New Vistas of Rottenness - Part 4
By Patrick Gaffey
As the new accusations emerged, Buron Fitts, the new District Attorney, decided to run against Governor Young’s re-election. Allegations that Berman had bribed Young to appoint Friedlander to protect Julian Petroleum were pure gold. Young had been uncomfortable in appointing Friedlander, which he made obvious in his announcement: "I have chosen Mr. Friedlander...largely on the showing of the four hundred or more extremely strong endorsements which have come to me from those who are acquainted with his record of public service in Los Angeles.... I have received practically nothing adverse to these opinions.... In view of these facts I feel that I have no right to hesitate longer or to oppose my own lack of close personal acquaintance with Friedlander to the verdict of his own fellow townsmen who know him best." He felt so defensive he actually listed 100 of Friedlander’s advocates, including William Rhodes Hervey, Charles F. Stern, Louis B. Mayer, Motley H. Flint and Cecil B. DeMille.
Despite this stain on Young’s armor, White Knight Fitts himself looked rather grimy. After fifteen months, though the Federal Government and other courts had convicted a few defendants, the only man Fitts had managed to send to prison in the scandal was his former boss—Ed Rosenberg was still on his way—and people were asking why. Worse, the statute of limitations would expire May 6, and it looked as though everyone else might escape justice. Former Chief Deputy District Attorney "Buddy" Davis, who had prosecuted the fixed Julian trial and had since been convicted of bribery, said he had alerted Fitts to the jury-buying a year earlier, but that Fitts had done nothing about it. Even the friendly Times reported its staff had taken those accusations to Fitts six months earlier, but were met with a complete lack of interest. Fitts’ rebuttal to these charges was less than detailed: "Humph! Bunk!"
Fitts lost a legal battle with S.C. Lewis, who did not want to be prosecuted further and won the right to leave for Seattle and federal prison, but then Fitts managed to have him returned. The District Attorney let the Loves and Weaver off in exchange for their testimony against Lewis, who acted as his own attorney. During his summary argument, the Times reported that he "broke down and wept while pleading with the jury not to add another ten years to his present sentence." Lewis piously claimed he was framed as punishment for trying to help investors salvage something from the wreckage of his company. He wept again when the jury quickly returned with a verdict of "not guilty." Then he returned to prison at McNeil Island.
Photo: District Attorney Buron Fitts
One of Fitts’ problems was that most of his evidence came from witnesses who had turned states’ evidence; most importantly, Berman. The public wanted Berman punished. Berman and Rosenberg had issued millions of shares of excess stock. They could not have been more clearly guilty. That both were obviously Jewish at a time of anti-semitism in America helped make them targets. Perhaps worse for Berman was his alias, "Jack Bennett." Newspapermen believe every criminal should have an alias or a nickname; a catch phrase helps. Berman had that, too. Lewis first introduced him in Los Angeles as "a very bright young man." He became "the bright boy" of the Julian scandal, receding hairline, gathering jowls and all.
Defendants accused of Julian-related offenses were being prosecuted throughout the court system, and prosecutors repeatedly targeted Berman. Fitts saved his witness from one courtroom after another until, feeling under siege, Berman threatened to head to McNeil Island to start serving his federal sentence. Governor Young made Fitts’ repeated rescues of Berman a campaign issue.
When Berman was due to be tried on one set of charges, he escaped from Fitts’ guards, disappeared, then surfaced in Seattle, attempting to turn himself in to the federal penitentiary. It took several days. Fitts nearly extradicted him, but Berman finally obtained the necessary paperwork and broke into prison.
The extortion trial of Leontine Johnson and Morris Lavine ended May 12 with a hung jury. The District Attorney’s staff investigated the single juror holding out for aquittal, claiming they had watched him receive signals from a trial visitor.
In the first part of June new usury charges against members of the Million Dollar Pool were dismissed, as were charges involving the second pool only days later. The same month juror John Groves of the original Julian trial and the man who bribed him were both convicted, but juror Frank Grider was not prosecuted; though Fitts had dragged Berman back to Los Angeles, he would not testify.
Later, though, Berman’s testimony helped convict Johnson and Lavine in their retrial. "Little girl" Johnson was sentenced to nine months in the county jail, Lavine to one year and a $5,000 fine.
