Ron Unz provides a genuinely eye-opening look at the history of macrocorruption in the state of California and its relationship to the Chicago Mob. It’s a long and detailed article that is absolutely worth reading in its entirety.
Money was undoubtedly the mother’s milk of postwar California politics. But the speed with which these recent Chicago transplants transformed themselves into powerful financial figures in their new state was greatly assisted by their participation in a particular financial windfall. They were leading beneficiaries of one of the worst governmental violations of constitutional rights in our national history, and Russo devotes an entire chapter to this dark tale.
Like all other Asians, California’s ethnic Japanese population had long suffered under the harshest sort of racial discrimination, being denied naturalized citizenship and therefore prohibited from owning land, while nearly all additional immigration from their homeland had been banned in the 1920s. Yet although they had arrived as penniless farm laborers mostly around the turn of the century, their intense work-ethnic and diligent savings had established them as a small but reasonably prosperous community by the late 1930s. The Fourteenth Amendment granted citizenship to their American-born children, thus allowing their families to eventually acquire large amounts of farmland and other properties, with their visible success sometimes provoking considerable envy from their white neighbors and competitors.
As I have discussed elsewhere, FDR’s desperate attempt to circumvent overwhelming public opposition America’s involvement in World War II eventually led to his endless 1941 provocations against Japan, which successfully culminated in the attack on Pearl Harbor. Soon afterward, demagogic appeals by politicians and media pundits led much of the public to begin demanding the incarceration of all ethnic Japanese, U.S. citizens or not, and by early 1942 FDR signed an executive order shipping some 120,000 Japanese-Americans off to grim concentration camps, with those individuals sometimes being forced to leave their homes on very short notice. As a result, they lost nearly all the property they had steadily accumulated over two generations, most of which was either seized or otherwise ended up in government hands. Similar government edicts led to the confiscation of numerous German-owned businesses throughout America, many of which had enormously valuable assets.
Within a couple of years, these federal holdings has swelled to include half a million acres of the state’s best farmland, some 1,265 small Japanese-owned hotels, and numerous urban parcels throughout Los Angeles, San Jose, and other cities. In 1942 the federal government estimated the value of these former Japanese-American properties at around $3 billion in present day dollars, but the huge postwar California economic and population boom would surely have greatly increased the value of this real estate portfolio by the early 1950s. The business assets and patent holdings of the seized German companies were worth additional billions.
Following the end of the war, all this property needed to be sold off, and powerful Chicago interests recognized this tremendous opportunity. The 1946 elections had produced a crushing national defeat for the ruling Democrats, with the Republicans regaining control of both houses of Congress for the first time since 1932. Thus, President Truman faced an desperate battle for reelection, and Chicago’s powerful political machine deployed its considerable political clout to place the sales process in the hands of David L. Bazelon, a young Chicago lawyer and leading Democratic fund-raiser with deep Syndicate ties. Bazelon had taken a pay cut of 80{739b910556a9cc9c1a54a816a1fda004c1b87c8f235f686ea012b71861344b41} to enter government service, but he soon boasted to the Washington Post that he had become “one of the largest businessmen in the country.” His motive quickly became apparent as he arranged the sale of assets for a fraction of their real value to his circle of Chicago friends and associates, sometimes apparently receiving a secret slice of the lucrative ownership stakes in return.
As an extreme example, Bazelon almost immediately sold Chicago’s Henry Crown a twenty-six thousand acre California mine site, containing tens of millions of dollars worth of coal, for a mere $150,000. A private $1 million sale of seized German property in 1948 to a group formed by his lifelong best friend and former law partner Paul Ziffren was worth $40 million by 1954, and Ziffern soon rewarded Bazelon with a 9.2{739b910556a9cc9c1a54a816a1fda004c1b87c8f235f686ea012b71861344b41} share of his multimillion-dollar real estate holding company. Another major beneficiary of Bazelon’s unusual sales practices later told a Congressional investigating committee that he gave Bazelon a 25{739b910556a9cc9c1a54a816a1fda004c1b87c8f235f686ea012b71861344b41} share of his large hotel holding company because he “was just feeling good and generous and was grateful.”
These particular hidden gifts to Bazelon only later came to light through happenstance references that were eventually uncovered by diligent researchers, so we may assume that such transactions probably represented just the tip of an enormous iceberg. It seems plausible that Bazelon received quiet kickbacks totaling many millions or perhaps even tens of millions in present-day dollars in exchange for his very favorable distribution of billions in government assets to the network of beneficiaries who shared his roots in the Chicago Syndicate.
This vast transfer of wealth in the early postwar years from the plundered Nisei gave all these mobbed-up Chicago newcomers the financial wherewithal to soon gain substantial control of California’s money-based political system.
One of the things I quickly noticed upon moving to Europe was that while the corruption in the European countries was very open and obvious, it wasn’t anywhere nearly as systematic and structural as in the United States.