L.A. Noir: The Struggle for the Soul of America's Most Seductive City

      OLNEY CAME from one of California’s most distinguished families. His grandfather was one of the founders of the Sierra Club; his father had been a justice on the California Supreme Court. Olney himself was one of Governor Warren’s closest and most valued associates. He was also something of an authority on interstate gambling and the racing wire. As the head of the California attorney general’s criminal division in the late 1930s (when Warren had been the state attorney general), Olney had begun to investigate bookmaking in California, with a particular focus on Moses Annenberg’s Nationwide News Service. At first, Olney had struggled to figure out what was so important about the wire service. But after three days at Reno’s Bank Club, it came to him. The tout sheets, the hot tips, the fluctuating pari-mutuel prices, the odds at the gate, the conditions of the track—all of that was really just a distraction. Bookies needed the wire so that they could quickly roll $2 bets from one race into $2 bets on the next race. Most gamblers weren’t reading the Daily Racing Form, looking for an inside edge. They were betting on race after race just like gambling junkies played slots.

“Bookmaking has nothing to do with horse races,” Olney concluded. “It’s a strict lottery—nothing more than that.” The wire delivered the information that made it possible to place bet after bet, hour after hour.

This system was generating immense amounts of money for Mickey Cohen. According to LAPD estimates, in mid-1949, Mickey had about five hundred bookmakers paying for protection (typically, $40 per week for every telephone in their operation plus $5 a week per agent). Even if the average bookie had only two telephones, this would have generated more than $160,000 a month. In exchange for such princely sums, Mickey provided attorneys and bail money for bookmakers unfortunate enough to be arrested. This service was famously speedy. In one notorious case, vice squad officers arrested a bookmaker at 3:05 p.m. only to be presented twenty-six minutes later with a bail bond and a writ of habeas corpus, signed by a judge and duly executed, ordering them to release the arrested bookie. Cohen also provided insurance against clients who engaged in “past posting”—placing bets after the race was over—in the form of a menacing visit to bettors who tried to cheat. After these visits, bettors rarely persisted in their claims.

Olney realized that there was a simple way to end it all: cut the wire. An investigation by the California Public Utilities Commission revealed that all the bookmakers in California were supplied over a single telegraphic wire leased from Western Union by the Continental Press service.^[13] Continental then telegraphed information on odds, post times, track conditions, and results to “drops” across the nation. The Special Crime Study Commission identified eight in Southern California—front companies with unclear ownership structures and bland names such as Consolidated Publish Inc. and Southwest News. The system was fast but also vulnerable. Olney’s investigators discovered that Western Union’s contract with Continental gave state law enforcement authorities the power to request that the wire be terminated if they suspected it was being used, directly or indirectly, in violation of California law. Clearly, Continental’s services were being used to violate California law, but when Olney directed the state attorney general’s office to that provision, it did nothing. Finally, after months of pressure from Olney and his commission, Attorney General Howser ended his foot-dragging and presented Western Union with such a request. Western Union disconnected the wire, throwing bookmaking in California into chaos.

The halt was temporary. A mysterious new entity, the Illinois News Association, soon appeared with a request to provide a new telegraphic wire service. When the public utilities commission declined to authorize it, the “news association” sued in federal court—and lost. Undeterred, the news association appealed and sought a temporary resumption of wire service, pending the outcome of its appeal request. Attorney General Howser, ever solicitous of the underworld, declined to provide attorneys to defend the public utilities commission’s action. Despite lacking counsel, the state utilities commission again prevailed.