The necessity of using criminals to testify against each other continued to plague Fitts, who seemed incapable of understanding that his star witness should be on trial. Berman had received a grant of immunity, which prevented his being charged with most of the crimes he had clearly committed. But in April an eagle-eyed judge spotted a two-year-old indictment on instances of forgery and embezzlement not covered by Berman’s immunity. The judge put Berman on trial. District Attorney Fitts exploded, white with fury that his prize witness was being harassed. He insisted Berman could never be convicted on the charges and went farther: "The action of Judge Marshall F. McComb in causing the arrest and imprisonment of Jacob Berman at this juncture, places in serious jeopardy, if it does not actually destroy all hope of convicting any guilty person in any way connected with the gigantic Julian Petroleum crash."
Tygiel notes that Berman’s trial was, "the final opportunity for the State of California to extract retribution from either Lewis or Berman for their crimes." Berman was convicted on three counts of forgery and sentenced to three to 42 years in San Quentin, following his federal term. The Times spun the conviction shamelessly, editorializing that it, "removes the Keyes contention that there was not enough evidence on which to proceed," (emphasis added) and "Dist.-Atty. Fitts promised the courts and the public that he would cause Bennett [Berman] to be prosecuted on at least one major charge...and his promise has now been kept."
Defending the business community to the end, the Times also wrote that Berman’s overissued stock had, "negatived the support given by pools," presumably the pools which sucked millions of dollars from the failing corporation.
In the fall of 1930 Fitts admitted he would not be able to convict Lewis, Berman or anyone else for overissuing stock. In dismissing the remaining cases, the judge publicly savaged Fitts for leading the Grand Jury to issue indictments which could not be brought to trial.
The $75,000 bribe Charlie Crawford had paid Morris Lavine, after being impounded as evidence, became the subject of a tug of war. Crawford asked for its return. Lavine also claimed it, presumably feeling he had earned the spoils of his crime. The heirs of the defunct Wagy Co. argued that they deserved the money, the other two claimants having illegally exploited the brokerage. On May 19, 1931, clear title to the money was awarded to Crawford.
The next day David Clark, war hero, former crusading deputy district attorney and current candidate for municipal judge, went to Crawford’s office, the scene of the bribery sting, where he met with Crawford and his business partner, journalist Herbert Spencer. After an hour witnesses heard gunshots. Spencer staggered into the street, bleeding and dying. Crawford’s body was found in his office, where a witness said a policeman removed a cigar from the dead man’s right hand. Judicial Candidate Clark disappeared for days, then surrendered. The White Spot waited weeks before Clark told his—the only—side of the story, that the incident was unrelated to the Julian scandal and that he had killed the men in self defense after they had tried to blackmail him. No weapon was found in Crawford’s office, and if his dead right hand had held a cigar, it could not have held the gun Clark said he took with him and threw away.
A special prosecutor was appointed to prosecute the former prosecutor. As Clark awaited trial 60,000 Angelenos voted for him for municipal judge—not enough to win. The trial ended in a hung jury, one man holding out for conviction while the other eleven jurors, many of them women, hailed the handsome young attorney as an American hero; he had killed a leader of the "underworld" and a journalist. In a second trial Clark was found not guilty.
A year after the deaths Crawford’s widow petitioned the county for her husband’s $75,000. The first response was a confused silence. The money was gone. So was Deputy County Clerk Liberty Hill, a quiet white collar worker, who had earned the county’s trust over a 20-year career. Hill turned out to be another Angeleno addicted to the dream of something for nothing, who had been testing his luck on the stock market for some years. Knowing the $75,000 was sitting in the county vault, he decided to take it out for a spin, double it on the market, then return the original amount, nobody the wiser. Of course he lost it all and wound up in San Quentin in the last sad episode of the Julian scandal, which had twisted and stretched over more than a decade.
The particulars of the scandal, from the arcane financial manipulations to a plot which constantly branches and folds back upon itself in a confused welter of detail, was difficult enough for Tygiel to research, but his genius lies in presenting the story as a drama not only comprehensible, but gripping, with a surprise around every corner and—obviously—far more shocks, revelations, side stories and detail than this space allows. He gives the scandal meaning by placing it in its temporal context, the prelude to the Great Depression. He also shows it was part of the American fantasy of something for nothing, which remained alive and deadly in the early 1990s, when Tygiel was writing the book and S.C. Lewis’ specialty, corporate mergers, were resurgent. Of course the continuing American fantasy threatens the economy today. Tygiel also makes clear without particular emphasis that the atmosphere of the White Spot spawned the career of Richard Nixon, which was marked by many characteristics of Los Angeles politics, from anticommunist witchhunts to pious hypocrisy.
Tygiel’s is the definitive work on the Julian Oil scandal, and one which should be read by anyone who cares about Los Angeles or American history.
