Arnold Rothstein


Arnold Rothstein, nicknamed "the Brain", was an American racketeer, businessman and gambler who became a kingpin of the Jewish mob in New York City. Rothstein was widely reputed to have organized corruption in professional athletics, including conspiring to fix the 1919 World Series. He was also a mentor of future crime bosses Lucky Luciano, Meyer Lansky, Frank Costello and numerous others.
According to crime writer Leo Katcher, Rothstein "transformed organized crime from a thuggish activity by hoodlums into a big business, run like a corporation, with himself at the top". According to author Rich Cohen, Rothstein was the person who first realized that Prohibition was a business opportunity, a means to enormous wealth, who "understood the truths of early century capitalism and came to dominate them". His notoriety inspired several fictional characters based on his life, portrayed in contemporary and later short stories, novels, musicals and films.
Rothstein refused to pay a large debt resulting from a fixed poker game and was murdered in 1928. His illegal empire was broken up and distributed among a number of other underworld organizations and led in part to the downfall of Tammany Hall and the rise of reformer Fiorello La Guardia. Ten years after his death, his brother declared Rothstein's estate was bankrupt.

Early life and education

Arnold Rothstein was born into a comfortable life in Manhattan, the son of a wealthy Jewish businessman, Abraham Rothstein, and his wife, Esther. His father was a man of upright character who had acquired the nickname "Abe the Just". Arnold was highly skilled at mathematics, but was otherwise uninterested in school. His older brother, on the other hand, studied to become a rabbi.
Rothstein was known to be a difficult child, and he harboured a deep envy of his older brother, Harry. Rothstein's father believed that his son always craved to be the center of attention, and would often get frustrated when he was not.
While still a child, Rothstein began to indulge in gambling, but no matter how often his father scolded him for shooting dice, Rothstein would not stop. In 1921, Rothstein was asked how he became a gambler, "I always gambled. I can't remember when I didn't. Maybe I gambled just to show my father he couldn't tell me what to do, but I don't think so. I think I gambled because I loved the excitement. When I gambled, nothing else mattered."

Illegitimate career

By 1910, Rothstein, at age 28, had moved to the Tenderloin section of Manhattan, where he established an important casino. He also invested in a horse racing track at Havre de Grace, Maryland, where he was reputed to have fixed many of the races that he won.
Rothstein had a wide network of informants; very deep pockets from some among his father's banking community associates; and the willingness to pay a premium for good information, regardless of the source. His successes made him a millionaire by age 30.

1919 World Series

There is a great deal of evidence both for and against Rothstein being involved in the 1919 World Series fix. In 1919, Rothstein's agents allegedly paid members of the Chicago White Sox to "throw", i.e. deliberately lose, the World Series to the Cincinnati Reds. He bet against them and made a significant profit in what was called the "Black Sox Scandal".
He was summoned to Chicago to testify before a grand jury investigation of the incident; Rothstein said that he was an innocent businessman, intent on clearing his name and his reputation. Prosecutors could find no evidence linking Rothstein to the affair, and he was never indicted. Rothstein testified:
In another version of the story, Rothstein was first approached by Joseph "Sport" Sullivan, a gambler, who suggested Rothstein help fix the World Series. Rothstein supposedly turned down Sullivan's proposal but when he received Attell's offer, Rothstein reconsidered Sullivan's first offer. He figured that the competition to fix the game made it worth the risk to get involved and still be able to cover his involvement. David Pietrusza's biography of Rothstein suggested that the gangster worked both ends of the fix with Sullivan and Attell. Michael Alexander concluded that Attell fixed the Series "probably without Arnold Rothstein's approval", which "did not prevent Rothstein from betting on the Series with inside knowledge".
Leo Katcher said that "all the records and minutes of the Grand Jury disappeared. So, too, did the signed confessions of Cicotte, Williams and Jackson.... The state, virtually all of its evidence gone, sought to get the players to repeat their confession on the stand. This they refused to do, citing the Fifth Amendment." Eventually, the judge had no choice but to dismiss the case. Katcher went on, "Thus, on the official record and on the basis of Hoyne's statement, Rothstein was never involved in the fixing of the Series. Also, on the official record, it was never proved that the Series had been fixed." All eight White Sox players were forever banned from the game of baseball. Despite all his denials, though, Katcher noted that "while Rothstein won the Series, he won a small sum. He always maintained it was less than $100,000. It actually was about $350,000. It could have been much – very much – more. It wasn't because Rothstein chickened out. A World Series fix was too good to be true – even if it was true."

