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CHAPTER FIVE

Win, Place, and Show

The third race at the Suffolk Downs racetrack was set to go according to script. The Winter Hill gangsters were standing by in Somerville in eager anticipation. Led by Howie Winter and including associates Whitey Bulger and Stevie Flemmi, they had placed thousands of dollars in bets at both the track in East Boston and with bookmakers.

Time to sit back and smell the roses.

But something was wrong. One jockey, who’d been paid $800 to do his part, had decided to improvise. Instead of holding his horse out of the running, he’d raced hard to the end. Bets had been made, and now money had been lost. Howie Winter was not happy.

In the back room of a restaurant in Somerville, the jockey dutifully showed up for a postrace secret meeting. Winter was there waiting, along with one of his henchmen and the fixer himself, Anthony “Fat Tony” Ciulla. Howie Winter had gone into business with Ciulla in order to make big money off horse races up and down the East Coast. Known as the “master fixer,” Fat Tony was a hulking beer keg of a man: six-feet-four and 230 pounds.

The menacing Winter got right to the point.

“You realize you took my money and allowed your horse to run?”

The jockey was nervous. He tried responding with a light touch, but his remark came off as flip. Before he could finish, Winter’s sidekick, Billy Barnoski, whipped out a blackjack and whacked the jockey on the head. For good measure Winter stepped up and slapped the jockey’s face.

The jockey decided to adjust his attitude. Profusely apologizing, he offered to hold back horses in upcoming races for nothing. Winter wasn’t sure. There had been talk about killing the jockey and dumping his body in the back stretch of Suffolk Downs—nothing like a cold corpse to send a message.

But Winter decided the beating itself would suffice. The mangled race result in mid-October 1975 probably signified nothing more than a rare bad day. Federal prosecutors estimated that the gang’s race-fixing enterprise with Ciulla had amassed more than $8 million in profits while operating in eight states. It could afford to lose one race.

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It would always be Connolly’s position that the extent of the Boston FBI’s knowledge of Bulger and Flemmi’s criminal activities was narrow—restricted to the gambling and loan sharking the two had going in order to maintain their underworld credibility. But the truth was that Bulger and Flemmi had all kinds of rackets going, including the racetrack plot.

The scheme was straightforward. Using bribes and intimidation, Ciulla made sure that certain horses, usually the favorites, lost. Depending on the jockey and the horse, the bribes ran from eight hundred to several thousand dollars. Meanwhile, Winter’s associates were putting down bets on the long shots, either to win, place, or show or in various high-paying combinations; in a trifecta, for instance, a winning bettor picked, in sequence, the first three winners. The gangsters spread their bets around—at the track, with bookies in the Boston area, and with bookies out of Las Vegas. In some races, handicapping the outcome of the race was a cinch. For instance, the field at Pocono Downs in Pennsylvania was often small. Ciulla bribed three of the five jockeys and then watched the money roll in.

For his part, Ciulla really had no other choice but to hook up with Winter’s gang. The son of a fish merchant, Ciulla grew up in the Boston area tagging along with his father to the track. He began fixing races in his twenties at tracks in Massachusetts and Rhode Island, sometimes bribing jockeys, sometimes drugging the horses. By late 1973 the thirty-year-old hustler had made the mistake of hoodwinking bookmakers controlled by Howie Winter. The crime boss discovered he was being “victimized” by young Ciulla. Winter decided to pay Fat Tony a visit.

Ciulla recalled meeting Winter at Chandler’s Restaurant, a restaurant in the South End of Boston that Winter controlled. “He told me he knew I had bet with his bookmaker, Mario, on a fixed race.” The amount was $6,000. “He told me I was responsible for beating him out of X amount of dollars and that I would have to make this money good or otherwise I would be in trouble.”

But by the time they were finished talking, the beef had evolved into a new business opportunity. Soon afterward the two met again in Somerville. They talked some more. Then, near the end of 1973, they convened at Winter’s Marshall Motors. This time Winter had his inner circle present, including Bulger. Terms were negotiated; techniques were discussed. For each party there was a strong upside. Ciulla had the racing expertise; he knew the tracks, the jockeys, and the horses. Winter had the access to bookies. He and his associates also had the deep pockets to finance the substantial betting action they all had in mind. Just as important, Winter Hill brought along its muscle to ensure that the bookmakers they exploited would not think about retaliation if and when they realized they’d been cheated.

