Black Mass: Whitey Bulger, the FBI, and a Devil's Deal by Lehr, Dick, O'Neill, Gerard (2012)

PART TWO

I do my best to protect you and I may break a
few rules, but I break them in your favor
.

RAYMOND CHANDLER,
THE BIG SLEEP

CHAPTER SEVEN

Betrayal

Responsibility for the stunning breach in security in the potentially devastating state police bugging of Bulger and Flemmi fell squarely in the FBI’s lap, and on one agent in particular. “It was Connolly,” Flemmi later admitted. But Connolly wasn’t the only FBI agent watching out for Whitey Bulger like a lifeguard monitoring shark-infested waters. Morris, Flemmi added, had also tipped them off. The supervisor, said Flemmi, had told Bulger that another agent had come to him looking for background information on the two gangsters. Morris interpreted the inquiry as groundwork for another group’s plan to launch electronic surveillance.

In fact, before he heard from Connolly and Morris, Flemmi had gotten an even earlier tip about a possible bug from one of the bookies he and Bulger were in business with. The bookie claimed to have picked up his information from a state police trooper. But Flemmi was the first to acknowledge that this was secondhand, underworld hearsay that could not compare to the solid confirmation Connolly soon provided. “His job was to protect us,” said Flemmi about Connolly’s help.

Years later Connolly would finally admit that he warned Bulger and Flemmi, but his version came with a self-preserving twist: he claimed O’Sullivan had asked him to alert his informants. Flemmi, in court testimony, backed up Connolly: “Jeremiah O’Sullivan told John Connolly . . . [we] were being bugged down at Lancaster Street and to provide us with that information.”

O’Sullivan’s camp has denied Connolly’s version, a strained account that did not square with the prosecutor’s passion for putting gangsters behind bars or his animated enthusiasm for the state police operation in his meetings with troopers. Flemmi’s testimony was simply seen as a bid to protect the agent who had protected him for years. The more likely scenario, according to state police, was that O’Sullivan may have taken Connolly into his confidence out of professional courtesy—mindful that Connolly was in fact the FBI’s handler of Bulger and Flemmi—and that Connolly then betrayed that confidence. Indeed, the state police’s long-held suspicions of FBI duplicity hardened into dogma when one of the troopers doing surveillance spotted Bulger sitting with Connolly in a car in South Boston. Whatever the fine details, Morris and Connolly had warned Bulger and Flemmi, and the FBI leaks had undermined another police agency’s bid to target Boston’s Irish gang.

But amid the Morris and Connolly cover-up there was one potential bright spot. O’Donovan had found an earnest audience in the one agent who counted—the new FBI boss in town, special agent in charge Lawrence Sarhatt, who did not buy Morris’s defensive explanations. They didn’t sound credible, and the more Sarhatt thought about it, the more he began asking a question far more threatening. Sarhatt wondered whether Bulger had become more trouble than he was worth. Had this South Boston gangster grown too close to his FBI handlers? Beyond the question of the leak, Sarhatt began asking Morris and Connolly about Bulger’s “suitability.” This whole new line of inquiry further jeopardized the core deal Connolly established five years earlier.

The strife landed on Morris’s desk at a difficult time. At home his marriage was falling apart. His reckless party chatter and phone call to O’Donovan had almost blown everything. And work was all-consuming. He was coordinating the strategy to win federal court approval to bug Gennaro Angiulo’s office at 98 Prince Street. He was overseeing a punishing schedule for his expanding squad of agents. Now along came Sarhatt questioning the cornerstone of the Organized Crime Squad—Whitey’s and Stevie’s information highway. On top of all that, Morris knew he was losing control over the loose cannon on his squad, the crafty and connected Connolly.

Connolly had been livid at Morris for his foolhardy overture at the midsummer party. Morris had tried to make things better with Connolly. During the leak inquiry Morris had omitted in his reports that Connolly also knew about the bug well before Morris had shot his mouth off at the Friday night party. Morris’s report kept Connolly off the FBI’s internal suspect list of leakers. But Connolly was exerting his influence over Morris more than ever before, his bombastic personality overwhelming the introverted boss. “I should have said no to Connolly,” Morris said. “But I didn’t want to take him on.” After weathering a crisis of his own making, Morris began to fear Connolly’s political connections with a vindictive Billy Bulger and Connolly’s South Boston brotherhood with the dangerous Whitey.

