Staggering losses in the Battle of the Atlantic during 1942 led many U.S. Navy officials to believe that Germany’s Kriegsmarine was receiving assistance from Axis sympathizers on the U.S. East Coast and had spies in New York City. To counter this threat, the Office of Naval Intelligence’s (ONI’s) District Intelligence Office (DIO) in the Third Naval District sought assistance from an unlikely ally to help secure the waterfront: the Mob.
By using informants from organized crime families, which in this time period were referred to simply as “the underworld,” the DIO was able to secure the waterfront and the coastline around New York to ensure troops and supplies could move freely to Europe without being sabotaged. It may have been a strange arrangement—but it was in many ways an effective one.
A State of Fear
In the winter of 1942, the U.S. Merchant Marine fleet was suffering devastating losses at the hands of Nazi Germany’s unrestricted submarine warfare campaign in the Atlantic. The unrelenting onslaught of attacks along America’s East Coast (see “The Drumbeat Mystery,” February 2022, pp. 12–19) led some intelligence officers to believe that German U-boats were receiving assistance from sympathizers on U.S. soil, supplying these submarines with fuel, food, and distilled water.
Further intensifying the situation, the French passenger ship Normandie, which was in the process of being converted into a troop transport, caught fire and was destroyed while in port in Manhattan. Although the investigation determined the fire was caused by a welding accident, many people in New York feared that Axis spies had sabotaged and destroyed the ship.1 This was not a far-fetched theory, considering that only a month prior, more than 30 German-born American men had been convicted as part of the Duquesne Spy Ring—an underground German spy organization operating in New York before the war.
These factors sparked a wave of fear among many people in New York, who were paranoid at the thought of Axis sympathizers terrorizing their city and sabotaging the Merchant Marine fleet. With no solution in sight, Navy Captain Roscoe MacFall, the District Intelligence Officer, was forced to take drastic measures to secure New York’s waterfront and the ships that departed from its harbors.
On 7 March 1942, Captain MacFall met with Frank Hogan and Murray Gurfein of the New York District Attorney’s Office to discuss the issue of security on the waterfront. MacFall expressed genuine concern over the possibility of fishing vessels or former rumrunners providing supplies to German U-boats along the coast, and he wanted to see what the D.A.’s Office could do to help. During this meeting, Gurfein offered to put MacFall in contact with underworld figures, who wielded significant influence on the waterfront and potentially could prove helpful.
After further discussion, MacFall decided to explore this off-the-wall possibility of seeking assistance from racketeers. He assigned Lieutenant Commander Radcliffe Haffenden from B-3 (investigations) to be the representative to the D.A.’s Office on the operation. This marked the beginning of the Underworld Project—a secret alliance between ONI and organized crime families in New York, with the goal of protecting the Port of New York from Axis saboteurs.2
Underworld Gets Underway
The first official meeting between the Third Naval District DIO and the underworld occurred in late March 1942, when Haffenden and Gurfein met with Joe “Socks” Lanza, who was accompanied by his lawyer, Joe Guerin. Lanza was a business agent for the United Seafood Workers’ Union and had extensive experience working in the Fulton Fish Market. He had a wide sphere of influence on the Manhattan waterfront, making him an ideal contact regarding security there.
Haffenden’s plan was to use Lanza’s influence to get ONI agents embedded within the fishing fleets and along the waterfront to better observe activity there. He also was to report any suspicious boats in the area to Haffenden. Lanza was able to secure the requisite union cards and get numerous civilian agents aboard fishing vessels and trucks around the city, and he not only brought several other colleagues into the project, he also convinced them to comply with ONI.3
Because of the sensitive nature of the operation, very few individuals within ONI were aware of the information coming from the underworld. Informants’ identities were considered extremely confidential and were not kept on file for the sake of their privacy. Since most underworld informants did not want others to know they were working with the government, protecting their identities was crucial to ensure their cooperation. Informants were assigned a code number to which only Haffenden had access, and the only documents kept were temporary files for the sake of interagency cooperation.
