For decades the Outfit had a nice piece of gay nightlife in Chicago, IL, and during the 1960s and 1970s its operations were overseen by John Gattuso according to recently released FBI files on the mobster. The FBI noted in June 1973 that under Gattuso's watch "business operations among homosexuals has become highly lucrative source of income for Chicago LCN Family."
The FBI commenced its investigation into Gattuso in late 1971 after confidential informants advised that he had undisclosed interests in numerous gay bars on Chicago's near north side and was paying off dirty cops in the 18th, 19th and 20th police districts to avoid raids against them. The investigation continued for three years, and the reports generated by the G-men read like a cross between a gay guide and pulp fiction involving tales of iconic establishments and mob ownership, vendor placements and profit skimming, political corruption and police payoffs, and beatdowns and other bullying tactics for control over the lucrative industry. One confidential informant told the FBI in 1974 that "one had to be connected with the outfit or at best have the outfit permission to open and operate a homosexual tavern."
In 1955 at the age of twenty Gattuso married the niece of Rush Street crew boss Jimmy "the Monk" Allegretti, and by the early 1960s was managing the Monk's interests in strip clubs, B-girl joints and gay bars. The Monk was a degenerate who was charged in 1959 with paying $30 for oral sex from an underage girl -- although the case inexplicably was dismissed a month later -- and he was a natural to run the vice rackets for near north side boss Ross Prio.
Gattuso first came to the attention of the FBI when busted in January 1962 "in connection with a vice investigation at the French Doll Lounge" of which he was the nominal licensee, and his brother Dominick "was also arrested for running a gay bar about the same time." In June 1964 a confidential informant advised the FBI "that Gattuso has operated the Playhouse and the French Casino for Allegretti" which "were former strip shows and now are operating without strippers but now have B-girls," and in July 1965 another confidential informant told that FBI that "Gattuso controls gay taverns on the near north side for Jimmy Allegretti." A confidential informant advised that "Allegretti considered Gattuso to be like his son and very trusted," and Gattuso ultimately was sponsored by Allegretti for membership into the Outfit.
Gattuso's star continued to rise within the Outfit even after the death of Allegretti in 1969. The gay bar operations were raking in a lot of money for the Outfit, and Gattuso had developed a strong relationship with Ross Prio. Gattuso bought Prio's suburban Glenview home in 1964 for $65,000, and the FBI noted in 1972 that "on Sunday afternoon, Gattuso will frequently entertain members of the Ross Prio family of the LCN, when weather permits a backyard barbecue will be held." Gattuso further was close to Joseph "Little Caesar" DiVarco and Joseph "Big Joe" Arnold who took over the Rush Street crew after Allegretti's death, and he frequently was seen at the shirt shop the pair operated on North State Street. Gattuso and Arnold would "both go on fishing trips together in Minnesota and Canada."
A 1973 FBI assessment on Gattuso describes more of a hustling businessman rather than an Outfit mobster, and states:
Gattuso appears to be a high-strung individual who moves about rapidly, and is always in motion. Gattuso dressed in a business-like manner with a slight modish touch and seems to favor double knit suits. He also indicated that he likes to play a little golf. He also gives the impression of being always occupied in his business ventures, working 12 hours or more a day.
During the FBI investigation Gattuso allegedly arranged in November 1972 for someone to carry $3 million in cash out of the country for deposit into a Swiss bank, and afterwards "allegedly said that he was no longer worried about the 'G' because they could no longer touch his money."
In light of Gattuso's history with his operation of the French Doll Lounge he was precluded from obtaining a liquor license, and he necessarily relied upon a series of clean names or front men to operate the establishments on his behalf pursuant to a profit split where he and his Outfit bosses took 50 percent and the frontmen took the other 50 percent.
Among the more notorious gay bars in which Gattuso allegedly had an interest according to multiple people was New Jamie's on North Clark Street which supposedly served as a meat market for rent boys and their admirers. One confidential informant stated that "New Jamie's is well known as a place to pick up male prostitutes." Another source advised the FBI in early 1972 that Gattuso intended to buy the building out of which the bar operated, and "remodel the rest of the building and make rooms which he will rent to patrons of the bar for what the source considered to be obvious activities." In August 1973 a confidential informant told the FBI:
The hotel above New Jamie's is known as the Crystal Hotel and is now open. The charges are $14 a night for the room. It is daily pay for the room and there are 32 rooms in the hotel. Source advised that there is no organized prostitution taking place at the Crystal Hotel till this time.
In May 1975 a confidential informant to the FBI "advised that the young homosexuals who live in the Crystal Hotel above New Jamie's Tavern . . . have credit to drink in New Jamie's," and that "most of the young men in the hotel are male prostitutes."
Gattuso also was accused by multiple people of having undisclosed interests in gay bars operated by Chuck Renslow who opened the leather bar Gold Coast in 1959, and went on to build a gay nightlife empire. The FBI interviewed Gattuso on November 20, 1973, and told the mobster "that his [alleged] involvement in taverns such as Sparrow's, The Gold Coast, and The Club Bath at 609 North La Salle Street, was of interest to the Federal Bureau of Investigation." All three establishments were Renslow operations, and Gattuso told the G-men that "he has nothing to do with the ownership of the taverns that [redacted] is connected with." However, he admitted that "he [Gattuso] does have connections with Chicago Police Officers and has asked police officers in the past to not harass [redacted] and [redacted] friends."
