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Shadowy Connections
Is the Mafia still in Milwaukee? Was it ever in Milwaukee?

By Chuck Nowlen
Published January 30, 2003
Copyright 2003, Shepherd Express


They wouldn’t break in until the last guy was gone. Then it went like clockwork. Ba-da-bing, ba-da-boom.

Seven bugs in all – each planted by FBI cat burglars in the wee hours of the morning. One in a first-floor office at the Shorecrest Hotel on Prospect Avenue. Another at Snugg’s restaurant across the hall. One at another restaurant on Jackson Street. Four in Frank Balistrieri’s phones.

And that was just for starters. This was the biggest FBI mob hunt in Milwaukee’s history after all. They wanted Balistrieri bad.

So it was nine months around the clock, beginning in October, 1979: 12 agents with backups; a stack of court orders; endless undercover work and a cadre of snitches; tedious days of waiting. They even set up a dummy "competing" vending company to attract Balistrieri muscle.

And nobody ever forgot that except for a one-year tax-evasion rap in the ‘60s, cagey old “Frankie Bals” had made them all look like chumps in the past.

Some 7,000 wiretapped conversations later, the feds raided Balistrieri’s home and other locations on March 5, 1980; and a four-year court battle was on.

They said he’d ordered and threatened murders. They said he’d skimmed millions from casinos in Las Vegas, sharing it with bosses in Chicago, Cleveland and Kansas City. They said the Teamsters pension fund was in Frank Balistrieri’s pocket, as was local vending and more. They said he put Milwaukee big-time on the national Mafia map.

And after two banner-headline trials in Milwaukee and Kansas City, the 67-year-old Balistrieri got 13 years for conspiracy and extortion – the FBI finally had its man. He died of a heart attack on Feb. 13, 1993, about a year after his release. Sons John and Joseph ended up serving three years as well, losing their law licenses in the process.

And to think, just a decade or so before the Balistrieri investigation began, both J. Edgar Hoover and Milwaukee Police Chief Harold Breier had declared that the Mafia didn’t exist.

Big Questions
But did it really exist in Milwaukee –- at least as extensively as the government said it did -- under a far-reaching Balistrieri hand? And, more importantly, in the wake of a massive FBI sweep that took down almost every major mobster in America just a few short years ago in the ‘90s, is the Mafia still at work in Milwaukee today?

Is it behind all those adult shops lining the Interstate between Milwaukee and Chicago? Internet porn and gambling? How about telemarketing and cigarette tax schemes?

Is it mostly security fraud and predatory business deals now – where you lose your property deed, not your life, if you cross a mob financier? Are restaurants and taverns still feeling the mob pinch?

Is behind-the-scenes mob money fueling the local drug trade and rackets run by other organized-crime groups, with the profits carefully laundered through the syndicate’s legitimate businesses?

And, if so, as Enron and other recent scandals have taught us, where exactly are the lines that separate government, capitalism and organized crime, anyway?

The More Things Change?
“C’mon, Milwaukee’s only 70 minutes away. Do you really believe the mob would leave a town like that alone?” laughs Chicago lawyer David Schippers, a former US attorney who helped convict Sam “Momo” Giancana in the 1960s. Schippers is now in private practice and defended an accused Chi Town mobster as recently as six months ago.

Giancana’s Chicago “Outfit” meanwhile – believed to have had a big hand in the assassination of John F. Kennedy in 1963 – has long been assumed to be calling the big-picture mob shots in Milwaukee, Schippers notes. And recent mob-related sentencings in Chicago-suburb Cicero, for example, he says, point to a transformed, but still potent, Mafia reach to Milwaukee today.

“As Chicago goes, so goes Milwaukee – that’s just the way it is,” adds former FBI agent Mike DeMarco, the bureau’s point man in the ‘80s Balistrieri investigation.

What’s more, Schippers, DeMarco and many others insist, the Mafia learned its lesson from the domino fall of high-profile bosses like the late John Gotti, who thumbed his nose at the cops and curried favor with the media, while still wielding murderous old-time muscle.

“They’ve learned that when you commit violence, you’ll just get more law enforcement,” explains current FBI agent Ted Wasky, who worked on the famous “Pizza Connection” money-laundering case in the ‘80s – which, by the way, included one restaurant in tiny Milton, Wis. just an hour's drive west. “It’s evolved into things more like stock fraud, money laundering and Securities and Exchange Commission violations.”

Or, as FBI union-racketeering informant Ronald Fino testified before a congressional subcommittee on crime in 1996: “Many creative members and associates … are no longer adorned in fedoras, and you will find that they are well-educated and take full advantage of that education and the monies they have accumulated. Today, you will find the mob is as reliant on public relations firms as it is with its high-powered attorneys and accountants.”

