August 15, 2006

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Modern History:

 

[From "Organized Crime: 25 Years After Valachi," Hearings Before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, 100th Congress, Second Session, US Government Printing Office, Washington: 1988, pp. 592-598]

592

U.S. Department of Justice

Federal Bureau of Investigation

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Statement of

Robert B. Davenport.

-SAC Kansas City Division

Federal Bureau of Investigation

Before the

Committee on Governmental Affairs Permanent Subcommittee on Investigations United States Senate

April 15, 1988

 

 

Re: Organized Crime - 25 Years

After Valachi

593

Mr. Chairman and members of the Committee:

            It is a privilege to appear before you today representing the Kansas City Office of the Federal Bureau of Investigation.

            Kansas City has been plagued by organized crime since the 1930s, and this activity continues today despite the successful prosecution of Kansas City mob figures in recent years.

            The purpose of my presentation is to relate our efforts in the never-ending battle against organized crime and to explain what we are striving to accomplish in the future.

            The Kansas City organized crime family, commonly called the "Outfit," has traditionally been involved in a multitude of criminal activities -- bootlegging, gambling, prostitution, loansharking, labor racketeering and murder. More than 50 murders, or attempted murders, were attributed to the Kansas City mob between 1940 and 1978. Only one of those murders was solved and no member of the Outfit was ever charged with a gangland slaying. Witnesses and informants were too intimidated to cooperate with law enforcement.

            A series of bombings and murders in the 1970's caused law enforcement to step up our efforts to attack the pervasive organized crime threat to society.

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            In April, 1978, an investigation was launched by the FBI in cooperation with the Kansas City Police Department, the Internal Revenue Service and Department of Justice Strike Force attorneys, focusing on unsolved murders and contract killers.

            Federal court-authorized electronic surveillance provided-virtual daily coverage of the Kansas City Outfit from May, 1978, through February, 1979. This case, designated the "Strawman" investigation, resulted in one of the most successful and far-reaching organized crime investigations in FBI history. After years of frustration by law enforcement, top leaders of the Kansas City La Cosa Nostra (LCN) family, brothers Nick and Carl Civella, were convicted and sentenced to lengthy prison terms. In addition, organized crime leaders and their henchmen in Chicago, Cleveland, Milwaukee, and Las Vegas -- a total of 19 LCN members and associates in all -- were convicted in three lengthy federal court trials in Kansas City between 1980 and 1986.

            The Strawman investigation laid bare the structure of organized crime and the mob's corrupt influence on Las Vegas and the Teamsters Union.

            Intercepted conversations of mob figures provided concrete evidence of the LCN's hidden ownership in the Tropicana Hotel in Las Vegas and the skimming or concealing of gambling proceeds averaging $150,000 per month from the casino. This case was aptly code named "Strawman" because of the mob's concealed

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ownership of Las Vegas casinos by Kansas City, Chicago, and Cleveland LCN families. The investigation also revealed LCN efforts to expand their interests in the Argent Corporation, owner of several Las Vegas hotels and casinos.

            In February, 1979, search warrants served in Kansas City resulted in the seizure of an $80,000 skim package being delivered to Kansas City from Las Vegas by an LCN courier. Seized records documented meetings between Kansas City LCN members and LCN members in other cities; detailed how the skim money from Las Vegas was distributed between Kansas City, Chicago, and Cleveland LCN families; and also showed that additional skim money was given to Teamsters official Roy Lee Williams of Kansas City, who was later elected president of the International Brotherhood of Teamsters.

            Eight convictions resulted from the lengthy "Strawman" trial in 1983, including the top Kansas City LCN leaders, their Las Vegas representatives and skim couriers. All received lengthy prison terms.

            The second phase of the "Strawman" case, the Argent Corporation investigation, resulted in the convictions in January, 1986, of Chicago LCN boss Joseph Aiuppa; Milwaukee boss Frank Balistrieri; Cleveland LCN representative Milton Rockman; and the entire Kansas City leadership and their Las Vegas representatives.

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            The Kansas City LCN's influence has been prevalent nationally, as well as in Kansas City, in financial affairs of the Teamsters Union. Through murder, fear, and intimidation over several decades, the Kansas City LCN gained control of various Teamsters officials in Kansas City, most notably Roy Lee Williams. Williams was told to run for president of the Teamsters in 1981 by Kansas City LCN boss Nick Civella. His selection was the result of a compromise involving Chicago LCN bosses Jackie Cerone and Joey Aiuppa; Angelo Lonardo and other high-ranking Cleveland LCN members; and ultimately, the boss of New York's Genovese family. Once Williams was in office, friends and relatives of Kansas City LCN members were placed in key Teamsters positions, and Teamsters members were required to pay extra dues for health and welfare benefits as kickbacks to the LCN.

            Most important, the multi-billion dollar Teamsters pension fund, the largest pension fund in the country, was controlled by Williams and other trustees under the domination of the LCN. As a consequence, Teamsters pension fund loan applicants, with LCN ties, received preferential treatment in return for substantial kickbacks from the loan proceeds to the LCN and the pension fund trustees.

            All of these manipulations caused the cost of Teamsters services in hauling goods across the country to escalate, thus

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increasing the cost paid by the public for goods and services. Not only were citizens unaware that they were being victimized, but law enforcement was generally not aware of the scope of the criminal activity taking place and its harm to the public.

            There is no doubt that the "Strawman" case struck a major blow against organized crime, destroying the rank and file of the Kansas City, Chicago, Milwaukee and Cleveland LCN families. Most of those convicted in the "Strawman" case are still in prison.

            An interesting note is the fact that this Committee's use of "Strawman" evidence led to the first criminal contempt of Congress prosecution when Kansas City LCN member, William Cammisano, after being granted immunity, steadfastly refused to answer questions posed by this Committee in 1980.

            In Kansas City, a temporary vacuum was created by the loss of LCN leadership. But the war against organized crime goes on. Traditional LCN activities continue in Kansas City under new leadership. Last September, Sal Manzo, an LCN associate, disappeared and is believed to have been murdered by the mob. Within the past year there was an attempted bombing of a union official's car as the mob is again trying to gain a stronghold in the Teamsters local. Mob-controlled gambling is pervasive. And there is evidence the LCN is moving into the construction industry and highly profitable drug trafficking.

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            In spite of our successes we cannot let up the pressure. We will continue to use the tools and techniques that have proven to be effective -- electronic surveillance, the RICO statute, high level informants and continued cooperation between federal and local authorities. We cannot afford to become complacent in our victories.

            Mr. Chairman, this concludes my prepared remarks. I will be happy to answer the subcommittee's questions.