Finney writes well, and provides a sense of immediacy, but he wrote his Bubble too early, before the scandal had ended. Lorin Baker’s That Imperiled Freedom is written in a nearly unreadable flowery style, loaded with irony and inside "jokes," and is so dedicated to its asserted conspiracy that it makes victims of Keyes, Berman and Rosenberg. But Baker includes valuable and evocative information missing from other accounts.
Buron Fitts’ reputation for integrity survived the Julian scandal, but then dissolved in public view. If a single honest American lived in the White Spot during the period, it was not District Attorney Buron Fitts. In 1931 investors in a web of dummy businesses set up by the California Reserve Company, which traded in real estate mortgages, complained they had been fleeced. Five thousand of them had, in fact, been swindled of $7,000,000. The president of the California Reserve was George G. Gregory, who was married to Buron Fitts’ sister, Berthal. Mrs. Berthal Gregory worked as her brother’s secretary.
Fitts assured the 1931 and 1932 grand juries that no criminality was involved in the case. He told the same story to the jury in 1934, but some members of that panel saw through the whitewash. They found that all records of complaints against the California Reserve had mysteriously disappeared from the grand jury files maintained by Mrs. Gregory. The panel pressed the issue. But unlike Keyes, Fitts was part of the Los Angeles political establishment and had the solid support of the Los Angeles Times. As the grand jury pushed harder, a bomb exploded in the home of Lyndon Foster, one of its investigators. Wide and heavy political pressure was brought to bear to stop the jury. Still, it managed to indict George Gregory and nine others on charges of grand theft, violations of the corporate securities act and forgery, beating the three-year statute of limitations by hours.
Amid evidence of blatant fraud and looting emerged the revelation that $200,000 of the looted funds had been directed into the political campaigns of Buron Fitts.
Massive efforts were made to stall or halt the prosecutions. Charges were dropped against one conspirator after another. Finally, in what Finney (Angel City in Turmoil), called "the astonishing climax in this case," in 1937 Gregory and two others "were ACQUITTED" (Finney’s emphasis). One underling was found guilty of forgery and given probation.
On March 5, 1931, six weeks before Charlie Crawford and Herbert Spencer were murdered, three people were arrested in Southern California: a former prostitute, Olive Day, her sometime lover and partner, William Jobelman, and a millionaire named John P. Mills. Day and Jobelman had a lucrative agreement to provide Mills with a young virgin each week for his sexual enjoyment. Though they apparently provided him with some young prostitutes, using various subterfuges to make them seem virgins, they also recruited real virgins, anesthetizing at least one 16-year-old with large quantities of alcohol to get her through her encounter with the millionaire.
After publicly expressing his outrage, Fitts proceeded to build a case against the accused. Leslie T. White, a member of Fitts’ special detective squad, arrested Mills. In his autobiography, Me, Detective (1936), White says Mills’ reaction was to ask, "what he was wanted for." White observed: "It nearly always happens that way—when a prominent citizen is taken into custody, he is never quite sure of the specific thing for which he is wanted." Mills could think of several recent business deals which might have led to his arrest; he was horrified when he realized which crime had been discovered and how it might look to the public. However, he quickly recovered and set his attorneys to work.
Mills spent $10,000 to hire Lucien Wheeler to help him through his difficulties. Wheeler was a former federal agent who had organized the D.A.’s detective squad; he was a close friend of Buron Fitts. Six days after Wheeler was hired, he agreed to pay Fitts $18,500 for an orange farm near Claremont held in the name of Buron Fitts’ mother, who had paid $15,000 for it during the boom before the 1929 crash, after which its value plummeted. Three months after Wheeler agreed to the purchase, Fitts’ mother deeded the farm to her daughter, Mrs. Berthal Gregory, who opened escrow with Wheeler for his purchase of the land.
Within 48 hours of the sale the three young girls held as witnesses and up to that time carefully guarded by the District Attorney’s office were released. Two disappeared for good. Then Fitts lied to the court, claiming that the third refused to testify. He asked that the charges against the millionaire be dismissed for lack of evidence. The trial judge insisted that Fitts proceed with his case. Fitts said that without witnesses he had no case. Mills, Jobelman and Day were released.
