, Newport, Ky.
Mr. Rice. And vou are city commissioner there?
Mr. Eha. That' is right:
218 ORGANIZED CRIME IN INTERSTATE COMMERCE
Mr. Rice. How long have you been city commissioner ?.
Mr. Eha. Since January 1, 1950.
Mr. Rice. And you were backed by the Newport Civic Association
in your campaign '.
Mr. Eha. That is correct.
M r. Rice. Now. then, since you have been a commissioner, have you
helped to take act ion against gambling in the Newport area \
Air. Eha. Yes, sir; I have.
Mr. Kick. And what have you found there with respect to the gen-
eral policy toward gambling? Can you tell us something about that
licensing system that used to be in effect?
Mr. Eha. Well
Mr. Rice. Whether it has changed or not.
Mr. Eha. Do you mean the licensing of these places?
Mr. Kick. Yes.
Mr. Eha. Well, that was repealed on December 30, by the old board,.
the outgoing board. At that time it had been in effect approximately
6 months. In fact, it was due to stay in effect until under the ordi-
nance, that was drawn up until, I believe June or July 1 of 1951, but
they repealed it on December 30, 1949.
Mr. Rice. During your regime, had it ever been considered that
they might reenact that?
Mr. Kiia. No, sir. We wanted to divorce the city's financial con-
dition, or the city's economy from that kind of business, because it is
unsound, and the sooner you can get away from it, the better it w7ill be.
Mr. Rice. You feel, then, that it is economically possible for the
city of Newport to support itself without resorting to any sort of
taxing of the gambling operations?
Mr. Eha. That is right.
Mr. Rice. And you feel that you can get along very well without
the gambling?
Mr. Eha. That is right. And I think that was proven last year,
when the city, through its efforts, made more improvements in the
city in the way of streets than has been made in years. We bought
more new equipment than has been bought in years, and generally
the people, I think, were much more satisfied.
Mr. Rice. Well, as a matter of fact, then, the city could not only
survive, but it is actually much better off, in your estimation, with
the suppression of gambling?
Mr. Eha. That is right.
Mr. Rick. Now, then, there was a time when there was a raid on a
fellow by the name of Schmidt, wasn't there \
Mr. Eha. Yes, sir.
Mr. Rice. Tell us about that.
Mr. Eha. Well, on December 5 or 6 of 1950, at our board of com-
missioners' meeting, prior to the board of commissioners' meeting the
mayor of the city informed two other commissioners and myself, that
on a previous night there were 15 slot machines in operation in the
basement of the Pete Schmidt Playtorium.
Mr. Rice. Where is that located?
Mr. Eha. It is located at Fifth Street, between Monmouth and
York, and I told the mayor at that time, that, if necessary, I would
make a personal inspection myself.
ORGANIZED CRIME EN" INTERSTATE COMMERCE 219
The police had gone down there during the course of the week —
first of all, the mayor first informed the city manager, and during
the course of a week I let go by, I went down there On a Monday night.
Mr. Rice. "Who of the police went down there. Mr. Eha, do you
know ?
Mr. Eiia. Well, I know that White was one of them, and Fred
Wesling.
Mr. Rice. Did the chief go down?
Mr. Eha. Oh, no, the chief, I don't think, goes to those places.
I went in, and I went down, and I went down the basement steps,,
which is sort of a large meeting room. I mean, it will probably seat
five or six hundred people, and in going down the steps I heard these
machines in operation. There were only three of them at the time,.
I believe two nickel machines
Mr..RicE. Was that place open to the public?
Mr. Eha. Yes.
Mr. Rice. You could walk right in off the street?
Mr. Eha. I did. I walked right in off the street, down to the
assembly room, but these machines were not in the main assembly
room, they were in sort of a large storage room 20 by 30 feet. There
were mops and brooms and various paraphernalia that they might
use in cleaning.
Mr. Rice. Everything for cleaning up ?
Mr. Eha. That is right. There was a large dice table, dissem-
bled, the legs were off, and it was sitting in one part of the room.
I got in touch with City Manager Rhoads, and related to him
what I had seen, and he called George Mullencamp, the city prose-
cutor, and Mr. Mullencamp obtained a warrant, and I signed it, and
we went to Judge Mayberry's and had the warrant signed.
Mr. Rhoads and Mr. Mullencamp went in and had it signed. Mean-
time, Mr. Rhoads had contacted Lieutenant Hanley.
Mr. Rice. Was it a search warrant or an arrest warrant?
Mr. Eha. It was a search warrant.
Mr. Rice. Against the premises?
Mr. Eha. Yes.
Mr. Rice. Did it name any individuals?
Mr. Eha. It named Pete Schmidt.
Mr. Rice. It named Schmidt?
Mr. Eha. Yes, Pete Schmidt.
Senator Kefauver. That is spelled S-c-h-m-i-d-t, is it not ?
Mr. Eha. That is correct. And Lieutenant Hanley came up. and
while the search warrant was being signed by the police judge, he
and I went back to Schmidt's place in an effort to get in there before
Mr. Rhoads and Mr. Mullencamp got down to police headquarters,,
because we felt like there would possibly be a tip-off.
Mi-. Rice. Yes. And you wanted to be there to see what happened ?
Mr. Eha. We wanted to be in the room when the police came.
The doors were locked on the outside. It could possibly have been
that they saw me in there, when 1 was in the first time. 1 was only
in there about 30 seconds, probably 30 seconds to a minute. I wasn't
there very long, just long enough to set- what was going on.
So we went back to police headquarters, and we got more police,,
and the third time we came back the front door was open, and we
220 ORGANIZED CRIME IN INTERSTATE COMMERCE
proceeded on down the hall, and the door was locked, where these
machines were.
First, there wasn't anyone down there, and the police went through
the building.
Mr. Kick. How much time had elapsed from the time you actually
gained access — I mean from the time you saw the gambling and the
time you actually gained access.
Mr. E ha. Oh, it was 10 o'clock when 1 went in, and it was around
11:30 to a quarter to 12 when we went in the final time, with the
police. It took somewhere between an hour and a half and an hour
and 45 minutes.
The police and detectives were going around looking, and about
5 minutes later, we were in there, and Glenn Schmidt, the son, came
down, and the detective that had the search warrant started to read
the search warrant.
After about 3 minutes of waiting, or after about 5 minutes to find
someone, and about 3 minutes elapsed during the reading of part of
the search warrant, he said, "Well, you had better read that to Pop."
So they had to go after "Pop," who was Pete Schmidt. About
another 5 minutes elapsed before Pete Schmidt came around, and
t hen it took about 5 minutes to read it.
I would say from the time we entered the building with the search
warrant, until it was finally read to him, about 20 minutes had
elapsed.
After the search warrant was read, Pete Schmidt said, "Well, there
it is. boys. You don't see nothing, and there is nothing there."
He pointed to the assembly hall, and there wasn't anything visible
there.
I said, "We are interested in what is behind that door." He said,
"I don't have a key."
So the police, they didn't say anything for a few seconds there, like
there was some hesitancy on their part, and I told them, I said, "Break
down the door." And with that, Carl Ape, who is now a sergeant,
2~>roceeded to give it two pretty hard kicks, and it looked as if the
door was going to give way. So Pete Schmidt reached into his pocket,
pulled out a key, unlocked the door, and said, "There is what you want,
I guess."
So I stayed with the machines, because I did not want them walk-
ing off.
Mr. Rice. The machines were there?
Mr. Eiia. They were there. There were three of them. And the
police going through the building, and the big dice table, they got
ready and moved that out, and I suppose 1 was down there waiting
altogether a half hour.
Sergeant Thiem was along, he was among those present, and dur-
ing the course of going through the building. I heard one detective
say to one of the men, one of the officers there, that there was a friend-
ly poke)- game going on upstairs by the "JC" members. It was some
men from the junior chamber of commerce, who were having sort of
an affair t here that night on the upper floor.
I think it was a 10- or 15-cent poker game, just more or less of a
sociable affair.
Anyway, the police did not do anything about it, because I think
they realized it was just purely social purposes.
ORGANIZED CRIME IN INTERSTATE COMMERCE 221
Mr. Rice. What became of the slot machines?
Mr. Eha. Well, they moved those out.
Mr. Kkk. They confiscated those?
Mr. En \. Yes. . a .
Senator Kefauver. I don't understand, what was the tip-off, what
is all this about? , ,
Mr Eha. I really don't believe there was any truth to that. 1 don t
believe there was any truth in it, because of the fact that they could
have seen me, when I went in there the first time.
Senator Kefaxjveb. So the only thing is, the place was closed up and
locked when you got back.
Mr. Eha. Yes.
Mr. Rice. Did they convict Schmidt ?
Mr. Eha. No, sir." I was branded by Charley Lester in the police
court, who is attorney for the Schmidts, as a "Carrie Nation."
Senator Kefauvir. As a what?
Mr. Eha. As a "Carrie Nation."
Senator Kefauver. What is that I
Mr. Eha. Well, it seemed like Carrie Nation was a woman who
went around chopping up bars, and something like that. At one time
that happened. She was a dry, or something to the effect.
Anyway, the case was bound over to the grand jury, and an indict-
ment was — in the meantime, I signed a warrant of arrest against
Glenn Schmidt, because I believe the licenses were in his name. We
had a search warrant against Pete Schmidt, and a warrant of arrest
against Glenn Schmidt.
The case went to trial, and I was finally branded pretty well, and
pretty well taken apart by Charley Lester for my actions. I was
again branded as a "Carrie Nation" and a liar.
He apparently succeeded in convincing the jury. He had said that I
did not see the machines, that I had sworn falsely to the affidavit, the
search warrant. The jury retired and I would say within about 3
minutes' deliberation they returned and rendered a verdict of not
guilty.
That was against Glenn Schmidt.
The case against Pete Schmidt was dismissed, because it seemed
that the property is not in his name.
Senator Kefauver. All right. Anything else?
Mr. Rice. Did you ever do any more crusading?
Mr. Eha. Yes. Early, I would say
Mr. Rice. Don't go into too great detail on it.
Mr. Eha. Yes. Well, in June of 1950, 1 had received word that slot
machines had returned that evening. That was around G o'clock. I
went and investigated one particular place, a cafe, and I found that
that was so.
So I called the police department, and I talked to sergeant, to a
sergeant there, and told him who I was, and gave him my telephone
number so he could call me back in case he doubted it, and told him
that I wanted the police sent up there.
Well, he called Gugel, and asked Gugel if he should send police up
there.
Senator Kefauver. You don't know that of your own personal
knowledge, do jou'i
85277— 51— pt. 15 15
222 ORGANIZED CRIME IX INTERSTATE COMMERCE
Mr. Rice. T)i<l yon check with him later?