Late in 1980, as the FBI internal inquiry evolved from a look at a possible leak into a more dangerous review of Bulger, Morris began to follow Connolly’s lead in converting the challenge they faced into something resembling an old South Boston us-versus-them fight against outsiders. To rebut Sarhatt’s concerns, Connolly and Morris would have to prove that Bulger and Flemmi were invaluable assets that the state police were simply trying to destroy out of jealousy. Look at Bulger’s potential, they would argue right up the FBI chain of command, not at his life in crime. No matter what it took, this is what they had to make Sarhatt see.

As the new FBI man in town, Sarhatt learned quickly that boisterous Boston was not at all like his last posting in sleepy Knoxville, Tennessee. Never before during his twenty-year career had he encountered such a tangled tale of treachery. But he was determined to get to the bottom of it. Almost alone at the FBI, he viewed the state police’s O’Donovan as a straight shooter with a genuine problem. Prodded by O’Donovan, Sarhatt kept demanding more sensible answers from Morris and kept getting specious ones. After weeks of internal go-arounds and lame memos, Sarhatt began to turn up the volume about possibly closing Bulger down. If the state police knew about Bulger’s ties to the FBI, he worried, then everyone else at the roundtable at the Ramada knew. If all those state and police officials knew, that meant eventually the top-secret information might spill into the city’s underworld. Indeed, Sarhatt worried that the word was already out about Bulger and that it would get him killed, leaving blood on everyone’s hands. Besides, Sarhatt questioned whether Bulger’s information was all that good. He began to entertain the heretical thought: shut Bulger down.

But Morris and Connolly had an answer: cut Bulger and Flemmi into the biggest case ever in the history of the Boston FBI office—the bugging of Angiulo headquarters. It was a brilliant plan, and John Morris sat in an extraordinary catbird seat, a traffic cop directing the players on both sides of the line to suit his own needs without any disruption in the Organized Crime Squad.

Winning a court’s permission to plant a bug required jumping through a number of legal hoops, all of which had to do with providing the court with detailed information about the specific location the FBI was targeting for its proposed invasion of privacy. The FBI, working with prosecutors from Jeremiah O’Sullivan’s office, had to prove to the court that it had “probable cause” to infringe on the mafiosi’s otherwise constitutionally protected right to be left alone. In other words, the FBI had to show that the Angiulos used the office as their base and were likely to be committing crimes there.

To get the inside information that Gennaro Angiulo presided over his wide-ranging rackets at 98 Prince Street, Morris relied on a number of informants who often went there. These six or so informants—gamblers and bookmakers who regularly visited 98 Prince Street to do business with the Angiulos—brought the FBI squad intelligence that was ample and impressive. Many of them reported to Connolly, but one—the best informant in the lot—reported to Morris. This informant was awell-established bookmaker from the city of Chelsea, just north of Boston, and Angiulo depended on the bookie’s financial acumen.

For his part, Whitey had rarely, if ever, stepped inside 98 Prince Street. The Mafia was wary of the cheeky Bulger. He was Irish and hoarded South Boston profits for himself. But Flemmi had always been a Mafia favorite. He was Italian and had a long history of ruthlessly collecting loan-shark debts for the North End. But even Flemmi had been inside Angiulo’s office only four or five times.

By the fall of 1980 one of the federal prosecutors assigned to work with the FBI was already putting the finishing touches on the government’s application for electronic surveillance, known as a “T3 application.” In painstaking detail the application incorporated Morris’s reports from agents and from agents’ informants. They contained no mention of Bulger and Flemmi.

Morris and Connolly had to find a way to turn Prince Street to their advantage, and the T3, though in its final draft, was not yet complete. There was still time, and during the frenetic days leading up to its filing in court, Morris and Connolly went to work. The plan was to give Bulger and Flemmi credit for 98 Prince Street.

