CHAPTER 4. ROY COHN’S “FAVOR BANK”
“THE CITY’S PREEMINENT MANIPULATOR”
Roy Cohn, whose public reputation ranged from “boy wonder” to sleazy mob lawyer over the course of his lifetime, was one of the most influential political operators in the country for the better part of three decades. Not only would he serve as Joseph McCarthy’s right-hand man during the height of the Red Scare, he would also help secure electoral victories for prominent politicians in New York and beyond, including for US presidents. Years after his death, Cohn’s protégé, New York real estate billionaire Donald Trump, would serve as the 45th president of the United States.
Yet, for someone who was so influential, both his admirers and detractors have declined to dig too deeply into his career and dealings, particularly those that are most unsavory. Part of this may owe to Cohn’s apparently contradictory nature – he was an anti-communist crusader that closely collaborated with the FBI as well as a close confidant, business associate, and legal counsel to some of the biggest names in organized crime. Perhaps for that reason, Cohn’s story is central when detailing the rise of the networks that are the focus of this book.
Roy Cohn was a man once called New York City’s “preeminent manipulator,” precisely because he was “a one-man network of contacts that have reached into City Hall, the mob, the press, the Archdiocese, the disco-jet set, the courts and the backrooms of the Bronx and Brooklyn where judges are made and political contributions are arranged.”1 In addition, Cohn’s ability to manipulate the press, politics and much more may have been partially due to his ability to wield blackmail in a way similar that practiced by his close associate and friend, J. Edgar Hoover. This particular relationship, aspects of which were discussed in Chapter 2, may explain why, long after Cohn’s death in 1986, much of the FBI file on Cohn – believed to be over 4,000 pages long in total – has still not been made publicly available despite efforts by Cohn biographers and others over the years.2
Cohn’s background and the earlier parts of his career serve as a useful window into how the world of “above-board” and “legitimate” business and politics has intermingled with the criminal underworld throughout the decades and how blackmail was critical to Cohn’s ability to successfully navigate those murky, grey areas between the legal and the illegal.
AL COHN AND THE NEW YORK MACHINE
Roy Cohn’s father, Albert Cohn, was the son of immigrants from Poland, whose limited financial means forced Albert to skip high school. He eventually attended City College, working his way through university, and graduated in 1903. Afterwards, he attended New York Law School, teaching high school classes simultaneously, and became a practicing lawyer in 1908.3 In 1910, Albert Cohn became heavily involved in the Democratic Party clubhouses based in the Bronx, which involved “attending the once-a-week meetings, working the precincts and winning the district leader’s favor,” according to Roy Cohn biographer Nicholas von Hoffman.4 Albert’s connections to the Bronx Democrats grew strong enough that he was appointed assistant district attorney for the Bronx by 1917.5 At this point, Albert or “Al” Cohn sought to become a judge but lacked the money that was necessary to secure such a position. This was because the party required payments from the men it put on the ballot as a form of fundraising, and the more influential the position, the more money was required. Cohn lacked such wealth but continued to ascend through the ranks of New York’s legal scene, becoming chief district attorney in 1923 under Bronx County District Attorney Edward Glennon.