Gone, agrees Schippers, are some of the ways of ‘60s, ‘70s and ‘80s kingpins who are now “either dead or in the shithouse, or hobbling around with walkers.” Instead, it’s seemingly legit businessmen in “pin-striped suits and white shirts.”

“Try to open a restaurant or a nightclub. You’ll find out real quick whether there’s still a mob,” Schippers says. “You might start getting visits. A guy’ll come in one day and ask you, ‘Who does your cleaning? Well, we’ve got a cleaning guy right out here for you.’ They’ll infiltrate like that little-by-little. And if you say no, just try and get your laundry picked up. Try and get your liquor delivered. Then maybe (mob) guys even start causing trouble at your place, and, pretty soon, it’s the cops who have a (regulatory) gun to your head too.”

Chicago private investigator and former FBI agent Pete Wacks puts it this way: “As long as something’s working and making money for the mob, that’s the bottom line in all this.”

Milwaukee County Supervisor Gerry Broderick, meanwhile, thinks there’s still mob money to be made in a cigarette-tax scheme that he’s convinced he documented while working in the state Department of Revenue about 20 years ago.

Capitalizing on tax differentials between Wisconsin and other states, the scheme goes like this: Mob operatives buy semis full of cigarette cartons in low-tax states, then truck them to high-tax Wisconsin – paying off weigh-station workers and other officials along the way.

Once the cartons are here, Wisconsin tax stamps are forged, and the merchandise is sold at a huge profit. Broderick estimates that the payoff might have been as high as $100,000 per semi in the ‘80s.

“There would be minimal risk; the criminal penalties wouldn’t exactly stagger anyone,” he says. “I remember showing my flow charts and everything to the agents who took custody of them, and those agents were just taken aback as they looked at all my evidence. … But nothing ever came of it, which I found curious.”

Broderick adds: “To assume that something like this has just gone away would be a mistake because, if anything, the tax differentials have gotten bigger, and the penalties have gotten less stringent. And where there’s money like this to be made, I’ve got to believe that somebody will make it.”

Schippers and Wacks see highway porn shops as another plausibility.

“Just a few years ago, some guy opened up a men’s club with a lingerie shop, just outside of Chicago,” Schippers notes. “And he started getting visits. Pretty soon they were constant, and pretty soon he was out of business. … I don’t think there’s any porn in the United States that doesn’t at least pay tribute to the mob.”

Many also see cooperation between the mob and other ethnic organized-crime groups: the African-Americans, the Eastern Europeans and Russians; the Latinos, the Asians and the rest. In America, ethnicity is a matter of survival; no group is immune to organized crime. But now, many experts say, the new Mafia’s presence is kept well off the radar.

“Some people say that in 10 to 15 years, the Outfit as we know it will be dominated by blacks,” Schippers says of Chicago, where African-American gangs got all the big headlines during the ‘90s and early 2000s.

W.K. Williams, the new head of the FBI Organized Crime Section in Washington, D.C., adds telemarketing scams and Internet and offshore-based gambling to the Mafia’s new “white collar” profile.

“I won’t be specific about the numbers, but there are some L.C.N. (La Cosa Nostra, or “This Thing of Ours”) members in the Milwaukee area,” Williams says. “I just wouldn’t like to characterize what we may or may not be doing there. Basically, I don’t want to give them any information to use.”

Self-Perpetuating Myths?
None of this, however, washes with noted Milwaukee lawyer Jim Shellow, a former president of the National Association of Criminal Defense Lawyers who has represented many local organized-crime suspects during his long career – including Balistrieri relatives and associates. Shellow thinks the government often sees only what it wants to see – a sophisticated network – when something much less organized is at work, if it exists at all.

And, Shellow insists, FBI investigators have a vested interest in justifying the scope of the activities they look into, often at a steep budgetary and manpower cost.

“The hard data I have – and this is based on experience, not only in Milwaukee, but in Chicago, New York, Denver, Philadelphia and Las Vegas – I never saw what has been defined as the Mafia in Milwaukee, and I don’t see it now.

“I never saw evidence of extortion or evidence of organized hijacking. I never saw domination of construction trade unions or the Teamsters, or the hotel/restaurant workers or bartenders. I never saw domination of laundry businesses or garbage and trash collectors – or narcotics or prostitution. And I never saw organized-crime domination of gambling or stores that peddle adult material.”

“Yes,” says Shellow, “there certainly were narcotics dealings in Milwaukee. There was gambling conducted in Milwaukee and a lot of other things. But I never saw either Italian influence or, indeed, any Italian interest in dominating it.”

