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The Corrupt City: Reading, Pennsylvania

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Exposing the devastating legacy of corruption in Reading, Pa., this 1969 film by Group W-Westinghouse reveals how public apathy and dishonest city officials allowed Reading to have been dominated by an organized crime syndicate.

At the Kefauver Committee hearings in the U.S. Senate in 1951 (download final report by clicking here (PDF document, 0.98 MB), it was revealed that organized crime was extending its tentacles into Reading, PA.

Testimony dealing with Reading, Pa., was heard by the committee at a hearing held in Washington on June 28, 1951.

It was immediately apparent that Reading was what law-enforcement officers describe as an "open town." (i) Two horse rooms operated without molestation within a short distance of the center of the city, one within the shadow of city hall itself ; (ii) slot machines were openly exposed except for periodic pronouncements by the district attorney that they must stop, warnings that received scant attention; (iii) punchboards littered store counters, with change from purchases being deliberately placed on them to induce play by minors as well as adults; (iv) numbers were written openly in many places, including newsstands and barber shops.

Numerous complaints were made in vain to enforcement officers. District Attorney John E. Ruth answered that he viewed gambling as part of the life of the community that had to be accepted and, anyhow, he was a prosecutor and not an investigator. This was on May 2, 1949, and the following month church groups who approached Mayor John Davis were told that gambling was part of the nature of the people of Reading and that the city was not any worse than other cities of its size. He said it was not his responsibility as mayor to rid the city of gambling. He said it was the responsibility of the clergy to induce the people to stop gambling.

Western Union records introduced at the hearing showed that a horse room at 601 Franklin Street had been receiving wire service from March 22, 1950, until May 28, 1951, when it became known that the committee was making its investigation. However, service to a horse room at 31 Poplar Street, which began on March 4, 1950, was still being continued as of June 7th 1951, the date upon which Western Union supplied the data. The subscriber for the Franklin Street place was listed as "Ben Moyer" and in the ease of the Poplar Street operation the subscriber was "Moyer A.C." The service came from Metro-Globe News Service,

Hoboken, N.J., a distributor for Continental News Service. Actually the operator of the Franklin Avenue horse room was Alex Fudeman, nephew of Abraham and Isadore Minker, long-standing racket powers in Reading and in control of practically all gambling. The building in which it operated was owned by Thomas A. Williams, who admitted that the horse room had been located in the basement of the building for years. Williams displayed some remorse over the committee's entry into Reading and the danger of losing his tenant. As he put it, "Who else would pay $150 a month for it?"

The committee secured from Ralph S. Kreitz, a lifelong resident of Reading and an operator of slot machines for more than 20 years, some idea of the "take" realized by the owners of these machines and their locations. He said he owned about 100 machines and had been operating until the committee's investigators came to town. He insisted that the machines were all in chartered clubs and that there were no machines located where youngsters could play them. These "clubs" were found to have practically no restrictions on membership, payment of nominal annual dues being practically the only requirement for membership.

According to Kreitz, profits from the machines were split on a 50-50 basis between the owner of the establishment and himself. He estimated the share received by his locations during the preceding 14 months at $180,000. His share, he maintained, was only about $60,000 because of heavy expenditures for beer, lunches, and so forth, to insure "good will." Kreitz figures his net income "in a good year" at $25,000 to $30,000 after the payment of all salaries and expenses, but asserted that there were times when he was forced to close down and "live off his fat." He also admitted that he operated punchboards and console slot machines, but declared that he realized very little revenue from these.

Kreitz was never arrested for gambling or slot-machine operations except once 15 years ago by the State police, but if too many complaints were made, the local police sometimes chased him out of his locations. One such period lasted 9 months. He admitted that there were others in the same racket but he would not name them. The State police had "knocked off" his machines on two occasions, once putting him completely out of business. It was some time before he was able to accumulate enough funds to obtain more machines. He admitted also that the Federal Government caught up to him in 1948 for income-tax evasion for which he went to jail.