Around the time that Al Cohn had gone as far as he could without having the money required for the judgeship he coveted, he met Dora Marcus, the daughter of a wealthy banking family. According to friends of Al Cohn and members of the Marcus family, the relationship between Cohn and Dora Marcus quickly led to an arranged marriage, as Dora “was the ugly duckling daughter they couldn’t marry off.”6 According to interviews given by members of the Marcus family, which aired in Matt Tyrnauer’s 2019 documentary Where’s My Roy Cohn?, Dora’s father Joseph S. Marcus essentially offered Albert Cohn the money and influence necessary to become a judge in exchange for his marrying Dora.7 They married in January 1924, and, a year later, Albert Cohn was appointed Bronx County judge by New York governor Al Smith.8 After their marriage, Al and Dora argued about where to live, with Al initially winning, securing their place in the Bronx. Al’s desire to stay in the Bronx was motivated by his desire to stay connected to the political connections he had developed, where he handled the party’s “Jewish patronage” on behalf of Bronx party boss Ed Flynn.9 Al Cohn is regarded as a protégé of Flynn’s who came to wield “substantial power in the Democratic Party,” according to author Robert Shogan.10
In 1921, Cohn created the Pontiac Democratic Club at Flynn’s behest in order to weaken the political base of a Flynn rival, Patrick Kane.11 The club later became hugely influential in local elections. Years later, Roy Cohn would describe his father as Flynn’s “chief lieutenant” during this period while his mother Dora would host annual dinner parties at their home in Flynn’s honor. As a judge, Al Cohn was incredibly loyal to Flynn and the Democratic Party. According to historian Christopher Elias, “When the party needed Al to rule a certain way for reasons political or personal, he followed through. When they needed his support for a specific candidate, he gave it. When the son of a friend and fellow Democratic operative killed a young woman in an automobile accident, Al made a late-night visit to the police station and ‘straightened it out.’”12
Al’s service to the party and to Flynn paid off, with New York governor Franklin Delano Roosevelt appointing Cohn to the Bronx Supreme Court in 1929, making him Roosevelt’s first judicial appointment.13 At the time and for years afterward, Flynn was one of Roosevelt’s most senior strategists. Eight years later, Albert Cohn was appointed to the State Supreme Court’s Appellate Division.14 Like many of the networks already explored in this book, the political machine in which Al Cohn was intimately nestled was interwoven with the city’s criminal underworld.
Some modern-day mainstream sources trace the origin of organized crime’s influence on New York’s Democratic Party to 1931 when Lucky Luciano sent two hired guns to intimidate Harry Perry, the co-leader of Manhattan’s 2nd Assembly District, demanding he step down in favor of Albert Marinelli.15 However, the same crime syndicate had cozy ties with labor unions, a key component of the Democratic Party’s power base, going back to the 1920s – an arrangement for which mobster Arnold Rothstein is credited.16
Similarly, Marinelli’s ties to the mob also dated back to the 1920s, when he owned a trucking company that Lucky Luciano managed during the Prohibition era. Luciano had been responsible for helping Marinelli become the first Italian- American district leader at Tammany Hall well before the incident with Perry, which speaks to organized crime’s earlier influence over New York politics through Tammany. Yet, after Perry stepped aside and ceded his position to Marinelli, the National Crime Syndicate’s influence on New York City politics, particularly the Democratic Party, became “brazen,” according to decades-old reports in New York magazine, as the move gave Marinelli – and by proxy, Luciano – control over who was chosen to serve on grand juries as well as the counting of votes in local elections.17
The influence of the National Crime Syndicate on top New York politicians was considerable at the time when Albert Cohn was deeply involved in Democratic affairs. For instance, Meyer Lansky is known to have donated to the political campaigns of Al Smith, the governor of New York for much of the 1920s.18 Smith was a top figure with Tammany Hall, the political powerhouse of New York Democratic politics that controlled Democratic Party nominations and became synonymous with corruption. Smith is regarded as one of the main protégés of Tammany boss Charles M. Murphy, who had worked to improve the organization’s reputation until his death in 1924. However, Murphy’s success in cleaning up Tammany’s public image did not extend long past his death, largely because many of the top names at the organization had remained closely enmeshed with the city’s criminal underworld despite his efforts.