Starting in July 1974 Ciulla and Winter’s gang began fixing horse races along the East Coast—in East Boston (Suffolk Downs); in Salem, New Hampshire (Rockingham); Lincoln, Rhode Island (Lincoln Downs); Plains Township, Pennsylvania (Pocono); Hamilton Township, New Jersey (Atlantic City); Cherry Hill, New Jersey (Garden State); and at other racetracks as well.

Then things went wrong. A jockey in New Jersey began cooperating with state police. Ciulla was busted, convicted at trial, and sentenced to serve four to six years in New Jersey state prison. But Fat Tony did not cotton to prison life. By late 1976 he’d begun talking too. The New Jersey State Police brought in the FBI, and suddenly, in early 1977, Ciulla was plucked out of prison and deposited into the federal witness protection program. In return for leniency Ciulla was going to reinvent himself as a star government witness, and in the early days of 1977 he began talking to agents about his venture with Howie Winter’s gang, about the regular meetings at Marshall Motors with Winter’s crew, about Bulger and about Flemmi, who in 1974 had returned to Boston from Montreal.

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Back in Boston during the early part of 1977 word about Ciulla’s career change was not widespread. Though FBI agents in Boston were assigned to the case, Connolly was not one of them. John Morris had yet to take over as supervisor of the Boston office’s Organized Crime Squad. None of the controls were in place that in the future would help snuff out inquiries into the prized informants. The race-fix probe had gotten under way out of state and only then looped back into Boston. It was all happening beyond Connolly’s control. No chance for Melotone-redux.

The FBI case agent was Tom Daly, who worked out of Lowell, Massachusetts. Daly later grew close to Connolly but for now was discreetly developing Ciulla as a major trial witness to take down Howie Winter and his gang. Things got even more complicated not long after John Morris stepped into the picture as Connolly’s new supervisor. The FBI could not be running informants who were simultaneously targets of a major FBI case. Thus, Morris ordered the top-echelon informant shut down. Bulger, wrote Morris in a memo, was being “placed in a closed status at the present time as subject could possibly become involved in legal difficulties in the near future.” Connolly himself had no choice but to sign off on the report of January 27, 1978, that was placed in Bulger’s administrative file and sent to FBI headquarters in Washington, DC. The bureau’s guidelines and regulations for handling informants required no less.

Had the dance ended so abruptly?

Hardly. Morris and Connolly had something else in mind.

The January memo actually marked the start of an era of creative record keeping that Morris and Connolly would adopt when it came to the FBI’s files on Bulger and Flemmi. It was nothing short of cooking the books. Morris may have appeared to be the no-nonsense career agent—his guarded manner, thin-lipped face, and small size combined to give him the look of a pencil-pushing stickler for the rules—but all this concealed another side. Looking around the office at the likes of the flashy Connolly and, before him, the silver-haired Paul Rico, Morris was like the team manager jealous of the jocks who started and starred in the big game. And not long after transferring to Boston in 1972 he’d even sought to show that he too had the right stuff.

He was toiling on a stubborn loan-sharking investigation and had made little headway trying to persuade a wiseguy named Eddie Miani to become a cooperating witness. Having failed one on one, Morris and two other agents one night went to Miani’s house and crawled around under his car. “It was a wire and a blasting cap,” Morris said later, “as if you were going to rig an explosive device on it.” Then they left and hurriedly placed an anonymous call to the local police reporting unknown persons monkeying with a car outside Miani’s house. The police went to the scene, roused Miani, and showed him the mangled bombing device. The very next day Morris was back in Miani’s face: See, I told you. Your “friends” are trying to kill you. Get smart. Come with us. The FBI is your only hope.

Miani told Morris to get lost, and the dirty car bomb trick remained the agents’ secret. But the bit of law breaking had given Morris a taste for the wild side, so that by the time he assumed command of the Organized Crime Squad he’d already developed the flexibility that made him a fitting match with Connolly. Next to faking bombs, fooling with the FBI’s paperwork was lightweight; starting with the race-fixing case, the lies they wrote seemed to come easy.

