Genovese and Kefauver
After Genovese's return to the US and the dismissal of 1936 murder charge, he began a campaign to regain the family leadership from Costello. Genovese started building loyalty among family soldiers by lending them money or by doing them favors that they someday would have to reciprocate. The resentment Genovese felt for Costello was multiplied by the fact that Genovese was no longer a top boss in the family; he was just a capo (caporegime), a street boss in charge of a crew of soldiers. However, Genovese was treated as a "don" by the capos and street soldiers who committed most of the violent crimes (i.e., murder, robbery, etc.). In contrast, Frank Costello controlled the support of the capos and soldiers who ran the white collar crime rackets (i.e., gambling, loansharking, construction, etc.) and the family's many legitimate investments. Costello's position as a Commission member and his popularity as a top boss kept him safe from any assassination attempt or power move by Genovese. To unseat Costello, Genovese needed more support from the Luciano family and the other Commission members. Genovese was also dissuaded from a direct attack on Costello by the strength of underboss, Guarino "Willie Moore" Moretti, a Costello cousin and staunch ally who commanded a small army of soldiers in New Jersey.
From May 1950 to May 1951, the US Senate conducted a large scale investigation of organized crime, commonly known as the Kefauver Hearings. The entire country was held in awe by the parade of over 600 gangsters, pimps, bookmakers, politicians and mob lawyers testifying before Congress, showcased on television. The hearings were called by a Special Committee of the United States Senate chaired by Senator Estes Kefauver of Tennessee, who had been appointed to investigate organized crime in Interstate Commerce.
By this time, Costello had become a powerful and respected underworld figure; however, Costello still craved the respectability of high society. Costello allegedly consulted a psychiatrist on achieving this goal, but ultimately failed to gain legitimate respectability. During the Kefauver hearings, Costello became the star attraction, being billed as America's #1 gangster and the de facto leader of New York's Tammany Hall. As the underworld grapevine put it, "Nobody in New York City can be made a judge without Costello's consent."
Costello agreed to testify at the hearings and not take the Fifth Amendment, in contrast to all the previous underworld figures to take the stand. The Special Committee and the TV networks had agreed not to broadcast Frank Costello's face, only his hands. During the questioning, Costello nervously refused to answer certain questions and skirted around others. When asked by the committee, "What have you done for your country Mr. Costello?", the raspy-voiced Costello's reply evoked a rare laugh at the hearings: "Paid my tax!" Costello eventually walked out of the hearings.
Costello found the 1950s to be very trying, as the high visibility he received during the Kefauver Hearings brought additional law enforcement and media scrutiny. However, Costello's greatest troubles began with the assassination of Willie Moretti, his right hand man. His mental condition had prompted Moretti to reveal some embarrassing details at the Kefauver hearings. As a result, the Commission ordered Moretti's elimination, which happened October 4, 1951 in a New Jersey restaurant. In addition to Moretti's death, Costello was convicted on contempt of Senate charges in August 1952 for the hearings walkout, and went to jail for 18 months. Released after 14 months, Costello was charged with tax evasion in 1954 and sentenced to five years imprisonment. Costello served 11 months of this sentence before it was overturned on appeal. In 1956, Costello was again convicted and sent to prison. In early 1957, he was again released on appeal.
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