It began with Morris cleaning up some paperwork. Ever since the race-fixing investigation Flemmi had been closed as an informant. (Morris had reopened Bulger in 1979, but Flemmi had been overlooked.) Flemmi did not know he’d been closed and still met with Connolly as often as he ever did; he had to be officially reopened in order to be tucked into the Prince Street T3. Morris arranged the reopening in a teletype to FBI headquarters in Washington, DC. Flemmi’s new code name was “Shogun,” the term for the ruling military governors in ancient Japan who paid lip service to titular emperors.

Next came a meeting between Morris and Sarhatt on October 10. The top FBI agent in Boston told Morris straight out that he was thinking of closing Bulger. Sarhatt’s alarming ruminations sent Morris and Connolly into overdrive. They called an emergency meeting for that very night, at Bulger’s Quincy condominium. They explained the crisis at hand to their informants. And then the scheming agents explained that they wanted to add Bulger and Flemmi to the pending T3 as additional confidential informants who had provided inside information about 98 Prince Street.

To fend off Sarhatt’s concern about Bulger’s value, Morris and Connolly had come up with a master stroke—a cameo appearance inside 98 Prince Street. Flemmi could walk easily into 98 Prince Street. But now Bulger would tag along, and afterward the agents could convert the walk-on part into a starring role. It was a dream solution: save Bulger to sink Angiulo. And once in place, Sarhatt would not be able to oppose the two agents except by spurning the collaborators who helped the FBI find its Holy Grail: a surefire case against the Boston Mafia.

The last obstacle to the devious plan was some stage fright by Bulger and Flemmi. The savvy pair knew that a bug in Angiulo’s office would inevitably produce evidence of their own gambling and loan-sharking ventures with Angiulo, maybe even some old murders by Flemmi. Later Flemmi would say that he and Bulger pressed Morris and Connolly about whether they would be prosecuted for crimes revealed in bugged conversations at 98 Prince Street. Flemmi would claim the agents “assured us we wouldn’t have a problem and not to be concerned about it.” The FBI, they were repeatedly told, would look the other way on everything short of murder.

Reassured, Bulger also blew off the state police contention that word about him was out and he was in danger. He said the only gangsters up to the job of “taking him out” were the ones who would never believe he was an informant in the first place—the Boston Mafia. He said his one worry was that the perceived weakness of Winter Hill, with some of its leaders in jail and on the lam, might prompt Angiulo to make “a move” on him to reclaim territory and lost authority. Law enforcement was not even a concern worth mentioning.

▪   ▪   ▪

Inside the FBI Connolly and Bulger teamed up, collaborating on an extraordinary memorandum that reduced agent Connolly to a ghostwriter for the rampaging Bulger. Recasting the whole issue as a political attack, Connolly’s internal memo said that Bulger viewed the state police as part of a conspiracy to embarrass his brother Billy. It was a toned-down FBI version of a South Boston Tribune editorial that railed at intruders from across the Fort Point Channel. It was us-against-them.

Furthermore, the memo continued, Whitey wanted it known that the troopers were trying to make Connolly the fall guy for their own failures at the Lancaster Street garage. Look at the players, Bulger and Connolly exhorted—some of the same troopers who had worked for Norfolk County district attorney William Delahunt. They were all after revenge because of Connolly’s recent success in investigating their murderous informant, Myles Connor, the one who ratted out other people for his own crimes.

Bulger/Connolly even went so far as to put the conspiracy inside the State House. The memo said that Delahunt and a political ally, Attorney General Francis Bellotti, were plotting revenge against Billy because he bottled up legislation that would have allowed Bellotti personal use of $800,000 in campaign funds. Whitey even protested that the state police were spreading rumors that Connolly passed him information through Billy.

Connolly’s memo invoked the South Boston maxim: always retaliate when attacked by outsiders. But it misfired. Sarhatt suddenly had a highly spun polemic on his desk, a bizarre memo from an arrogant agent on behalf of an entitled informant, full of undocumented, even crazy inside baseball about political enemies seeking vengeance. For Sarhatt, it heightened rather than assuaged his original concerns.