During the now-infamous effort of the National Crime Syndicate to rig the Democratic National Convention in 1932 in favor Franklin Delano Roosevelt, it was a tearful Al Smith, who had personally warned Luciano, Lansky, and Costello that Roosevelt would betray them.19 Smith specifically warned that Roosevelt would break his promise to restrain an official inquiry into criminal activity in New York City, a promise Roosevelt had made to appease organized criminal interests in order to secure his nomination. This anecdote was relayed separately by both Lansky and Luciano.20 Smith’s warning, which the crime bosses had ignored, turned out to be true, as Roosevelt allowed the inquiry, led by Judge Samuel Seabury, to advance after his nomination was cemented. The inquiry soon exposed extensive criminal activity being conducted by Tammany politicians, leading several top officials to resign. Jimmy Walker, the Tammany-backed mayor of New York City and Al Smith’s own protégé, not only resigned as mayor but fled to Paris to avoid charges.21
Regarding the 1932 convention, Luciano later stated that it was commonly known at the time that his criminal enterprise controlled most of New York City’s delegates to the convention, which speaks to their considerable influence over the party’s dealings in the city during that period.22 Seabury and Roosevelt’s combined determination to clean up the Democratic Party’s image in New York, however, saw Tammany’s influence wane due to its entrenched association with organized crime becoming public knowledge. The National Crime Syndicate’s influence on New York politics nevertheless remained strong well past Tammany’s fall from grace.
The elder Cohn remained deeply involved in the Democratic political apparatus during this period and, as mentioned, was specifically close to Edward Flynn, who had tightly controlled the Democratic Party in the Bronx since 1922. Flynn, who was another protégé of Tammany Hall boss Charles Murphy but not a Tammany member himself, became favored by Roosevelt in the wake of the Seabury inquiry, supposedly because Flynn had kept his district free of corruption.23 An argument can be made, however, that Flynn had merely kept his district and his own reputation free from a public association with corruption, as Flynn later moved to protect the mob-linked politician William O’Dwyer. According to Robert Shogan, O’Dwyer was one of the Cohn family’s “famous family friends.”24
The rise of William O’Dwyer, not unlike that of Thomas Dewey, was based on his reputation as a crusader against organized crime, including Meyer Lansky’s Murder Inc., and specifically his role in the takedown of syndicate boss Louis “Lepke” Buchalter. It has been disputed, however, as to whether the reality of the Buchalter case was the same as what was publicly reported (i.e., ex-cop O’Dwyer bravely taking on the mob) or, rather, the masking of the consolidation of mob power into fewer hands.
As noted by Sally Denton and Roger Morris in The Money and the Power, it was Lansky himself who had arranged for Buchalter to be arrested by the FBI and the Federal Bureau of Narcotics in 1937. Of this alliance, Denton and Morris write that the “betrayal [of Buchalter] at once removed a Lansky rival, gratified Hoover and FBN director Harry Anslinger in their mutual obsession with popular image, and further compromised federal law enforcement, which was growing ever more dependent on informers and double agents for its successes.”25 Both Dewey and O’Dwyer prosecuted Buchalter with great zeal, gaining considerable recognition for themselves in the process.26 The man they took down, however, had already been consigned to death by both his “friends” and the government before Dewey and O’Dwyer were even involved, which casts doubt on the narrative that Buchalter’s prison sentences and eventual death sentence were merely the result of Dewey’s and O’Dwyer’s prosecutorial abilities.
Further doubt regarding the official story of this incident is raised when one considers that both star prosecutors had their own ties to the same syndicate, with Dewey’s ties to Mary Carter Paint/Resorts International having already been noted in Chapter 1. In the case of O’Dwyer, he was meeting with Frank Costello the same year that he secured Buchalter’s death sentence.27 O’Dwyer ran for mayor of New York in 1941 and lost, but he was later elected in 1945, largely on his anticorruption public image. However, an investigation launched by an attorney O’Dwyer had once hired and who was successfully elected to O’Dwyer’s old position as Brooklyn District Attorney, Miles McDonald, brought that image – and O’Dwyer’s career – crashing down. In 1950, McDonald began investigating Harry Gross, who had been running a multi-million-dollar gambling empire in the city. The investigation into Gross grew rapidly with McDonald discovering a series of other related rackets throughout the city. Most of those rackets led back to one man, James Moran – the man who had served as O’Dwyer’s right-hand man when O’Dwyer served as a judge, as a district attorney, and now as the city’s mayor.
