The Real Father of Organized Crime in America

by Jay Robert Nash

A dapper little man, Paul Kelly came from New York's seedy Five Points. Cunning and clever, Kelly was an inventive criminal, the first to conceive of crime as an organized business in the U.S. He became the first modern-day underworld boss, taking over the Five Points Gang at the turn of the 20th Century, a gang that spawned Al Capone, Johnny Torrio, and a host of other lethal and later celebrated gangsters.

While organizing all rackets in his area, Kelly established close political ties with the corrupt Tammany Hall political machine, which controlled with absolute power the Five Points and neighboring districts, exacting tribute on all illegal activities. Kelly gladly paid these Tammany politicians, who, in turn, protected his criminal operations.

The gang leader outlined his organizational plans to his lieutenant, Torrio, who would later expand Kelly's criminal concepts into the idea of a national crime syndicate. That syndicate took root at a 1929 criminal conference in Atlantic City, N. J., presided over by then Chicago crime czar Al Capone, who was a Torrio protégé.

New York underworld boss Paul Kelly, shown in 1905; his criminal modus
New York underworld boss Paul Kelly, shown in 1905; his criminal modus operandi led to the establishment of the U.S. crime syndicate. (image from the Jay Robert Nash Collection)

Born on December 23, 1876, Paulo Antonio Vaccarelli became a bantam prizefighter at an early age in the 1890s, changing his name to Paul Kelly (assuming an Irish name for the ring was then the custom). With his prize money, Kelly invested in several bordellos east of the Bowery in the squalid Italian District.

From his bordello proceeds, Kelly then set up various "athletic clubs" which were fronts for youthful gangs that came under his direct control. Having this army of thugs at his disposal, Kelly approached Tammany sachem Big Tim Sullivan, offering his political services in the frantic 1901 campaign for the Second Assembly District.

This hotly contested primary race was between Paddy Divver, an old-time saloon keeper and incumbent Tammany leader, and Tom Foley, who had Sullivan's undivided support. The issue was simple. Divver's banners stretched across all the streets of his area. They read: "Don't let the Red Lights into the old Fourth Ward."

Paul Kelly knew all about the Red Lights, and they meant money. He went to Sullivan and told him that his hordes of "repeaters" could put the primary into Foley's pocket. Sullivan enlisted Kelly and his minions on the spot, thus establishing the first powerhouse connection between organized crime and politics in America.

On September 17, 1901, the primary proved to be the most savage in the history of the city, and the Second Assembly District was turned into a madhouse of mayhem and brutality. Kelly's thugs, numbering more than 1,500 men, swarmed into the area. Divver men were blackjacked openly in the street, held off from the polls by gun-wielding gangsters, driven down the streets by crowds of club-smashing Five Pointers.

Kelly's men filed into the polling places, repeating their votes time and again. Dozens of police squads stood by while the travesty went on and did nothing. Foley won the primary, three to one, and subsequently the election. The Red Lights moved into the district, and they belonged to Paul Kelly.

His fortunes rising and his position of power in the underworld mostly unchallenged, it was a wonder to everyone when Paul Kelly was suddenly arrested and briefly jailed for assaulting and robbing a man in the street. Not until years later was it learned that Kelly's act was not for self-gain. He was merely exercising his leadership in that he periodically had to perform a criminal act to prove his worthiness as gang chieftain, a ritual—"making my bones"—Kelly himself instituted.

Kelly's headquarters was his sprawling cafe and dance hall, the New Brighton, termed "a vile saloon" by authorities and squatting just west of the Bowery on Great Jones Street. Here, Kelly ruled his criminal fiefdom adorned in a tuxedo and black tie, greeting socialites, who loved to go slumming in his dive.

By 1905, this slight, well-groomed gangster practiced all the graces of good company. He spoke Italian, French, and Spanish fluently. His manners were seemingly faultless, and his conversation reflected education and sophistication. All the while, his killer legions spread throughout Manhattan and even into New Jersey, monopolizing all rackets.

Kelly's lieutenants aped their boss in dress and conduct, but they were awkward imitations. There was Richie Fitzpatrick, Maxwell "Kid Twist" Zwerbach, Johnny Spanish (Joseph Wyler), Razor Riley, and the hulking James T. "Biff" Ellison. These and hundreds of other Kelly gunmen protected Kelly's expanding criminal empire against the likes of Edward "Monk" Eastman, the boss of the Lower East Side. Many of Kelly's men had been recruited from other gangs and some of them, like Ellison and Riley, later became disenchanted with their subservient roles. While Kelly became a multi-millionaire, his lieutenants more closely eyed and coveted his success.

With the 1904 imprisonment of Eastman, however, Paul Kelly's criminal empire went unmolested for several years. Then, in November 1908, Ellison and Riley attempted to unseat their boss. The two gunmen invaded the New Brighton, firing wildly at Kelly and his bodyguards. Kelly returned fire, surviving, but two of his bodyguards were dead while Ellison and Riley fled. In the melee, dozens of slumming High Society and important politicians were injured. Kelly, with three bullet wounds, recuperated in a private hospital.

The firefight at the New Brighton spelled the end of Kelly's criminal empire in New York. His club was ordered closed by Police Commissioner William McAdoo. Kelly moved into an Italian community in Harlem and opened another night spot called Little Naples, but his power waned and he was soon reduced to operating strike-breaking squads in labor squabbles.

Kelly retired about 1910, dying in bed of natural causes on April 3, 1936. He had lived to see the national crime syndicate—a concept first conceived by Kelly—come into existence under the direction of Lucky Luciano, Meyer Lansky, Frank Costello, and others. A mourner at his wake nevertheless sagely remarked: "Paul Kelly was a brilliant man, but all his dreams were evil."