The Mafia in Mexico (Part V)
Mafia in Mexico: The end
1951 was a bad year for the mafia’s Mexican connection. It not only witnessed Cossman’s arrest, but also the dismantling of the mafia’s third and final attempt to establish a wholesale heroin trade south of the border. This was the attempt run by Harold “Happy” Meltzer’s. And again it showed the infighting that dogged the mob’s operations in Mexico.
Meltzer was essentially an East Coast version of Cossman. Like Cossman he started as relatively small-scale drug peddler – from New Jersey according to his passport or from Eastern Europe if you believed the FBN. He was part of Luciano and Lansky’s mob. He also saw the opportunities offered by Mexico’s new poppy growing trade. And he realized that to take advantage of it he needed local protection. So around 1945 he made contact with a U.S. embassy employee called Salvadore Duhart Martínez.
Duhart was not difficult to ensnare. Born in Mexico City in 1903, he was son of a shopkeeper. Despite his relatively humble background he was a smart kid. He graduated from Mexico’s main university and managed to secure a prestigious job in the foreign ministry. A rising star, he got a posting in Washington, DC in 1940. He was, however, a fan of the finer things in life. He often visited New York where he stayed at the upmarket Waldorf Hotel. According to Meltzer he also had a “degenerate fondness for women”. It was this fondness, Meltzer claimed, that brought him to the attention of the mob. Whether he was blackmailed or bribed Meltzer and the well-spoken Mexican now started to work together.
Meltzer arranged the funds. According to the FBN, the money for the operation came from a group of Jewish and Italian-American racketeers, led by Meyer Lansky. Each put in upwards of $50,000 and the total investment was over $1 million. He also set up a border storage point near a nightclub he owned in Laredo, Texas. Duhart located the suppliers and the chemists, and bribed the relevant border guards. Once the network was established, Meltzer moved down to Mexico City to oversee the operation. He also started diversify. Drugs were taken out; stolen jewelry was smuggled in. According to the FBN, the operation made $6,000,000 a year.
Soon, however, things started to go wrong. The mafia, it seems, overplayed its hand.
In the immediate post-war period, the mafia was looking for friendly, lightly regulated places in which to establish their gambling interests. In the following decade, they would go on to make Las Vegas and Havana into centers of U.S. tourism and mob profit making. But initially at least Mexico seemed perfect.
The country already had a reputation for tacky, booze-soaked tourism. And politics had moved on from the radicalism of the 1930s. The new president, Miguel Alemán Valdés (1946-1952) was pro-American, anti-union, and keen to attract foreign investment. As Mexico’s first civilian leader in over two decades, he dismissed the puritanical zeal of his predecessors, and was frequently pictured hanging out with media moguls and sipping champagne with movie stars. He was approachable, jovial, and charismatic; and at first he was known as the smiling president - Mr Colgate. (Though Mexicans soon started to suspect that the joke was on them).
He was also relatively open to mafia money. Personal relations were key. In particular Alemán was close to Alfred Cleveland Blumenthal, a former Broadway producer turned Mexico City entertainment entrepreneur. Blumenthal not only owned the upscale Hotels Del Prado and Reforma and the famous Bar Ciro’s, he was also Croesus rich. In the midst of the depression, U.S. newspapers had wondered at how the flashy showman could buy five Rolls Royces and a $65,000 chinchilla blanket. Ties to Blumenthal went deep. Alemán was a shareholder in the Hotel Reforma. Blumenthal was a major contributor towards Alemán’s pricey presidential campaign. And Blumenthal even introduced Alemán to one of his most high-profile lovers, the Brazilian dancer Leonora Amar.
At first friendship brought favors. In 1947 Alemán changed Mexico’s gambling laws and allowed the San Diego mobster to reopen the Agua Caliente casino in Tijuana. The same year he allowed various mobsters to open a fraudulent sweepstakes operation. The scheme bypassed U.S. betting laws by selling tickets to Americans but focusing on races at the Mexico City horseracing track. In fact, Alemán was so invested in the scheme; he personally made the public draw. The following year New York mobster, Frank Costello, even came down to Mexico, stayed at Blumenthal’s Hotel Del Prado, and spent days wining and dining political dignitaries. (Despite the language barrier, it seems that there was a certain cultural overlap. They shared a love of gunplay and competed to blast the tops off champagne bottles.) The visit was enough to provoke rumors that Alemán was considering turning Acapulco into a kind of seaside Las Vegas.
Blumenthal was so close to President Alemán he even introduced him to his lover, the Brazilian dancer, Leonara Amar.
In fact, by 1948, Meltzer’s drug business was just one among many of the mob’s Mexican interests. And this – together with other high-profile scandals - started to bring heat. Some came from the U.S. Anslinger started to blame American drug use on Mexican supply. And U.S. prosecutors started to take a renewed interest in mafia businesses. But the rest came from Mexico, where an increasingly boisterous alliance of the capital’s workers, housewives, and students were becoming incensed by Alemán particular brand of cheery corruption. In fact, in summer 1948 as protests grew, many observers thought that Alemán might fall; bar room bookies started to take bets on when he would resign; and there were even rumors of an assassination attempt by dissatisfied members of the military.
President Alemán was close to Americans with mafia links. This note lies in Alemán’s presidential archive and seems to indicate that a) the mafia’s heroin king, Max Cossman sent Alemán a present and b) this present was in exchange for some favor.
The combination of outside and inside pressures caused a crackdown. The dodgy sweepstakes was wound up; no more casinos were opened; the plans for Acapulco’s gambling Riviera were shelved; even his lover, Amar, was smuggled out of the country back to Brazil.
The drug business also started to fall apart. Meltzer attempted to bypass Duhart’s expensive protection scheme by going through Cossman’s Guadalajara contacts. The move was a disaster. Mexican producers started to take advantage, filling opium cans with coins, nails and bullets for extra weight. His American distributors refused to pay for the inferior product. And his creditors on both sides of the border started to demand repayment. What happened next is open to debate. Meltzer claimed the Mexicans kidnapped Cossman and requested money for his release. Cossman claimed that Meltzer just fled leaving him a debt of over $200,000.
Whatever went on, Meltzer and the mafia’s Mexican operation was over. Meltzer and Cossman were arrested. And the Mexican federal government backed off supporting mobster enterprises. From 1951 onwards France – not Mexico – would be the source of over 80 per cent of America’s heroin.