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Organized crime continued: The case of a respected lawmaker caught up in the grasp of Cosa Nostra

The Congressman and the Hoodlum

Originally appeared in Life on August 9, 1968
This article was prepared by a LIFE investigative team consisting of Russell Sackett, Sandy Smith and William Lambert.

More on Congressman Cornelius Gallagher

Laetrile, a purported cancer drug, is manufactured in Canada by a firm called Biozymes International Ltd. and promoted by the McNaughton Foundation. Both are headed by Andrew R.L. McNaughton, the swashbuckling son of the late General A.G.L. McNaughton, distinguished Canadian soldier and diplomat. The use of Laetrile, which is made chiefly from an extract of peach and apricot pits, is illegal both in Canada and in the U.S. If it could be government approved Biozymes International stock would become very valuable indeed. This was a situation bright with the prospects of profit for a man like Joe Zicarelli, with his Washington connections.

The McNaughton Foundation gives callers the names of four doctors said to be treating cancer patients with the drug. One of the doctors is located in Italy, two others in Mexican border towns.

The fourth doctor practices in Union City, N.J. the heart of Zicarelli country - at the clinic where Joe Zicarelli himself is being treated for "anxieties." (The doctor told a LIFE reporter Zicarelli is receiving "placebo therapy," i.e., sugar pills, for his nerves.)

In a remarkably candid interview with two LIFE reporters in Montreal on May 1, McNaughton admitted: "I am doing something highly illegal in your country.

"First of all," he said, "the diversion of Laetrile from Canada to the U.S. is an offense against the Canadian food and drug regulations. Secondly, it's an offense against the American food and drug regulations. Thirdly, it's an illegal act to take it across the border - and I suppose you could find 10 other crimes that are involved in it. We are doing this on a reasonably large scale Zicarelli, said McNaughton, has an interest in smuggling Laetrile into the U.S., where he said at least 150 patients are now being illegally treated with the drug. McNaughton said that Steve Hoffman, who had been his attorney and a stockholder in Biozymes International, had introduced him to Zicarelli. He also said he strongly suspects that the gangster, using another man's name as a front, had donated between $100,000 and $130,000 to the nonprofit McNaughton Foundation. And he guessed that Zicarelli might, under someone else's name, also be a stockholder in Biozymes.

It was Hoffman, according to McNaughton, who also introduced him to "the man who can do the job [for Laetrile] in Washington . . . introduce us around, get us favorable consideration from the Food and Drug Administration." Enter, once again, Congressman Gallagher.

"Gallagher was to take us to the Veterans Administration, Bethesda [Naval Hospital], Walter Reed, you name it," said McNaughton. "Hoffman said, 'Gallagher's the man.' I said, well, he'll expect some recompense, and Hoffman said, 'We'll work it out.' " Gallagher denied that anyone talked to him about recompense. The appointments were made, all right, but the presentations misfired and Laetrile remains an unauthorized and, for now, unprofitable drug.

Congressmen often do constituents favors and see that they get hearings in the halls of the capital. Gallagher claimed that is all he was doing for Laetrile - at the request of a constituent, Dr. John A. Morrone. Now deceased, Dr. Morrone was a Jersey City surgeon and a close friend of Joe Zicarelli.

As it turns out, helping Dr. Morrone was not Congressman Gallagher's only interest in the contraband drug. Until recently one of the directors of Biozymes was Gallagher's friend and law partner, E. A. ("Ed") Dembe. Of the total stock issue of Biozymes, the largest single block - some 1.2 million shares - is held in the name of the Broadway National Bank of Bayonne. Ed Dembe is one of the bank's owners. Congressman Gallagher is a director.

Dembe claims he did not know of Gallagher's connections with Laetrile at the time he became a director of the manufacturing firm and later when he agreed to let his hank become nominee for the Biozymes stock in a strange agreement with an old friend of his, Steve Schwartz. (Schwartz is a gunrunner and international operator who is tied to mobster Carmine Galente, a fellow capo of Zicarelli's in the Bonanno Family of Cosa Nostra. Schwartz was also in Santo Domingo at the same time Gallagher and Hoffman were there, but no one is quite sure why.) Dembe told two LIFE reporters he presumed the stock actually belonged to Schwartz, but "I never had a pinpoint, detailed, hold-'em-up-against-the-wall conversation with Steve" about it. Dembe said the stock certificates are not held in the Bayonne bank, but "someplace up in Canada."

Gallagher claims he knew nothing of his partner's or the bank's involvement with the stock until "after you fellows talked to Eddie."

When interviewed by LIFE, all parties - McNaughton, Hoffman, Dembe and Congressman Gallagher - made essentially the same request: don't write anything that's going to hurt the fight against cancer. Gallagher was asked if a congressman wasn't sticking his neck out a bit to go to bat for a cancer drug unknown to him, being promoted by men he claimed were virtual strangers. "Look," he said, "if Bonnie and Clyde had a cure for cancer, you should listen."

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