O’Keefe said, “You two are being assigned to the Special Agency Service. Everything is arranged for you to report for duty day after tomorrow as Customs guards on the North River piers. When you get your uniforms, badges, buttons and insignia, I’ll give you more specific instructions.”
Fleishman and Gallagher were assigned to work as partners on the piers handling the cargoes of the trans-Atlantic liners. In less than a week each was accepted as “one of the boys” and they listened to Customs guards, inspectors, stevedores, seamen and other waterfront employees openly discussing their success in smuggling liquor and other merchandise from incoming ships. The standard pay-off for permitting a case of whiskey to cross the pier unmolested was $1 per bottle.
They sat in on smuggling plans and watched the pay-offs being made. They accepted their share of the money—and then met in secrecy to mark the bills to be used as evidence in court. In only eighteen working days these two alone had gathered evidence of corruption involving twenty-three Customs and city waterfront employees.
Instead of proving La Guardia wrong, they found that his charges only touched the surface of a serious breakdown in law enforcement. They found that many waterfront workers were merely the tools of the mobsters. Whiskey smuggling was big business and the pay-offs were tempting to government employees whose average pay in the 1920s was less than $100 a month. Customs inspectors were earning only $4 a day and pier guards $75 a month. The Bureau of Labor Statistics had reported that the minimum salary on which a family could live decently was $2,260 a year—or $1,124 more than the average government wage. Forty per cent of the Customs employees in New York worked at night at whatever they could find to supplement their pay. The conditions were ripe for corrupting influences to flourish.
One night Fleishman and Gallagher were standing guard at Pier 57 aboard the French lineship DeGrasse. An underworld tipster had reported that the ship carried 1,500 cases of liquor which were to be smuggled ashore that evening. As they stood on the stern deck of the ship, a man dressed as a longshoreman walked up to Gallagher and asked for a light. Gallagher handed him a match and as the man touched the flame to his cigarette, the two agents saw well-manicured fingers and the gleam of a large diamond ring. Then they recognized their visitor as a hoodlum known as “Mike the Barber.” Whenever there was a waterfront murder at that time, the name of Mike the Barber was certain to be mentioned sooner or later in the police list of those to be questioned.
Mike the Barber had said suddenly to Gallagher, “You’re a new man, aren’t you?”
Gallagher said that he was, and the hoodlum said, “Where do you come from?”
Gallagher replied, “I’ve been working as a subclerk at the post office over in Paterson, New Jersey.”
Mike the Barber nodded. “Is that so? I happen to have a good friend over at Paterson. He is the assistant postmaster over there. You know his name, don’t you?”
Gallagher was evasive. He began to make excuses for not being able to recall the assistant postmaster’s name. Mike the Barber growled, “Oh, yeah? Look, you son-of-a-bitch, you forget everything you see here tonight or you’re liable to get killed.” And with that the hoodlum walked off into the darkness.