Management
Objectives
Lucchese quickly realised the almost unlimited potential that existed in this
volatile and ever changing business. Garment manufacturers needed access to
large amounts of money, particularly when funding their new season's offerings
twice a year. Often this was not available from traditional banking sources.
Infusion of short-term capital, or lack of it could make or break a business.
Lucchese pioneered what became known as “knockdown loans.” Traditionally
this would be $50,000 leant for twenty weeks at five “points”, meaning a
weekly interest rate of $2,500. The interest had to be paid first, which meant
that the borrower paid twenty times $2,500 and at the end of the term still owed
the principal. The profit to Lucchese was huge.
However usurious the loans amounted to, they were often a salvation to a
maker who had orders for his new lines, but wouldn’t get paid for them until
thirty days after they were delivered. The loan funded his raw material and
labour costs and kept him going until the money arrived from his customer. In
the event that he had to default on the loan, Lucchese would simply step in and
take over part or all of the business. Within a few years, he would come to have
an interest in dozens of garment making companies and own at least seven of them
outright.
Using Buchalter as a lever through his control of the unions, Lucchese added
a novel rider on his operation by employing non-union labour in his factories,
which gave him the edge on prices through cheaper costs than his competitors.
Never one to miss up on any opportunity, he also arranged for many bank
officials to be bribed into letting him know when they had refused prospective
customers, so that he could show up at the company with an offer of alternative
financing.
To complete his stranglehold on the industry, Lucchese went after the other
critical area that was the key to control, alongside the cutters' local. The
trucking in and out of goods was the aorta that pumped along the lifeblood of
the whole industry. Disrupting or closing down the shipment of raw materials and
finished goods would bring the area to a halt.
By 1939, Louis Buchalter had come to the end of his reign, was arrested and
sentenced to prison. This was the least of his worries, and eventually he was
tried, convicted and executed for his part in a murder that had occurred years
before. By then, Lucchese had cemented his hold on the Garment Center. Through
his loan-sharking activities, control of clothing unions and domination of the
corrupt Teamsters Union locals and the trucking industry, he was undoubtedly the
most powerful figure in that forty square blocks of mid-town Manhattan.
At some stage, his son Baldassare, who had graduated from West Point, came
into the family business helping to run the clothing factories and other
interests Lucchese had amassed. His daughter Frances, an attractive woman
educated at the Sacred Heart Convent in Manhattan, married Thomas, elder son of
Carlo Gambino at one time considered to be the most powerful Mafia don in
America.
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Carlo Gambino
Credit: World Wide Photos.
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Lucchese and Gambino were close friends going back into the Castellammarese
War period. They were men with many things in common. Both had been born in
Palermo. Both were small and slight in stature and did not have to raise their
voices in order to get noticed. They dressed and lived modestly and worked hard
to keep low profiles. Although Lucchese often chided his friend on a particular
blatant example of immodesty -- his car registration plate, number CG 1. Mob
watchers and law enforcement agencies saw the marriage of Frances and Thomas as
not only a wedding between, but also a welding of two major criminal dynasties.
When Lucchese died, much of his power in the Garment Center, particularly the
control of the Teamsters locals and the haulage industry, transferred to Thomas
Gambino and the crime family he had become part of. By the early 1980’s, the
four companies he owned and operated (direct descents of the business Lucchese
had bequeathed him) were handling ninety percent of the trucking of finished
goods picked up and shipped to retailers and showrooms. He was also charging
forty to seventy percent more on his freight costs than independent haulers.
Thomas Gambino was being groomed at this time in 1984, for leadership of the
family, to succeed his uncle Paul Castellano, the current boss, who inevitably
would go off to prison on impending charges. Although he had married well,
helping to cement the power of two of the major Mafia families in America, and
although he was a successful and very rich man, due in no small part to his
relationship into the Lucchese family, he had never succeeded in becoming his
own man. Overheard on a hidden “bug” in the home of Castellano, he said,
“Me, I never had a chance to say, ‘Well I’m going to do something I
want to do,’ I always did it for my family, for my children, for my father,
for my mother. Matter of fact, always, even when I spoke, it was always, how
does it affect other people? I wish I had your independence, Paul. In my life,
in my fifties, I still haven’t reached it. Where I could do something that I
want to do and the hell with anybody else. Understand I don’t begrudge it to
you. I’m glad you have that leverage, that privilege. You wear it well. God
bless you, Paul.”
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Thomas Gambino
Credit: 1991/Newsday/
Don Jacobsen.
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With all their wealth and power, control and domination of their people and
environment, at the end of the day, even Mafia chiefs succumb to mid-life
menopause.