For example, Morris’s 1978 memo might have reported that Bulger was out of the informant business, but Bulger was never told about his putative change in status, and Connolly continued to see him as if nothing had changed. Moreover, Morris flat-out lied in a later document saying that during the race-fixing probe Connolly had “discontinued contacts”; it was just not true. Then, in the 1980s, there would be a three-year period when Flemmi was closed down as an informant. But no one ever told Flemmi, and during those three years Connolly would file forty-six FBI reports of contacts he and other agents had with Flemmi during the supposed shutdown. No FBI manager would ever ask Connolly to explain the large number of contacts he and other agents were having with a closed informant. As long as the paperwork appeared in order, all was well.

For his part, Morris at the time had other, more pressing concerns than someone else’s race-fixing case. The ambitious supervisor was determined to have his Organized Crime Squad devise a plan to do what no police agency had yet been able to accomplish—put a bug in Gennaro Angiulo’s North End office. More immediately, Morris was up to his eyeballs overseeing another investigation already under way.

This one involved the widespread hijacking of trucks in New England. The joint probe between the Boston FBI and the Massachusetts State Police was given the code name Operation Lobster. Dozens of agents and troopers had been assigned to the case, which was built around an undercover FBI agent, Nick Gianturco, who had become Nick Giarro. He’d been brought in for the job from the FBI office in New York to minimize the chances that the local hijackers would detect him. In fact, John Connolly was the one who’d nominated Gianturco. The two agents had worked on the same squad together when Connolly was stationed in the Big Apple, and they had remained friends ever since.

Gianturco was set up in a ten-thousand-square-foot warehouse in the Hyde Park section of Boston that was wired for sound and closed-circuit television. Just a few doors down the FBI and state police had rented another site, a “monitoring plant,” to work the video cameras and microphones. Just a few more blocks away investigators had rented an apartment to use as a command post.

Midway through 1977 Gianturco opened for business, posing as a fence to an expanding lineup of hijackers, many of whom operated out of Boston’s Charlestown neighborhood. The stolen merchandise Gianturco recovered ran the gamut—flour, liquor, shaving products, furniture, tool boxes, beer, ski jackets, sports coats and other clothing, heavy construction equipment, cigarettes, coffee, and microwave ovens. Fifteen months later, in the fall of 1978, Gianturco’s field supervisors were writing FBI headquarters that “Boston now has a date of 10/31/78 as a possible date of cessation of the operation phase.” By then more than $2.6 million in stolen goods had been recovered.

While Morris was busy with Operation Lobster, Connolly was meeting with Flemmi, and at one of the meetings the separate investigations suddenly came together. “It was an accidental statement made to me by a friend of mine,” Flemmi recalled. “He had said to me that there was a fence, that this guy was wide open, and he was buying trailer loads of stolen goods. They were eyeing him as a potential [robbery] target because of the money he was handling, but the reason they were reluctant to do anything was that they didn’t know if he was connected to anyone. So my friend asked me about it. He says: ‘Can you find out if he’s connected with anyone?’ Because people wanted to do something, and they didn’t want to take the chance of doing something and have repercussions.”

Flemmi later insisted he had no idea at the time that Connolly’s FBI pal was working undercover as the fence in question. But Connolly was immediately concerned for Gianturco’s safety. He picked up the telephone to give his friend a heads-up.

“I got a call from Mr. Connolly at home,” Gianturco said later, “and he asked me if I was going, if I had a meeting set up with the Charlestown people.”

Nick Gianturco told Connolly that, yeah, he actually did have a meeting scheduled for later that night at the warehouse.

“He told me not to go,” recalled Gianturco, “because, he said, they were going to kill me.” Gianturco, weary from the long months of living an undercover life, was shaken to the core. He was tired of looking over his shoulder all the time, commuting between Hyde Park and his role as Nick Giarro to his home and real life as a husband and father. Right after talking to Connolly, he bailed out of the meeting, and in the years to come he would say how grateful he was to Connolly for watching his back.

In the days following the incident Connolly did not document the episode in any FBI report. He did not notify the two FBI and state police field managers of Operation Lobster who were responsible for the safety of “Nick Giarro.” Connolly told Morris about it, and the Flemmi tip was transformed as it was passed along, just as in the child’s game of telephone, deepening in seriousness from a possible shakedown to a threat of murder. The more they talked about it, the more they dramatized the idea of a heart-pounding, midnight scramble that resulted in saving an agent’s life, the more they now had in hand a profound illustration of the importance of the deal they had with Bulger and Flemmi. The “accidental tip” that began with Flemmi seemed suddenly to capture the essence of why Connolly and Morris had to do what they could to keep Bulger and Flemmi for the FBI.