▪   ▪   ▪

Having vented his spleen, Bulger finally got down to the business of providing the FBI with some intelligence from Prince Street. It wasn’t much, but that wasn’t the point. It was something that could be dressed up and written about. Perception, not reality.

On a crisp late fall day at the end of November the pair dropped by for a visit Flemmi arranged. They talked with Danny Angiulo. Jerry wasn’t even there. Danny beefed about the poor football betting season, and they talked about how Vincent “The Animal” Ferrara, an up-and-comer in the Mafia, had agreed to track down a $65,000 blackjack debt that Billy Settipane owed Larry Zannino.

Later memoranda extolled the mission as vital to the Angiulo effort, but nothing of the sort showed up in Connolly’s initial report. He even credited Flemmi but not Bulger for information about Ferrara’s mission for Zannino. But a few months later, when Connolly folded the ballyhooed Prince Street visit into larger memos listing Bulger’s contributions, he claimed that Bulger provided detailed information on the momentous case, though he never explained what it was. Morris and others later testified that Bulger and Flemmi did a reconnaissance of Angiulo’s security system and that Flemmi drew an office layout for agents.

In truth, the prized informants only told the FBI what it already knew—where the doors and windows were and that no alarms were visible. Morris admitted later that the foray was helpful but not necessary to get court approval for the bug. But at the time it was enough: Bulger and Flemmi made it into the massive T3 document.

Still, even with Morris and Connolly pushing the 98 Prince Street angle, Sarhatt wanted more: a face-to-face meeting with the crime boss from South Boston to satisfy himself that retaining Bulger was the right thing to do. Connolly used one of his many connections around town to get a room at the Logan Airport Hotel on short notice.

Although the meeting-on-demand had an edge to it, Whitey arrived alone and with all his brash confidence. Flanked on each side by his FBI handlers, he was the most relaxed man in the small room. Sitting across from Sarhatt in one of the cheap chairs, he clasped his hands behind his head and plunked his cowboy boots on a small table. He talked for four hours about his relationship with the bureau and his life in crime.

Bulger proclaimed himself an old-fashioned, true-blue FBI man. In fact, he said, his entire family were all admirers of the bureau, dating back to the kindness shown to them in 1956 by none other than agent Paul Rico, Flemmi’s onetime handler, who went to Bulger’s home in Southie to mollify his stricken parents after Whitey was arrested for bank robbery. It was such a transforming experience for him, Bulger told Sarhatt with a straight face, that he no longer harbored indiscriminate “hatred for all law enforcement.” He threw in kudos for his good friend from the neighborhood, saying his “close feelings” for Connolly cemented his affinity for the FBI.

Bulger also got in some licks at the state police, working the institutional bias against locals. He assured Sarhatt that even though the state police knew about his informant role, he was not concerned about his own safety. He recycled his standard answer that no wiseguy would ever believe he was a rat. “It would be too incredible,” he told the FBI boss, stressing his desire to remain an active informant. He also roundly denigrated O’Donovan, saying that the detective’s derogatory comments about the FBI marred their meeting in the late 1970s. Taking a page out of Connolly’s book, he took “great umbrage” at the criticism, standing tall for the FBI and praising Morris and Connolly for being “nothing but the most professional in every respect.”

And finally getting to the point of the meeting, Bulger denied that the FBI had leaked word of the state police bug to him. He told Sarhatt that he learned about it from a state trooper. In a stunning breach of informant protocol, Bulger refused to identify the trooper, saying only that the tip had been given as a favor and not as a “corrupt act.” For the state police Bulger’s refusal to identify a mole within law enforcement was a high-risk outrage. It should have been a simple matter of standard housekeeping for Sarhatt: you plug the leak or you close the source. Otherwise, Bulger would keep his purported snitch in the state police while rank-and-file troopers such as Bob Long, Jack O’Malley, and Rick Fraelick risked their lives chasing a crook who always knew they were coming.

