Monday, June 14, 2010

"Get Capone" by Jonathan Eig

This is, simply put, the best true life crime saga since last year's "L.A. Noir." That book dealt with the crime syndicate and it's history in Los Angeles. It was known there as "the Combination." This one deals with the rise of Al Capone from his early years in Brooklyn to his heyday and eventual downfall in Chicago.

The book is painstakingly researched and covers not only the activities of Capone and his henchmen, including the notorious "St. Valentine's Day Massacre," but goes on to connect the dots of the criminal enterprise that was Chicago during the "roaring twenties." Every cop, alderman, delegate, the mayor himself and anyone in between was on the payroll of "the mob."

Surprisingly, Capones "mob" was composed of many nationalities; from Jewish to Irish to Italian, all the ethnic groups were represented. Sometimes they had disagreements over turf, and these disagreements usually took the form of what is today known as the "drive by shooting." The Thompson machine gun made it's criminal debut in the early 1920's after having been perfected too late for inclusion in the First World War.

But the real intersting part of this book deals with the Federal Governments efforts to curtail the criminal activity that grew out of the Nineteenth Amendment. When the Volstead Act was put into place to combat the flagrant violations stemming from that Amendment, the government still had no "teeth" with which to enforce the law. With Treasury Agents making less than a good bribe could bring them, there was little incentive to enforce the law and risk your life in doing so. Some new and better way to control the gangsters was clearly needed. Enter Income Tax Violations.

The common perception holds that Capone's was the first prosecution of a mobster for tax evasion. This is not quite true. But first, as I always say, a little background on Income Taxes in general. Initially begun during the Civil War under President Lincoln as a way to finance the Union Army, the rate was set at 3% of annual income above $600. This included any income from "property, rents,interest, dividends,salaries or from any profession, trade, employment or vocation carried on in the United States or elsewhere, or from any source whatever." There was no distinction made for illegal income. As far as Uncle Sam was concerned, if it came in, you owed them 3 percent.

The law was very unpopular and was overturned in 1872, re-instated in 1894, and ruled Unconstitutional in 1895. In 1913 Wyoming ratified the 16th Amendment creating the 3/4 majority necesssary to make it law. An additional 1% was levied on those who made more than $3,000 per year and an additional 6% surtax was added to incomes higher than $500,000. Death or fraud were the only 2 ways to avoid the tax, causing Will Rogers to remark in the 1920's that "The Income Tax has made liars out of more Americans than golf."

At first, in an effort to collect these taxes, 6 Post Offices Inspectors were tasked with this responsibility. Now came the tricky part. What was income? Were criminals responsible to report income gained illegally? Would this not fall under the protections of the 5th Amendment? Wasn't it up to the government to prove that you were cheating? All valid questions at the time, when there was no settled law relating to the issue.

In 1921 the first challenge to the law by a criminal took place in the trial of a bootlegger named Manley Sullivan. He would take his case all the way to the Supreme Court, arguing that disclosure of his illegal activities for tax purposes violated his 5th Amendment Rights. The Court decided against him and he was forced to pay back taxes on all his income. This was the opening of the door that would eventually bring Capone down.

Beginning with Al Capone's brother Ralph "Bottles" Capone, the Special Intelligence Unit in Chicago began to pester "Bottles" so much that he finally filed a return listing his income of $20,000 per year as a "gambler." When played out over a 4 year period he owed $11,000 in back taxes and the government began to seize some of his assets. This was the beginning of the close watch on Al Capone's finances that would finally bring to a close his career as a criminal.

The book is quite extensive, delving into Herbert Hoover's role in starting a war on organized criminals and the establishment of Federal Agents tasked with the responsibility to catch them.

A fascinating book that looks into the formation of the FBI as a crime fighting organization, as well as the utilization and enforcement of tax law, to break the hold of one of America's most notorious gangsters over an entire city and part of a nation.

No comments:

Post a Comment