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As 1978 came to a close the FBI handler and the FBI supervisor had a big problem looming on the horizon: the gathering storm of the race-fixing case. Instead of fizzling, the case building around Fat Tony Ciulla had taken off. For Howie Winter, Ciulla was turning out to be the biggest insult to a string of injuries he and his gang had suffered. In a state prosecution Winter had been convicted of extortion and was sitting in a Massachusetts state prison as Ciulla was unloading before the federal grand jury in Boston. Hit by a run of huge losses in his New England sports-betting operations, Winter had actually gone to see the Mafia’s Gennaro Angiulo before his incarceration and borrowed more than $200,000.

The November 6, 1978, issue of Sports Illustrated featured a cover story about Ciulla and his life in crime as the “master race fixer.” The newly minted government witness was paid $10,000 by the magazine for the long piece, which mentioned the ongoing Boston probe. Down in Mt. Holly, New Jersey, Ciulla was busy walking through a dress rehearsal of sorts for the upcoming Boston case, testifying as the key witness at a local trial against nine jockeys and trainers.

It all worried John Connolly. He didn’t care about Howie Winter, but he cared about Bulger and Flemmi. In a sense, the New Jersey trial was not the immediate threat; that trial involved only the jockeys. But Ciulla’s role in the New Jersey trial was nonetheless making life in Boston miserable. Testifying against the jockeys, Ciulla was talking publicly for the first time about how the race-fixing scheme worked. During the same weeks when Connolly was scrambling with information he’d gotten from Bulger and Flemmi that might affect undercover agent Nick Gianturco’s safety, Fat Tony was providing a blow-by-blow account of who had done what to fix horse races that netted millions of dollars for the gangsters back in Boston. At one point Ciulla had been asked to identify his partners in Boston. Ciulla at first hesitated, like an actor setting up his best lines.

“Your honor, I have been in front of federal grand juries with these names. I don’t know if I am allowed to say these names here in open court.”

The local judge was unimpressed with Ciulla’s dilemma. “You are here now,” the judge replied from the bench. He ordered Ciulla to identify the key partners in Boston.

There was to be no holding back, and Ciulla didn’t.

“Fellows that were partners of mine,” he began.

“One’s name is Howie Winter.

“One name is John Martorano. M-a-r-t-o-r-a-n-o.

“Whitey Bulger.

“Stephen Flemmi.”

It was the end of 1978, and the much-anticipated Boston indictments in the federal race-fixing probe were being assembled. John Connolly and John Morris both decided they had to do something, even if Ciulla’s sworn testimony in another state had made any backstage maneuverings to guard Bulger and Flemmi all the more difficult to pull off.

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First off, Connolly and Morris huddled secretly with Bulger. The meeting was “off the books.” No report or memo was ever written up describing the January 1979 session. Connolly and Morris rendezvoused with Bulger at his apartment in South Boston, and the three talked through the case that had been constructed around Ciulla. “We thought we were going to get indicted,” Flemmi said about those tense days of early 1979.

To Bulger, his position was pretty simple. He told the two agents that he and Flemmi were not part of their gang’s race-fixing scheme. The government was in bed with a liar.

Bulger’s claim hardly came as a surprise to the FBI agents—a criminal target’s assertion of innocence was neither unique nor unusual. To cover his bases, Morris could have played hardball with Bulger. He could have insisted that Bulger and Flemmi execute a sworn affidavit attesting to their innocence. Doing so would have made the FBI look more responsible. If evidence ever surfaced showing Bulger to be the liar, the informants could have been prosecuted, at a minimum, for making a false statement to the FBI.

But Morris was not about to put Bulger and Flemmi through that kind of meat grinder. He “never gave that any thought,” Morris said. Bulger was a prime cut, not ground chuck. Instead, Morris and Connolly wholeheartedly adopted Bulger’s position—Bulger’s word against Ciulla’s—and promised to pursue the cause by seeking an audience with the chief prosecutor in the case, Jeremiah T. O’Sullivan.