With respect to Renslow's Club Bath franchise in Chicago one source stated the following to the FBI:
When the Club Baths first opened in Chicago at 609 North La Salle Street it was at the instigation of [redacted] and [redacted] both of Cleveland, Ohio. When they got to Chicago and tried to establish themselves in the homosexual scene, they were placed in contact with [redacted] told [redacted] in front of her that Johnny Gattuso was his man. She stated [redacted] told her that Gattuso receives one third of all the gross from the Club Bath.
Multiple people told the FBI that the Club Bath was paying off cops to avoid raids. For example, one "source has advised that [redacted] makes $2,000 per month payments to the Chicago Police Department to allow that homosexual bath house to operate," and allegedly the payments got results:
[Redacted] would let them know what was happening at the Police Department in regard to the bath and source stated that on one occasion, approximately two years ago, [redacted] advised the club would be raided by the Police Department in the near future. The bath was called the day before the raid was to take place and advised to close for the day, that they were to be hit on that day, and when the Police came no customers were present.
A former Chicago Police officer advised the FBI on August 21, 1973 "that Club Baths at 609 North La Salle Street, was off limits to police officers in 1971 and 1972," and he "stated that it was his belief that the Club Bath was receiving protection from the downtown police headquarters."
Renslow further opened up a Club Bath franchise in Kansas City, MO, and a June 8, 1973 teletype from the FBI's Chicago field office to its Kansas City field office alleged the following:
Investigation in Chicago has also revealed that Chicago LCN figure John Gattuso operates numerous homosexual bars and an extremely lucrative homosexual bath house in Chicago. [Redacted] is frontman for Gattuso's homosexual operations and investigation indicates the bath house operation has been extended to Kansas City, Missouri. Officers of corporation operating bath house Kansas City known associates of [redacted].
The FBI was concerned whether Renslow's new Club Bath franchise "may be collusion between Gattuso and [Kansas City mob boss Nick] Civella." A relative of Civella was Louis S. "Red" Chiavola who not only worked in Chicago's 19th District Station until his 1973 death but further allegedly had undisclosed interests in three unidentified Windy City gay bars. The Chicago G-men advised their Kansas City colleagues that they "should note involvement of deceased Chiavola in homosexual operations and relationship to Kansas City LCN leadership."
In 1976 and 1977 there were a series of confirmed and suspected cases of arson involving gay bathhouses along the west coast including the Folsom Street Barracks at 8 Hallam Street, San Francisco; Club Bath at 328-330 Ritch Street, San Francisco; Steve's Bath House in Sacramento, California; and Club Bath in Portland, Oregon. The FBI launched an investigation to determine whether "organized crime groups, using extortion, threats, and arson" were attempting "'take overs' of homosexual bath houses in the San Francisco, California area." The FBI was concerned whether the Mafia had infiltrated the west coast gay bathhouses because it suspected "[o]ther homosexual bath house chains have been determined as being financed by organized crime," and more specifically claimed the following:
Chicago investigation entitled [redacted] ANTI-RACKETEERING (Chicago File 92-3518) indicates organized crime influence in Club Bath Chain. * * * Investigation at Chicago has indicated LCN associates as having been involved with some Club Bath Chain Bath-houses in the Chicago area approximately five years ago.
The FBI closed out the San Francisco case after investigation "failed to show any organized crime influence in captioned case and has established that insurance fraud was not possible as a motive in this case," and said that "remaining explanations of local competition in the homosexual bathhouse trade or random pyromania remove the case from FBI jurisdiction."
Renslow is the subject of the recently published biography Leatherman by Tracy Baim and Owen Keehnen in which the barkeep and bathhouse operator is quoted extensively concerning the historic pervasiveness of the Outfit in the industry. In Leatherman Renslow insists that he was not a mob front; however, he admits that he otherwise had to play ball with the syndicate boys which included monthly protection payments to them and the use of their vending services.
Although many people alleged to the FBI that Gattuso had interests in Renslow's bars and bathhouses, some accounts by confidential informants generated during the investigation corroborate Renslow's position. For example, one source claimed in August 1971 that when Gattuso learned Sparrow's was not serving beer from his distributorship "John Gattuso came around and there was a confrontation" which remedied the situation. Moreover, others told the FBI on more than one occasion that Gattuso was complaining that he was not getting enough in payments. For example, in March 1973 a confidential informant told the FBI that "Gattuso is complaining that [redacted] is not giving him much money from the bath house operation and he cannot understand why." There's a big difference between an extortion target who went with the flow and a clean name who fronted for the mob, and on balance the evidence suggests Renslow more likely was the former rather than the latter.
Neither Gattuso nor Renslow were ever charged by the FBI, and by memo dated February 20, 1976 the Bureau placed "[t]his case . . . in a closed status inasmuch as no information has been developed concerning violations of criminal status."
In the end it wasn’t the FBI who brought down Johnny Gattuso but the Outfit.
On February 10, 1983 Gattuso and Jasper Campise botched an Outfit-ordered hit on Ken Eto who ran the numbers racket, and two days later the FBI's Chicago Field Office sent a priority teletype to the Bureau Director in Washington, D.C. that "throughout the law enforcement community in Chicago it is believed that the LCN would attempt to kill both Campise and Gattuso for the 'sloppy job' they did on Eto."
Gattuso knew it was coming. In the biography Leatherman Renslow recounts how Gattuso visited him after the Eto mess to confess that he feared for his life. Sure enough, a few months later in July 1983 the decomposing bodies of Gattuso and Campise were discovered in a car trunk.
Further reading that may be of interest: