The History of the Mafia’s Hand in Drugs & Crime in Atlantic City

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Article Overview:

The true story of how the Prohibition era made Atlantic City, New Jersey, the birthplace of the organized crime syndicates that would rise to power in the mid-20th century. The history of the Mafia’s hand in drugs and crime in Atlantic City explains how a cabal of greedy, violent men cornered the market on vice in the United States.

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America’s nostalgic love affair with crime stories often blurs the lines between life and art. Such is the case with HBO’s critically acclaimed series Boardwalk Empire, which tells the true (if dramatized) story of how the Prohibition era made Atlantic City, New Jersey, the birthplace of the organized crime syndicates that would rise to power in the mid-20th century. The history of the Mafia’s hand in drugs and crime in Atlantic City explains how a cabal of greedy, violent men cornered the market on vice in the United States.

The Birth of an Empire

In the mid-1800s, developers saw the sun-kissed beaches and strategic location of what would become Atlantic City and knew they had a goldmine on their hands. Their goal was to make the area into a resort city, using tourism and vacationing as primary sources of funding. The construction of regional railroad infrastructure between 1854, when the city was incorporated, and 1874, when almost 500,000 visitors a year came to enjoy the hotels (including what was, at the time, the largest hotel in the country) and the famous Atlantic City boardwalk, connected major population centers like Philadelphia to the hitherto remote Absecon Island, on which Atlantic City was developed.[1]

After a boom period in the early 20th century, Atlantic City was set to make the most of Prohibition. While the rest of America groaned and broke the law in secret, Atlantic City made it quite clear that it was open for business of any kind. That was all due to Enoch “Nucky” Johnson, the man who made Atlantic City his personal empire, and the breeding ground of the organized crime movement that would spread out into the country’s biggest cities.

While the rest of America groaned and broke the law in secret, Atlantic City made it quite clear that it was open for business of any kind.

Nucky Johnson and Atlantic City

According to Foreign Affairs magazine, Johnson was a “monumentally corrupt” local politician, who made Atlantic City into a haven of illegal alcohol sales, gambling, and prostitution.[2] His power came from his position as the boss of the Atlantic County Republican Executive committee, which gave him control of the governments of both Atlantic City and Atlantic County. His annual salary from the job was $6,000, but his connections with bootleggers, casinos, and brothels saw him pocket an estimated $500,000 a year (approximately $10 million in today’s money).

Daily Mail explains how even though Atlantic City was understood to be a paradise of vice and pleasure, Nucky kept the entire operation under his thumb. Gangs in other cities made headlines by waging open warfare against each other, but Johnson had a strict no-violence policy. No one stepped on each other’s toes, giving the police no reason to interfere with the business. When arrests were made, they were carried out with Nucky’s approval, such was the level of power and influence he wielded. Not only did he have the final say over law enforcement’s actions, he oversaw the appointment of every cop the city hired, ensuring that whoever donned a badge would turn a blind eye to the industries that made Atlantic City the hotspot of the Roaring Twenties. When Congress passed the Eighteenth Amendment, outlawing the sale and distribution of alcohol, Nucky Johnson had such sway in Atlantic City that he simply decided Prohibition would not be enforced in his town – no smuggling, no speakeasies.[3]

Indeed, the series premiere of the HBO series Boardwalk Empire shows Johnson (renamed “Nucky Thompson” and played by Steve Buscemi) raucously celebrating the dawn of Prohibition (with the mayor of Atlantic City in tow), knowing that the ushering in of the “noble experiment” would create a fortune for men like him.

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His annual salary from the job was $6,000, but his connections with bootleggers, casinos, and brothels saw him pocket an estimated $500,000 a year

Whiskey, Wine, and Women

Even before the passage of the Eighteenth Amendment, Johnson was already raking in the public goodwill for his decision to let Atlantic City establishments serve alcohol on Sundays, which was outlawed in most American states – including Johnson’s own New Jersey. The move caused an instant boost in tourism.

In writing of the development and production of Boardwalk Empire, The New York Times quotes the real Nucky Johnson as refusing to deny or apologize for the “whiskey, wine, women, song and slot machines” he provided, reasoning that the only reason he was so profitable is because there was such a wave of demand for what he was selling.[4]
Johnson wasn’t exaggerating. Between 1926 and 1933 (the year Prohibition came to an end), around 40 percent of all the illegal alcohol brought into the United States came ashore in, or near, Atlantic City.[5] Criminal elements were over the moon, but even legitimate businesses enjoyed themselves. Atlantic City’s hotel industry threw its support behind Johnson’s reinvention of what had once been a family-oriented summer beach town, making the most of the tourists, big spenders, conventions, and parties that would eschew other New Jersey resorts and instead come to the boardwalk.

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Between 1926 and 1933, around 40% of all the illegal alcohol brought into the United States came ashore in, or near, Atlantic City.

The city was a popular destination for holidaymakers from Philadelphia, walking down the four-mile wooden boardwalk to take in the ocean air, the sunsets, and the neon lights that advertised hotels that looked like palaces. In 1921, “Atlantic City’s Inter-City Beauty Contest” was held to entice tourists to stay for the Labor Day holiday weekend and enjoy other activities in the area. Today, the event is known as the Miss America pageant, making Atlantic City the birthplace – and current headquarters – of the $50,000 scholarship.[6]

Nucky Johnson’s power stretched far beyond his boardwalk empire. While he was the go-to man for local vice and political machinations, even President Warren Harding owed Johnson a favor for the way Johnson had arranged for New Jersey Republicans to back Harding’s presidential bid.

Al Capone and the Saint Valentine’s Day Massacre

Johnson’s skill as a diplomat and negotiator was the catalyst for Atlantic City becoming more than just an adult playground. In February 1929, seven soldiers in Chicago’s North Side Mob were killed on the orders of Al Capone, who was intent on controlling the organized crime scene in Chicago. The event became known as the Saint Valentine’s Day Massacre and drew widespread attention to the workings of the underworld. While most mob bosses were content to minimize violence and do their business in the shadows, Capone – referred to by The New York Times as “violent, intimidating and unpredictable” – had no problem with settling matters in his own way.[7], [8] Today, Capone is remembered as one of the most notorious gangsters in American history.[9]

In February 1929, seven soldiers in Chicago’s North Side Mob were killed on the orders of Al Capone, who was intent on controlling the organized crime scene in Chicago. The event became known as the Saint Valentine’s Day Massacre and drew widespread attention to the workings of the underworld.

The Saint Valentine’s Day Massacre represents the culmination of the ugly side of the Prohibition era. It signaled not only the intention of some mob bosses who were willing to go all the way in their drive for power and greed (the so-called “Beer Wars”), but that the Eighteenth Amendment had created such an opportunity for them to do so. Local law enforcement were either in the pockets of gangs, unwilling to enforce Prohibition rules, or both. Overlooking the occasional murder or disappearance was easily done; seven men gunned down, their bodies left for the newspapers to photograph with sensational descriptions, were harder to ignore. “The roar of the shotguns mingled with the rat-a-tat of the machine gun,” wrote The New York Times of the slaughter. The Chicago Daily News was much less poetic: “Killing scene too gruesome for onlookers.”[10]

Such vulgar displays of power were not conducive to the interests of the criminal underworld, who were more interested in reaping the profits from bootlegging, gambling, and prostitution than they were in going to war with each other. Atlantic City had a big role to play in aligning the numerous (and disparate) gangs in the northeast.

The Atlantic City Conference

Regional bosses decided to get together to hammer out the details of the brave new world they envisioned, the first time that such a meeting had been conceived. One of the architects of the conference was Salvatore “Lucky” Luciano of New York, who went from being a simple enforcer to a criminal mastermind, thanks to the plethora of opportunities provided by Prohibition. Another was Meyer Lansky, a Jewish-American mob financier who would become the most financially successful organized crime member in history and is remembered as one of the most significant gangsters of the 20th century. It was Lansky who chose Atlantic City as the best location to talk business and pleasure. They did so – Capone included – in May 1929, three months after the Saint Valentine’s Day Massacre, during Lansky’s honeymoon.[11], [12]

What became known as the Atlantic City Conference was also the height of Nucky Johnson’s power. Johnson was not a mob boss and had no crew or gang of his own; but as he wielded unparalleled political power, and the conference was taking place on his turf, he became a central figure in the development of a national organization of crime.

Under his auspices, representatives of criminal establishments from New York, New Jersey, Chicago, Philadelphia, Cleveland, Detroit, Kansas City, Florida, Massachusetts, and Louisiana pledged not to get involved in the business of other territories, with a special focus on eschewing more gangland warfare. There were agreements to cooperate on the fixing of alcohol prices and discussions on other venues of enterprise in the event that Prohibition was repealed.