To compartmentalize the project, Haffenden was reassigned from B-3 to the newly created F section, the primary task of which was to oversee the Underworld Project. Within this new section of DIO Third Naval District, numerous Navy personnel and civilian agents worked to gather intelligence from the fishing fleet and other personnel working on the waterfront.
Although the project had some initial success, trouble arose when others along the waterfront grew suspicious of Lanza. In mid-April, he expressed frustration to Haffenden about how his struggle to bring certain individuals onto the project who were suspicious of his intentions, particularly those of Italian descent who were loyal to other families. Since Lanza was under investigation by the Court of General Sessions, there were those on the waterfront who believed he had made a deal with the D.A.’s Office as an informant.
With Lanza’s credibility on the waterfront undermined and his sphere of influence limited to Manhattan, Haffenden knew he would need other underworld informants to participate if the project were going to continue successfully and expand to the entire city.
Feeling Lucky
With his influence beginning to deteriorate and rivals questioning his loyalty, Lanza knew he had to move up the chain of command if he was to continue to make contacts for ONI. In a meeting with Haffenden on 16 April 1942, Lanza suggested that they bring Charles “Lucky” Luciano into the project, as he would have a much larger influence on the city as a whole.
Lucky Luciano was one of the more prominent and influential organized crime leaders in American history. He was born in Sicily and moved to the United States when he was eight years old. Luciano began working for street gangs at a young age, and by the 1930s he was considered one of the most dangerous gangsters in America. In 1936, he was convicted of running a prostitution ring and sentenced to 30 to 50 years in jail. However, even behind bars, Luciano retained a great deal of influence over the New York underworld, and Lanza believed the mobster would be an asset to the project.
On 12 May 1942, Luciano was transferred to Great Meadows Prison in Comstock, New York, so he could be more accessible for interviews. To ensure his cooperation, Haffenden contacted Luciano’s former lawyer, Moses Polakoff, and close friend Meyer Lansky to approach Luciano about the project.
Lansky had been friends with Luciano from a young age on the East Side of Lower Manhattan. After enduring a tough childhood together, Lansky and Luciano worked in the bootleg-liquor business together during Prohibition. Lansky and Luciano helped connect smaller Mafia factions to form a larger crime syndicate. Lansky’s close connection to Luciano made him the ideal person to be the liaison on the project.
During their visit, Polakoff and Lansky were able to convince Luciano to cooperate. With the mob boss imprisoned, Lansky would act as his liaison, since “those people knew that if Lansky said he was acting for Luciano, that statement would not be questioned.”
Luciano and Lansky were able to bring numerous influential underworld informants into the project.4 And with Lansky on board, the DIO was now able to access the longshoremen’s union as well. Several other key underworld figures such as Joe Adonis and Frank Costello also were convinced to cooperate, which now gave the DIO access to the Brooklyn and New Jersey waterfronts.5 Using longshoremen’s union cards, civilian agents were able to freely monitor ships, piers, and suspicious individuals throughout New York City with no interference from the underworld organizations that controlled those areas. This expanded network gave ONI more eyes around the city to continue to monitor for potential enemy saboteurs.
‘Useful to the Navy’
The lack of preserved documents about the Underworld Project makes it difficult to determine its full impact on waterfront security during the early part of World War II. Because of the project’s sensitive nature, there was minimal documentation of the events that occurred, and any documents that were kept were destroyed after the war to protect the integrity of ONI and the identities of the informants involved.
The only documentation that exists today is from the 1954 Herlands Report, which summarizes more than 3,000 pages of interview transcripts conducted with personnel involved in the project. The investigation was intended to determine the extent of Luciano’s involvement in the war effort—and whether this involvement warranted the commuted prison sentence he received after the war.