Mills went home to enjoy his millions. Jobelman, the white slaver, was re-charged on misdemeanor charges before being unconditionally released. Olive Day, the lone female in the dock, a former prostitute and the only defendant who candidly admitted everything and expressed remorse, went to prison
After a reporter discovered the Claremont orange farm transaction, Fitts ordered an investigation of himself, which he controlled; he managed to induce the 1931 Grand Jury to clear him. The 1934 Grand Jury would not be controlled; it re-investigated the entire affair. Finney gives a fine account of the case in Angel City. Fitts denied he had benefitted in any way from the farm sale and claimed he knew almost nothing about it. But it quickly became clear that Mrs. Gregory had signed over part of the payment, a $7,300 trust deed note, to Fitts, who used it as collateral for a $4,000 loan, which he used to buy a ranch. In the process of the ranch purchase, Fitts signed papers attesting that he was the legal owner of the orange farm. After testifying elaborately to one set of assertions, he was forced to return before the jury and admit, fact by fact, that everything he had sworn to was untrue. He explained that the whole sequence, involving thousands of dollars, had slipped his mind. Years later he explained it again: "My mind was paralyzed in 1931."
With the previous district attorney sitting in San Quentin, the 1934 Los Angeles County Grand Jury indicted his successor, Buron Fitts, and Fitts’ sister, Mrs. Berthal Gregory, who had testified in his behalf, on charges of perjury. On December 14, 1934, the grand jury went farther and filed for Fitts’ removal from office, charging 21 counts of misconduct.
Always supported by the Los Angeles Times, Keyes now had the business-minded Examiner and Herald-Express behind him as well. Thus heartened, he did what any good politician would do: He announced that he was the victim of "an amazingly vicious effort to break down the largest law-enforcing body in this country."
Fitts was not removed from office. With his deep support from the Southern California establishment, led by the Times, getting him to trial was an ordeal that reached the California Supreme Court. His trial was finally held in 1936. On February 8 of that year he was acquitted. He continued to serve as District Attorney until 1940.
Leslie White’s Me, Detective is a true classic of the period, which should not be out of print; it provides a friendly inside view of Fitts’ office and covers a number of astonishing cases. Angel City in Turmoil is a partly first-person account of the fight against corruption in Los Angeles in the 1930s, culminating in a surprising success. Buron Fitts was a primary opponent of the anti-corruption movement, and Finney covers his activities extensively. William Bonelli was a member of the California Board of Equalization when he wrote Billion-Dollar Blackjack, covering much of the same period as Turmoil. He was one of a number of writers who traced the corruption of Los Angeles back to the Los Angeles Times. Morrow Mayo’s Los Angeles is as much a classic as Me, Detective; it covers the entire history of the state up to its writing, opening with a blast of racism directed toward the Native American inhabitants of the state; Mayo’s feeling was widespread at the time and caused the violent extinction of some of the original tribes. But Mayo was better than his time in other ways, beginning with his attitude toward other races and cultures; his writing is engaging, and so is his sense of humor.
The writers of the period share a number of assumptions: Though outraged, they take corruption in Los Angeles for granted. To a greater or lesser extent, they see the Los Angeles Times as a key component of the problem. They share a jaundiced view of the entire "justice" system, none so much as Leslie White, who was part of it. And they share a suspicion of big business and the wealthy in general.
Buron Fitts’ view of crime in Los Angeles changed during his tenure as district attorney. Upon taking office he said, "We all know that crime is rampant in California and it seems to me that we should be honest about it and admit it." He added that, "the criminal the public is concerned with today often wears evening clothes and has the confidence of the people." Of course the office of district attorney often required its occupant to appear at formal functions in white tie, which Fitts may well have worn as he spoke.
A year and a half after that inaugural speech, as the Julian scandal’s revelations of pervasive corruption spilled in every direction, Fitts was running for governor. Then he said, "I sincerely believe that the backbone of the underworld in this county has been broken." He was using the nice distinction between the "underworld" of lawbreakers who were tavern owners, whorehouse madams and policemen as opposed to the criminals who were bankers, film industry moguls and district attorneys. He claimed the "underworld" of crime was nearly defeated; he could not make that claim for the upperworld; anyone could see the upperworld was running wild.
In April 1934 as the grand jury collected information leading to his indictment, Fitts repeated his earlier observation; he sounded almost proud: "Ten years ago the criminal was vastly different. Today he is generally well-dressed, intelligent and a gentleman. Because of his access to the auto, radio and the airplane, the size of our city and our attractive climate, he is hard to corral." The Times headlined its account of his speech, "Fitts Calls City ‘Whitest’" and reported without comment his claim that in terms of "organized crime," Los Angeles was the "whitest" spot in the nation.
© 2006 Patrick Gaffey
pjgaffeyATearthlinkDOTnet
Photos courtesy of the author