Once word got out that McDonald was onto Moran, heat started to be applied from the very top, with O’Dwyer denouncing the man he had once hired and calling his investigation a “witch hunt.”28 Soon afterward, Ed Flynn called President Harry Truman and urgently requested a meeting. No formal record of the meeting exists, but it is believed that the topic was the implications that McDonald’s investigation would have, not just for New York City but for the Democratic Party and Truman himself. Two days later, Truman met with the head of New York’s Democratic Party and a close associate of Flynn’s, Paul Fitzpatrick. He then met with Eleanor Roosevelt, whose influence on the New York Democratic Party was still considerable. According to journalist David Samuels:
What McDonald’s investigation would reveal, Flynn and Fitzpatrick knew, was that Mayor O’Dwyer was the frontman for a system of citywide corruption that was administered by Moran, the mayor’s closest political associate. Worse, they knew – as the public would find out the following August, from the public testimony of a gangster named Irving Sherman – that O’Dwyer and Moran had been meeting personally with the syndicate boss Frank Costello as far back as 1941. And as a former chairman of the Democratic National Committee, Flynn also knew that the urban political operations that had helped elect Franklin Roosevelt to the presidency four times, and Truman once, were based on a system of unsavory alliances. Putting O’Dwyer on the stand would put the Democratic Party in New York – and elsewhere – on trial. One way to keep O’Dwyer safe from McDonald’s grand jury was to get him out of the country.29
This is precisely what happened, as Truman appointed O’Dwyer to be ambassador to Mexico, which allowed O’Dwyer to avoid charges and further scrutiny. Ed Flynn’s close ally and accomplice in helping orchestrate this deal to protect O’Dwyer, Paul Fitzpatrick, thanked Truman in a letter: “Your recent announcement of the pending appointment of the Ambassador to Mexico, again proves to me your deep understanding of many problems and your kindness in rendering assistance.… May I just say thanks.”30
Though O’Dwyer had escaped from McDonald’s investigation, he was forced to return to the US from Mexico City to testify before the Kefauver Committee on his alleged dealings with organized crime in March 1951. During his testimony, he did not deny having visited Frank Costello’s home in 1941. He also admitted that he had appointed the friends and relatives of powerful mobsters to public offices and became evasive when asked how much he had known about their ties to organized crime at the time. A subsequent report issued by the committee stated that “during Mr. O’Dwyer’s term of office as district attorney of Kings County between 1940 and 1942, and his occupancy of the mayoralty from 1946 to 1950, neither he nor his appointees took any effective action against the top echelons of the gambling, narcotics, water-front, murder, or book-making rackets,” while his time as mayor had “contributed to the growth of organized crime, racketeering, and gangsterism in New York City.”31
Less than a year later, O’Dwyer’s right-hand man, James Moran, was convicted on twenty-three counts of extortion for his role in the corruption McDonald had exposed. If Flynn was indeed a Bronx political boss who was free of scandal and corruption as some historians claim, it is hard to justify why he would intervene so dramatically – directly involving the White House – in order to protect the corruption that had enabled O’Dwyer. Rather, he stepped in to protect the system of “unsavory alliances” that had given his party its power, including its obvious organized crime ties. There is also the fact that a young Roy Cohn had been considerably involved with and worked in O’Dwyer’s election campaign, bragging that he had been the one who had found dirt on O’Dwyer’s Republican challenger.32 The mob connections and the use of “dirt” and blackmail in politics is something that would later define much of Roy Cohn’s career and, ultimately, his legacy.
UNCLE BERNIE’S BANK
Though Roy Cohn was undeniably born into privilege given his father’s influence and connections, it can easily be argued that much of Albert Cohn’s own success and clout had been due to marrying into the Marcus family. Roy Cohn’s mother, Dora Marcus, hailed from an elite family in New York’s Jewish community that was later mired in controversy and scandal in connection with their Wall Street activities during the Great Depression.