Mr. Eha. Yes, sir. I asked Chief Gugel about it. I asked him
why he did that, and he said he didn't know. Anyway, they did send
police up, and they picked up two slot machines at about 7 o'clock.
At 8 o'clock a Catholic bingo was raided on orders of Chief Gugel.
Child' Gugel said that someone had called his home and said that
bingo was as much gambling as -lot machine-.
Now, I personally don'1 even know Chief Gugel's telephone number,
because it i- an unlisted telephone. During the course of our drive
againsl these commercialized gambling houses, we have been more or
less told through the grapevine, or jusl through different people that
might he friendly towards us, thai they are not going to lei bingoes
operate so long as commercialized operal ion- are closed up.
Mr. Rice. Have yon ever received any threats?
Mr. Eha. Well, over the telephone, yes, sir. I have had to have my
telephone changed several times, when they have gained knowledge of
the number.
Mr. Rice. Did they say they would act even with you?
Mr. Eha. Well, early in the campaign, or early in the year. 1 was
voicing my objections so far as the police department was concerned,
and f was told thai if I didn't keep my mouth -lint that I would get
waylaid somewhere.
Another time I had calls at my home, and they told me if I knew
what wa- good for me. that T had better stop fighting them.
Mr. Rice. Von never received any letters, any threatening letters?
Mr. Eha. No. sir. I have received crank letters pertaining to things
when they don't agree with yon, but certainly none that were threat-
ening.
Mr. Kick. You don't intend to let those telephone calls deter you in
your conscient ions objective \
Mr. Kiia. Onr job is too big to be afraid.
Mr. Rice. You are going right ahead?
Mr. Eha. Yes, sir.
Senator Kefauver. Well, are conditions better generally in New-
port than they were when you had wide open gambling?
Mr. Kiia. Yes, sir; I am sure they are. \ mean. I have every reason
to believe that. 1 know that the people at lea-t are going to have an
opportunity to actually show how they feel about it this coming
election.
Senator Kefauver. Do yon know whether Newport lost some other
industry or industries, because of the conditions existing there?
Mr. Kiia. Well, to be specific about it, I cannot say. but I do know
this, that conditions as they were -1 years ago. industry then would be
very, very skeptical about" coming into Newport for that reason, be-
cause they had a very sound economic — or rather, a very unsound
economic sit nation.
Senator Kefauver. What is your business?
Mr. Kiia. What Irind of business am I in?
Senator Ki \\v\ er. Yes.
Mr. Eha. I am a time-stndv man for the Wadsworth Watchcase
Co.
Mr. Rice. Do you have a full-time job?
Mr. Eha. Yes. A commissioner's job in both Covington and New-
port, is only a part-time job, at $1,500 a year.
ORGANIZED CRIME IX INTERSTATE COMMERCE 223
Mr. Rice. Well, now. have you ever Lost any time from work be-
cause of being subpenaed in connection with cases in which you
were never called '.
Mr. Eha. YeSj on several occasions. Art Dennert? represented
by Charley Lester, was on trial for violations, and Mr. Lester would
subpena the entire board, including the mayor, the two attorneys, the
city manager, in fact, all eight of u>.
Mr. Kick. Yes, Thai was a way of harassing you, you would take
it?
Mr. Eha. That is right, trying to make our job as disagreeable as
he possibly could.
Mr. Rice. And you were subpenaed and forced to sit around all
day, but never called?
Mr. Eha. That is right. He made some statements the last time,
when Mr. Warren during the trial requested of the judge that the
witnesses be dismissed, and Mr. Lester said something like this. "Oh,
let them sit around, they don't have anything to do anyway with
their little pointed heads.*'
Mr. Rick. Well, perhaps we had better not comment on that, from
the number of witnesses that had to sit around today.
I think that is all.
Senator Kefauyek. All right. We are glad to hear of your deter-
mination that you and the other commissioners are going to keep up
this effort.
Mr. Eha. Well, Senator Kefauver
Senator Kefauver. Do you have anything else you want to add to
the testimony here?
Mr. Eha. Well, before you commended City Manager Rhoads for
the way in which he is successfully carrying out this thing. I have
an editorial that I want to leave with you that appeared in the Ken-
tucky Times-Star. I would like for you to read it. It is written by
an editor who has long been opposed to commercialized gambling, and
I think he can give 3-011 a true picture as to how he feels about the
city manager.
Senator Kefauver. We would like very much to have it. Mr.
Rhoads impressed me as being an honest man trying to do a good job,
and I hope time proves that I am right.
Mr. Eha. Mr. Rhoads' best recommendation, probably, is that
those who are opposed to him are the gamblers, and those that sympa-
thize with the gamblers.
Senator Kefauver. All right, sir. We thank you very much for
3Tour testimony and your coming here.
Now, the names of a good many people have been brought out here
in the hearings, and if they want an opportunity of testifying, or
submitting a letter or statement, they should immediately notify
Senator O'Conor or the staff of the committee, and I am sure that
that opportunity will be given to them.
It is good to note that there have been some efforts made to better
conditions in northern Kentucky. This new city commission, and
the mayor, and the city manager of Newport, seem to be on the job in
carrying forward courageously, and there seem to be some 1 tetter signs
in other places.
224 ORGANIZED CRIME IX INTERSTATE COMMERCE
There is still a great deal to be done in law enforcement. One of
the distressing things — some of the law-enforcement officials we have
had testimony from, either through ineptitude, or for some other
reason, have not been doing their duty, as is quite obvious by the
hearings, and one of the distressing things is that this is one and has
been for some time, one of the principal centers of operation of the
Cleveland gang, with very substantial operations, and nothing really
seems to have been done about getting at the big boys.
I hope that these prosecuting attorneys and judges and people who
are in places of responsibility will keep that in mind, because the
facts can he gotten, and they can be presented to grand juries, and
certainly this seems to be a basis for al least a very substantial effort
to get at other than the little fellows.
I have not had the opportunity of following all this testimony, but
the summation seems to be that there has been considerable improve-
ment in northern Kentucky, with a great deal left to be done. There
are some good enforcement officers, and some who are not interested
in cleaning up the situation.
Is there anything you want to add, Mr. Rice?
Mr. Rice. I think you have covered it very well, sir.
Senator Kefauver. All right. I am sorry to have kep,t everybody
here so late, but I did not know that we had so many witnesses.
The committee will stand in recess until further announcement.
(Whereupon, at 8:40 p. m., the hearing was adjourned.)
APPENDIX
Exhibit No. 1
Country Club enterprise (Beverly HiUs County club),' Alexandria Pike, Route
r,. \i wport, Ky.
1944
1945
1946
P.i 17
1948
1949
Gross receipts
Net income
$85,381.00
i::. r.l mi
30,537.00
13,461.81
:;. Ml 81
3. 461. SI
3,461.81
2,517.68
2. 697. 51
2. 090. 58
2, 563. 55
2, 338. 75
4, 248. 59
3, 147. 10
$369,920.00
166,570. 14
173,325.00
16,135.38
16,135 38
16,135.38
16, 135 38
11.734.82
12,572.99
9. 744. 04
7. 334. 26
6. 286. 50
19,802.50
14, 668. 51
8395 893 00
172,387.60
195,426.00
17,027. 73
17. 027. 73
17,027. 73
17,027.73
12,383 80
13.20*. II)
10. 282. 99
7. 739. 88
6,634.19
20,897.67
"" 15,479.75"
3, 795. 00
3. 795. 00
$310,699.00
134, 194.78
150,703.00
12.839.73
12,839.73
12,839.73
12.839.73
9 337 98
10. 004. 98
;. 753.84
5. 836. 24
5,002.49
15, 757. 85
11,672. 1*
$447,318.00
195,770.74
193,704.00
19, 576. 79
19,576 79
L9, 576. 79
14,237.66
L5, 254 63
11,822.32
8. 898. 54
7. 627. 32
24,026 04
17,797.07
$528.'
230, 428. 36
225,531.00
Partners' shares of above in-
come:
As profit:
Samuel A. Tucker
M. B. Dalitz
24, 442. 92
24,442.92
Louis Rothkopf ..
Morris Kleinman
Charles Polizzi
T.J. McGinty
John Croft
24, 442.92
24, 442.92
17,776.67
19. 046. 43
14,760 98
Harry Potter
11. 110.42
Mitchell Meyer
Samuel Scbraeder.
Marion Brink
9, 523. 21
29, 998. 13
22. 220. 84
As salary:
M. Meyer
4, 095. 00
4, 095. 00
1, 695. 00
10, 000. 00
3, 735. 00
3. 735. 00
3, 900. 00
3,900.00
4,110.01)
II. Potter
4, 110. tO
10. 000. 00
to,
10. 000. 00
Breakdown of receipts avail-
able only for 1946, 1947, 1948:
Receipts, net:
(120. 00)
75, 256. 00
20,670. 00
37,«4.00
17,5.246.00
87, 167. 00
355. 00
52, 851. 00
30,627.00
149, 556. 00
61,914.00
(5,774.00)
70, 089. 00
17,931.00
51,031.00
244,338.00
69, 70.",. 00
Chuck
Total
395. 893. 00
310,699.00
447,318.00
.
Expenses:
Payroll
195, 126.00
18,000.00
10, 079. 40
150, 703.00
16.500.00
9,301 22
193,704.00
44,000.00
13, 843. 26
Rent
Other.
Total..
223, 505. 40
176,504.22
251.547.26
172, 387. 60
134. 194. 78
195. 770. 74
1 Country Club Enterprise runs the gambling casino while a Kentucky corporation, Beverly Hills, Inc.,
operates the night club entertainment, dining room and liquor business. A Nevada corporation, Boulevard
Enterprises, Inc., holds the real estate. Alvin E. Giesey is secretary of both corporations.
2 Salaries and wages included in deductions — excluding compensation to any of the partners.
Note. — Returns prepared bv E. W. Sailers for 1944-49. Returns signed by S. A. Tucker for 1944-48
and Harry Potter for 1949.
