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The Distillery and The Godfather

by David MacNicoll

With thousands of visitors annually, the picture-postcard Edradour Distillery, established in 1837 is one of the most frequently visited in Scotland; and rightly so. Beautifully set among the rolling barley fields above the town of Pitlochry in the southern Highlands. But beneath the rustic vibe, crystalline streams and the smell of aging spirit there lies an extraordinary tale which transports us from the quiet, timeless hills of Perthshire to the blood-soaked streets of 1930s Manhattan. For Edradour was once owned by the New York Mafia.

In 1914 wine merchant, William Whitely secured the purchase of Leith based, JG Turney & Son. Turney had been established in 1891 as ‘distillers, blenders and exporters of Scotch Whisky and other spirits.’ But by 1914 however it was to all intents and purposes defunct, and he bought for peanuts. It was registered, then immediately shelved as a holding company, while the same time listing ‘William Whiteley Co. Ltd.’ as the principal trading name going forward. Following the War, and during the lucrative hey-days of prohibition, he had seen an opportunity to make serious money selling his blends under the counter into a very thirsty United States, introducing his House of Lords brand in 1922 and the even more successful King’s Ransom in 1928, with Edradour Single Malt beating at the heart of both. To this end, he got involved with New York’s notorious mobsters who provided him with the market and distribution capacity. Prohibition would prove a cash-cow for all concerned.

With the passage of the Eighteenth Amendment in 1919, the making, selling and buying of commercial alcohol for domestic and personal use was outlawed. The philosophy and morality behind ‘Prohibition’ was essentially sound, as it was genuinely believed that by the removal of alcohol from the equation then other societal evils, like crime would crumble. But the reality was very different, and there was no hiding the obvious fact that organized crime, usually prosecuted from the business end of a Tommy gun, prospered and developed into a multi-billion-dollar enterprise.

By the late 1920s, having streamlined the city’s criminal underworld into a structured business model, the king of New York was Charles ‘Lucky’ Luciano. His reorganizing created the modern Mob, constituted in the fashion of the old Sicilian Cosa Nostra, and one of his top lieutenants or consiglieri was the intelligent and ruthless operator, Frank Costello, supposedly the inspiration behind Mario Puzo’s character, Vito Corleone from The Godfather. Although money from slot-machines was his main income source, but with so much to be made from illegal alcohol sales, he was also by the late twenties dabbling in booze-running. In 1930 he began working with a mid-level bootlegger from Philadelphia called Irving Haim. The pair had gotten to know each other well during prohibition, and they established a very slick operation along the east coast, and formed a very natural partnership.

Haim was born in Romania in 1905, and had become a naturalized US Citizen in 1912, and had climbed the ranks of the local syndicates, and investing himself into the world of rum-running, but he was also involved in bribery, corruption and federal agent pay-offs, work that resulted in an attempt on his life. All the while he ran a successful and wholly legitimate tobacco industry, where he funneled all the drink money and washed it into clean bills. Money laundering and a spotless public persona had seen him dodge more bullets than the ones fired at him from a gun. Haim would never be arrested for any crime, a fact not lost on Costello who used this seemingly untouchable quality to their business strategy. In 1933 following the repeal of the 18th amendment, Haim and Costello, whose network of speakeasies had been a major part of the success story, formed ‘Alliance Distributors’, who became the exclusive legal importers and distributors for all of Whiteley’s products in the United States.

By 1932 Edradour itself was facing closure and so the company bought the place to ensure supply. By this point his portfolio included over 50 labels, but he wasn’t getting any younger, and with no children of his own the clock was counting down towards inevitable retirement, and so in 1937 he sold his stock Alliance. A year earlier Luciano was jailed for running a prostitution racket and so Frank Costello became the de facto boss of the organization, head man in the world of American organized crime. It came him freedom to flex his economic muscle. In order for Alliance Distributors to buy Whitely out, Haim needed money and although he tried to distance himself at a later Senate hearing, in 1938 Costello endorsed a note to the tune of $325,000 to use against a bank draft to purchase the business. Initially, the Englishman got cold feet when he heard of Costello’s direct involvement in the scheme, and so the gangster ‘officially withdrew’, instead using an ‘associate’, millionaire sportsman, and future friend of President Truman, William Helis, as the front man. Reassured, although probably unconvinced, he was happy to take the man’s money and retired.

So, with suitcases stuffed with money, Irving Haim became the legal owner of Edradour Distillery and would remain so until his death forty years later. Alliance would continue, with Haim at the helm, and fellow crook, Phil Kastel would play the role of Brand Ambassador for the Scotch labels in America. He personally received a commission on every single cask sold. How much the big boss got is anyone’s guess, but you can bet Costello wasn’t in it for the good of his health. He later insisted that he’d signed the note to Haim out of longstanding friendship with all parties concerned, and that after the sale went through had no further part to play. However, in 1943 he was opening bragging about owning a Scotch distillery, and claiming House of Lords and King’s Ransom, still enormously popular through the forties and fifties in America, as “his whiskies”. But the net was closing in.

In 1950 he was hauled in front of a Senate investigative committee to answer for illegal involvement in the drinks industry going all the way back to prohibition. It would spend a good amount of time delving into the dealings with Whiteley, both as a distributor and in the eventual takeover. It noted: “Though Costello probably makes most of his money in gambling, one source of revenue is his partnership with Kastel, Helis and Irving Haim, as sales agents for House of Lords and King’s Ransom whiskies. . . [and in] 1938 an agreement was executed between Irving Haim and William Helis, giving the latter an interest in William Whiteley & Co.” It was further concluded that Costello provided the money and remained an interested party, and that his denials to other hearings including that of New York State Liquor Authority, was tantamount to perjury.

From this point the Feds began a systematic attack on the organization with the US Government looking to bring him down, like Capone, with charges of tax evasion. He would be imprisoned for contempt of the Senate and political corruption. In and out of jail his position weakened, and he lost control of the mob. He died of a heart attack at his Manhattan home in February 1973, aged 82.

Haim died in 1977, and his spirits holdings split up. William Whiteley & Co. was sold and dissolved, and Edradour purchased first by an Australian consortium and then in 1982 by the House of Campbell, a subsidiary of the French drinks giants, Pernod. In 1986 they would release the first ‘Edradour’ as a single malt under its own name, and this charming, little distillery with a colourful, and now rarely mentioned history, emerged into the light. The tour buses turned up and it has never looked back.

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