Owney Madden: The Underworld Tycoon Who Controlled Prohibition and Beyond

Owney Madden and Big Bill Dwyer’s business relationship was working out well for Owney. He was masterful at organizing the underworld by lining pockets, threats, or violence. People eventually saw things his way. Fast profits were being made and Owney branched out into other enterprises, using many of the same tactics.

Prohibition

One of the first was the opening of a massive brewery right in the middle of the city, at Twenty Sixth St. and Tenth Ave. The Phoenix Cereal Beverage Co. opened in early 1924. It had originally been the home of Clausen and Flanagan Brewery. They had tried to brew and distribute “near beer,” a diluted product with very little alcohol content, that was legal during Prohibition. Madden didn’t worry about what was legal and what wasn’t. He had taken care of Tammany Hall and Tammany, in return, took care of the Prohibition agents. Contributions to the Policemen’s Benevolent Association assured Owney of the protection of the police. Madden’s Number One was available by the barrel or the bottle, and even though it was illegal, it was in high demand throughout the city and surrounding areas. This venture gave Madden the capital to buy nightclubs and back entertainers and professional fighters.

The Cotton Club

One club he purchased was a failing Harlem night spot at Lenox Avenue and 142 Street. Owney brought in the best Black musicians and dancers he could find. The girls were dressed in skimpy outfits to help attract affluent, connected white audiences. Blacks were not admitted as customers. The Cotton Club was the place to be and the place to be seen. Politicians, judges, and mobsters rubbed elbows here. Some with wives, some with mistresses, all oblivious to the Eighteenth Amendment.

Duke Ellington and Lena Horne

The Cotton Club launched the careers of many performers and attracted the big names in jazz. Duke Ellington was a regular performer and Lena Horne, a young girl from Harlem, began her decades-long career with Owney’s help.

Hollywood

Madden was also in a position to help his childhood friend, George Raft, get his start in Hollywood. Raft and Jimmy Cagney were regulars at the Cotton Club and both personified the gangsters of the twenties and thirties simply by adopting the speech and mannerisms of their friend Owney, right down to the way he wore his hat, a Fedora pulled low to conceal his face, a holdover from his stick-up days.

One night, George Raft walked in with the most beautiful woman Owney ever laid eyes on. Mae West was doing shows on Broadway, and that night Owney promised to back her financially with any production she wished to do. Using his ever-extending influence, he got her to Hollywood and national fame. Mae and Owney were an item for a while and remained friends until Madden’s death. Later in life, she described Madden as sweet but vicious.

By the late 1920s, Owney Madden was a millionaire; he and his associates had their hand in real estate, boxing, gambling, bootlegging, breweries, nightclubs, and entertainment. Anywhere Madden thought he could make a profit, ignoring laws and civilities, he was there. With his political contributions, he controlled police and the courts. He could make or break anyone with political aspirations, or so he thought.

The Syndicate

Madden’s headquarters was the Harding Hotel, in the middle of the theatre district. By this time he owned many of the city’s more famous nightclubs, the Stork Club, Duffy’s, the Silver Slipper, the Central Park Casino, and of course, the Cotton Club. But it was at The Harding where he hung out with some of the most infamous mobsters of the day. Dutch Schultz, Arnold Rothstein, Lucky Luciano, and others. Madden organized them all into a “Crime Committee” or syndicate in order to maximize profits. He established a businesslike method of operating and strove to bring bad publicity to a minimum. Madden’s criminal organization did not go unnoticed; usually, violence would put them in the headlines and on people’s tongues.

Roosevelt

In 1930, New York Governor Franklin D. Roosevelt decided to make a bid for the nomination for president. Putting a stop to the blatant corruption in New York City politics was high on his agenda in his campaign push. In 1932, he had Madden arrested and sent back to prison for violating his parole. He was released from Sing-Sing in 1933, and later that year Congress repealed Prohibition.

Hot Springs

Owney was in his forties and had chronic health issues as a result of his bullet wounds and his constant smoking. He began visiting Hot Springs, Arkansas, which for years had a reputation for beautiful scenery and its health-giving hot mineral springs. It also had a darker side, with an equal reputation for a corrupt local government, gambling, prostitution, and bootlegging. Right up Madden’s alley. He met Agnes, a local gift shop clerk, ten years his junior. They married in 1935. Agnes was well aware of who Owney was, his mobster friends, and his way of life. They set up house in Hot Springs, but Owney was still commuting back and forth to New York.

Hot Springs Mafia

The details of Madden’s departure from New York are vague. Some believe a deal was brokered by none other than Luciano and high-ranking politicians, allowing Madden to stay out of prison, provided he stayed out of New York; a plan many think Roosevelt himself contrived. The New York Crime Syndicate needed Madden out of the spotlight and New York politicians just wanted him gone. Luciano and Frank Costello may have set Owney up in Hot Springs to oversee mob operations there. Whatever actually transpired, Agnes and Owney resided in town, with Owney playing the part of a small-town gentleman. It’s believed Madden played an active role in the illegal activities in Hot Springs. The mayor, Leo P. McLaughlin, and Municipal Judge Vern Ledgerwood ran their own syndicate to manage the gambling and prostitution in the town. They claimed Madden had nothing to do with it, but it was common knowledge that Madden and his New York associates brought in the wire service that brought race results to the local bookmakers. It’s difficult to believe they did this merely to be generous without expecting a cut of the profits of a lucrative enterprise.

Madden remained secretive until 1940 when he acquired a controlling interest in the Southern Club, a well-known and profitable gaming club, as well as other gambling operations. Mob bosses Luciano, Costello, Myer Lansky, and others visited Madden regularly and unabashedly. In 1946, McLaughlin and his crew were voted out of office, but under Madden’s leadership, criminal activity flourished. He became a powerful public figure. He was a familiar figure around town in his “trademarked” tweed cap and scarf. This made it easier for the FBI, who had Owney and his growing enterprises under constant surveillance.

In 1961, the Federal government concluded that Hot Springs, Arkansas, was home to the largest illegal gambling operation in the United States. Madden was called before the Senate Committee on Organized Crime, where he continuously invoked the Fifth Amendment. In 1964, the state government took major steps to eliminate the illegal operations in Hot Springs. But by now, Owney Madden was a very sick man, and a year later, he succumbed to emphysema. He is buried in Greenwood Cemetery.

And All the Saints is a very good novel by Michael Walsh. It is written as a memoir told by Owney himself. Although the dialogue is all conjecture, the story is based on fact. For a more accurate portrayal of the man, try Paddy Whacked by TJ English, a history of Irish Americans involved in organized crime.

Bob Carney is a student of Irish language and history and teaches the Speak Irish Cleveland class held every Tuesday at PJ McUntyre’s. He is also active in the Irish Wolfhound and Irish dog organizations in and around Cleveland. Wife Mary, hounds Rían, Aisling, and Draoi, and terrier Doolin keep the house jumping. He can be reached at [email protected].