But Sarhatt blinked and moved on.

▪   ▪   ▪

The airport hotel meeting clearly troubled Sarhatt, driving back to his downtown office with serious concerns about Bulger’s credibility. But he was a new man in town with no allies. His top organized crime agents clearly wanted to keep Bulger and make use of him in pending Mafia cases. Mulling what to do, Sarhatt reached out to O’Sullivan. What would be the impact of closing Bulger, he asked.

O’Sullivan jumped on him, saying it would amount to a calamity in chasing the Mafia. In his clipped, cocksure way, O’Sullivan told Sarhatt that Bulger was crucial to the mother of all Mafia cases, the imminent Prince Street bugging. “Crucial” became the watchword among all the sentinels guarding the FBI’s secret deal with Bulger. Somehow, in a matter of weeks Bulger had gone from being a troubling liability causing seismic fractures within law enforcement to the key to the future. Connolly and Morris had done well.

Of course, the relentless O’Sullivan viewed the issue through his prosecutor’s tunnel vision. He was for just about anything that would get him closer to nailing the Angiulos, and he needed the Organized Crime Squad led by Morris and Connolly to get there. To the firebrand prosecutor, Bulger was such a means to an end that he told Sarhatt to retain him “regardless of his current activities,” a recommendation that covered a lot of dirty ground. This tipped the scales for Sarhatt, who could live with unhappy agents but would have trouble making his way if the chief prosecutor in his new jurisdiction was against him.

As part of a one-two punch, Connolly quickly sent Sarhatt a long memorandum justifying the continued use of Bulger, listing all his contributions over the prior five years. Although Whitey’s recent visit to Angiulo’s office had produced no new information, Connolly proclaimed Prince Street the centerpiece of accomplishments that made Bulger the “highest caliber” informant in recent FBI history.

Connolly’s memo was the ultimate spin document. It covered the waterfront, almost hailing Whitey Bulger as a crime fighter. Connolly gave him exaggerated and at times false credit for solving murders, saving two FBI agents’ lives, and breaking news with inside information on a headline-grabbing bank heist. Morris weighed in to second the motion, saying that losing Bulger would be a “serious blow” to the bureau’s Organized Crime Squad.

By the time Connolly’s memo of December 2, 1980, landed on Sarhatt’s desk, the boss had touched all the bases. It was decision time. He had talked to the man himself, wrangled with the key agents, and got braced by the best prosecutor in town. Any reservations Sarhatt had were reduced to a final, face-saving demand he scrawled at the bottom of Connolly’s glowing memo. Sarhatt ordered that a “tickler” be placed in Bulger’s file so the issue would be revisited in three months. But it was a paperwork matter now. Connolly would do the review under Morris’s supervision. Whitey was home free.

Connolly would even walk away from the state police challenge with a career “stat,” or commendation, in his file for Bulger’s covert Prince Street work. It was the kind of formal recognition that was a hot item within the bureau. It brought salary bonuses to agents with informants who provided material incorporated into T3s.

▪   ▪   ▪

When all was said and done, the Lancaster Street caper had a dispiriting ending out of The French Connection, the movie in which drug dealers walked and cops were reassigned.

The state police wound up with what one of them called “a bloody bag of nothing.” The valiant effort to target the collaborating organized crime leaders of the Winter Hill gang and the Mafia was sabotaged and in ashes.

Sergeant Bob Long was transferred to the narcotics squad.

And within months an effort was made at the State House to eliminate the state police leadership that oversaw organized crime investigations, including O’Donovan and four others.

During one of the late-night sessions that became a hallmark of Billy Bulger’s long reign as Senate president, his chamber passed an anonymous amendment to the state budget that struck back at O’Donovan in an exquisitely simple and perversely personal way. A short provision with no fingerprints required officers fifty or older—O’Donovan, a major, and three captains—to make a choice: take a reduction in pay and rank or retire. The provision also covered the chief detective in District Attorney Delahunt’s office, Major John Regan.

After several anxious days and protests from public safety officials about a ploy by organized crime, the governor vetoed the item. But the point was made.