The Rise of La Cosa Nostra

According to The Press of Atlantic City, the aftermath of the Atlantic City Conference was not only the first organized crime summit in the United States, but also the most important one, as the gathering was directly responsible for what the media would come to call the “National Crime Syndicate,” a network of criminal organizations that spread its tentacles across the country and took decades to bring down.[13] TIME magazine observes that following the conference, Lucky Luciano (who was ambitious but a “minor hoodlum,” in the words of Foreign Affairs) reinvented the Mafia, moving away from the Sicilian traditions of honor and family into a decidedly more American-style operation of corporate structure, replete with a board of directors (known as the “Commission”) and “systematic infiltration of legitimate enterprises” that would project the mob to unparalleled heights of power in the mid-20th century.[14]

So influential was the conference in shaping the underworld vision for America that Luciano’s use of the Italian phrase (la) Cosa Nostra, meaning “this thing of ours,” or “our thing,” to distinguish the American Mafia from its Italian and Sicilian ancestors, has become the de facto term for Italian-American organized crime in the United States.

Despite the Atlantic City Conference ostensibly being convened because of Capone’s involvement in the Saint Valentine’s Day Massacre, it was Capone himself who stressed the need to think of the bootlegging empire as a business, one that would have to be conducted peacefully if profits were to be maximized. “We finally decided to forget the past and begin all over again,” Capone told a historian about the Atlantic City Conference.

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The Fall of the Empire

The future looked brighter than the lights of Atlantic City, but things were about to change. In 1933, four years after the conference, President Franklin D. Roosevelt repealed Prohibition, helping himself to a drink as he did so.[15] With that, Atlantic City lost its unique allure. Now, alcohol was freely available in any city in America that chose to serve it. Not only did the passage of the Twenty-First Amendment put a temporary dent in the machinations of organized crime, it put a permanent dent in Nucky Johnson’s boardwalk empire.

Another setback came with the Great Depression. Faced with personal income, prices, and profits plunging, and unemployment soaring as high as 25 percent in America, people had more important things to worry about than going to Atlantic City to scratch their vice itch.[16] With the city losing its sheen, Nucky Johnson could no longer count on his untouchability, to the point where the federal government felt free to conduct its own operations in the area. In 1935, FBI agents tracked down one of its four “Public Enemy Number One” targets, Alvin Karpis, to a hotel in Atlantic City. Karpis escaped the confrontation (however, he was personally arrested by J. Edgar Hoover in New Orleans the following year), but the shootout was indicative of the degree to which Nucky Johnson had lost Atlantic City.

Even as the New Deal moved the country out of the shadow of the Great Depression, Atlantic City was left behind. Las Vegas became the new home for gambling, prostitution, and 24/7 liquor service – all bankrolled by the mob.

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Faced with personal income, prices, and profits plunging, and unemployment soaring as high as 25% in America, people had more important things to worry about than going to Atlantic City to scratch their vice itch.

Decay and Death in Atlantic City

As Atlantic City’s fortunes fell, so did those of Nucky Johnson. He became embroiled in a feud with the newspaper magnate William Randolph Hearst, who allegedly encouraged officials of the Roosevelt administration to investigate Johnson’s activities.

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Johnson was sentenced to 10 years in federal prison and served four. He died in an Atlantic County n

In 1939, Johnson was indicted for evading taxes and put on trial in 1941. He was sentenced to 10 years in federal prison and served four. He died in an Atlantic County nursing home in 1968.[17] By that time, Atlantic City was in decay, better known for its crime, poverty, and corruption than the glitz and glamor that made it the go-to destination for holidaymakers and pleasure-seekers. Even the iniquitousness of the automobile conspired to bury Atlantic City; visitors were no longer bound by train schedules to spend a week on the boardwalk. They could come and go as they pleased, spending only a fraction of the money than they would have been tempted to spend in the days when the railroad was the only way in and out of the city.

Atlantic City Hosts the Democratic National Convention

Four years before Johnson died, Atlantic City hosted the 1964 Democratic National Convention. NJ.com writes that the city was “consumed by blight” when the political and national media came to town. Despite President Lyndon B. Johnson being nominated for a full term in office, and Robert Kennedy passionately paying tribute to his slain elder brother, the media focus was on how far Atlantic City had declined since its days as the thorn in the side of Prohibition. Hotels, where once Nucky Johnson and his Mafia connections decided on how to partition the country among themselves, were now decrepit and dirty, with poor plumbing and worse room service. The press described Atlantic City as “rundown” and “shoddy,” gleefully writing of the aura of failure that lingered over the boardwalk.