Bulger was heartened when the agents said they would go to bat for him. He immediately told Flemmi they were off the hook. Bulger explained that “John Connolly had told him that we would be taken out of the case and we would not be indicted.” It was music to Flemmi’s ears.

Within days Morris and Connolly were crossing the few city blocks separating their FBI office in downtown Boston at the John F. Kennedy Federal Building and prosecutor O’Sullivan’s office on the upper floors of the John W. McCormack Courthouse in Post Office Square. O’Sullivan was not pleased to be taking up a matter like this so late in the game. The intense prosecutor, a bachelor in his midthirties, was all business nearly all the time. To many lawyers who went up against him he came off as a self-righteous zealot. But to his associates he was a relentless crime fighter, even if humorless and demanding. He’d grown up in a three-decker in nearby Cambridge, graduated from Boston College and Georgetown Law School, and was determined to work his way through the ranks of local organized mobs until he reached his ultimate ambition, nailing the Mafia.

By the time Morris and Connolly walked into his office, the finishing touches were being put on indictments in the race-fixing case, and at that point Bulger and Flemmi were indeed in the mix of the nearly two dozen figures facing arrest. This was hardly the right time—the final days of a two-year investigation—to come asking for favors.

Morris and Connolly had no way of knowing the extent to which Ciulla had implicated Bulger and Flemmi. But O’Sullivan knew. In debriefing sessions in Sacramento, California, with agent Tom Daly, before the grand jury and, later, at the federal trial itself, Ciulla had been consistent and convincing. He’d described exactly how Winter and his six key associates—John and James Martorano, James Bulger, Stephen Flemmi, Joseph McDonald, and James Sims—shared the proceeds: “Profits were divided from this illegal scheme as follows: 50 percent to Howard Winter and his six abovementioned associates; 25 percent for Ciulla and 25 percent for Ciulla’s partner, namely William Barnoski.” He’d described the various duties: “Mr. Winter said that him and his partners would finance the situation, would be responsible for placing bets outside with illegal bookmakers, also supplying runners to the racetracks and various parts of the country. He would be responsible for collecting money with bookmakers.”

Most troubling, he’d put Bulger and Flemmi right in the middle of the whole scheme. “I had them dead to rights,” Ciulla recalled. Bulger and Flemmi might have left before Ciulla and the gang began partying and snorting coke, but they were around when it mattered. “Did I hang out with him?” Ciulla said about Bulger. “Socialize after the day’s business? Go with him to Southie? No.

“But there was always money for him and Stevie.”

The visit to O’Sullivan was stealth: without permission from FBI headquarters, the agents had no business confiding in a prosecutor. In addition, the identity of an informant was considered a palace secret; disclosure—even to a prosecutor—violated FBI rules. But that didn’t stop Morris and Connolly from telling O’Sullivan about their arrangement with Bulger and Flemmi.

“We went to the prosecutor,” Morris recalled, “and we told him that they had represented to us that, first of all, they weren’t in it, that it was not their scheme.”

Just as important, the two agents brought up a matter they knew was dear to the intense prosecutor’s heart—Gennaro Angiulo. Morris said they told O’Sullivan, “These guys were in a position to help us in what was our number-one priority, the Mafia, and we asked O’Sullivan to consider these facts and consider not indicting them based on this.”

The prosecutor did not press the FBI agents for the basis of their trust, why they took the gangsters at their word, or whether they had undertaken any investigation to corroborate the claims of innocence. But Morris knew that for O’Sullivan to go along, the prosecutor was going to have to find a way around his star witness. The entire prosecution was being built around Ciulla. His credibility was paramount to winning at trial, and here were Bulger and Flemmi pitting their word against his.

Though still not happy that the agents had waited so long—it was virtually the eve of the indictments—O’Sullivan listened intently to their pitch. When they finished, he said he would get back to them. “He would consider it,” Morris recalled O’Sullivan saying. “He was favorably inclined toward it, but he wanted to discuss it with Tom Daly, who was the case agent.”