Kreitz defended gambling and even tried to picture Reading gamblers as benevolent characters. According to him, if a man were to lose $500 betting on a horse and the "bookie" learned that he couldn't afford it, the money would be returned to the man's family. He said there had been occasions when a player lost $60 or $70 in his slot machines and he saw to it that the money was refunded "rather than have any trouble."

Kreitz' personal relationships with public officials were not without significance. He holds "open house" for men in all walks of life, including important city officials. The district attorney visited him once when he was sick and a State policeman once took him for a plane ride to Florida. He could not remember whose plane it was. Also, he admitted having given $800 to Lieutenant Hoffman of the Reading police "to save his life when he was sick" and that he didn't expect to get the money back. Kreitz is only one of several racketeers in Reading and his operations are probably dwarfed by those of the Minker brothers.

Abraham and Isadore Minker, on the surface, are in the wholesale fruit and produce business and operate two realty companies. Behind the scenes they engage in activities about which they refused to testify on the ground that their testimony might tend to incriminate them. Their nephew, Alex Fudeman, a former bootlegger who operates the two horse rooms, also refused to testify on the same ground.

Abraham Minker, a Russian immigrant who was penniless in 1939 when he was released from Lewisburg Federal penitentiary, is far from penniless now. He and his brother Isadore refused to say whether they knew Frank Costello, Owney Madden, Nig Rosen, Willie Weisberg, or Muggsy Taylor, and they refused to identify the source of large amounts of miscellaneous income reported in at least one case in an income-tax return as being derived from "gambling."

The conduct of all three of these witnesses before the committee was such that they were subsequently cited for contempt of Congress and their cases are now in the hands of the United States attorney for the District of Columbia for prosecution.

Perhaps some light is thrown on the Minkers' affairs by the testimony of their bookkeeper, Miss Ann Brenner, a reluctant witness whose unexplained accumulation of wealth still remains a mystery. Over the 4-year period of 1946 to 1949 the combined income of herself and her sister was approximately $37,000. Yet during at that time they had invested $17,000 in Government bonds, made loans totaling $21,000, purchased stocks worth more than $22,000, put $7,500 in Federal savings and loan bonds, and loaned $24,000 to the Minkers' Brighton Realty Co. In addition, they had $15,910 in cash in a safe-deposit box and had three bank accounts. Miss Brenner could not even hazard a guess as to the balances remaining in these accounts. The bank records showed deposits over the 4-year period aggregating $61,037.18. She admitted that the deposits looked high but she guessed, "It may be the same money rotating."

Miss Brenner's investments included loans of $4,000 to Lt. Albert M. Hoffman of the Reading police and $2,400 to Richard Birney, son of the chief of police, but she denied that these were to incur police sympathy toward the Minkers' operations.

Her explanation consisted of vague statements about family sayings and frugal living, along with a few claims that were not entirely consistent with her income-tax returns. She recalled vaguely that the tax returns of Isadore Minker showed "miscellaneous income or gambling or something to that effect," and that she might have seen that on the returns of Isadore or Abraham, or both, but she brushed this aside by saying, "I am a bookkeeper. I am not to judge other people's lives."

The most dismal and distressing aspect of the story of the failure of the law enforcement in Reading was extracted from Chief Birney, the final witness. The committee can classify his testimony only as "pitiful." Chief Birney has held his job for more than 7 years and is the head of a department with a personnel of 155, including policemen and civilian employees. But he solemnly told the committee that the top law enforcement officer in Reading was the sheriff and that the mayor, and not he, was the man who had complete supervision over the police department under the Third Class City Act of the State of Pennsylvania.

Chief Birney said he had "assumed" that the Minkers and Alex Fudeman had been "partly at the head" of the rackets in Reading for a period of years but it had never been proved. He had "heard" there had been two wide-open horse rooms in the city for 20 years but no investigation was ever made because he did not receive any complaints. He admitted that the horse rooms were never raided and no arrests for bookmaking had ever been made since he became chief.

