Under the union, bakers’ hours were soon strictly controlled, with wages rising to match those of high-end plumbers and electricians, plus paid vacations, life insurance, and pension plans. With a direct line between union members and their fathers who worked the benches before them, it was impossible to take such gains for granted. It also made concessions nearly impossible when it came to negotiating contracts.
Ultimately, it barely mattered to shop owners. In a thriving industry that by the mid-1960s was pumping out more than 2 million bagels per week to a market only just beginning to reach beyond New York City, they could afford it. With their industry grossing some $20 million per year, these men purchased homes on Long Island, drove fancy cars, and sent their children to prestigious colleges. It was a copacetic ecosystem, working out favorably for all involved.
Naturally, the Mafia wanted in.
By the time Johnny Dio — given name: Giovanni Ignazio Dioguardi — got involved with Manhattan’s bagel industry, he was 50 years old and, in the words of United States Attorney General Robert Kennedy, a “master labor racketeer.”
A capo in the Lucchese crime family, Dioguardi had already made a fortune skimming off the top (and frequently the middle) of fraudulent New York labor unions he’d formed for that very purpose. (Dio’s paper unions — bearing full voting rights despite no membership to speak of — were instrumental in electing his pal Jimmy Hoffa to the national presidency of the International Brotherhood of Teamsters in 1957.) In 1963, Dioguardi — having just served three years of a four-year mob-related prison sentence for tax evasion — proclaimed himself a changed man. He portrayed the work he’d lined up upon his release, for a company called Consumer Kosher Provisions, Inc., as legitimate. He was a hardworking frankfurter salesman, he said, who left his home in Point Lookout at 4 o’clock each morning and drove some three hours to Sullivan County to make sales calls.
The business was aboveboard, but Dio’s description omitted significant details. Consumer was one of two kosher-products companies vying for supremacy in New York. Its rival, American Kosher Provisions, Inc., had recently raised industry eyebrows by employing a gangster named Max Block, whose Mafia connections provided him extraordinary sway with supermarket buyers, who were subsequently strong-armed into favoring American’s products over Consumer’s. Consumer owner Herman Rose was baffled about how to respond.
Enter Dio, who convinced Rose that the path to profits involved fighting fire with fire, namely bringing his own mob muscle — Dio himself — onboard. There was something to this. With the Teamsters in his pocket, Dio’s threats of labor discord were all too real, and grocers paid ready attention. The kosher tide quickly turned.
Dio accelerated the process after Rose died unexpectedly in 1964. Utilizing a dormant corporation that Rose had set up in the Bronx called First National Kosher Provisions, he transferred all of Consumer’s assets into it, then listed himself as the company’s primary officer, boosting his own salary from $250 per week to $250,000 per year in the process. Dio leaned on supermarket buyers across New York with threats, getting them to sell what were frequently substandard First National products while writing into the contract a refusal to accept returns. (At about this point, reports of green, sweaty meat under Dio’s new label began cropping up with regularity.)
Pertinently, the mob now had significant say in (and the ability to skim from) Manhattan’s two top kosher-meat companies, resulting in a spike in consumer prices. New Yorkers whose diet relied on these products were beside themselves.
Not content with his newfound riches, Dio forced a merger with American Kosher and set about distributing the assets of both outfits into a host of smaller companies he created for just this purpose, which were themselves acquired by a larger sham company. (Newspapers of the time called the organization “the Kosher Nostra.”) Bills went unpaid while Dio and his cronies suctioned as much money as they could, as quickly as possible, content to let the business burn. It was enough to get Dioguardi indicted for bankruptcy fraud, for which he was sentenced to five more years in prison. His attorneys, however, delayed the proceedings for nearly four years, time enough for him to shift his parasitic sights to another local Jewish industry: bagels.