225
226
ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 2
'/'//( Yorkshire, Newport, Ky. — Business: Caf< and games
1944
1940
1947
■ -
1949
B
117.74
50 06
$637,838 28
111. 125 20
179.61 9
403,675.00
$856 604 09
(745.21)
(12,818 in
181,667 68
144,70
148,1
200, 303. 57
144,781 54
200, 095. 00
184,733.34
347,318 68
212. Mil 25
Partner's shares of inc
Maurice Ryan, Fori
Thomas, Ky
Fred Eallam, Bellevue,
Ky
(203. 42)
(1,006.84)
(193.42)
(163.42)
157.95
(322.05)
(803. 42)
(803. 42)
(803. 42)
(1,253.34)
(1,253.34)
1,253 34)
(803 13)
(1,253.34)
1,606. 55)
ld.S99.54
16,674.07
969 15
10, 899. 54
8, 589. 72
12,009.76
5,774, 54
5,774 54
5, 77-!. 54
6. 956. 23
15,469.73
10,621
15, 21
•-
20, 700. 84
17.193.21
20.901.42
Richard Fox, Bridgetown,
Ohio
Morris Nemmo, Fori
11,574.86
9, 266. 92
12,678.84
5,894.86
5, 894. 86
5,894 86
7,073.84
7,073.84
11.070.33
9, 757. 20
-
5, 595. 33
5, 595. 33
5. 595. 33
6, 714. 39
6,714.39
13, 800. 42
10, 645. 26
4. 470 25
1.470.24
7, 450. 42
7, 4.50. 42
8, 940. 49
- 940 (9
L6 693 .'!
Roberl F. Bergin, Fori
13. 475. 93
Sam G . < lincin-
6, 025. 93
Geoi I, Mel-
A. R. Masterson, Fori
Thomas, Kj
F. R. Lowe, Loui \ ille,
Ky.1
10,043.21
10, 043. 21
Alfre Cleve-
land, Ohio
< }eorge <'■ irdon, Cleve-
12.051.86
12.051.80
Tohn Angersolo, Cleve-
Samuel Tucker, South-
, Ky
Brink, Fori Mit-
6, 956. 23
5,774.54
6 9 ,6 23
11,549.07
5, 700. 09
6,956 23
9, 535 10
•
7,073 84
5 894 86
7,073.84
11,789.73
7,073.84
12, 528.84
6, 714. 39
5, 595. 33
•'..714.39
11. 190 65
5 595 3
6, 714.39
11,739 38
6, 679. 60
8,940.49
7. 450. 42
8,940 19
1 1,900 84
8,940. 19
14,615.49
5, 980. 18
12. 051. SO
10, 043. 21
Ruby Kolad, < 'l \ el ind,
Ohio
12. 051. 86
\ h ■ bneider, Ci icin
20, 086. 41
Him Fori
Charles Pplizzi, Cleve-
10,043.21
12,051.86
Crof t, Cini
( ihio
18, 476. 86
George Bear, Detroit,
13, 175.93
<\. Melbourne,
Ky
Address of E. R. Lowe sh >.\ □ as Tucson, Ariz., in 1948 and 1949.
Note. Ul of the above returns prepared by Jack Kuresman. Returns for 1944 through 1947 signed by
1948 and 1949 returns signed by lohn Croft, Cincinn iti, Ohio.
Deductions for 1945 include "cu iense"of$10,405,de luctionsfor I948includ< "< i pense"
of $16,314, deductions tor 1949 include "customer promol ion exp 2,759
ORGANIZED CRIME EN INTERSTATE COMMERCE
227
Exhibit No. 3
Lookout Club, Covington, A ;/.. org<miz\ d Sept. 8, m'/i
1944
mont 1 1
ttths)
1946
1948
1949
Gross receipts
Gross profil
Net income
Partners' share of income:
719.00
17:'.. 771. 18
1 18,844.29
.89,
62,770 68
• 1 -
064.21
- ■
3 274 18
■
6,221.50
•
- 1
6,548 96
5,239. 16
14.884. i ;
17 '
Samuel M illei
3,041.03
3,041.03
■ 777 96
6,082.07
6,082.07
6,082 H7
Charles V Can
Mitcb 11 Meyei
rohn Croft
7. 142.21
-
1
199.90
18,315.29
• (15.29
18,315.29
18,315.29
14,661. 17
7. 142.21
-
in ; -
5,391.98
21,541.65
21, 1
21,{
21, E
17,243. 82
8, 177. 17
10,074.28
' 037 14
'." 1, 124 1 12
20, 124 02
M. B. Davis ' Dalitz
2ii 224.02
16, 109.01
B. W. Brink .........
8, 177. is
1,950.00
'Wife of Samuel Tui kei
Note.— Returns prepared bj E. W. Sauers for 1944 19. Retu by James Brink for 1944; B. W.
Brink for second 6 944 and 1946-49. 1915 and 1947 returns have m>t been loi
Lookout Club operates the gambling casino. Lookoul H use, Inc., operates the nigh
mont. dining room i business. Ii is a Kentucky corporation. Jimmie Brink, Inc., a Ni
state.
Comanagers of Lookoul Club: Charles Drahman and Gei r& ["odd. Secretary of Jimmie Brink, Inc.,
and Look"iii ll"us>\ Inc.: A. E. Giesey.
Exhibit No. 4
The press carried the suggestion thai the sheriff's office could assisl in a
check-up for gambling at Campbell County cafes, restaurants, and madhouses,
My office has always been willing to cooperate with the county patrol, because
we recognize the inability of the small force of patrolmen to effectively do all
of the police work assigned to them. We have not always been able, because of
our many other duties in serving the civil rutins, the collection of taxes. etc;, to
render actual assistance.
The collects n <>f taxes by the sheriff is now completed, and the pressure of
that business is relieved. As an indication of the willingness of myself and my
deputies to cooperate with the county patrol in performing their many duties,
aid to give the citizens of Campbell County the kind of police protection to
whii h they are entitled, our i fhYe is willing to assume the policing and sup >rvision
of the cafes, restaurants, and roadhoi ses of the county and to eliminate all forms
of gambling insofar as that is posisble. With onlj six patrol men working each 24
hours it is obvious thai the citizens of the county, as well as visitors passing
through the county, cannot ivcei\ e proj er police protection. This not only applies
to traffic but to the protection of their homes and farms. Acting chief Robert
Matthews and the men under him have been performing splendidly, but it is un-
fair to both them and the taxpayers to expect them to devote the major por-
tion of their time trying to ferret oul violations of moral laws. The police de-
partments of the various cities and towns in the county have apparently done
a fine job of cooperating with the county patrol. Therefore, we are more than
pleased to assume the supervision of the cafes, restaurants, and roadhouses of
the comity and to make the sheriffs office an active police agency, so that the
county patrol can resume the constant patroling id' the roads of the county.
Moebus Wants Diebold To Help Police County
State law still sets the maximum salary which can he paid to county police
by a fi cal court, Camp] ell County Judge Stanley c. Moebus was informed Mon-
day in an 0] in ion from II. I >. ltee< I. assistant attorney general.
Judge Moebus had requested t he opinion in an effort at arriving at some method
of increasing the wages of members of the county police force.
228 ORGANIZED CRIME IX INTERSTATE COMMERCE
Reed's opinion held that while a 1950 law gave the fiscal courts righl to sot
salaries of police and similar personnel in the county set-up, it did not give the
righl to exceed th<' maximus established in the statutes.
i ■ der the law those maximums are $2,400 Cor patrolmen, $2,700 for captains,
and $3,000 for chief. Mosl of the members of the Campbell patrol arc now
carried as captains,
Judge Moebus voiced the opinion thai it' he could not work out a plan to secure
increased salaries for his patrolmen the office of Sheriff Ray Diebold should be
cal'ed on for assistance in policing the county.
II' said the county police constitute an additional Law-enforcement agency
in a co inty to the sheriff's office. Moebus also noted that the sheriff's office in
Campbe'l receives approximately $5,500 more yearly for deputies and clerical
help than does the county patrol.
EXHIBH No. 5
Newport, Ky., March 2Jf, 19&1.
Mi:. M \i.coi m RHOADS,
City Manager, City of ~Sarport, Ky.
Dear Malcolm: I have repeatedly called your attention to alleged booking
Clearing houses interests having their offices in thi' building at the southeast
corner of Fourth ami York Streets, Newport, Ky. From the information which
I have, this condition still exists.
I feel that it is your duty and the duty of the chief of police of Newport, to
see that this condition is stopped and that any operations or activities at that
time he hailed into court.
Trusting that you will look into this matter immediately, I am
Yours very truly
J\mks E. Peckert,
Mayor, City of Newport.
Registered mail, return receipt requested.
February 2, 1951.
Mi:. George (Iugee,
Chief of Police, Newport, Ky.
Dear Sir: Inasmuch as reports have come to my attention through the press
and from officials of the city of Newport, thai illegal activities are in operation
in the Finance Building at Fourth and York Streets, it is my order that said
building he kept under surveillance to determine whether or not any illegal
activities are in operation; and if so. it is my further order that immediate
steps he taken to eliminate such illegal activities.
Yours truly,
Malcolm R. Rhoads, City Manager.
Received by :
George Gugel, Chief of Police.
Exhibit No. 7
Aork! mi n i' Entered Into March 1 I. 1950, ky i in Social Action Committle and
the Covington and Kenton County Peace officers
We who have met and conferred concerning commercial organized gambling
and law enforcement conditions in Kenton County agree to cooperate whole-
heartedly in the enforcement of the law.
We agree that commercial organized gambling must cease throughout the
county immediately.
The peace officers agree to work sincerely at this and the social action com-
mittee will seek the fullest possible cooperation on the part of the citizens
and organizations of the county.
The social action committee of the Kenton County Protestant Association
note- with pride that for 1949, CovingtOD had the second host record of second-
class cities in Kentucky for absence of major crimes.
ORGANIZED CRIME IN INTERSTATE COMMERCE
229
It was agreed by all that with the elimination of organized gambling, Coving-
ton and Kenton County can well become an ideal community. And tlie social
action committee commends the law-enforcement officers for this splendid record.
Those present and agreeing to the above statement were: James E. Quill,
commonwealth attorney; Judge William E. Wehrman, Kenton County judge;
Sheriff Henry A. Burndt, Kenton County sheriff; Chief Al Schild, Covington
chief of police; Chief Carl Mershon, Kenton County police.
Those representing the Kenton County Protestant Association were: W..
Sharon Florer, executive secretary ; Rev. Jesse I,. Murrell, chairman of the so. l
action committee; Rev. Paul Wilbur, minister of Trinity Episcopal Church;
Rev. Barton Johnson, minister of Madison Avenue Christian Church; Harry
Perkins, principal of third district school.
The press: Bud Deters, of the Times-Star; Bob Rankin, of the Enquirer;
Carl Sanders of the Post.