At the end of the report, Commissioner William B. Herlands concluded:
No practical purpose would be served by debating the technical scope of Luciano’s aid to the war effort. Over and beyond any precise rating of his contribution is the crystal-clear fact that Luciano and his associates and contacts during a period when “the outcome of the war appeared extremely grave,” were responsible for a wide range of services which were considered “useful to the Navy.”6
One of the initial intentions of the Underworld Project was to catch German saboteurs operating in New York. There were two major instances of German spies being apprehended there during the war. The first was the aforementioned Duquesne Spy Ring, a network of 33 German spies discovered and apprehended in 1940 after the FBI intercepted radio transmissions between the spies and their superiors in Germany, well before the United States entered the war.7
The second incident occurred in June 1942, when George Dasch and his team of spies landed on remote beaches in Long Island, New York, and Jacksonville, Florida, and were spotted by a Coast Guard patrol.8 Although Haffenden’s unit worked with some of its waterfront contacts during the manhunt, it ultimately was the FBI that once again tracked down and apprehended the suspects after Dasch turned himself in and gave up the location of the rest of the crew. This meant the underworld played little to no role in identifying and tracking down these particular spies.
The other intention of the project was to catch sympathizers who may have been running supplies to German submarines in the Atlantic. However, intelligence discovered later in the war determined that this theory was unfounded. Since 1940, the Kriegsmarine had been using a fleet of resupply submarines to carry weapons and supplies to U-boats operating near the United States. But because these supply submarines had not yet been detected early in 1942, ONI believed that the only plausible answer at the time was that U-boats had to be receiving supplies from sympathizers on U.S. soil.
Although Haffenden had numerous agents monitoring the trucking industry, fishing fleet, and waterfront, there was never a recorded instance of sympathizers being caught running supplies to German submarines. The closest recorded incident was the case of Ernest Frederick Lehmitz, a German-born naturalized American who was sending coded messages to Germany from Staten Island about U.S. ship movements. However, just like the Dasch and Duquesne cases, Lehmitz was apprehended by the FBI, not ONI and its underworld allies.9
Busting Fascists and Averting Strikes
In the interviews conducted during the 1954 Herland investigation, numerous ONI officers and civilian agents testified that the underworld contacts had been extremely helpful in the war effort and with maintaining security on the waterfront. Lieutenant Maurice Kelly of the DIO Third Naval District, a former New York Police Department officer who joined the Navy after the attack on Pearl Harbor, testified that “from the time Commander Haffenden made these contacts with Luciano there was a very open and cooperative condition that existed between the investigators and the people that were very influential on the various docks in the Port of New York.”10
Kelly acknowledged in the interview that he had worked with many ex-convicts on the waterfront who were more than willing to cooperate with the Navy once Lucky Luciano gave the word. Before the Underworld Project began, the DIO had had a “great difficulty in obtaining reliable informants along the waterfront.”11 The same ex-convicts who were usually unwilling to cooperate with any investigation suddenly became very cooperative after the initial prison visits with Luciano in May 1942, proving just how much influence he had throughout the city.
Even though there is no record of these agents capturing German spies or seizing any contraband moving through the harbor, the existence of this security barrier as a deterrent was still an important part of the war effort. The Duquesne Spy Ring and Dasch spies had proven how vulnerable U.S. ports were, and having additional eyes on security allowed planners to ensure that troop transports were safe to move through the harbor without the threat of sabotage.
One of the Underworld Project’s significant contributions to homefront security was its ability to locate, monitor, and if necessary assist in the arrest of pro-fascist groups in New York. Haffenden’s organized-crime contact in Harlem, William McCabe, helped with this on multiple occasions. In the summer of 1942, McCabe assisted ONI and the FBI in apprehending Robert O. Jordan and other leaders of the “Ethiopian Pacific Movement of the Eastern World” for violations of the 1940 Smith Act, which criminalized advocating for violent overthrow of the United States.12 This movement reportedly envisioned an African and Axis coalition, and its extremist views were considered a threat to the homefront by several government agencies.
Later that year, McCabe also helped locate the headquarters of a Spanish Falange group that was operating within Harlem. Both these pro-fascist organizations were deemed a danger to the homefront by the FBI, and the underworld’s role in locating them was beneficial to security in New York during the war.
In addition to providing information on local fascist sympathizers, the underworld also played a role in ensuring that strikes would not delay the war effort. Because the racketeers were influential within the unions, they were a valuable asset for preventing strikes. These strikes were a huge concern for the Navy, as they would have slowed down shipping and kept supplies and soldiers from reaching Britain in a timely manner.