Dorothy “Dora” Marcus was the daughter of Joseph S. Marcus, who had created the Bank of the United States. Marcus, a Russian-Jewish immigrant, started his career in the garment industry before entering the world of banking, first creating the Public Bank of New York in 1906. He disposed of his interest in that bank in 1912 and chartered the Bank of the United States a year later. One of Marcus’ reasons for doing so was apparently related to problems at the Public Bank that had resulted from Marcus’ hiring of William Koelsch as cashier. Koelsch’s presence at the bank caused “friction” among the bank’s directors, according to the New York Times.33
Marcus, Koelsch, and a business partner of Marcus’ named Saul Singer came together to create the Bank of the United States soon afterward, but they had different men officially file the bank’s incorporation. This was allegedly done in order to hide their involvement to avoid alerting Public Bank’s leadership that Marcus and Koelsch were the real forces behind their new competitor. Marcus’ new bank was the subject of immediate controversy, as his new for-profit enterprise was to be located just a stone’s throw from Public Bank, leading Public Bank’s leadership to complain that “there was no public necessity for such additional banking facilities in that particular block” of the street.34
In addition, Public Bank leadership objected to the name of Marcus’ new bank, arguing that the name “Bank of the United States” sounded too much like some historical government-linked institutions, such as that which had served as a prototype for a central bank during the days of President Andrew Jackson. This, they argued, could give the false impression of a direct US government connection to Marcus’ bank, particularly to the uninformed. This point was made explicit in a letter written on behalf of Public Bank by Samuel I. Frankenstein and sent to the Senate Banking Committee.
Frankenstein, according to a report on the letter published by the New York Times, argued that “ignorant foreigners … would believe that the United States Government was interested in this bank and that it was a branch of the United States Treasury in Washington, and if the bank should fail these poor depositors would bewail the fact that they had entrusted their scant savings to the United States government.”35 He added, “It must be evident to any impartial mind that the motive and purpose in selecting this very peculiar and misleading name for a bank to be located in a neighborhood almost exclusively inhabited by foreigners, especially when so many other appropriate names could have been so easily adopted, was not a laudable one. This name was not selected through pure accident.”36 TIME would prove Frankenstein very prescient.
Despite these concerns, the Bank of the United States was granted its charter by George C. Van Tuyl Jr., NY State Superintendent of Banks, who subsequently became become a vice president and later a director of the bank. The Bank of the United States, as Frankenstein had expected, immediately worked to attract business and deposits from the local Jewish immigrant community. Starting with a modest $100,000 in working capital, it experienced moderate growth and had a total of five branches by 1925. Given its Jewish ownership and efforts to cater directly to Jews, it became a point of pride for the New York Jewish community, which “eagerly embraced the new bank, opening savings accounts and borrowing money for fledgling businesses,” according to historian Beth S. Wenger.37
Legal proceedings were, however, filed against the bank in 1926, requiring an independent examination of the bank’s books. The case was dismissed by NY State Supreme Court judge Joseph S. Proskauer, allegedly because the plaintiffs had failed to “make out a case.”38 Yet, there are reasons to doubts Proskauer’s objectivity in the case, as he was connected to the same political machine as Albert Cohn. For instance, Proskauer had been appointed by New York governor Al Smith, whose ties to organized crime have already been discussed. Proskauer had also served as Smith’s key political advisor during campaigns bankrolled by Lansky, which took place while Proskauer served on the NY State Supreme Court and subsequently the Appellate Court. Proskauer was appointed chair of the New York State Crime Commission in the early 1950s, despite his past conflicts of interest.39
That commission had been created at the behest of Governor Thomas Dewey, who, as mentioned in Chapter 1, had released Lucky Luciano from prison after his involvement in Operation Underworld and who was also closely tied to both John Foster Dulles and Allen Dulles. Allen Dulles was serving as CIA director at the time of the commission’s activities and as the Agency’s ties to organized crime deepened. Soon after the Crime Commission’s work was completed, Dewey’s former chief assistant, Paul Lockwood, in 1955 became a top executive at Lewis Rosenstiel’s moblinked Schenley Industries, while Dewey himself officially became a business associate of Lansky frontmen in 1958.40 Lansky had also previously donated to Dewey’s unsuccessful bid for the US presidency in 1944.41 The Proskauer-led Crime Commission was insignificant in terms of its end results, especially in comparison to the impact the Kefauver Committee had had the year before, when Dewey had been called to testify due to his suspected mob ties.42 This suggests that Proskauer, like Albert Cohn, Ed Flynn and others, could be counted on to protect certain influential actors within the system of “unsavory alliances” that was woven throughout the city.