Exhibit No. 8
List of Slot-Machine Taxes Which Appeared in the Kentucky Times-Stab,
September 11, 1950
covington
Brunsman, Clara, Southern Club, 1046
Madison
Willmes, Harry T., 422 East Seven-
teenth Street
Spicker, Henry, Heintz Cafe, 429 Scott
Street
Moddeman, Ervin, Moddeman's Cafe,
358 East Sixteenth Street
Sterling, Edith and Jones, Marie, La-
tonia Bar, 237 West Southern Avenue
Warman, James A., Shamrock Club, 12
East Fifth Street
Marshall, Sylvia, Marshall's Cafe,
Forty-fifth and Huntington
Schewe, George J., 407 West Ninth
Street
Grimm, Curly, Curly Grimm's Cafe,
1121 Madison
Fessler, Ray, Play House, 399 Alta-
mont
Patrick, Mrs. Ethel, Pat's Cafe, 217
East Twelfth Street
Smith, George L., 1600 Cafe, 1602 Madi-
son
Wagner, Gus, 100 Club, 139 Pike Street
Deters, Cliff and Borge, Nick, Nick and
Cliffs Cafe, 3505 Decoursey
Hall, Mrs. Anna, 701 Philadelphia
Street
Mink, Roscoe, Club Zamba Wanga, 234
Pike Street
Woods, Ranee G., Main Street Bottle
House, 704 Main Street
Schmeing, Albert J. and Ben H., Club
Kenton, 432 Scott
Mitchell, Leslie, Silver Front Cafe, 1016
Greenup
Arlinghaus, E. L., Southbound Bar, 417
Pike Street
Wandstrat, H. T., Butch's Old Heidel-
berg Inn, 902-906 Madison
American Legion Latonia Post 203,
Thirty-sixth and Southern
Brownfield, Ray, Fourth and Main
Cafe, Fourth and Main Streets
Powell, A. H. and Hegener, F. X., Silver
Leaf Cafe, 4101 Decoursey
Paddock Liquors, 734 Madison
Carr, Edward and Robert, Carr Bros.,
1916 Madison
Moore, Philip, Phil's Cafe, 4 East
Southern Avenue
Jewell, W.. Jewell's Sandwich Shop,
607 Main
Hellman, Roxie, Southern Gardens, 409
West Southern
Webber, Mrs. Elizabeth, 202 Scott
Street
Ginney, Thomas J., 1303 Highway
Connor, Leonard J., the Turf Club, 10
Southern Avenue
Baueries, Ray, Baueries Cafe, 432
Bakewell
Cappel, Henry, and Jansen, Ben, Tiny's
Tavern, 648 Bakewell
Marshall, Sam, Marshall's Cafe, 613
Main
Frazier, Arthur, Southland Bar, S09
Madison Avenue
Weisenberger, John, the Clover Club,
1906 Madison
Tully, Jack. 430 Cafe, 430 Scott
Nieman, Willard and Leo, Nieman
Bros Cafe, 801 Main
Bender, Fred, 619 Cafe, 619 Washington
Street
Sageser, Ray. Ray's Cafe, 11 East Fifth
Street
Daly. Virgil and Oscar, Daly's Cafe,
1127 Russel Street
Chapman, Virginia, Anchor Grill, 438
Pike
Boehmker, Henry, Heinie's Cafe, 718
Pike
Mullen. John L 529 Club, 529 Madison
Avenue
85277— 51— pt. 15-
-16
230
ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 8— Continued
covington — continued
Thiel, Joseph H., Green Lantern Cafe,
3!>38 Decoursey
Steiinle, Joseph, and Hampen, Nicholas,
Corner » Jafe, L05 1 Madison
Cluii Keeneland, Inc., 1053 .Madison
Henderson, W. D., Henderson's Delica-
tessen, 1601 W Iburn
Vasilofh, Risto, Chili Bowl, 438 Madi-
son Avenue
Nienaber, Theresa, Lees Cafe, 1701 Gar-
rard
Boone, Worth, New Admiral. 301 Bake-
well
Birkett, Louise, Birkett's Cafe, 101
West Sixth Street
Gellenbeck, Robert, Bob's Stag Bar,
1131 Scotl Street
1 ressman, I rank H., Dressman's Cafe,
1132 Lee Street
Sehaller. Al, Schaller's Cafe, 601 West
Ninth Street
Orr, C. G. and Davis, C. C, Orr &
Davis. ID Pike Street
Vest, Elmer, Market Cafe, 10-12 West
Seventh Street
Club 326, Inc., 326 Scott Street
Grubbs, Wallace, Wallace's Cafe, 301
East Eleventh Street
Moore, .lames W., Moore's Cafe, 1565
Holman Street
Kramer, Louis II., Lou Kramer's Cafe,
3428 Decoursey
Becker, Lloyd and Lauretta, Recker's
Cafe. 1137 Garrard
f.14 Club, Inc., ~>14 Madison Avenue
BPO Elks. Covington Lodge 314, 34
West Fifth Street
Brill, .Manuel, B. & G. Bar and Grill,
213 West Nineteenth Street
Elliott. Van, Van's Place, 1301 Holman
Street
Wright. Paul, and Gresshoff, Frank,
Hoff & Paul's Cafe, 3614 Decoursey
Plaggenburg, Rohert, Patton Cafe, 1558
Eastern
Schroder, Joseph and Hilda, Florwin,
1358 Scott Street
Nielander Anthony. J., Nielander's
Cafe, 2023 Garrard
Smith. Arthur and Lucille, Dog House
Cafe, 3!rj7 Decoursey
Drosses, Nicholas B., Madison Grill,
I 3 Madison Avenue
Boles, Sandford R.. and Koenig, Hilda,
Sandy's Cafe, 1330 Highway
St. John, Burton, 322 Greenup
Hallau, Gladys, Ralph's Cafe, 531 Rus-
sell
Cut man. Joseph, Hatchet Lake, Six-
teenth and Monroe
Barkhau, Ann, Hagner, 12."»3 Highway
Fromme, Harry, Harry's Place, 302
West Twelfth Street
Ililtz, Herman, Hiltz Cafe, 1101 Lee
Street
Warren, Daniel G., Dick's Place, 329
West Southern Avenue
Collett, Charles and Robert, Collett
Bros., 222 Pike Street
Arinsmier, Edward, Ed & Bell, 4006
Winston Avenue
Vnst. I Yost Post, 3H4 Pike Street
Zembrodt, John M.. Hillside Cafe, 925
Worth Street
o'Rourke's Cafe, 228 West Third Street
D'eddens, John H., Deddens's Cafe, 408
Madison Avenue
Bobbins, Donald, and Vetter, Lawrence,
Don's Cafe, 420!) Decoursey
Vougarelis, Steve, and Kaisar, Law-
rence, L'OL' West Fourth Street
Hahn, Luster, Magnolia Hotel, 118 Pike
Street
Murray, K. P., and Bayless, James,
Rainbow Club, 1021 Greenup
Schwartz, Jack, Bridge Cafe, 407 Main
Street
Orr, Ernest, and Kees, Ben, Derby Cafe,
1918-20 Madison Avenue
Nageleisen. Charles, ( 'harlies' Cafe, 2101
Howell Street
v*FW, Post 1484, 1531 Madison Avenue
FOE. 329, Pi East Eighth Street
Wigglesworth, William and Evelyn, 145
West Twenty-first Street
Weierich, William, W. W. Cafe, 1103
Pike Street
Wilson, C. R., Palace Car Cafe, 831
Madison Avenue
lU'vi\, Edith May, Greenup Street Cafe,
144 East Tenth Street
Stuntebeck, Herbert J., Stuntebeck Cafe,
534 Pike Street
Gausepohl, Fred, Gausepohl's Cafe, 335
West Nineteenth Street
Blank, Arthur and Al, Blank's Cafe, 266
Pike Street
Evans, Charles, Charley's Cafe, 302
Main Street
Schultz, William A., Golden Horseshoe,
1234 Madison
Seliger, Theresa, New Avenue Cafe, 1432
Madison
Naumoff, Kime, Liberty Chili Parlor,
f>12 Madison
McGough, T. R. and Gertrude, Mc-
Gough's Cafe, 801 Bukowell
Katsikas, Lee, Lee's Hamburgers, 10
East Fourth Street
Victor, Hilda, Victor's Cafe, 701 Phila-
delphia SI reel
Heile, Earl, Heile Cafe. S02 Crescent
Avenue
Rich, .1. W. and Streif, M. F. and Wenz,
E. v.. Rich's cafe. I7n4 Garrard
ORGANIZED CRIME IX INTERSTATE COMMERCE
231
Exhibit No. 8 — Continued
c ovington — continued
Bockweg, Joseph, and Ma, Bockweg's
Calc. H'21 -Main Street
Nienaber, Cliff, ami Cleo, c. & C. Grill,
111.") Pike Streel
Johns, Allan. 30 East Seventh Streel
Sturdivant, I'. '1'. and Marcella, Park's
Cafe, 3711 Winston
Steffen, Martin and Frieda. Steffeu's
Cafe, _:<>i»i Howell, Covington
Schilds, George W. Jr., George's Cafe,
:;:; Easl Fifth Street
Pappas, William and Theinelis, George,
West Pike
Leichman, Stephen and Virginia, Steve's
Cafe, 4102 l >ecoursey
Smiley. Eugene and Dorothy, Club
Madison, 2553 Madison Avenue
Kuhlman, Edward and Grace, 404 Club.
4H4 Pike Street
Westling, William. Heidel's Hall, Twen-
ty-first and Russell
Carter, .lames and Elizabeth, 1232 Club,
1232 Russell
Kloentrup, William. 4308 Decoursey
Hegge, Raymond H.. Ray Hegge's Cafe,
933 Main Street. Covington
Haycock, Mayme, Huesman's Cafe, 3515
Decoursey
Clark. Dorothy, East Side Cafe, 1201
Wheeler
Fessler, Faye O., Fessler's Cafe, 4505
Decoursey
Jobert, Reynold, Park Hills Tavern,
945 Montague. Covington
Kilcher, Michael, Sportman Bar, 1015
Banklick
Morris, Thomas N. and Finn, J. W.,
Pastime Club, 2007 Madison
Vetter, Charles, Sr. and Jr.. and Law-
rence, Vetter's Cafe, 516 Pike Street
Fisk. Luther and Riley, Joseph, Lou
and Joe Cafe, 304 Linden Street
Deters. Ed.. Jr., Farmers Liquor tSore,
39 Pike Street
Schroeder, Edna, Walt's Cafe, 15 West
Sixth Street
Za bring, Joe, 3224 Decoursey
Darpel, John A., Darpel's Restaurant,
Forty-fifth and Huntington
Innings, Ted and Massey, R. and J.,
Ted'S Cafe. 014 Washington
Richardson, William, Jerry's Cafe, 3439
Decoursey
Mardis, Josephine, 701 Main Street
Knights of Columbus Home Associa-
tion, 103L' Madison
Lamb, C. H. and Harold, Lamb's Cafe,
845 Banklick
ABC Chili Parlor, 403 Scott Street
Kersting, Robert, Kersting's Cafe, 525
West Thirteenth Street
Ira Lodge 37, 222 East Bobbins Street
Seligman, William G., Depot Cafe, 143
Pike Street
Treller, Walter, Walt's Cafe, 400 East
Thirteenth Street
Haberbusrh. John, Derby Cafe, 3722
Winston Avenue
Sheehan, Gus, West Covington Cafe,
1120 John Street
American Legion Home, Norman Barnes
Post, 115 East Fourth Street
Kohler, Eleanor Mae, Press Club, 709
Scott Street
Harper, James, 31 East Pike Street
Burns. Sam, Sam Burns Club House,
039 Russell Street
McNeil. Gordon, Shadv Shores, Forty-
seventh and L. & N. R. R.