Morris and Connolly left the meeting feeling encouraged. It would not be the first time that informants had been held out of harm’s way in a criminal case—and properly so—in order to nurture them for bigger payoffs in the future. Indeed, at this time in the history of the FBI’s ties to Bulger and Flemmi, they believed they had a strong argument for cutting the informants some slack. There was, as they’d told O’Sullivan, their potential value in developing the mega-case against Gennaro Angiulo. Moreover, Bulger and Flemmi were not the primary targets in the race-fixing case; Howie Winter was the main man. Bulger and Flemmi were midlevel, not the top dogs, and as such ideally positioned to help the FBI. O’Sullivan, the FBI could argue, should go ahead and topple the Winter Hill gang, but amid the rubble, he should just let the two lieutenants stand.

Within days O’Sullivan sent word to Morris at his FBI office that Whitey Bulger and Stevie Flemmi would be dropped from the indictment. There was some talk about how, with Bulger and Flemmi, he didn’t have the kind of corroborating evidence in place, like telephone records and hotel receipts, that would buttress Ciulla’s account, as they did for the other defendants. But this was simply taken as prosecutorial spin to cover their tracks. Morris quickly passed along the good news to Connolly, who was pleased. Connolly later recalled his own conversation with O’Sullivan. “He hoped they [Bulger and Flemmi] appreciated this, and that the FBI appreciated this, because he felt we waited a little bit too long in telling him their identities,” Connolly said. It turned out, added Connolly, that the government had the goods on Bulger and Flemmi. “Ciulla had actually buried them, apparently, in his grand jury testimony.”

Nothing, however, comes without a price. Fat Tony was now beside himself. “They tried to con me,” he said. O’Sullivan “tried to justify Stevie’s not being in the indictment by the fact he was a little bit on the lambrooskie. Then he said they couldn’t correlate certain dates.

“I said, ‘Fuck that. That’s not true.’” Bulger and Flemmi had rounded up bookies to take bets on fixed races unwittingly. After suffering huge losses, the bookies would be indebted to—and controlled by—Winter Hill. “And Whitey was there all the time.” Ciulla fought O’Sullivan. “Things didn’t add up, and I’m not a total buffoon. Why are these guys being left out? They were partners. Why leave them out when I had direct dealings with them?” O’Sullivan kept up the double-talk, but his FBI handlers finally told Ciulla the truth.

“They had to tell me because I was going fuckin’ nuts.” To Ciulla it was about self-preservation, not justice. “The more of them left out on the street,” Ciulla said he realized, “the more likely I get killed.”

After getting back to the FBI with the good news, O’Sullivan, continued Connolly, required that Bulger and Flemmi promise not even to think about taking out Ciulla. “He told me that as a condition of their being cut loose from the race-fix case they had to give their word that they would play no role in hunting down Anthony ‘Fat Tony’ Ciulla.”

Ciulla, still dissatisfied, felt reassured. “I wasn’t okay about Stevie and Whitey, but I had to swallow that load.

“That’s how it was.”

Several weeks later, and amid much anticipation, federal indictments in the celebrated case were handed up. It was Friday, February 2, 1979, and the news was splashed across the front pages of the city’s two daily newspapers.

In all, twenty-one men were charged, led by forty-nine-year-old Howard T. Winter and including nearly all of his associates in the Winter Hill gang, along with three Las Vegas casino executives, three jockeys, and two racehorse owners. Police were unable to round up everyone. Bulger and Flemmi, knowing from Connolly that indictments were coming down, had taken a couple of preventive measures. They warned John Martorano in time so he could get out of town, and they notified Joe McDonald, who was already a fugitive, that he had new troubles. “Because Mr. Bulger and I had been told that the indictment was imminent, we were able to warn them,” said Flemmi. “Martorano fled, and McDonald remained a fugitive.”

The indictment itself skipped over Bulger and Flemmi. The more-than-fifty-page federal court filing mentioned them only in a two-page attachment in a list of sixty-four “unindicted co-conspirators”: James Bulger, South Boston, and Stephen Flemmi, unknown. “The winnings,” wrote O’Sullivan, “were divided by defendants Howard T. Winter, John Martorano, James Martorano, Joseph M. McDonald, James L. Sims, and others.”

Bulger and Flemmi had become a couple of friendly ghosts.

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Come summertime John Morris decided to host a party at his home. He lived outside Boston in the quiet, tree-lined suburb of Lexington, Massachusetts. It was a bedroom community with a bedrock place in US history. His house was not far from where, in 1775, the opening shots in the American Revolution had been fired; the modest, colonial-style home was located near streets named after giants in American history, like Hancock and Adams.