In addition to Proskauer’s own apparent conflicts of interest, there is the added fact that Joseph Marcus had promised Albert Cohn a judgeship in exchange for his marrying his daughter Dora, which further reveals the influence of the Marcus family within legal and judicial circles, as well as with the politicians who appointed judges in New York during this period. Albert Cohn had been appointed as judge for Bronx County by Al Smith a year before this case was brought against Marcus’ bank, in 1925.43
Joseph Marcus died in 1927, giving his son Bernard K. Marcus – Roy Cohn’s “Uncle Bernie” – complete control over the bank’s affairs.44 Bernard Marcus had already been intimately involved with the bank’s leadership since 1919, when his father had turned over active management of the bank to him. After his father’s death, Bernard was named president of the bank and went on an aggressive acquisitions-and-mergers spree, resulting in the bank growing from five branches in 1925 to sixty two in 1930.45 Two major mergers took place in 1928 followed by two more in 1929, resulting in the Bank of the United States becoming the third-largest bank in New York City by May 1929.46 The bank became a member of the Federal Reserve of New York, which was greatly influenced by the Warburg brothers, Felix and Paul. Paul Warburg was the main architect of the privately owned Federal Reserve banking system and a powerful force at the central bank during its early years.47
Due to the Bank of the United States’ apparent success, Bernard was hailed at the time as “a financial wizard who could make dividends sprout from virtually nothing.”48 Yet, it was soon revealed that Bernard Marcus’ wizardry was largely the result of fraud and corruption by the Marcuses and Saul Singer, validating the earlier rationale for having the bank investigated, which had been dismissed by Proskauer. In February 1930, just months after the Black Tuesday stock market crash of October 1929, Bernard Marcus assured shareholders that the bank stood on solid ground.49 A few months later, the bank began negotiations for its largest merger yet, which would have resulted in their bank managing $1 billion in deposits. The would-be bank was to have been headed by J. Herbert Case, then head of the Federal Reserve Bank of New York, of which the Marcus-run bank was a member.50 In addition, Goldman Sachs was poised to have “a substantial interest” in the new bank, further underscoring that the merger was set to create another Wall Street behemoth.51 Terms of the merger were reportedly negotiated in November 1929.52
Yet, by December, rumors were proliferating that the Marcus-run bank was insolvent. Nervous investors and depositors, most of whom were Jewish, lined up to withdraw their money on December 10, 1930. By midday, over $2 million had been withdrawn, and tens of thousands of the bank’s estimated four hundred thousand clients had gathered outside the doors of the bank’s Bronx branch, leading to the police being called to maintain order. The panic quickly spread to other branches, but – by that time – all of the other branches had closed their doors. A massive sell-off of the bank’s stock ensued, plunging it to $3 a share, whereas it had stood at $91 the previous year. Bernard Marcus insisted that the bank would reopen following the planned merger. The merger, however, fell through, as clearinghouse banks involved in the deal pulled out after examining the books of the Marcus-run bank.
Superintendent of Banks Joseph Broderick attempted to work with Wall Street’s leading bankers to rescue the bank on December 11, 1930, but failed to reach any solution. The governor of New York at the time, Franklin D. Roosevelt, ordered the Bank of the United States closed, which made its failure the largest in US history at the time. An investigation was launched, and the evidence of fraud quickly piled up.
As the investigation began, it became readily apparent that Bernard Marcus and Saul Singer, the bank’s vice president, had engaged in illegal activity, including purchasing the bank’s stock with depositor funds in order to drive up the stock price.53 Not only that, but they loaned out over $37 million under suspicious circumstances, including $10 million in mostly unsecured loans to bank directors and their companies, as well as $5.5 million in loans to sixteen insolvent subsidiaries of the bank in the months leading up to its collapse.54 Marcus and Singer also raided the bank’s reserve to finance their own investments in the real estate market.