Faulkenburg, Walter. Fifth & Johnson
Cafe. 501 Johnson Street
Reiser. Earnest C. and Margaret, Rei-
ser's Tavern. 100 Pike Street
Kramer, Clara, Kramer's Cafe, 254
Pike
Rauf. George C, Rauf's Cafe, 424 West
Sixth Street
Flannery, Helen F.. Butche's Cafe,
Fourth and Scott Streets
Betz, Juliet, Betz Cafe, 391 Altamount
Reekers, Harold and Quentin, Reekers
Package Beer, 507 Berry Street
Gelvin, Lorena, Silver Bar Cafe, 508
Sixth Avenue
Faessy. Phyllis, Dayton Pony Station,
034 Fourth Avenue
Guerrea. Frank G., Midge Guerrea
Tavern. 1032 Kenton
Ritter, Al. Al's Cafe, 901 Walnut
Dupont. Theodore A., Starlite Bar, 1310
Third Avenue
Bierman, John, Pennant Cafe, 1129
Fifth Avenue
Million, Robert, Million's Cafe, S04
Sixth Avenue
Kroth. Paul, Mecca Cafe, 528 Sixth
Avenue
Harrison, George, Dayton Boat Club,
98 Berry Avenue
Roberts. Frank, Roberts' Cafe, Seventh
and Berry
Fenker. George, Mike's Cafe, 101 Sixth
Avenue
Beckner. L. S., Kenton Cafe, 1101 Third
Avenue
I Ian ma ii, Charles. Dayton Grille, 616
Sixth Avenue
Christ. .field. Peter, Eagle Chili Parlor,
»;•_' 1 Sixth Avenue
Alerding, Frank ('.. Alerding's Cafe,
1231 Fourth Avenue
Klein. Michael. M. & K. Cafe, Sixth
and Walnut
DBA Silver Bar Cafe, 508 Sixth Ave-
nue
232 ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 8 — Continued
BELLEVUE
Bruns, Frank P., Loyal Cafe, 402 Center
LUDLOW
Williams, Paul, Question Mark Cafe, MacDonald, Ora D. and Harry P., Mac-
sir. Oak Street Donald's Recreation Hall, 237 Elm
Mescall, J., Jim's Place, 4 Highway Katsikas, Gus, Lagoon Inn, 869 West
t'halfant, Mary, 21G West Street Oak
American Legion Post, Edgar B. Ritchie Bodkin, Walter B., Rock Bar Cafe, 308
No. 25, 856 West Elm Street Elm
Allingham, John, Allingham's Cafe, 207 Parsons, Ernest, 201 Elm
Adelia. Dillhunt, C. J., Old Elm Supper Club,
Turner, Flora, Main Cafe, 131 Elm 235 Elm Street
Retschulte, Carl, White Oak Cafe, 740 Burke, Frank and Henry, Burke's Cafe,
West Oak 'J41 Elm
Seta. Carmen, Ludlow Chili Parlor, 306 Bradley, T. J. and C. O., 302 Linden
Khn Chabert, L. E., Chabert's Cafe, 201 Elm
Schulker, Charles, 335 Elm Street
ERLANGER
Holloran, James A., Town House Cafe, Price, Elmer, Retschulte Inn, Dixie
53 Dixie Highway Highway and Hudson Avenue
Anaro, Pasquale, Arcaro's Restaurant, Stephens. Fred, Dixie Club Cafe, 28
110 Dixie Highway Dixie Highway
Korakas, James, Kenton Terrace, 903 Berling, William, and Fried, Leo J.,
Dixie Highway Greyhound Grill, 2500 Dixie Highway
Howell. Earl and Jack, Duke Tavern, Fletcher, Leah M., Cabana, 3126 Dixie
215 Dixie Highway Highway
Nordamn, Edward, Route 4, Anderson Napier, Nick, Bunnie B. Garden, 503
and Scott Roads Dixie Highway
Rainier, Ann, Ann's Place, Route 4 Augur, Frances, Augur's Cafe, Route 4
Balatcher, Gus and Betty, Southern Ginn, Mary, Dixie Dew Hotel and Res-
Grill, 409 Dixie Highway taurant, 233 Dixie Highway
ELSMERE
Nuxoll, Harry Jr., 25 and 42, 535 Dixie Gardner. Thomas E., Tom's Cafe, 133
Highway Garvey Avenue
The Swan, Inc., 815 Dixie Highway Edwards, S. D„ Doc's Place, Dixie High-
Rector, Dallas and Billie, Rector's way and Park Avenue
Manor, 915 Dixie Highway
NEWPORT
James Wallace Costigan, Inc.. Ameri- Derrick, Rose, Blue Grass Diner, 2128
can Legion, 22 East Sixth Street Alexandria Pike
Morris, Robert W. and Nellie, 721 Isa- Wald. Thomas A., Oasis, 2108 Alexan-
bella Street dria Pike
BROMLEY
Herman, Lillian, Lil's Place, 324 Pike Jennings, Dorothy Traylor, Harry Tray-
Street lor's Cafe, 1 Shelby Street
Goderwis, Florence. Engles Cafe, Pike
and Main Streets
SOUTH FORT MITCHELL
SHiicrberg, John J., Saddle Club. 24(i7 Dixie Highway
ORGANIZED CRIME IN INTERSTATE COMMERCE
233
Exhibit No. S — Continued
KENTON COUNTY
Marshall, William Jr., Marshall's Tav-
ern, 1450 Dixie Highway
Sandman, A. J. and Cecilia, New Casino,
Decoursey Pike
Bearden, Mrs. W. L., Bearden's Place,
Route 5, Covington
Kennett, Nannie B., Log Cabin Inn,
Box 260-A, Route 2, Ludlow
Townes, James E., the Farm, Three-L
Highway
Fisher. Edward, Villa Fiesta, Taylor
Mill Pike
Hansel, Mary, Stoneway Tavern, Route
5, Covington
Seitz, Richard H., La Vista Inn, Route
2, Ludlow
Menyes, Marie, Moonlight Tavern, Box
267, Route 4, Erlanger
Menninger, Frank, the Tavern, 1733
Dixie Highway
Foley, M., Shademore Garden, Route 4.
Erlanger
Kohlmeyer, Emme, Resident Tavern,
Lower River Road
Epperson, F. T., Floyd's Seven Oaks
Taylor Mill Pike
Windholtz, Aloysius G., Pleasure Isle.
Madison Pike
Weigands, John S., Sunny Point Inn.,
Route 5, Covington
Reimer, Charles, Kenton Lakes, Kenton
Station
Miller. William and Elizabeth, Betty
and Red's Tavern, Route 2, Ludlow
Gosney, Taylor, Taylor Gosney's Tav-
ern, Route 5, Covington
Woeste, Henry B., Log Cabin, Route 3,
Covington
Miller. Ted, Rio Rita by the Lake, Madi-
son Pike
Lafontaine, Robert, Green Gables Res-
taurant, 2124 Dixie Highway
Kendall, Cleve and Emma, Kendall's
Tavern, Route 2, Ludlow
Leistner, Ottila, Sis's Cafe, Route 5,
Covington
Schilling. John F., Schilling's Cafe, 326
River Road
Noel, Robert, Chez Paree, Madison Tike
at Kyles Lane
Stroer, Mary, Taylor Mill Inn. Taylor
Mill Pike
Holbrook, Roy, Blue Bonnett Tavern,
1032 Banklick Road
Summit Hills Golf Club, County Club,
Dudley Pike
Casullo, Margaret, Nick's Grove, Route
3, Covington
Dugger, Chester K and Young. L. K.,
Hillcrest Tavern, 1750 Dixie Highway
Pope, Grover, Route 1, Covington
Fairview Inn, River Road, Ludlow
Captiola, Dean, Silver Bell Fishington
Lake, Taylor Mill Pike
Nageleisen. Alfred, Latonia Springs
Cafe, Route 1, Covington
Lookout Club, Dixie Highway
Oelsner, Charles, Oelsner's Colonial
Tavern, 1740 Dixie Highway
Castieman, Ben, White Horse Tavern,
1501 Dixie Highway
Mclntyre, Henrietta, Rayett's Bronze
Tavern. 333 River Road
Kautz, Jenny, Jenny and Elmer's Tav-
ern, Route 2, Ludlow
Boylson, R. B., Old Mill, Dixie High-
way and St. James Avenue
Hahn. Johanna, Hahl Hotel, 1424 Dixie
Highway
Thamann. Anthony J., Thamann's Food
Shop, 1802 Dixie Highway
Wooten, Carl and Caldwell, Glenn,
Town and County, 1622 Dixie High-
way
Foltz, Katherine, Foltz Cafe, 1945 Dixie
Highway
Ballinger. Walter and Mary, Walt's
Hitching Post, Madison Pike at Kyles
Lane
Bingham, Otto, Lazy Acres, Dixie High-
way
Han ie, A. D., Harvie's Tavern, Route 1
Belcher, Williard R., Woodland Inn
Kenney, Laurel, Kenney's Tavern,
Route 1
Hempel, John, Maple Tree Tavern,
Route 1
Rankin. Gordon. Loral and Betty, Kane-
brak, 1907 Dixie Highway
Alexander. Russell. Lefty and Nan's
Cafe, 334 Pike Street. Bromley
Price, Herman, Spot Cafe, Route 5,
Covington
Calloway, Clyde. Clyde's Riverview
Tavern, Route 2, Ludlow
Menkhaus, Leonard and Pearl, Route
3, Latonia Lakes
Rennekamp, E. J.. Rennekamp Tavern,
Route ."». ( 'ovington
Mason. John II.. Margie's Place, Madi-
son Pike
Sanzere. Gus and Helen, Sansere's Res-
- i.i lira nt. 1504 Dixie Highway
Jackson, Alex. Jackson's Place, Route
1. Morning Yiew
Downard. Lawrence, Downard Cafe,
Route 5, Visalia
Mikeita. Nelson. Sunnyside Riding Club,
Sleepy Hollow Road. Fort Perry
Harmon. A. J., Blue Rock Gardens. Am-
sterdam and Crescent Springs Road
Frazier, Estill and Ethel. Frazier's
Friendly Tavern, Independence
234
ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 8 — Continued
k en TON county — continued
Ester, Robert and Pearl, Last Chance,
Route 1 . Morning View
Schreck, E. C, Blue Grass Gun Club,
Route 1, Morning View
Hellman, Roxie, Roxie's Supper Club,
Madison Pike
Gerbron, Gladys and Clarence. Crr-
bron's Tavern, Route 1, Morning View
White Villa County Club, Morning View
Origlet, Nicholas and Collett, Ann E.,
Crescent Club, Swan Road, Crescent
Springs
Wilson, Charles W.. Choeky's Cafe,
Main Street, Independence
