The Port of New York is a majestic natural harbor endowed with deep rivers, estuaries and bays and rimmed by 770 miles of profitable piers and docks. Thirteen years ago New York handled 22% of all the tonnage shipped to & from the U.S. Today tonnage has slumped to 15%. Principal reason: the New York waterfront is the realm of hoods and racketeers, where a payoff is as casual as a Christmas card, where whole truckloads of merchandise can vanish, where watchmen never make an arrest, and where mobsters recruit musclemen who are still serving time in Sing Sing.
Last week a five-man State Crime Commission opened public hearings in Manhattan on the plight of the waterfront. To lay a basis, the commission first cast its subpoena net into a school of neatly groomed waterfront businessmen—heads of stevedoring and shipping companies. In theory, these were the helpless victims in the domain of President Joe Ryan of the A.F.L.'s International Longshoremen's Association. In fact and testimony, most of the witnesses turned out to be men who would dangle a dollar on the end of a hook for either bait or payoff, whichever was in order. The basis they laid: racketeering runs rampant on the waterfront because nearly everyone there complacently accepts corruption as a matter of course.
Gratuities & Goodwill. Take the matter referred to as "gratuities." The largest stevedoring firm in the U.S. is the Jarka Corp., which unloads some 4,000 ships a year, did $40 million worth of business on the Atlantic Coast and the Great Lakes between 1947 and 1952. Jarka's president, Frank W. Nolan, admitted that Jarka paid out nearly half a million dollars in petty-cash "gratuities" in the last five years. Committee Counsel Theodore Kiendl prodded Nolan into an admission: Jarka paid off not only labor racketeers but agents and executives of shipping companies to get their unloading business. E.g., a vice president of the Waterman Steamship Lines got $2,500 a year for three years, the local manager of the Holland-America Line got $15,000 a year for two years.
Not all stevedore company executives admitted to such lavishness with customers and racketeers. But most admitted paying heavy tolls to the International Longshoremen's Union as regularly as they would drop nickels into a parking meter. Jarka paid out some $58,000 to I.L.A. officials, with a regular $100 Christmas envelope for Joe Ryan, the boss of I.L.A. Jules Sottnek & Son, stevedores, paid I.L.A. bosses $14,402 in five years. A Sottnek vice president staked Mike Clemente, an I.L.A. straw boss and graduate of the Socks Lanza mob, to an $11,000 wedding for his daughter. President James C. Kennedy of the stevedoring firm of Daniels & Kennedy, Inc. personally dropped off a sealed envelope, containing $1,500 in cash, every year at Joe Ryan's office. All burly Joe said was "hello," and "thanks."
"Isn't it a fact," asked Counsel Kiendl, "that you paid these moneys for the purpose of avoiding the possibility of ... flash strikes?" Replied Kennedy: "I say I gave him the money. If it prevented strikes, then that's what it done, but I didn't actually pay to prevent strikes." Kiendl: "Your motive was to pay the money and hope that it would keep you out of trouble?" Kennedy: "Yes, sir."