1921 Travers Stakes

Under the pseudonym "Redstone Stable", Rothstein owned a racehorse named Sporting Blood, which won the 1921 Travers Stakes under suspicious circumstances. Rothstein allegedly conspired with a leading trainer, Sam Hildreth, to drive up the odds on Sporting Blood. Hildreth entered an outstanding three-year-old, Grey Lag, on the morning of the race, causing the odds on Sporting Blood, to rise to 3–1. Rothstein bet $150,000 through bookmakers, allegedly having been informed that the second favorite, Prudery, was off her feed. Just before post time and without explanation, Hildreth scratched Grey Lag from the starting list. Rothstein collected over $500,000 in bets plus the purse, but a conspiracy was never proven.

Prohibition and organized crime

With the advent of Prohibition, Rothstein saw the opportunities for business; he diversified into bootlegging and narcotics. Liquor was brought in by smuggling along the Hudson River, as well as from Canada across the Great Lakes and into upstate New York. Rothstein also purchased holdings in a number of speakeasies. Later he became the first to illegally import Scotch whiskey in his own fleet of trans-Atlantic freighters. He knew high end booze would be the "chic thing to have."
With his banking support, and high-level political connections, Rothstein soon managed to end-run Tammany Hall to the street gangs. Subsequently, his criminal organization included such underworld notables as Meyer Lansky, Jack "Legs" Diamond, Charles "Lucky" Luciano, and Dutch Schultz, whose combined gangs and double-dealing with their own respective bosses subverted the entire late 19th century form of political gangsterism. Rothstein's various nicknames were Mr. Big, The Fixer, The Man Uptown, The Big Bankroll, and The Brain.
Rothstein frequently mediated disputes among the New York gangs and reportedly charged a hefty fee for his services. His favorite "office" was Lindy's, at Broadway and 49th Street in Manhattan. He often stood on the corner surrounded by his bodyguards and did business on the street. Rothstein made bets and collected debts from those who had lost the previous day. Meanwhile, he exploited his role as mediator with the city's legitimate business world and soon forced Tammany Hall to recognize him as a necessary ally in its running of the city. Many historians credit him as the first successful modern drug dealer.
By 1925, Rothstein was one of the most powerful criminals in the country, and had forged a large criminal empire. For a time he was the largest bootlegger in the nation, until the rise of George Remus. With a reported wealth of over $10 million Rothstein was one of the wealthiest gangsters in US history, and is widely considered to be one of the founding fathers of organized crime in the United States.

Assassination

On November 4, 1928, Rothstein was shot and mortally wounded during a business meeting at Manhattan's Park Central Hotel at Seventh Avenue near 55th Street. He died two days later at the Stuyvesant Polyclinic Hospital in Manhattan.
The shooting was reportedly linked to debts owed from a three-day long, high-stakes poker game in October. Rothstein hit a cold streak and ended up owing $320,000. He claimed the game was fixed and refused to settle up. The hit was intended to punish Rothstein for failing to pay his debt. Gambler George "Hump" McManus was arrested for the murder, but later acquitted for lack of evidence.
According to Kevin Cook in the book Titanic Thompson, the poker game was fixed by gambler Titanic Thompson and his associate, Nate Raymond. Due to some complicated side bets, by the end Rothstein owed $319,000 to Raymond : $30,000 to Thompson and about $200,000 to the other gamblers present. McManus owed Rothstein $51,000. Rothstein stalled for time, saying that he would not be able to pay until after the elections of November 1928, when he expected to win $550,000 for successfully backing Herbert Hoover for President and Franklin D. Roosevelt for Governor. Thompson testified at McManus' trial, describing him as "a swell loser" who would never have shot Rothstein. According to Cook, Thompson later told some of his acquaintances that the killer had not been McManus but his "bag man", Hyman Biller, who fled to Cuba shortly afterwards.
In his book Kill the Dutchman!, a biography of Dutch Schultz, the crime reporter Paul Sann suggests that Schultz murdered Rothstein. He says this was in retaliation for the murder of Schultz's friend and associate Joey Noe by Rothstein's protégé Jack "Legs" Diamond.
On his deathbed, Rothstein refused to identify his killer, answering police inquiries with "You stick to your trade. I'll stick to mine", and "Me mudder did it." Rothstein was buried at Ridgewood's Union Field Cemetery.

Break-up of empire

At his death, Prohibition was in full swing, various street gangs were battling for control of the liquor distribution and the carefully constructed political boss structure of the late 19th century was in total collapse. Frank Erickson, Meyer Lansky, Bugsy Siegel and other former associates split up Rothstein's various "enterprises" after his death. With Rothstein's death, the corrupt and already-weakened Tammany Hall was critically wounded because it relied on Rothstein to control the street gangs. With Tammany Hall's fall, reformer Fiorello La Guardia rose in prominence and was elected Mayor of New York City in 1933.
Ten years after his death, Harry Rothstein, Arnold's brother, declared Rothstein's estate bankrupt and Arnold's wealth disappeared.

In popular culture

Literature