Morris had a small guest list in mind. John Connolly was invited; it was he, in fact, who had urged Morris to hold the gathering. Nick Gianturco was going to come, all finished now with life undercover and back safe at home with his family. Then there were the special guests: Whitey and Stevie.

Morris’s home life was increasingly troubled—his marriage was stormy—but professionally he and the others had much to celebrate. The FBI agents were on cloud nine. They’d blocked the indictment of Bulger and Flemmi; the race-fixing trial was under way with Tony Ciulla on the witness stand pummeling Winter; and third, the truck-hijacking case, Operation Lobster, had gone to indictments on March 15, also making front-page headlines. It was as if they’d hit a trifecta—win, place, and show.

Back at the office Morris and Connolly had made certain to take care of some FBI paperwork. Morris sent a teletype to FBI headquarters on May 4 saying that Bulger was “being reopened inasmuch as source is now in a position to provide information of value.” The storm had passed. Seven days later Morris and Connolly added a second teletype that more fully explained the basis for the move. Bulger, wrote Morris, had not been closed in January due to unproductivity but rather due to the fact that he became a principal subject of a bureau investigation.

In view of the source’s status at that time, a decision was made to discontinue contacts with him until the investigative matter was resolved. Since then, the matter has been resolved resulting in numerous indictments.

Most important, the two Boston agents reported, Bulger had not been charged. “No prosecutable case developed against source in the opinion of Strike Force attorney handling matter. Accordingly, source was recontacted and continues to be willing to furnish information.” It didn’t matter to the agents that this information was false, and Morris made no mention to FBI headquarters of their backroom lobbying.

“Boston,” concluded Morris, “is of the opinion that this source is one of the most highly placed and valuable sources of this division.” Morris said later he’d puffed up Bulger at Connolly’s urging, recommending he be elevated back to his top-echelon rank. Morris didn’t care what Bulger was called so long as he gave the FBI information it wanted. But Connolly cared. “Top echelon informant is a credit to him,” Morris noted. “In other words, that’s reflective of his work and the caliber of informants that he’s operating.” The label was mostly about an agent’s ego and had no bearing on how the office worked with Bulger. “It made no difference whatsoever,” said Morris about the ranking of FBI rats. But Bulger was indeed quickly restored to his top-echelon status.

These were the sorts of developments the group could toast. Moreover, Bulger would soon turn fifty on September 3. Morris turned his attention to deciding what food to serve, what wine would be on hand. He was a wine connoisseur, an interest Bulger and Flemmi had noticed. They would bring bottles for John to subsequent soirees, and they eventually nicknamed the FBI supervisor “Vino.”

Together, as a group, they could consider what a new good thing they had. Look at Nickie Gianturco. He might have been dead if not for the alliance Connolly had made with Bulger and Flemmi. In a sense, as a result of the race-fixing case, they had even enlarged the family now to include prosecutor O’Sullivan. Connolly said later that O’Sullivan’s intervention provided a new layer of protective veneer to the FBI’s deal. It was as if the prosecutor had sanctified the notion that Bulger and Flemmi were protected from prosecution. “The first few years I met with Flemmi and Bulger there was no understanding. The understanding didn’t come until the race-fix case, and the conversations that I had with Jerry O’Sullivan,” Connolly later said.

Even though no government document would ever be drafted that reflected any kind of immunity or no-prosecution clause to the deal the FBI had with the two informants, that didn’t trouble Connolly. To him it was all in the secret talk, the wink, the body language, and, most important to this agent from South Boston, his word. To make the alliance seem more palatable, the FBI began portraying Bulger and Flemmi as a couple of leftovers from the now-devastated Winter Hill gang. As John Connolly always liked to say, they were merely a “gang of two.”

If only it were true. Bulger and Flemmi were hardly passive, sitting idly by. Instead, beyond the FBI’s radar they’d spent the better part of 1979 taking care of business, masters of their own destinies. Bulger especially was proving to be the grand puppeteer, pulling the strings of both the FBI and La Cosa Nostra.