Public hearings revealed that two months before the bank shut down, officers at the bank had burned a truckload of documents, more than a thousand bundles of papers of bank records, at an incinerator located at the Beresford Apartments, which was owned by a subsidiary of the Bank of the United States.55 Marcus, in a style that would later be exemplified by his nephew Roy Cohn, fought the investigation of his bank bitterly, even going so far as to refuse to testify and to seek the removal of the lead investigator of the case.56 Both Marcus and Singer were found guilty of fraud and were sentenced to three years in Sing Sing maximum-security prison, and their appeal was unsuccessful.
According to members of the Marcus family, including Roy’s mother Dora, the reason the other banking chieftains of New York had declined to step in to rescue the Bank of the United States had been “anti-Semitism,” and editorials appeared in some New York newspapers arguing the same.57 Per this theory, the Episcopalian J. P. Morgan, the Anglo-Saxon-dominated New York Clearing House, and the German-Jewish bankers – e.g. the Kuhns, Loebs, and Lehmans – had let the Russian-Jewish bankers fail when they could have saved their bank. Dora Marcus referred to these figures as “a dirty anti-Semitic cabal” that sought to destroy her family due to their Russian-Jewish origins.58
Other banks, however, have been allowed to fail throughout US history, and “anti-Semitism” was not blamed for those occurrences. In addition, the German- Jewish banking establishment was in part dominated by another powerful family – the Warburgs – with both Felix and Paul Warburg having married into another German-Jewish banking family, the Loebs. In June 1930, just months before the collapse of the Marcus-owned bank, Albert Cohn – Bernard Marcus’ brother-inlaw – was the guest of honor at a luncheon hosted by Felix Warburg, suggesting that this alleged hatred held by the German-Jewish banking establishment for the Russian-Jewish Marcus family did not exist at the time.59
It is perhaps more likely that either the fraud of the Bank of the United States was too enormous or that the German-Jewish banking establishment was disgruntled that such a massive fraud had been perpetrated by a Jewish-owned bank against mostly Jewish depositors. After all, the bank sought to target the Jewish immigrant community through deceptive means from its inception and subsequently committed fraud to rob mostly Jewish immigrants of their money. For example, the bank deliberately advertised its services to the Jewish community in Jewish newspapers and magazines less than a year before its failure at a time when its executives had been engaged in fraudulent activity.60 In addition, there had been efforts to investigate the bank for fraud earlier, but they had been dismissed with the intervention of Judge Proskauer. That intervention also raises the possibility that powerful interests had been willing to intervene on behalf of the Marcus-owned bank once but would not do so a second time.
Furthermore, Bernard Marcus was pardoned after just twenty-seven months in prison by Herbert Lehman when he was serving as New York governor.61 Lehman had been one of the judges presiding over Marcus’ appeal and was the only one who had argued for the conviction to be overturned.62 Lehman, who hailed from the German-Jewish Lehman Brothers banking family, was close to Albert Cohn, who had allegedly lobbied Lehman to grant the pardon.63 If the Lehmans and the rest of the German-Jewish banking establishment had indeed sought to destroy Marcus, it is highly unlikely that Herbert Lehman would have intervened to try to prevent his initial conviction and then intervened again by pardoning Marcus.
The trial and imprisonment of Bernard Marcus had a considerable impact on Roy Cohn, as “Bernie” was his favorite uncle. Roy, like other members of the Marcus family, took the view that the “anti-Semitic cabal” had used Bernard Marcus as a “scapegoat,” leading some of his cousins on the Marcus side to claim that it was this view that led Cohn to “fight the establishment.”64 Given other accounts and insights into Roy Cohn’s up-bringing, it seems more likely that he just resented the law and felt that it should not apply to him, a sentiment apparently shared by Bernard Marcus, as revealed by his conduct during the investigation and trial related to his role as the president of the Bank of the United States.