Brady, Virginia K., The Chicken Roost,
Route 1, independence
Marksberry, Hairy, The Barn, Route
1. Independence
(AMI'IIEI.L COUNTY
Reynolds, W. II., Moreland's Inn, Star
Route, Licking Pike
Scheutz, Bernice B., Scheutz Cafe, Star
Route. Newport
Heringer, Charles j., Wilder's Inn, 58
Licking Tike
Si eii en. Robert, Beacon Inn, Five Mile,
Licking Pike
Burkhardt, Al. L28 Licking Pike
Miller. Edward. Miller's Inn, River
Road, Brent
Meyer. Albert E., ATs Cottage, 2401
Alexandria Tike, Southgate
Fell/. Alberl M.. .lack's Shack, 603 Alex-
andria Pike, Southgate
Derrick, Rose, Bluegrass Diner, 2128
Alexandria Pike
Pelle, Arthur and Rachford, Walter,
Midway Cafe. Melbourne
Cozatcby, Stephen, Four Mile Inn,
Route 1, Melbourne
Braun, Frank, Clermont, Alexandria
Pike. Cold Spring
Kees, Helen DeMoss, Young's Tavern,
Route 2, Cold Spring
Schmitz, Edward T., Bide-a-Wee Inn,
Alexandria Pike, Highland Heights
Haley, K. P... Haley's Place, 21 River
Read, Silver Grove
Wubker, Frank. Plantation Nite Club,
U S 27, Cold Spring
( rubser, Joseph, Route 2, California
Wells, Oscar and Lucille, Wells Tavern,
River Road, Ross-Melbourne
Rebholz, Urban and June, John's Place,
Route 1, Alexandria
Pelle. William. Little Bill's Cafe, Four
Mile River Road, Silver drove
Torline, II. K., Torline's Cafe, Route 1,
Alexandria
Koeninger, Pete, Pete's Place, Mel-
bourne
Wigglesworth, Charles A., Melbourne
Tavern, Melbourne
Grover, Clifford and Jeanette, Renshaw
Road and Alexandria Pike, Cold
Spring
Dutle, Sylvester, Dutle Inn, River Road,
Silver Grove
Stein. Harry W.. Maple Lawn, 1 West
Main Street. Alexandria
Milburn, William W., Twelve Mile Inn,
Route U. Alexandria
Braun, Anthony and Lillian, Braun's
Crossroad Tavern. U S L'T and Lickert
Road, Alexandria
Barnes. Coy and Vera. Riverdale Hotel,
Melbourne
Kuneh, John J., Valley Gern Tavern,
Melbourne
Nagel, Chester. Nagel's Cafe, Route 1,
Alexandria
Stickling. E. W.. Sickling's, 20 River
Road, Silver Grove
Melbourne Country Club. Bregel's Grove,
Melbourne
Morscher, Edward, River Road. Silver
Grove
CRITTENDEN
Tungate, Esther Mae, Mary Lou Tavern, Ryan. Richard and George W., doing
Route 1 business as Shamrock Inn, Route 1,
Kennedy, Joe and Zola, Gay 90's, Route Bracht Station, Crittenden
1, Crittenden
COLD SPRING
Schweitzer, N. A., Sunset Inn, Alexan- Colton, Jack and Bertha, Alexandria
dria Pike Pike, Cold Spring
I \l ,\IOl I II
Moore. Virgelene R., Nite Owl Diner, Fisher. J. A.. Fisher's Tourist Camp,
F s l'T, Falmouth Falmouth
ORGANIZED CRIME IN INTERSTATE COMMERCE 235
CARROLLTON
Heuser, William, Lincoln Road
GHENT
Buren, Nellie Best, Oasis, U S 42
CYNTHIAXA
Moore, Herman, Moore's Service Station, Route 6
Exhibit No. 11
City of Newport, Ky.,
Department of Police,
February 15, 1950.
At 4 p. m. February 14, 1950, I visited Manager Roads' office in company with
Detective Chief Donnelly and Detectives Hawthorne and Fredericks. The pur-
pose of the visit was to ascertain from the city manager what he desired to
do in regard to the Merchants Club, 15 East Fourth Street, city, and the Yorkshire
Club, 518 York Street, city, in regard to gambling, which information I received
from William Hagedorn, Kentucky Post reporter, that the places were in opera- .
tion. Upon receiving this information, I detailed the detectives to make an
investigation of this complaint.
I informed Manager Rhoads that Detective Chief Donnelly and Detective
Hawthorne and Fredericks informed me that at their visit to the herein-men-
tioned clubs, they found the doors leading to the back rooms were locked, and
upon seeking permission to enter the back rooms this was refused, and they
were informed that in order to gain entrance it would be necessary for them
to secure a search warrant.
Manager Rhoads informed me that he was not interested in the Merchants
Club, 15 East Fourth Street, or the Yorkshire, 518 York Street, the only places he
was interested in were those owned and operated by Arthur Dennert, which are
the Flamingo Club, 633 York Street, Glenn Rondezvous, 928 Monmouth Street,
and the Club Alexandria, 2124 Monmouth Street, city, because Dennert was the
only operator who filed suit in the quarterly court concerning his assessments
of personal property. Detective Chief Donnelly asked the manager, "You mean
to tell us you do not want these other places stopped?" and the manager an-
swered, "No." Detective Donnelly asked this question two or three times, and
places outside of the Dennert clubs."
George Gugel, Chief of Police, Newport, Ky.
David Donnelly, Chief Detective.
Ray Hawthorne, Detective.
L. Fredericks, Detective.
236 ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 12
Name and addres
Paid first
install-
ment
Balance
License
No.
$250.00
1465
1468
125. 00
1470
125. 00
1471!
125.00
1474
125.00
1476
5, 393. 60
NC 11
125.00
1482
1491
1495
125. 00
1500
125.00
1502
1506
1508
1510
125.00
125.00
1511
125. 00
1512
125.00
1514
250. 00
152;?
1526
1527
125.00
1536
1, 762. 80
NC17
3,581.36
NC 18
4,912.52
NC21
125.00
1571
125.00
1572
125. 00
1573
125. 00
1574
125. 00
1583
125. 00
1583
125.00
1584
125. 00
1586
125. 00
1587
250. 00
1600
250 00
1601
250.00
1602
250. 00
1603
1191
1229
1233
1245
125. 00
1260
1264
1270
1279
1283
1293
1296
1304
1310
1322
1325
1332
1338
1350
1356
1359
125.00
125.00
1371
1381
1387
1389
1398
1413
NC 22
72.76
1417
1419
125.00
1420
1423
1424
1436
1117
125. 00
125.00
1447
1463
1464
250 00
Occupation
Bilverstein, H., 604 Monmouth
Drainer, I."uis, Northwest 6th and Columbia...
Dlerckes, Hattie, Nerthwesi »t.h and Monmouth
Algie, Irwin, 626 Monmouth
Algie, Irwin, 802 Central...
Klein, Louis, 10 East 6th
Yorkshire Bar, Inc., 518 York St
Fahey, John, Northeast 12th and Brighton
Pompilio, Johanna, 600 Washington
Roy's Cafe, Northeast 1 It h and York
Sadler, K.. Northeast 8th and Saratoga .
Faith, A.. 323 York
Ahlbrand, Clyde, Southwest 3d and Central
Seibert, S., Southwest 6th and Saratoga...
Fogel, K., 21 West 5th.
i i !. R., Southeast James Alley and Mon-
mouth.
Fogel, R., Northwest James Alley and Mon-
mouth.
Creutz, Edward. 1007 Monmouth
Greenberg, David, 131 Last 8th..
Abel, W., 924 Monmouth
Andrews, Frank, 330 Central
Alberts, J., Southwest 10th and York
Glenn Rendezvous, 92S Monmouth
Club Flamingo, 633 York
Merchants— J. Cazzaro, 15 East 4th
Schoept, William. Southeast 10th and Saratoga. .
Harris, Henry, 835 Monmouth..
Harris, Henry, 130 East 9th
Sander, J., Southwest 6th and Monmouth
Hymes, J., 633 York St
Hymes, J., 9 James Alley
Hymes, J., 14 East 10th
Hymes, J., Southwest Elm and Patterson
Hymes, J., 610 York
Ryan, M., 518 York St
Halpin, M., 03.5 York St.
LassofF, B., Finance Bldg..
Lassoff, B., Northeast 11th and Monmouth
Saurbrey, Spencer, Southwest 3 1 and York
Colleta, D., Southwest 6th and Monmouth
Tutt & Martin, Southwest 5th and Washington-
's, William, 725 Monmouth
Garrett, Robert B., Northwest 9th and York
Huck's Cafe, 317 East 8th.
Pope, Rav, 904 York
II. & C. Co., 204 West 11th.
Lackey, Kenneth, 1041 Monmouth
Hieber, John H., Northeast llth and Central
Fenber: & Bertelsman, 341 Fast 10th
Salem, J., 610 Monmouth
Kinsella. John II.. Southeast llth and Brighton.
Kettenacker, Mark, 201 East 3d
, Clarence, Northeast 7th and Robert
Frischok, Farl. 639 York St
Dores, Fred, 746 Central...
Waller, T., 202 Fast 7th
. Thomas, Northeast 7th and Columbia...
Morris, Roberl an I Nellie, 7_>i Isabella
P ! 1 ., ■ ■ ' ' rthwest8tb and Washington
Gn Easl oth
Kentucky State Liquor, Inc., 501 Patterson
Citmn, Oscar, 310 ' Jentral
Kalb, .Mike, 115 Fast Oth
Ranker & Zakem, Northeast 5th and York
Club Alexandria, 'jut Alexandria Pike
10 Monmouth.
Katifl, Henry, Soutbwesl 8th and Washington..