Early in the year they’d had a sit-down with Gennaro Angiulo in a room at the Holiday Inn in Somerville. The Mafia underboss wanted to discuss the more-than-$200,000 debt that Bulger and Flemmi had inherited from their fallen boss, Howie Winter. Angiulo wanted to talk interest rates and timetables for repayment. Bulger put him off, pleading hard times given the race-fixing probe, and he and Flemmi even managed to leave the meeting with $50,000 in cold cash that Angiulo gave them as a token of goodwill. Bulger and Flemmi might well have snickered afterward; they knew the FBI had begun poking around surreptitiously in the North End, looking for a way in. In fact, a few months later they overheard that Angiulo had erupted angrily after discovering two surveillance cameras aimed right at his 98 Prince Street office. Bulger knew the cameras belonged to the FBI, and he knew that if the FBI eventually made good on its promise to bring down Angiulo, he and Flemmi were never going to lose any sleep over the repayment of the $200,000 debt. Bulger eagerly told Connolly about Angiulo’s temper tantrum.

In more ways than one the underworld picture was in flux. By the time of Morris’s party Howie Winter was out of the way. Bulger and Flemmi were no longer anybody’s sidekicks, and Bulger was making his move upward as a crime boss in his own right. He and Flemmi were moving out of Winter Hill and relocating into new quarters in Boston not far from the Boston Garden, the aged home of the Celtics and Bruins. But by far the biggest change was a whole new approach that he and Flemmi had devised to conduct their underworld affairs. Gennaro Angiulo might enjoy the day-to-day of running an illegal gambling business. Howie Winter too. But Bulger and Flemmi had come up with a new idea that would not only take them out of the daily grind but also provide them with added insulation from law enforcement. They decided to strong-arm gamblers and loan sharks into paying them for the right to do business. They would extort from them a user’s fee. Like a credit card company, they would take a percentage out of every transaction, reinventing themselves as chief operating officers, as collectors of cash payments. It was a brilliant strategy that would soon have Gennaro Angiulo, with an unmistakable trace of admiration, calling the pair the new “millionaires.”

In 1979 Bulger and Flemmi began making the rounds to independent bookies to explain the new deal. Bulger, for instance, cornered one of the smartest sports-betting bookies in the region, Burton L. “Chico” Krantz. The two had a prior history: Bulger had once threatened to kill Krantz over an unpaid $86,000 debt Krantz had incurred to one of Howie Winter’s bookies. Krantz could offer little resistance, and soon he began paying Bulger and Flemmi $750 a month. The bookie, along with increasing numbers of other bookies, kept up those payments until well into the 1990s. By then Krantz’s monthly tribute had risen to $3,000.

These activities had not gotten completely by the FBI’s radar. Trickling in from other informants was word about the moves that Bulger and Flemmi were making on the bookmakers and loan sharks. In June, around the time of Morris’s party, another informant told the FBI that “Whitey Bulger and Steve Flemmi have been in the Chelsea area shaking down local independent bookmakers for payment.” Morris even had an informant who told him Bulger and Flemmi had expanded their collection business to include drug dealers.

But it was as if Morris and Connolly and the Boston FBI didn’t want to hear any of this. Like a drug, their ties to Bulger and Flemmi had evolved into a dependency that was hardening quickly into an addiction. Coming together for dinner at Morris’s Lexington home, they were all having too good a time. It was the end of a decade, and the ambitious agents stood atop a slope with their prized informants, a perch from which they took a long view over their city and saw the promise of FBI careers on the rise.

They saw only what they wanted to see. It was a moment built on a shared premise: the future belonged to them. They’d feed the Mafia to the beast that was FBI headquarters, the press, and even the public’s imagination. It didn’t matter how they did it or what methods they used, so long as they got there. Glory awaited.

Morris greeted his guests. It was the first of many such gatherings to come. “It was more social than anything,” Morris said. The easy tone of the evening conveyed the feeling that they all belonged to something special, that the playing field of Boston was theirs. Morris was one of many government officials who would recognize eventually that in this instant the rule book was being put aside for good. Something much stranger than the proper, arm’s-length FBI informant relationship was going on in Boston. But at the time Morris went ahead, opened some wine, and filled everyone’s glass. Bulger, it turned out, had indeed brought a gift, a token of affection revealing that the gangster had a sense of humor. He presented FBI agent Nick Gianturco with a little wooden toy truck, a remembrance of the agent’s undercover work in the Operation Lobster hijacking case.

“It wasn’t an adversarial relationship,” Gianturco said afterward. Everyone was happy.