What Moe Dalitz didn’t say to Kefauver

“Well, I didn’t inherit any money, Senator. … If you hadn’t have drunk it, I wouldn’t have bootlegged it.”

Many quotations mistakenly ascribed to historical figures are repeated to this day. Among the numerous witty quips by Mark Twain, “Golf is a good walk spoiled” was not one. The doomed French Queen Marie Antoinette never remarked, “Let them eat cake.” And, “There’s a sucker born every minute” was said not by showman P.T. Barnum, but by a wisecracker about the “Cardiff Giant,” Barnum’s latest hoax.

In the history of organized crime, one of the most frequently cited quotes is attributed to one-time Cleveland bootlegging and gambling syndicate figure Moe Dalitz, while testifying before the U.S. Senate Select Committee on Organized Crime and Interstate Commerce. Congress created the committee in 1950 to investigate racketeering activities in major American cities.

The committee’s chairman, Tennessee Senator Estes Kefauver, posed an aggressive line of questions about Dalitz’s earnings from his bootlegging days during Prohibition. Dalitz’s answer is widely quoted in books, magazines, websites – even museums – as a moment of defiance against hypocrisy:

“Well, I didn’t inherit any money, Senator. … If you hadn’t have drunk it, I wouldn’t have bootlegged it.”

But did Dalitz actually say all of that? Not according to the official transcripts of the hearings held by the panel, best known as the Kefauver Committee. The second sentence — “If you hadn’t have drunk it, I wouldn’t have bootlegged it” — is not mentioned anywhere in the record of Dalitz’s testimony.

The hearing took place on February 28, 1951, the committee’s second day of public proceedings in the Federal Building in downtown Los Angeles. Kefauver’s committee had been holding investigative hearings – mostly in public, but some in closed session – since May 26, 1950. The hearings were often televised live, drawing massive audiences coast to coast. Committee members traveled by air to conduct inquiries in Cleveland, St. Louis, Miami, New Orleans, Chicago, Detroit, Kansas City, Philadelphia, Las Vegas, San Francisco, New York and Washington.

At the time, Dalitz resided in Detroit and led a group of investors, including his old Cleveland syndicate friends Sam Tucker, Morris Kleinman and Lou Rothkopf, who held a 75 percent stake in the Desert Inn resort in Las Vegas. The Desert Inn, costing $6.5 million, opened in 1950, more than a year after the resort’s original owner, Wilbur Clark, requested a large investment from Dalitz’s crew to finish construction.

Dalitz’s reputation as a bootlegger of Canadian whiskey during Prohibition with Cleveland’s Mayfield Road Gang that included Kleinman, Tucker and Rothkopf, was well known by 1950. He had ducked the Kefauver Committee’s subpoena and avoided having to appear at its closed-door hearing in Las Vegas on November 15, 1950. But after Kefauver convinced the U.S. Senate to order Dalitz arrested for not testifying, Dalitz backed down.

On February 19, 1951, before Dalitz’s testimony, former Cleveland syndicate head Alfred “Big Owl” Polizzi admitted to the committee in Washington, D.C., to living off legitimate investments, including a construction firm in Florida, thanks to ill-gotten gains from rum-running during Prohibition and illegal slot machines. Kefauver would try to get Dalitz to admit that capital earned from running liquor and illegal casinos in Florida, Kentucky and Ohio led to deals for the Desert Inn, real estate and development projects in Michigan, a steel company and a Midwestern railroad.

On February 27, a day before Dalitz was sworn in, tension was mounting as the public and press considered pervasive influence of gangsters in Los Angeles. The Kefauver Committee accepted for the record the findings of a 1950 grand jury investigation in Los Angeles that revealed “an almost complete breakdown of law enforcement in Los Angeles County,” including unsolved gang shooting deaths and payoffs by racketeers to the Sheriff’s Department vice unit. The grand jury reported that Mickey Cohen’s lawyer, Samuel Rummel, was shot to death on the eve of testifying about bookies who set aside more than $200,000 for police protection. Clinton Anderson, chief of the Beverly Hills Police, described for the committee the 1947 shooting death of gangster Benjamin “Bugsy” Siegel in a leased home in that city. Siegel had arrived to pick up his clothes as the lease was to expire the next day. An unknown person called a number in Las Vegas from the house shortly before the shooting. Police believed Siegel’s killers “were informed and were waiting for his return. They knew he was coming for his clothes,” Anderson said.

When Dalitz took his turn to testify the next day, Kefauver went on the attack, getting Dalitz to admit making $230,000 after manipulating shares of stock during the merger of the Detroit Steel Company with Cleveland-based Reliance Steel in 1945.

In the official account of their exchange, on Page 923 of the committee’s transcript for that day, Kefauver grilled Dalitz about proceeds in the past from illegal gambling. Dalitz admitted to having invested in the former Pettibone Club casino in Cleveland with Tucker, Kleinman and Rothkopf, The Frolics Club gambling hall in Florida with racketeer Sam “Game Boy” Miller, and to bankrolling the Arrow Club casino in Cincinnati.

In advance of the hearings, Dalitz, accompanied by his lawyer Charles Carr, agreed to confess to illegal acts older than six years to avoid state criminal charges, outside the statute of limitations. Kefauver then asked about the wealth Dalitz had earned from bootlegging. Dalitz revealed that he made about $95,000 a year ($950,000 in 2016 dollars) from his legitimate investments.

The Chairman: Now, Mr. Dalitz, more than six years ago you fellows got your start by rum-running, didn’t you, back in the old Prohibition days? Now, I am not going to go into any details, but Polizzi has told us about it, and others have told us about it. Now, is that the way you got your original money to make your original investments?

Mr. Dalitz: Well, not all of these investments; no.

The Chairman: I understand not all of them because some of them are very profitable. As a matter of fact, you have been making a great deal of money in recent years, so I suppose from your profits from one investment you would then go ahead and make another investment. Now, to get your investments started off you did get yourself a pretty good little nest egg out of rum-running, didn’t you?

Mr. Dalitz: Well, I didn’t inherit any money, Senator.

The Chairman: In order to buy an interest in a good many of these companies you had to have money from somewhere; that is true, is it not?

Mr. Dalitz: Senator, I went into the laundry business a long time after all of that. I was in the laundry business before that and after that. I have been in that business all my life, practically.

A few moments later, Dalitz finally conceded he had enriched himself from bootlegging. “I made money many during that era; yes, Senator.”

Why does it matter that “If you hadn’t have drunk it, I wouldn’t have bootlegged it” is not part of the official transcript? It shows that one of the most indignant and oft-cited remarks by a member of organized crime during the Kefauver hearings was either somehow stricken from the record or never happened in the first place.

From the careful way Dalitz answered Kefauver’s questions, a man still with Mob ties and under the public spotlight only months after his Desert Inn opened, it’s difficult to imagine he would have talked down Kefauver in such a way, perhaps recalling the popular scrambled version of the famous line from Shakespeare’s Henry the Fourth, Part 1: “The better part of valor is discretion, in the which better part I have sav’d my life.”