In Shellow’s eyes – and those of several other sources interviewed for this story – even the successful Balistrieri investigation was based on a politically driven, self-perpetuating myth. And, once the government trains its sights on you, there’s no turning back – not then and not now. These are more than investigations, after all; they’re million-dollar budget items and political careers.

“Robert Kennedy certainly had information that Frank Balistrieri associated with people who were identified as organized-crime figures in Chicago, New York, Las Vegas and Kansas City,” Shellow says. “But I think the attorney general drew the inference that those who were friends of organized-crime figures are by definition involved in organized crime themselves.”

Bugs, Bugs Everywhere
As early as the 1960s, a government-wary time when FBI surveillance also often focuses on private citizens’ political activities, a young Joe Balistrieri found a microphone in his father’s office. The bug was later suppressed as evidence in his father’s ‘60s tax case after it was discovered that the government had used the device improperly.

“It’s like a cancer eating away at the foundations of the (legal) system,” the younger Balistrieri later told Milwaukee Sentinel reporter William Janz in 1974, insisting that his office and home were still being bugged – five years before his father’s extortion and conspiracy investigation formally began. “The big ear, the giant ear, is here.”

Joe Balistrieri, who still lives on Milwaukee’s East Side, declined to be interviewed for this story.

“And I hope this doesn’t keep me from being appointed to the Supreme Court,” he joked during a brief, but cordial telephone conversation.

When told about others’ suspicions about the presence of a new Mafia in town, he added, “If I’ve learned one thing in my 62 years, it’s that every point of view has a constituency.”

Even hard-boiled FBI investigators have to admit that at times, they’ve been charmed by their Mafia targets. Retired Milwaukee agent Fred Thorne, another key player in the Balistrieri case, says mob humor might be the most realistic aspect of the hit TV show, “The Sopranos.”

“I’ve met some people in the Mafia who were vicious, but they also were hilarious,” Thorne says. Usually, it was the mobsters’ strange mix of ruthlessness, sophistication and naiveté.

One example: big-time New York Mafioso Benjamin “Lefty” Ruggerio (played by Al Pacino in the movie “Donnie Brasco”), who gazed at the Lake Michigan horizon during a visit to Milwaukee and asked a Balistrieri-case undercover agent, “Hey, what ocean is this?”

Later, during a seaside conversation in Atlantic City, the reputedly murderous Ruggerio asked another agent, “So, is this the same ocean that’s in New York?”

Bodies In Beer Town
Retired Milwaukee detective Bob Blackburn and his partner, the late Ray Koehler, made up the city’s colorful “Body Squad” homicide-investigation team for more than two decades. And Blackburn remembers well the old days here, when apparent mob hits left corpses on the streets from time to time.

But Blackburn, too, is skeptical that the organized crime scene was as cut-and-dried in Milwaukee as it was sometimes made out to be.

“We had murders here, lots of them. But nothing Ray and I worked on was ever proven to be mob- or Mafia-related,” says Blackburn, who left the police force in 1980. “When you’re talking about the mob or the Mafia, you have to take this into account: These guys aren’t dummies. Now I’m not saying there’s no organized crime in Milwaukee. But to say the Mafia’s in Milwaukee – well, how do you prove something like that?”

Three suspicious murders during the alleged reign of Frank Balistrieri:

* Isador Pogrob, whose family owned the Brass Rail strip club for 13 years before selling it to Balistrieri in 1968. In 1960, Pogrob’s body was found in a ditch in Mequon, riddled with bullets from at least two guns.

* Reputed local crime figure August Maniaci, who was shot in the head multiple times on Sept. 11, 1975 with a .22-caliber pistol equipped with a silencer. His brother Vincent, who found 20 sticks of dynamite under his car hood in 1977, testified at Balistrieri’s sentencing hearing that he didn’t think Frank had anything to do with either incident.

* August Palmisano, another reputed local mobster, who died on June 30, 1978 when his car exploded. Palmisano relatives also told Balistrieri’s sentencing judge that they didn’t think Frank had any role.

None of the cases has been solved.

A more typical Mafia case, Blackburn says: “I was in uniform, riding is a squad car one day, and I just happened to be behind this car – and now all of a sudden it’s snowing. So we stopped the guy for littering, and it turns out we’ve got this very famous bookie – and he’s throwing his betting tickets out the window!

“Well, he turned out to be part of that organization, whatever that organization was. I can’t say for sure that it was a Balistrieri organization either, but he did associate with them.”

