The time the US Navy teamed up with the Mafia

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This podcast was produced on the lands of the Awabacal and Gadigal people.

G'day, Matt Bevan here.

And yes, I know the voice sounds awful, but you won't need to hear too much of it today, I promise, because we're catching up with Mark Finnell and he's going to do most of the talking.

He is the host of No One Saw It Coming, a a show about people, objects, and accidents that change the course of history.

And Mark's got a wild story from this season of his show, about the time the U.S.

Navy teamed up with the Mafia.

It's set during World War II and it's a story about boats bursting into flame, mobsters with excellent names, and the curious team-ups that come about in a country at war.

Hello, Mark.

Hello!

I love an exploding ship, don't you?

I absolutely do.

And I mean, ships used to really explode back in the day.

I don't know whether you've come across in your adventures the one that exploded in that harbor in Canada that basically managed to destroy a whole town.

No.

It was in the town of Halifax, Nova Scotia.

I don't know.

We're starting just on talking about exploding boats.

No, but I have a quite a good friend that lives in Halifax, Nova Scotia, and he will be offended that I don't know this.

So there was like a ship that was full of fertilizer.

Ah, see, that was your first mistake, wasn't it?

Yeah, yeah.

Crashes into a ship that's full of like bullets or something like that.

Oh, I have heard this one.

Yeah, yeah.

It's the most violent thing that's ever happened on Canadian waters, surely.

So it's the biggest non-nuclear explosion in history.

So big that it created a tidal wave that destroyed half the city or something like this.

It's this unbelievable explosion.

I went from being intrigued and obviously like, because boy, interested in things that go boom, but then also like, that is a genuine tragedy.

And I want everyone to know that I know that.

Yeah, it's really terrible.

It was genuinely very bad.

So, it was the Norwegian vessel SS IMO collided with the French ship SS Mont Blanc, and at least 1700 people were killed by the blast, debris, fires, or collapsed buildings.

Right.

Yeah, extraordinary.

Well, this is going to be one of those times where New York has nothing on Canada slash Norway slash France.

No, no.

So, tell me about this comparatively smaller explosion of this boat, which is where we're going to start this mafia story.

Well, it it is comparatively smaller, but the implications of it are huge.

So if you were standing near the water in New York in 1942, you were about to get the shock of a lifetime because you would look out and you would see a ship on fire and it sent New York into a panic attack.

The context, Pearl Harbor, early days of the war, there's a real like panic, like has it just arrived at our foreshore?

And what was intriguing about it was that it was a trigger point.

And what actually happened was the government in the US looked at that and they suddenly realized that they had a massive attack vector that they had not planned for, which was the entire shoreline of New York, right?

They were suddenly terrified that there were spies.

They were terrified about the prospect of being infiltrated through the foreshore.

And one of the issues there is a lot of people working on the foreshore were immigrants, Italian immigrants.

And the US was either suddenly then or about to be at war with Italy.

Yeah,

Italy's roles within the world Wars are a complicated in-and-out situation.

I know, I know.

It's like they were on our team and then they weren't on our team, but they kind of were so incompetent in the Axis that they kind of worked in our favor.

So, anyway, by the way, but so at this point, we're early in certainly America's involvement in World War II.

And the Port of New York is this incredibly strategic place that America's Defense Forces haven't really considered.

And so so they have this secret plan that they're going to try and secure it and kind of get intelligence all over this place.

And then they realize that they don't really control it.

It's controlled by the mafia.

And so that is when somebody makes the very clever decision of, you know what, we're the U.S.

Office of Naval Intelligence.

Let's work with the mafia.

Like they're there.

They like capitalism.

We like capitalism.

We've got some overlap.

Let's work together.

And so that's what happens.

And that's the beginning of what would eventually be known as Operation Underworld, which can we agree is an excellent name for an operation.

That is a sick name.

That is, that's pretty rad.

So the Office of Naval Intelligence have decided that they are going to work with the Mafia to turn

the foreshore of New York into a spy network.

So that if anything's coming in that shouldn't be, they would know about.

If there was going to be attacks, they would know about it.

But then there's this issue of like, well, hold on.

How does one work with the mafia?

There is not like a website one can log on to and so they actually start with this guy named socks lanzer who's this enormous dude and uh if you're wondering why they call him socks it's because well if you disagree with him you get socks and he is huge and he works particularly along the sort of the fish markets but what's interesting about him is that he's incredibly loyal to the concept of america he may be a criminal but he's incredibly loyal to the the concept and he becomes this sort of connective tissue into other parts of the organized crime.