To prevent this, Haffenden sought the assistance of Irish gangster Johnny “Cockeye” Dunn. Dunn was arrested before the war for assaulting the business agent behind the September 1941 strikes but was released a few months later. Haffenden knew that preventing further strikes would require a strong enforcer, which is exactly what Dunn was known for within the underworld. The underworld’s intimidation of the unions was something that government agencies could not replicate on their own accord. With the help of influential leaders such as Dunn, Lanza, and Lansky, the mobster element was able to keep the longshoremen in line and ensure that any rumblings of a strike were quickly snuffed out. This ensured the Port of New York continued to operate efficiently, getting much-needed supplies to Europe.13
One prominent case was in November 1942, when famous labor leader Harry Bridges of the International Longshoremen’s Association was causing trouble within the labor union with talk of a possible strike. The U.S. government had been attempting to deport Bridges for years over his his suspected Communist Party affiliations, but the decision never was approved by the Supreme Court. During the war, both ONI and the FBI were worried about Bridges’ influence on the waterfront, particularly in regard to strikes.
Haffenden knew that a strike at that point in the war would be devastating and tasked his underworld informants with ensuring Bridges would not become a problem to their operations. A recorded phone conversation from a legally placed New York D.A.’s Office wiretap confirms that on 25 November 1942, Haffenden asked Joe Lanza if there would be any more problems with Bridges. Lanza simply replied, “You won’t have any. I’ll see to that.”14
There is no record of what exactly Lanza and other underworld informants did to ensure the unions stayed in line, and it is something never mentioned in Herlands’ report. However, Lanza did keep true to his word, and there were no troubles from the labor unions with strikes that would hamper the war effort.
Sicilian Connections
Historically, the Underworld Project’s most well-known contribution to the war effort was the Italian underworld’s assistance in planning and executing Operation Husky, the Allied invasion of Sicily. Several agents within Haffenden’s F section of the DIO put together detailed maps with the help of Sicilian-born immigrants and contacted informants in Sicily who would play a crucial role in gathering intelligence in support of the operation.15 However, this might not have been possible if the underworld also had not helped secure the Port of New York in the early stages of the war.
Although there is not much documentation on the details of these operations, it is clear that underworld informants were a key part of homefront security and intelligence gathering in the early stages of the war, and they should be recognized for their contributions. Even if there are no confirmed reports of saboteurs being caught or supplies for German submarines being confiscated, ensuring that the Port of New York was secure for troops and supplies to continuously move to Europe was a vital step in ensuring the United States’ successful campaign against Nazi Germany in Europe—and bringing the world one step closer to liberty.
1. C. P. Trussell, “Carelessness Seen in Normandie Fire,” The New York Times, 15 April 1942.
2. Matthew Black, Operation Underworld: How the Mafia and U.S. Government Teamed Up to Win World War II (New York: Kensington, December 2022).
3. William Herlands, The Herlands Report, State of New York Executive Department: Office of the Commissioner of Investigation, 17 September 1954, 33–35.
4. Herlands, The Herlands Report, 61.
5. RADM Tom Brooks, USN (Ret.), “Naval Intelligence and the Mafia in World War II,” Naval Criminal Investigative Service History Project, August 2017.
6. Herlands, The Herlands Report, 94.
7. “Duquesne Spy Ring,” Federal Bureau of Investigation Records, 12 March 1985, vault.fbi.gov/Duquesne Spy Ring/Duquesne Spy Ring Part 01 (Final)/.
8. Lewis Wood, “Lone Coast Guardsman Put FBI on Trail of Saboteurs” The New York Times, 15 July 1942.
9. “Ernest Frederick Lehmitz: German Naturalized American,” UK National Archives, ref. KV 2/2847, 10 February 1942–10 October 1944.
10. Herlands, The Herlands Report, 88.
11. Herlands, 88.
12. Mohammed Elnaiem, “Black Radicalism’s Complex Relationship with Japanese Empire,” JSTOR Daily, 18 July 2018.
13. Black, Operation Underworld.
14. Herlands, The Herlands Report, 73.
15. Black, Operation Underworld.