A Thrown Gauntlet?
Shellow, meanwhile, suspects that the FBI’s Balistrieri investigations – beginning with the 1960s tax case – might have been prompted by two major factors.

One was the government’s view “that organized crime was a pervasive influence in every community, and that there really could be no exceptions,” Shellow surmises. The notion gained favor in Washington D.C. and the rest of the country after the famous ‘60s “Apalachin Conference,” in which a nationwide meeting of suspected mobsters was raided in rural New York State.

The other factor, says Shellow, was the way strip-club and real estate magnate Balistrieri circumvented a Milwaukee ordinance that banned dancers from asking their patrons to buy them a drink: He’d have them meet for cocktails elsewhere after they got off work.

“And I think stuff like that offended the Common Council, some aldermen or the police or somebody, and that might have started the wheels rolling,” Shellow says.

FBI Balistrieri hunters Fred Thorne and Mike DeMarco doubt that, insisting that the 1979-80 case was sparked only by a critical-mass stockpile of solid FBI evidence, backed by a parallel undercover investigation of local vending.

Besides, they add, there were more than enough checks and balances in the long subsequent legal proceedings to root out any bias.

“I don’t think people understand how wiretaps, for example, are approved,” Thorne explains, “how difficult they are to get, how stringent the rules are: the accounting, the reports to a judge every five days, when you can listen and when you can’t, a new court order for every new violation you find. And if you don’t find anything within a certain period of time, then your court order gets canceled and you have to start all over.”

Whatever the case, even FBI agents will admit that politics were all over the Balistrieri case at one level or another – both within and beyond the bureau. That’s just the way it is when you’re dealing with government agencies, competing budget priorities and investigations that cost thousands of man-hours to carry out.

The irony, insist many sources, is that politics are also essential to the Mafia’s survival.

“The fact of the matter is that the Outfit can’t exist without the cooperation of politicians and public officials, people like inspectors and beat cops – especially the cops,” says Chicago’s David Schippers. “If they do their jobs properly and don’t accept bribes, the Outfit can’t operate.”

Longtime Milwaukee Mayor Frank Zeidler echoes that, adding, “In my time, it was understood here – no vice in this city. And if you have that policy, maybe a little organized crime sneaks in, but it isn’t a major problem. … I don’t think the local underworld here has ever had a real hold like it might have in Chicago and other cities.”

Zeidler also cites his current regular meetings with stalwarts of the local Italian community: “These people would know about it if any major stuff was going on, and it would be brought up at the meetings. But it never has been – not once.”

A History Lesson
The FBI, of course, has been busy in Milwaukee lately, mainly on a City Hall investigation that had produced two indictments as of early this week – neither involving alleged mob connections.

Still, according to the [defunct as of December 2011] website,, history shows a strong connection between the Italian mob and the government dating back as far as the 9th century, when the island of Sicily was occupied by Arab forces that “oppressed the native citizenry.” The word, “Mafia,” in fact, is derived from the Arabic word for “refuge,” the website asserts. (Others say it’s a late-1800s acronym for “Moretta ala Francia, Italia avanatis,” or “Let the French die, Italy march on.”)

While unifying the natives and protecting them from their occupiers, Sicily's quasi-governmental secret society soon was ruled by a rigid hierarchy, wielded by dons in each village who answered to the don of dons in capital city Palermo. Five basic principles were sacred in members’ initiation oaths:

* “Omerta,” a total code of silence under threat of torture or death;

* Total obedience to the boss;

* No-questions-asked assistance to any befriended Mafia faction;

* A promise to avenge any attack on members of the family; and

* A vow to avoid any and all contact with authorities.

By the 19th century, the Mafia in Sicily had evolved into a vast, now criminally oriented society. The most common form of extortion: “Black Hand” notes that demanded money for protection – followed by kidnappings, bombings and murder if they were refused. By 1876, the Mafia controlled the entire Sicilian government.

And with mass migration in the 1800s, the system flourished amid the cruel realities of new ethnic neighborhoods in American cities. In New Orleans, which had the nation’s highest Mafia concentration at the time, local dons even had a crusading police chief assassinated.

By the early 1900s, every major US city had its own Mafia chapter, with operatives getting a big boost from Prohibition in the ‘30s. The most famous gangster of all, Al Capone, and others often passed through Milwaukee, with “Scarface” himself reportedly keeping a house in the suburbs that just recently went up for sale.

A turning point, of course, came just before World War II, when Charles “Lucky” Luciano organized the “Commission,” under which New York’s famous five families ruled organized crime like a corporate board, while other metropolitan areas came under the purview of a single boss.