And what's interesting here is that he is limited in his reach, right?

So he's obviously part of the Italian mob and he's quite useful in the Italian mob.

But eventually what they start to realize is that there's limitations to how much of New York the Italian mob control.

They need to go wider.

They need to be able to start to interact with the Irish and other groups.

And for that, they need somebody higher.

And that's what leads them to another excellently named mobster, Charles Lucky Luciano.

And he is powerful and he's important.

The problem is he's in jail, right?

Okay.

So they realize that he's powerful enough that he, and still connected to the outside world, that they can basically use him as a bit of a boogeyman.

So, you know, if you don't tell me what I want to know, Charlie Lucky is going to be very upset.

You know, and so they could kind of use him in that way.

He's Kaiser Sozi.

He's absolutely Kaiser So.

And actually, if if you go look at pictures of him, you know, he's got a big chunk missing out of his face.

This guy's seen some stuff.

Yeah, yeah, yeah.

Now, it's controversial even within the defense forces at the time.

Some people just disagree with this whole concept.

And those people are just quietly shifted away, apparently.

They're like, no, no, no, this is what we're doing.

Sometimes this is war.

You know, sometimes we don't like the stuff we have to do, but we're going to do it anyway.

But it's proven to be quite controversial.

And it's interesting because they also don't, they don't offer him anything, right?

Like he's not, he's not getting a lesser sentence or anything like that.

If when he gets out of jail, they just dump him back in Italy, right?

So, he's not.

It's interesting in the sense that there's not as much quid pro quo as I think I expected in this story.

And I think that's partly why I think it's so fascinating.

I just love this idea.

And I'm, you know, imagining all the different things where, you know, the cops and the villains decide to team up together.

That sort of thing happened all the way across the world during World War II.

I mean, Mao and Chiang Kai-shek, who were in the middle of a civil war in China, went, yeah, okay, we hate each other, but we really hate the Japanese a lot more than we hate each other.

So let's stop hating each other for a little bit, beat the Japanese, and then we can get back to our civil war, which I imagine is, you know, something quite similar to what's going on here.

The thing that I found most intriguing about this is actually, did it work right?

And was it based on anything factual?

So one of the big twists of this story is that explosion that sparked the U.S.

forces into forming this deal, they all assumed was a terrorist attack or, you know, sort of at the beginnings of the war coming to the US shores.

Actually, it was an accident.

It was an electrical fault from memory, right?

So it was all started based on, you know, a false fear.

But then this is actually genuine debate as to, well, hold on, this elaborate network between naval intelligence and the mob and different aspects of the mob, right?

Not just the Italian mob, but others.

Did it work?

And it's actually very hard.

And this is, I think, a a thing that comes up a lot with anything touching on intelligence and spies, which is how do you prove whether it worked if nothing happened?

Or how do you prove if it was a good idea or a worthwhile allegiance if nothing happened?

And it was interesting when we did this episode of the podcast, No One Saw It Coming, one of the things that sort of came out of it is like on the homeland,

very hard to gauge whether it was useful.

When it did become tangibly useful to Americans is actually when the war went to Italy itself, right?

And so the mafia's hold on the waterfront was extreme, but there was all of these connections to people back into Italy.

And so when US forces went into Italy, a lot of those family connections proved incredibly useful when they landed there.

And so in that regard, this particular program probably had more impact on the Italian homeland than it did on the US homeland.

That's very interesting.

So this is the invasion of the Allies coming up through Sicily and then through gradually working their way up the boot of Italy towards the knee in order to topple Mussolini's regime and eventually, you know, leading to the rather unpleasant death of Mussolini.

But, I mean, that would have been such a delicate and complicated operation because they really needed that to be a surprise attack.

They were, you know, running all these distractions and false flag missions in order to make the Axis powers think that they weren't going to attack Sicily and that kind of thing.

So, yeah, making connections via the mafia, you know, to try and gain intelligence about those things must have been a very interesting and delicate operation.

Remember that guy that I mentioned, the godfather guy, Lucky Luciano?

In the end, when this is all done, he is pardoned by the prosecutor, this gentleman by the name of Thomas Dewey.

But it's not much of a win.

He just gets dumped back in Italy, which is a country he hasn't been in since he was six years old.

It's not great.

But in some ways, the worst outcome is for that prosecutor, Dewey, because Dewey later becomes governor, and it becomes known that he pardoned this mobster guy.

But what's not public is why.

And so for Dewey's entire life and career from that point, people think he accepted a bribe from the mob.

People think that he's crooked, which I'm sure, you know, I'm not saying he wasn't in any other regard.