, II. B., Northwesi oth and Monmouth...
, Frank, 91 1
v. i| and, John M 5 [onmouth
:, Carl, Northwest lOthand Monmouth
1 1 ud Saratoga.
Faith, A., North :a.
I t, Ray, Northwest 8th and Columbia
■V Co., 313 York. .
« Paid in full.
250. 00
250. 00
500. 00
250. 00
500. 00
250.00
2, 644. 20
5, 372. 04
7, 368. 78
250. 00
250. 00
250. 00
250.00
250. 00
250. 00
250. 00
250.00
250. 00
500. 00
500. 00
500.00
500. 00
250. 00
250. 00
250. 00
250. 00
250. 00
250. 00
250. 00
500. 00
250. 00
250. 00
250. 00
250. 00
250. 00
250. 00
500. 00
250. 00
250. 00
250 00
250. 00
2.50. 00
250. 00
250. 00
IT 0
250. 00
250. 00
2.50. 00
.572. 70
2.50. 00
250.00
250. 00
250. 00
250. 00
250. 00
250.00
250. 00
250. 00
500.00
$250. 00
(')
125.00
125.00
125.00
125.00
2, 6%. 80
125. 00
(')
0)
125. 00
125. 00
(')
(■)
125.00
125.00
125.00
125. 00
250. 00
(')
0)
125.00
881.40
1,790.68
2, 456. 26
125. 00
125.00
125.00
125. 00
125. 00
125. 00
125.00
125. 00
125. 00
250. 00
250. 00
250 00
250. 00
(0
(')
(')
(')
125. 00
(>)
(»)
(')
(')
(')
(')
(')
0)
to
(')
0)
to
(')
to
125. 00
125. 00
(')
(')
0)
(')
(0
500. 00
(')
125.00
to
0
(0
125. 00
125. 00
(')
250. 00
Brokerage.
Do.
Do.
Do.
Do.
Do.
Employees.
Brokerage.
Do.
Do.
F>o.
Do.
Employees.
Brokerage.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Night club.
Do.
Do.
Brokerage.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do. •
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Nightclub.
Brokerage.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
ORGANIZED CRIME IN INTERSTATE COMMERCE
Exhibit No. 12 — Continued
237
Name and address
Total
amount
Paid first
Install-
ment
Balance
License
No.
Occupation
Spalding, Charles B., 336 West 9th
Blenke, John A., 638 Monmouth
Blenke, John A., 534 Columbia
Ahlbrand, John, Jr., Southwest 7th and Saratoga
Wade, Clarence, Northeast 11th and Saratoga
Spatter, I., Southwest 6th and Monmouth
Fogel, II., Finance Bldg ._
Thomer, John, Northwest 9th and Central
Polinsky, Saul, 20 West 4th
Morgan, L., Southwest 8th and Monmouth
Sharbell, Albert. 627 York
Roll, Wilbeit, Northeast Kim and Patterson
Dogpatch— Mageard, 2d and York
$250. 00
250. 00
250. 00
250. 00
250.00
250.00
500.00
250. 00
500.00
500. 00
250.00
250. 00
2,061.81
$125 00
125.00
125.00
125.00
125.00
125.00
250. 00
125. 00
250.00
(')
125. 00
(')
1,600. 00
$125.00
125.00
125.00
125.00
125.00
125.00
250. 00
125.00
250.00
125.00
"461.81
1605
1645
1646
1656
1664
1666
1670
1672
1687
1688
1729
1746
NC 23
Brokerage.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Night club.
Total 50, 109. 99
i Paid in full.
This is to certify that the above is a true and accurate copy taken from the
records of License Department and represents the status of the named accounts
when this report was compiled.
A. L. Wald,
City Auditor, City of Newport, Ky.
Pertinent Kentucky Statutes Covering Oaths of Office, Duties of Peace
Officers and Gambling Generalities
Section 228: Oath of officers and attorneys
Members of the General Assembly and all officers, before they enter upon the
execution of the duties of their respective offices, and all members of the bar,
before they enter upon the practice of their profession, shall take the following
oath or affirmation: I do solemnly swear (or affirm, as the case may be) that I
will support the Constitution of the United States and the Constitution of this
Commonwealth, and be faithful and true to the Commonwealth of Kentucky so
long as I continue a citizen thereof, and that I will faithfully execute, to the best
of my ability, the office of * * * according to law ; and I do further solemnly
swear (or affirm) that since the adoption of the present Constitution, I, being a
citizen of this State, have not fought a duel with deadly weapons within this
State, nor out of it, nor have I sent or accepted a challenge to fight a duel with
deadly weapons, nor have I acted as second in carrying a challenge, nor aided
or assisted any person thus offending, so help me God.
28.170 (972): Oath of circuit judge
Every regular circuit judge and every special judge, before entering on the
discharge of his duties, shall, in addition to the oath prescribed by the Constitu-
tion, take an oath as follows :
"I, A. B., do solemnly swear (or affinn) that I will administer justice without
respect to persons, and do equal right to the poor and to the rich, and that I will
faithfully and impartially discharge all the duties incumbent upon me as judge,
according to the best of my abilities."
62.010 (8753; 8755) : Oath of office; when to oe taken
(1) No officer shall enter upon the duties of his office until he takes the oath
required of him by law.
(2) Each person elected to an office shall take the oath of office on or before
the day the term of office to which he has been elected begins.
(3) Each person appointed to an office shall take the oath of office within
thirty days after he receives notice of his appointment.
70.010 (J,555): Special oath of sheriff
In addition to the oath prescribed in the Constitution, every sheriff shall take
the following oath in the county court of his county: "I, A. I'... do swear that
I will do right, as well to the poor as to the rich, in all things belonging to my
238 ORGANIZED CRIME IN INTERSTATE COMMERCE
office as sheriff; thai I will do no wrong to any one for any gift, reward or
promise, nor for favor or hatred, and in all tilings I will faithfully and impartially
execute the duties of my office according to the best of my skill and judgment, so
help me God."
lO.O.'tO (Jf55S; Jf561) : Deputy's acts and omissions; liability for
The sheriff shall be liable for the acts or omissions of his deputies. When a
deputy sheriff omits to act or acts in such a way as to render his principal re-
sponsible, and the latter discharges such responsibility, the deputy shall he liable
to the principal for all damages and costs which are caused by the deputy's act
or omission.
10.160 (3186-3): Sheriff to visit and inspect dance halls and roadhouses
The sheriff or his deputies shall at least once each month visit and inspect
each public place in his county where music is furnished or permitted, or where
public dancing is conducted or permitted, and also all camps, restaurants, road-
houses, or any place where intoxicating liquors are sold or furnished or per-
mitted to be sold or furnished to the public, or where men and women are fur-
nished rooms for lodging either in the day or the night. The sheriff shall report
in writing to the county attorney his conclusions, together with the name and
address of any witness who claims knowledge of any violation of law at such
places or of any disturbance occurring at such places. He shall also file with
the circuit court clerk of his county a duplicate of each report, which shall
be delivered to the grand jury next to be convened in the county.
281.180 (1599f-13): Peace officers to visit
The sheriff, deputy sheriff and county patrolmen of each county shall visit
places of entertainment regularly. Upon their observing any violation of this
chapter, by the owner or manager, they shall make arrests without warrants
for violations committed within their presence.
812.010 (1955): Gambling transactions void
Every contract, conveyance, transfer or assurance for the consideration,
in whole or in part, of money, property or other thing won, lost or bet in any
game, sport, pastime or wager, or for the consideration of money, property or
other thing lent or advanced for the purpose of gaming, or lent or advanced at
the time of any betting, gaming, or wagering to a person then actually engaged
in betting, gaining, or wagering, is void.
312.020 (1956) : Recovery of gambling losses from winner or Jiis transferee
If any person loses to another at one time, or within twenty-four hours, five
dollars or more, or anything of that value, and pays, transfers or delivers it,
the loser or any of his creditors may recover it, or its value, from the winner,
or any transferee of the winner, having notice of the consideration, by action
brought within five years after the payment, transfer or delivery. Recovery
may be had against the winner, although the payment, transfer or delivery was
made to the endorsee, assignee or transferee of the winner. If the conveyance
or transfer was of real estate, or the right thereto, in violation of KRS 372.010,
the heirs of the loser may recover it back by action brought within two years
after his death, unless it has passed to a purchaser in good faith for valuable
consideration without notice.
812.030 (1951) : Equitable relief against tvinner; no penalty or forfeiture
Any person entitled to recovery under KRS 372.020 may have discovery and
relief in equity; but when such relief is obtained, the winner shall be dis-
charged from all penalty and forfeiture for having won the money or other
thing which, or the value of which, is so recovered back.
312.0)0 (1958): Suit by third person where loser or creditor docs not sue
If the loser or his creditor does not within six months after its payment or
delivery to the winner, sue for the money or thing lost, and prosecute the suit
to recovery with due diligence, any other person may sue the winner, and recover
treble ttie value of the money or thing lost, if suit is brought within five years
from the delivery or payment.
312.050 (1959): Return of money or property held by stakeholder
The stakeholder of any money or other thing staked on any bet or wager shall,
when notified to do so, return the stake to the person who deposited it. If he
fails to do so, the person aggrieved may recover from him the amount or value
of the stake.
ORGANIZE© CRIME IX INTERSTATE COMMERCE 239
872.060 (209): Ohampertous contracts and conveyances void
Any contract, agreement, or conveyance made in consideration of services to
be rendered in the prosecution or defense, or aiding in the prosecution or defense,
in or out of" court, of any suit, by any person DOt a party on record in the suit,
whereby the thing sued for or in controversy or any part thereof, is to be taken,
paid, or received tor such services or assistance, is void.
436.200 (1977): Gambling in gt neral
Any pel-son who engages in any hazard or game on which money or property
is bet, won. or lost, in any case in which no other penalty is proscribed, shall be
fined not less than twenty dollars nor more than one hundred dollars.
J/86.210 (1971): Common gambler
Any person who is without any lawful occupation, but supports himself for
the most part by gambling, shall be indicted as a common gambler and lined not
less than fifty dollars nor more than two hundred dollars, or imprisoned for not
more than six months, or both. He shall also give surety for his good behavior
in the sum of five hundred dollars for one year, or be imprisoned for not more
than one year or until he gives such surety. If, after giving surety, lie bets any
money or thing of value during the year at any game, he shall be deemed to have
broken his recognizance.