On Roy Cohn’s maternal side, it was not only his grandfather and uncle who were influential figures in New York (despite their very public fall from grace in the 1930s). His maternal grandmother, Celia Cohen Marcus, was the sister of Joshua Lionel Cowen (born Cohen), who cofounded Lionel Corporation, a producer of model railroads and toy trains. The origins of the prominent toy company lie in Cowen’s work for Acme Electric Light company, where he began registering patents for lamps and motors in 1899.65 That same year, Cowen was awarded a $12,000 contract from the US Navy to design and manufacture fuses to ignite submarine mines.66 Cowen used the money to finance the creation of Lionel Corporation in 1900. Though Cowen is best known as the long-time and founding president of Lionel Corporation, he was also a director of the Bank of United States at the time of its demise.67
While his nephew was sent to Sing Sing, Cowen managed to get off light through the help of Fred Piderit, the special deputy banking superintendent charged with overseeing the liquidation of the Bank of the United States.68 Piderit’s son later became a prominent fixture at the New York Federal Reserve.69 Cowen ultimately settled for $5,000 (about $107,000 in 2022 dollars), despite having personally attended bank directors’ meetings during which many of the fraudulent loans had been approved. He testified that he knew nothing of the bank’s criminal activities and learned about its many problems from media reports after its closure. Cowen’s avoidance of charges in the case further weakens the theory that the prosecution of Bernard Marcus over the bank’s collapse was a plot against the Marcus family perpetrated by other Jewish banking families.
Lionel’s influence grew and peaked in the early 1950s when it became the world’s largest toy manufacturer.70 Its glory days faded relatively quickly, and by the end of decade, Cowen and his son Lawrence stepped away from the company, selling their shares to none other than Roy Cohn. Cohn’s involvement with and role at the company would subsequently be linked to suspect financial activity and organized crime networks. Friends of Cohn’s, including former congressman Neil Gallagher, have alleged that Roy persuaded friends and acquaintances to buy Lionel stock while he privately shorted the firm, resulting in Cohn getting rich while those who had invested at his behest took a financial beating.71 Cohn also “side-stepped” federal regulations in the late 1950s by borrowing large sums from US and foreign sources to buy Lionel stock.72 At the time, Cohn had already become enmeshed in business interests tied to mob figures such as Moe Dalitz and Tony Salerno.
Regarding other notable claims about Roy Cohn’s family tree, it has been alleged by some, including his biographer Nicholas von Hoffman, that his maternal grandmother, Celia Cohen Marcus, was “deranged,” suffering from serious mental issues. One of his uncles on his mother’s side, Jesse Marcus, was “either mentally retarded or brain-damaged,” which the family speculated was due to the misuse of forceps by the doctor who delivered him, while others suspected a congenital condition. Von Hoffman also reported that some members of the Cohn family thought that Roy Cohn’s mother needed to be institutionalized, while others thought something similar but believed that being well-to-do made her eccentricities manageable.73
Other members of the Marcus family, including Roy Cohn’s cousins, have not made such extreme claims but have said that Dora’s neurotic and sociopathic tendencies left an undeniable mark on her son. According to one of his cousins, it all started the day Roy Cohn was born in 1927, with Dora telling Al, “This is my baby. I’m going to bring this child up and you’re going to have nothing to say about it.”74 Though dominated by his mother and having much less contact with his father, Cohn was aware from a young age of their unhappy marriage and was able to play his parents against each other with ease. Bernard Marcus’ wife, Libby Marcus, once stated to biographer von Hoffman that Cohn’s parents “saw quite differently in ways of discipline and so forth, so Roy was never said no to. He could always find one person on his side, and that’s the one he would use.” Cohn’s Aunt Libby, added, “I don’t think there was any [discipline] between Roy and his mother. It was always in a direction of power, influence, recognition, and there was no chance of Roy ever being stymied because he always, always got his way.… It was not a normal relationship.”75
This permissiveness was, perhaps, the most lasting impact Cohn’s mother had on his character. It was also expressed by one of his law partners, who was anonymously cited by von Hoffman as saying, “His doting mother created a person who was totally free of the rules that you and I or most people go by. What will people think, what’s the right thing, what does my religion say about this – Roy played by his own set of rules. Whatever he wanted at any given moment was the right thing.”76