A City on Life Support

Harry Hurley, the host of an Atlantic City morning talk radio show told NJ.com that the city was “already on life support” well before the Democratic National Convention took place. However, local and state government, and civic and business leaders, enthusiastically (and perhaps a bit desperately) lobbied for Atlantic City to win the bid to host the convention, hoping that the spark would jumpstart the regional economy. When the Democratic National Committee chose Atlantic City, then-Governor Richard J. Hughes touted the move as “a stroke of good fortune for New Jersey as a tourist mecca.”

But according to the Atlantic County Executive, the Democratic National Committee was unaware that they selected a city where “hotels were falling apart.”

After Las Vegas became the place to be, the middle and upper classes had no reason to come to Atlantic City. When they left, the poor – mostly black, mostly poor, mostly elderly, and usually a combination of all three – took their place, writes author Nelson Johnson (and from whose book Boardwalk Empire: Birth, High Times, and Corruption of Atlantic City was the HBO show based). America in 1964 was still not a very kind place to ethnic minorities and the disenfranchised. When the national media saw what had happened to Atlantic City, and who now populated the city, they savaged the city’s reputation in their coverage of the Democratic National Convention, putting the city in a “death spiral toward ruination,” according to Hurley, the talk radio show host.[18]

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After the convention, the famed hotels of the Atlantic City boardwalk were either converted into low-income apartments or nursing homes, or simply demolished. Atlantic City, once the neon light in the bootlegging crown and the starting point of the Mafia’s control of America, looked dead and buried.

A New City and Old Problems

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In 1974, voters defeated a statewide gambling referendum but approved one for Atlantic City only in 1976.

But New Jersey wasn’t prepared to give up on the city and once again looked to vice as a way to revitalize local fortunes. In 1974, voters defeated a statewide gambling referendum but approved one for Atlantic City only in 1976.

The first casino opened in 1978. The Press of Atlantic City writes that when Governor Brendan Byrne stood on the Boardwalk and warned organized crime bosses to “keep [their] filthy hands out of Atlantic City,” two men – Nicodemo “Little Nicky” Scarfo, the now-former boss of the Philadelphia crime family, and his nephew and second-in-command Philip “Crazy Phil” Leonetti – were watching the speech live from just a few blocks away. “Doesn’t he know we’re already here?” Scarfo asked his nephew.[19]

Scarfo’s observation hints at an uncomfortable truth that Atlantic City will never be able to get away from, no matter how many times it reinvents itself: Its historical and contemporary allure of pleasure, indulgence, and vice (whether by way of alcohol, drugs, gambling, or prostitution) will always give it an underworld taint.

Disorganized Crime

But Scarfo’s ultimate fate – sentenced to life in prison in 1987, partly on the testimony of his nephew – also hints at an uncomfortable truth for the Mafia: things have changed. In writing about the state of “disorganized crime in Atlantic City,” NJ.com quotes George Anastasia, who covered organized crime in Philadelphia and New Jersey for 35 years for the Philadelphia Inquirer as saying that, unlike the days of Nucky Johnson, and even “Little Nicky” Scarfo, there is no single player in Atlantic City today. Instead, the Mafia operates in the form of different families who continue to be on the fringe but will never be able to move into a central position of power.[20]

One reason is because of the decline of Cosa Nostra in general. The rise of gangs from Russia and South America have chipped away at the pieces of the pie that the Mafia once considered their own, and the love affair between organized crime and the federal government has long since grown cold. In 2009, a report by the Philadelphia Police Department presented to the New Jersey Casino Control Commission showed that the local branch of the Mafia had only 20 members, down from about a strength of 80 in the 1980s. Of those 20 members, nine were serving prison sentences, thanks to the development of harsh new laws (especially the Racketeer Influenced and Corrupt Organizations Act), and scores of Mafia soldiers and leadership turning state’s evidence in the hope of securing lighter punishments.

The New Jersey Casino Control Commission itself, which regulates casinos in Atlantic City and the legitimacy of their business, has also been vigilant in ensuring that people with connections to the mob are kept far away from the administration and management of businesses in Atlantic City.