486.220 (1970) : Gambler may be required to give surety for good behavior
Two justices of the peace, a county judge or a police judge may cause any per-
son charged with having no visible estate or lawful occupation but supporting
himself for the most part by gambling, to be brought before them, and if the
charge appears to be well-founded, may require him to give surety for his good
behavior in the sum of one hundred dollars for one year or commit him to prison
until he gives it. If, after the person gives the surety, he plays for or bets any
money or thing of value during the year at any game, he shall be deemed to have
broken his recognizance.
486.230 (1960; 1961): Oik rating gambling machine, game or contrivance; pools
at race tracks exempted
(1) Any person who, with or without compensation, sets up, keeps, manages,
operates, or conducts or assists in setting up, keeping, managing, operating, or
conducting a keno bank, faro bank or other machine or contrivance used in
betting whereby money or anything of value may be won or lost, or any person
who, for compensation, percentage or commission, sets up, keeps, manages,
operates, or conducts a game of cards, oontz, or craps, whereby money or any-
thing of value may be won or lost, or with or without compensation, percentage
or commission, assists in setting up, carrying on, managing, operating, or con-
ducting any game so set up, carried on, managed, operated, or conducted for
compensation, percentage, or commission, shall be fined five hundred dollars,
and confined in the penitentiary for not less than one nor more than three
years. In addition, he shall be deemed infamous after conviction, and be for-
ever disqualified from exercising the right of suffrage and from holding any
state, county, or city office of honor, trust or profit. The judgment of con-
viction shall recite such infamy and disqualification, and shall not be valid
without the recital.
(2) Subsection (1) of this section shall not apply to persons who play at
such games, machines, or contrivances, unless they aid or take other part in
setting up, conducting, keeping, managing, or operating them.
(3) The change of the name of any of the games, banks, tables, machines, or
contrivances prohibited by subsection (1) of this section shall not prevent the
conviction of any person violating the provisions of that subsection.
(4) Subsection (1) of this section shall not apply to persons who sell com-
bination or French pools on any regular race track during the races on that
track. An indictment for a violation of the provisions of subsection (1) of
this section may charge the accused in one count with any or all of the offenses
mentioned or included in that subsection.
/■>'<;. 240 (1967): Permitting operation 0/ gambling device on premises
(1) Any person who permits any game, table, hank-, machine, or contrivance
prohibited by KRS 480.820. to he set up, conducted, kept, or exhibited in any
house, boat, or float, or on any premises in his occupation or under his control,
or leases such a place or any part of it for that purpose, shall be fined not Less
than two hundred and fifty dollars nor more than five hundred dollars.
240 ORGANIZED CRIME IN INTERSTATE COMMERCE
(2) After proof of the getting up, conducting, keeping, or exhibiting of such
game, machine, or contrivance in such a house, boat, float, or place, it shall be
presumed to have been with the permission of the person occupying or con-
trolling the place, unless the contrary is clearly proved.
486 3150 i t978) : Permitting gambling on premises
Any person who permits any game at which money or anything of value is
won or lost to lie played in a house, boat, or float or on premises in his occupa-
tion or under his control, under circumstances not constituting a violation of
the provisions of KRS 436:230, 136.240, or 430.310, shall be fined not less than
two hundred dollars nor more than five hundred dollars.
486.260 (1969): Persuading (mother to visit gambling place; liability to him
and his creditors
Any person who invites, persuades or otherwise induces another to visit
any place where any gambling prohibited by KRS 436.230 is carried on shall
be lined not less than fifty dollars nor more than five hundred dollars, and shall
he responsible to the other and his creditors for whatever he may lose in gambling
at that place.
436.280 (1968) : Playing at gambling device
Any person who engages in or plays at any game, table, bank, machine or con-
trivance ser up. managed, operated, kept or conducted in violation of any of the
provisions of KRS 130.230 shall be lined not less than fifty dollars nor more than
one hundred dollars.
'fS6.280 (1962) .-Gambling implements to be seized and destroyed
Any bank, table, contrivance, machine or article used for carrying on a game
prohibited by KRS 436.230, together with all money or other things staked or
exhibited to allure persons to wager, may be seized by any justice of the peace,
sheriff, constable or police officer of a city, with or without a warrant, and upon
conviction of the person setting up or keeping the machine or contrivance, the
money or other articles shall be forfeited for the use of the state, and the machine
or contrivance and other articles shall be burned or destroyed. Though no
person is convicted as the s'etterup or keeper of the machine or contrivance, yet,
if a jury, in summary proceedings, find that the money, machine or contrivance
or other articles were used or intended to be used for the purpose of gambling,
they shall be condemned and forfeited.
£36.290 (V.n>,): Search p»- gambling tables
A judge or justice of the peace may, by warrant, cause any building to be
searched, by night or by day. for the detection of gambling tables. If admission
to the building is nol given on demand, the person in charge of the warrant shall
force an entrance ami seize the table, all implements used with the table, and all
money and other things staked or exhibited on the table, and arrest the keeper
of the table.
',36.840 (1980): Limitation of actions under KRS 436.200 to ',16.330
Any prosecution or other action arising under KRS 436.200 to 436.330 shall be
commenced within live years after the commission of the offense or the cause of
acl ion arose.
$6,850 I 1968, 1964): Peace officer to arrest person operating gambling machine,
game or contrivances
Any peace officer, having knowledge or information of the commission of the
Offense of settinu' up or carrying on a keno bank, faro bank, game of cards or
other gambling machine or cunt rivance whereby money or anything of value may
he won "i- i,,st as prohibited by KRS 136.230, or who has knowledge of any person
aiding or abetting in the offense, who fails to arrest or cause to be arrested
immediately the person offending, ami take him before the proper court, shall be
tined nol less than one thousand dollars and imprisoned for not less than six nor
more than twelve months, and shall forfeit his office.
\86440 i 8914b 8): Keeping or leasing premises where bets an placed on races
or oth( r contests
1 1 i Any person who pro1* ides, manages, maintains or keeps any room, building,
float, vessel or premises, or aids and abets others in so doing, iii which persons
emble to wager money or anything of value on the result of any horse race or
other contesl of man or beast to be decided in or out of the state or advertised
ORGANIZED CRIME IN INTERSTATE COMMERCE 241
or reported as having been or to be run, or in which any money is wagered or
received and deposited to be transmitted elsewhere to another to wager, or in
which any money or other thing of value is received or paid for any ticket, lot,
pool or chance on the result of such a race or contest held or to be held in or
out of the state, or advertised or reported as having been held or to be held
shall be fined not less than one thousand dollars dot more than five thousand
dollars, and imprisoned for not less than six nor more than twelve months.
(2) Any person who, either as owner or agent, leases or rents to any other
person, any room, building, float, vessel or premises, to be used for any of the
purposes described in subsection (1) of this section, or permits it to be used for
such purposes, shall be fined not less than one thousand dollars nor more than
live thousand dollars.
(3) Each day that the room, building, float, vessel or premises is provided,
managed, maintained, kept or used shall constitute a separate offense.
436.450 (3941b-2) •' Acting as agent or employee of another in keeping premises
tch ere bets are placed on races or other contests
Any person who acts as the agent or employe of any other person in establish-
ing, setting up, maintaining, keeping, operating or conducting any room, build-
ing, float, vessel or premises of the kind referred to in KRS 430.440 shall be
confined in the county jail for not less than six months nor more than one year.
Each day any person assists in maintaining, keeping, operating or conducting
such a room, building, float, vessel or premises or acts as agent or employe of
any other person in maintaining, keeping, operating or conducting it, shall con-
stitute a separate offense.
436.460 (3941b-4) : Assembling on premises where bets are placed on races or
other contests -
Any person who assemble for any purpose referred to in KRS 430.440 in any
room, building, float, vessel or premises shall be imprisoned for not less than ten
nor more than thirty days.
436.470 (3914b^5) : Peace officer to suppress places where bets are placed on
races or other contests
Any peace officer who willfully fails to suppress any room, building, float,
vessel or premises in which the provisions of KRS 430.440 are being violated or
to arrest violators of the provisions of KRS 430.440 shall be imprisoned for not
less than six nor more than twelve months. In addition, a peace officer convicted
under this section shall forfeit his office and shall be ineligible to hold any other
office in the gift of this state.
436.490 (1328a) : Betting on or transmitting bets on horse races other than
authorized Kentucky races
(1) Any person who, either for himself or as agent or employe of another,
wagers money or anything of value on a horse race run or about to be run or
advertised, posted or reported as being run at any race track in or out of this
state, or who engages in the occupation of receiving, making, transmitting or
negotiating, either in person or by messenger, telephone or telegraph, wagers on
horse races run or about to be run or advertised, posted or reported as being run
or about to be run at any race track in or out of the state, shall, except in the
case of wagers made wdthin the enclosure of a race track licensed by the State
Racing Commission during an authorized race meeting at that track, or an
enclosure during regular meetings in which running, trotting or pacing races are
being conducted by associations regularly organized for that purpose, be im-
prisoned for not less than one nor more than twelve months.
(2) In any prosecution under subsection (1) of this section, the State need not
prove that the horse race upon which the wager was placed was actually run.
Proof that the wager was made upon wdiat purported to he or what was ad-
vertised, reported, or understood to be a horse race shall be sufficient to estab-
lish a prima facie case for the State.
436.510 {1328a; 1973; 2579) : Protection of icitnesses in investigation or pros, ca-
tion for gambling
(1) In any prosecution or any investigation by an examining court or grand
jury under KRS 436.490, or any prosecution for gambling, it shall he no exemption
for a witness that his testimony may incriminate himself.
(2) It shall be no exemption for the buyer of a lottery ticket, in any prosecu-
tion against the seller of a lottery ticket, that his testimony may incriminate
himself.
242 ORGANIZED CRIME IN INTERSTATE COMMERCE
(3) No testimony given in the proceedings stated in subsections (1) and (2) of
this si ction shall be used against the testifying witness in any prosecution except
for false swearing.
(4) Except as provided in subsection (3) of this section, a witness testifying
in any prosecution or any investigation by an examining court or grand jury
under KRS 436.490, or any prosecution againsl the seller of a lottery ticket,
shall be discharged from all liability for any offense necessarily disclosed in his
testimony.
(5) A witness testifying in any prosecution for gambling shall be discharged
from all liability for gambling disclosed in his testimony.
(G) No person against whom a witness testifies in any prosecution or any
investigation by an examining court or grand jury under KRS 436.490 shall
testify as to similar violations on the part of the witness.
(Ti* No person against whom a witness testilies in any prosecution for gam
bling shall testify as to any gambling by the witness.
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