"The policy of the department is to act on complaints only on orders from the mayor. No complaints were received, nor no orders given," was a stock answer made repeatedly to questions addressed to Chief Birney by the committee. He asserted that a report of a violation submitted by an officer on the beat was not considered a complaint.

Chief Birney said he never consulted with the mayor about rumors that the horse rooms were operating. He said his orders were that if complaints were received the police were to warn the parties responsible, but that no arrests were to be made "unless absolutely necessary."

"In a small department you don't initiate action. You wait for orders. You don't set a policy, you merely carry out a policy. That is what I did," said Birney in defense of his position. He admitted that he had seen a newspaper article in 1949 which stressed that gambling was wide open in Reading and that "the syndicate" was getting $5,000,000 annually, but he had done nothing about it. He denied knowing anything about the special "pagoda" stamp which was attached to punchboards, suspected as being a sign that those particular boards were protected, and he admitted that he had never investigated to find out what he could about any such stamp. Chief Birney did recall one occasion when a ban on punchboards was ordered, but he insisted that tobacco and candy companies in Reading stormed the mayor's office complaining that the ban was interfering with trade and compelled the mayor to lift the ban.

The committee has no difficulty, after reviewing the Reading testimony and particularly that of Chief Birney, in arriving at the conclusion that Reading is a classic example of political strangulation of a police department at the behest of gambling interests seeking to thwart any interference with their activities.

Findings from Kefauver Committee hearings....

Five years later, after a new Democratic administration took over in the city, the IRS launched a campaign to collect taxes from gambling machine operators. Two years after that the federal Alcohol and Tax Unit raided a huge still and IRS agents completed investigations of two large numbers banks. After President Kennedy signed into law interstate gambling legislation in 1961, J. Edgar Hoover sent 100 FBI agents into Reading to arrest more than 100 gamblers in a large craps casino. Year after year local law enforcement looked the other way as racketeers took over the city. A bookie working for the Philadelphia Mafia was murdered in Reading before testifying at a grand jury hearing. The local mob kingpin, Abe Minker, was eventually convicted and imprisoned, as was Mayor John Kubacki. The war raged for six years before organized crime lost its control of vice in Reading.

Reading Corrupt City

The film notes that corruption is the basis of organized crime in the United States and that such crime can flourish only where it has corrupted local officials. Reading had been crippled by organized crime since the 1920s. The film contains interviews with former city officials, local business people, and ordinary citizens. All of those interviewed relate their experiences with and reflections on 'The Mob.' Thomas McBride, former leader of the 'Select Committee on Crime,' and Shane Craemer, former head of the Justice Department Task Force in Philadelphia, provide an overview of the Reading situation. McBride notes that a vacuum of leadership existed in Reading, which made the city very vulnerable to future domination by organized crime. Elected officials note that when they first took office, they were approached by persons who offered them payoffs in return for relaxed law enforcement and favored treatment. The consequences of organized crime are all negative. Organized crime seeks to nullify government and make it powerless. Besides the moral decay, the economic effects of organized crime domination are staggering. Prior to 1966, the annual profit to organized crime in Reading exceeded $5 million. In conclusion, the film observes that people get the type of government they deserve and that alliances between organized crime and elected officials, which would not be tolerated in most other countries, are far too frequent in the United States.

Traffic in illegal drugs now presents Reading with a far greater crime problem than illegal gambling, extortion, and prostitution ever did. Before the proliferation of marijuana, cocaine, and heroin, only a handful of murders were attributed to racketeering in Berks County. There were headline killings such as Ben Myers' during Prohibition, Tony Moran's in 1945, and Joe Donato's in 1963. But the mob violence in those eras pales in the gory glare of today's drug wars. Most of today's drug racketeers don't live long enough to establish reputations.

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