Just a month before I was born in Newport, Ky., the newspaper, Louisville Courier-Journal, got a tip that one of the gambling joints, in the town where I would live until I was five, would be raided. Just one of the 60 or 70 dining-drinking-gambling-prostitution nightclubs was about to be one of the first establishments controlled by organized crime to be busted in Newport.
The newspaper, according to a Time Magazine article published that summer, “sent photographer George Bailey hustling to the scene. The Glenn Schmidt’s Playatorium, a plush nightclub, was about to be raided. The leader of the raid was Louisville Detective Jack Thiem, who had hired 16 private detectives in Louisville, 106 miles from Newport, to help him.
“When photographer Bailey arrived on the scene, he got more than he expected. Inside the Playatorium the raiding party not only found such gambling equipment as crap tables and bingo games; they also encountered Newport’s police chief George Gugel, and three detectives who had just dropped by ‘for a soft drink.’ Photographer Bailey snapped pictures, including one of Chief Gugel with Playatorium Proprietor Schmidt. But Bailey’s picture taking, came to an abrupt end.”
This was not some movie plot concocted in Hollywood but a good-ol’-boy network, which had started in the 1930s and had evolved into graft and corruption.
“’Arrest that man!’ shouted Chief Gugel, pointing at photographer Bailey. ‘I’m still boss in this town, and I’ll tell you when you can take my picture.’ He seized Bailey’s camera, ruined his film, and had him carried off to jail. The Courier-Journal reported what had happened in page one stories, and the grand jury indicted Police Chief Gugel for interfering” with the photographer’s civil rights.”
Gugel was indicted and even Detective Thiem, who had arrested Gugel, was even arrested because he was thought to have some interest in one of the brothels and some other vice operations. By the summer Thiem had moved to Las Vegas to become a Deputy Sheriff. Gugel was fined $1,000 and returned to running the graft ridden police force.
Many high-end nightclubs, called “carpet clubs” were developed in Newport during the 1940s and 50s and continued long after those days - legally. Some may remember the 1977 third most deadly fire in U.S. history, which destroyed the Beverly Hills Supper Club killing 165 people. Singer/actor John Davidson was on stage when the fire started. Frank Sinatra had performed there and Dean Martin had been a blackjack dealer at the club before the illegal operations across the area had been shut down, eventually, due to community outrage.
The corruption-weary community formed a sort of posse whose sole purpose was to clean up corruption in Newport and surrounding areas. Called the “committee of 500,” a secular and nonpolitical civic group (my father a member,) worked to finance the campaign of an honest candidate for sheriff to clean out the courthouse, and with the help of Robert F. Kennedy’s task force on organized crime end the corruption in Newport.
How would corruption of that magnitude develop in the middle of America?
According to a case study conducted at Eastern Kentucky University (EKU), “The legitimate market’s failure to serve sizable consumer populations is responsible for the existence of most vice operations. As a consequence, organized crime capitalizes on market voids and profits from services to these consumers.”
Organized crime in Newport existed because (1) there was a market and (2) there was a community need for productive, profit-making enterprises.” It supplied jobs for community residents, and it allowed legitimate income and employment. “Organized crime required waitresses, clerks, technicians, bartenders, and the like, not just in Newport’s casinos and brothels, but in all the legitimate businesses which benefitted from the presence of vice. Clearly, gamblers supported local businesses. In fact, we can suggest strongly, that at least from 1930 to 1960, gambling profits assisted small shopkeepers in competing with chain stores or larger competitors,” the EKU Report theorizes.
To a lesser extent, corruption can begin with intimidation by people of means who may place selected persons in positions of power. But in today’s environment the efforts to revive the good-ol’-boy network are typically squashed by younger generations who do not want to cede total control to a powerful few. But there’s one problem:
Today’s young turks can be tomorrows good ol’ boys.