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Atlantic City’s Second Fall

Unfortunately for New Jersey, the victory may be a hollow one. Atlantic City’s eight remaining casinos took in $2.56 billion in 2015, but that figure represents a 6.5 percent drop from 2014, after some establishments closed their doors (due in part to out-of-state competition).[21] The year 2013 marked the eighth consecutive year of decreasing tourist numbers, leading a local news outlet to refer to Atlantic City as a “struggling resort town” as recently as March 2016.[22], [23], [24]

In Boardwalk Empire: The Birth, High Times and Corruption of Atlantic City, Nelson Johnson writes that Prohibition created Atlantic City, where some of the most ruthless and iconic gangsters in American history saw the American Dream in the neon lights and dollar signs of the boardwalk.[25] Nearly everything the world came to know of organized crime in the United States originated from the Mafia’s hand in drugs and crime in Atlantic City. And even with the decline of both Cosa Nostra and Nucky Johnson’s empire, the two remain inextricably linked in memory and nature.

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Atlantic City’s eight remaining casinos took in $2.56 billion in 2015, but that figure represents a 6.5 percent drop from 2014, after some establishments closed their doors.

Citations

[1]History of Atlantic City.” (n.d.) Official Website for the City of Atlantic City. Accessed May 14, 2016.

[2]Boardwalk Empire as History.” (June 2012). Foreign Affairs. Accessed May 14, 2016.

[3] “The Mafia’s Greatest Untouchable: The Flamboyant 1920s Mob Boss And The True Story Behind TV’s Boardwalk Empire.” (February 2011). Daily Mail. Accessed May 15, 2016.

[4]On The Boardwalk, HBO Hangs Out With A New Mob.” (September 2010). The New York Times. Accessed May 15, 2016.

[5]Atlantic City Timeline 1614-2010.” (2014). Rutgers, the State University of New Jersey. Accessed May 16, 2016.

[6] “What Does Miss America Win? A Heck of a Lot More Than Just a Crown, For Starters.” (September 2014). Bustle. Accessed May 15, 2016.

[7]The St. Valentine’s Day Massacre.” (February 2014). Chicago Tribune. Accessed May 15, 2016.

[8]Capone’s Legacy Endures, to Chicago’s Dismay.” (April 2010). The New York Times. Accessed May 15, 2016.

[9]The Gangster Next Door.” (September 1989). Sun Sentinel. Accessed May 15, 2016.

[10]Old Files Offer Fresh Look at St. Valentine’s Day Massacre.” (February 2016). Chicago Sun-Times. Accessed May 15, 2016.

[11]Spoiled by Mobsters, Meyer Lansky’s Daughter Recalls Family Men, Not Killers.” (June 2014). Tampa Bay Times. Accessed May 15, 2016.

[12]Family of Late U.S. Gangster Wants Compensation for Cuba Hotel.” (December 2015). Sun Sentinel. Accessed May 15, 2016.

[13]80 Years Ago, the Mob Came to Atlantic City for a Little Strategic Planning.” (May 2009). The Press of Atlantic City. Accessed May 15, 2016.

[14]LUCKY LUCIANO: Criminal Mastermind.” (December 1998). TIME. Accessed May 16, 2016.

[15]The Real Reason for FDR’s Popularity.” (October 2010). Mises Institute. Accessed May 15, 2016.

[16]The Great Depression of the 1930s and Its Origins.” (n.d.) San José State University Department of Economics. Accessed May 15, 2016.

[17]Nucky Johnson: The Man Who Ran Atlantic City for 30 Years.” (August 2010). The Press of Atlantic City. Accessed May 16, 2016.

[18]Atlantic City’s Summer Of ’64: Hosting Democratic Convention Turned Into Referendum On Resort’s Decline.” (August 2014). NJ.com. Accessed May 16, 2016.

[19]Philip Leonetti’s Book Details an Era of Crime in Atlantic City, Region.” (December 2012). The Press of Atlantic City. Accessed May 16, 2016.

[20]Disorganized Crime in Atlantic City.” (February 2010). NJ.com. Accessed May 16, 2016.

[21]Which Atlantic City Casinos Raked In The Most Money in 2015?” (n.d.) NJ.com. Accessed May 16, 2016.

[22]Atlantic City Visitors Declined For Eighth Straight Year in 2013.” (March 2014). The Press of Atlantic City. Accessed May 16, 2016.

[23]Casino Closings in Atlantic City May Diminish N.J’s Tourism Economy.” (September 2014). NJ.com. Accessed May 16, 2016.

[24]Would an Atlantic City Shutdown Hurt Tourism? Don’t Bet On It.” (March 2016.) New Jersey 101.5. Accessed May 16, 2016.

[25]How Real is ‘Boardwalk Empire’s’ Al Capone?” (October 2011). Salon. Accessed May 16, 2016.