Everywhere, the mob depended on corrupt city politicians and officials, as well as union clout drawn from the highly stratified, working-class ethnic neighborhoods that fueled the Chicago Teamsters’ membership, for example.

According to Zeidler, though, Milwaukee was insulated, “largely due to the socialist and labor movements here that weren’t supportive” of the mob. Zeidler was Milwaukee’s mayor from 1948 to 1960.

FBI sources, meanwhile, note that consent decrees signed by several unions from 1989 to 1995 all but admitted past mob influence and agreed that members would have no more contact with organized-crime figures, with at least one decree specifically mentioning Frank Balistrieri. There has been no publically disclosed evidence since of any Mafia union influence in Milwaukee.

During World War II, the Luciano-controlled longshoremen’s union worked closely with the government to protect New York shipping docks against Nazi sabotage. The mob – deeply involved in 1950s Havana casinos – also is widely believed to have helped the CIA in Cuba as Fidel Castro’s rebels were seizing power.

The Enforcement Pendulum
All along, notes Marquette University history professor Athan Theoharis, the nation’s mob-enforcement tactics changed with the winds of politics. In the ‘30s, wiretaps were banned as evidence in court out of Depression-era fears of Big Brother government. The taps continued anyway, however, under J. Edgar Hoover’s “Top Hoodlum” program, under which each FBI office was required to identify a city’s major suspected organized-crime figures. The bugs just couldn’t be used in court.

“That is, unless you could somehow launder the information you got so it wouldn’t be seen as obtained by a wiretap,” Theoharis notes.

In the wake of the Apalachin raid and the high-profile testimony of Mafia turncoat Joe Valachi came 1968’s federal Omnibus Crime Control and Safe Streets Act, which revived wiretaps and set standards for their use.

Then, in 1970, Congress passed the Racketeer Influenced and Corrupt Organizations (RICO) Act, which made it easier to attack organized crime by focusing on previously hard-to-pinpoint conspiracies whose proceeds could be shown to benefit a criminal association or “enterprise."

Soon, undercover agents were also authorized by the FBI – before the Apalachin and Valachi bombshells, Hoover had worried that undercover agents might be corrupted if they got too close to the mob.

The final modern federal law-enforcement tool: the US witness protection program, which shattered the mob’s previously solid omerta.

“They all came together,” Theoharis explains – prompting the series of convictions during the ‘80s and ‘90s that all but eliminated the mob as it was known until then.

The Future
In the aftermath of Sept. 11, 2001, the FBI’s problem isn’t so much a lack of enforcement tools as it is a matter of competing priorities. Terrorism is the top demon now, and the FBI is in the midst of a fundamental reorganization aimed at bringing Osama bin Laden and others down.

FBI organized crime section chief W. K. Williams insists that the changes won’t dilute the agency’s power. “Fortunately, we haven’t been impacted by the restructuring,” Williams says. “It will still enable us to do our job. Our strategies have changed – I’d say it’s more focused, in fact. Actually, our manpower and budget have stayed pretty constant.”

Williams declined to release specifics. DeMarco and Thorne, meanwhile, note that in Milwaukee, their onetime 12-agent contingent had dwindled to one agent by the late 1990s.

Other FBI sources, however, explain that the investigative and enforcement techniques for organized crime apply to terrorism as well.

“Both types of groups have to be attacked in the same way,” says one FBI source. “The difference is that the fundamental goal of organized crime is making money, whereas Al Qaeda’s goal is annihilation. And with organized crime, law enforcement can afford to sort of watch and wait for them to make a mistake. But with terrorism, we can’t wait.”

Still, Theoharis worries that at some point, hard choices will have to be made by the agency, with organized crime taking a back seat to the nation’s war on terror.

“You’ve got Enron and white-collar crime to worry about, too, as well as the kinds of things we’re seeing now at City Hall,” he adds. “And I suspect that it all puts a strain on the resources of the bureau. If you’re increasing the number of agents in counterterrorism, it’s almost got to affect the FBI’s ability to monitor organized crime.”

Bottom line? You decide whether to be worried or relieved by state and local law-enforcement agencies' official responses to Shepherd Express requests for comment on the Mafia's presence in Milwaukee today:

“There’s nothing going on with the Mafia here, and I don’t know if we’ve ever had anything,” said a spokesperson for the Milwaukee County Sheriff’s Department.

“Nothing current here,” said the Milwaukee US Attorney’s Office, while at the state Attorney General’s Office, the reply was, “That’s part of what we’ve been asked to do here, but we haven’t been involved in it for a long time.”

The Milwaukee Police Department also reported nothing current, suggesting that the Shepherd Express contact the FBI.



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