He's not the governor of New York.

So, you know, this is why I'm like, you know, I mean, there's levels to this thing.

But he, you know, he fought for a long time to have the secrecy of Operation Underworld released.

There was a top secret report that he wanted to have produced to kind of clear his name.

Never was done.

In the end, it did come out, but not until after Thomas Dewey was gone.

So you've got these sort of intertwined fates of politics and war and navy and mob kind of all overlapping.

And it is this incredible saga that links the two, but a lot of it just didn't come out.

until well and truly after a lot of these people had died.

But it's a, I think it's a good reminder of how,

I guess, malleable the morals of that particular conflict were and how terrified America was.

The outcome of that war, like now we look back on it, obviously, and they're like, well, of course the Allies won.

Of course.

Hitler was evil.

But the thing is, I think from America's standpoint, and what I think often gets lost when we flatten out history is there was it was by no means a foregone conclusion that America and the Allies would come out victorious.

And I think what this story exposes is the desperation and their willingness to try, at a minimum, unorthodox alliances to make it happen.

And I think it's one of those curious missing stories of World War II.

Yeah, and I think it's an interesting point because, I mean, I think it's pretty unlikely that they would have lost World War II.

But the fact was that they managed to win it by so much that they got to totally occupy and control the Axis countries for decades afterwards and turn those Axis countries into allies.

The scale of the Allied victory was massive as opposed to, you know, previous wars where Germany lost World War I, but they kind of were just, you know, okay, just go back into Germany now, bugger off, pay us back, please.

Whereas the scale of the victory ended up being so massive.

And it was because of all of these compromises and principles that they abandoned in various ways in order to absolutely and utterly crush the Axis powers in a way that basically caused those Axis powers to cease to exist in any form at all.

So, yeah, it's interesting, but it's so morally complicated.

That series of relationships with those different countries, those Axis countries, or what's left of them afterwards, you look at how the differences between what the UK did after World War II and what the US became after World War II.

And, you know, the UK's decimated, and they're very different wars for these two different countries, right?

But, you know, the UK's decimated takes decades to rebuild.

Whereas the US somehow, I think, emerges with this new positioning in the world that becomes the sort of the stage for what is the next century of its existence.

This concept of world's police, right, emerges in the wake of some of these actions.

And I think that framing of the U.S., you know, accurate or otherwise, it's perception at this point, right, is sort of undeniable.

But I think what I like about chapters like this is it reminds you that it was not.

it was not always guaranteed that that was would be the outcome for that nation and the desperation required and and the acting from a position of fear

is kind of an interesting one when you look back on it.

Do we know if there are other examples of collaboration between organized crime and governments during World War II?

I know that there are examples of overlap with organized crime in the French resistance, for example, just to take it to another front.

But you're also talking about

groups that

how do I put this, have some agency and experience with violence.

And therefore, I don't seek to kind of flatten all organized crime into one sort of monolithic thing, but I do know that there are sort of examples where, you know, the overlap continues.

Yes.

And bear in mind also, like the initial vector was the Italian mob, but they also ended up doing relationships with Irish gangsters and other things like that.

It's just the fact that it ended up being much more useful when the Allies went into Italy and much less useful on the home front, which I find the most bizarre part of the story.

So what ended up happening to Lucky Luciano?

From memory, he lived out his days in Italy.

Many years later, there was an article that came out that claimed that Lucky Luciano had been awarded a Medal of Honor, which I don't think was actually true.

I think a gossip columnist got a hold of a few pieces of the story and was trying to piece together what had actually happened.

And I think it was one of those things that dogged Dewey in particular for the longest time.

Because Dewey was trying to run for president and that kind of thing.

He had very, very high aspirations.

Well, I mean, this is the thing, right?

This whole story is like smacks of like mid-90s mid-90s drama.

You know, I feel like this would have been from the producers of Mobland comes Operation Underworld.

There's just a part of me that just looks at this story and goes, why aren't you a mini-series next?

Yeah, yeah, yeah.

Like, why didn't that happen?

Because it seems just so perfect for it to me anyway.

Yeah.

Mark, fascinating story.

I love it.

And I love the names, both of the operations and of the relevant gangsters.

Fantastic.

Excellent story.

Thank you very much.

Thank you, man.

No One Story Coming is available now on the ABC Listen app.

On Thursday, we're tackling Donald Trump's attacks on the Federal Reserve.

It's taken decades to build robust, independent central banks that people trust to fight inflation and keep the economy on course.

But now a generation of populist leaders are threatening to undo that work.

What is that going to mean for the global economy?

That's next on If you're listening.