The Wall Street Journal - 21.10.2019

THE WALL STREET JOURNAL. Monday, October 21, 2019 |A

A Suspect

In the Family

In Hoffa’s Shadow

By Jack Goldsmith

(Farrar, Straus & Giroux, 354 pages, $28)

BOOKSHELF| By James Rosen

J

immy Hoffa is back! No, the legendary labor leader has

not risen from the end zone at the old Giants Stadium

in East Rutherford, N.J.—or from any of the other sites

where his body was rumored to have been deposited after

he disappeared on July 30, 1975. But we are witnessing a

boomlet of interest in the head of the International Brother-

hood of Teamsters in the 1950s and ’60s. There is Martin

Scorsese’s “The Irishman,” a dramatization of “I Heard You

Paint Houses,” the 2004 nonfiction account that presented

mobster Frank Sheeran’s claim that he murdered Hoffa. And

now we have “In Hoffa’s Shadow” by Jack Goldsmith.

A top Justice Department official in the Bush-Cheney era,

now a Harvard law professor, Mr. Goldsmith has produced

an unusual hybrid of confessional memoir and investigative

history. “In Hoffa’s Shadow” is compulsively readable, deeply

affecting and truly groundbreaking in its re-examination of

the Hoffa case. The FBI’s lead suspect was always the man

who was erroneously described by reporters as Hoffa’s

adopted son and who, as it

happens, adopted Mr.

Goldsmith as his own son.

Charles “Chuckie” O’Brien

first met Hoffa as a 9-year-old.

Abandoned by his father, a

petty criminal, Chuckie inher-

ited the worldview of his canny

mother, Sylvia Pagano, whose

Mafia connections stretched

back to Sicily and extended into

the underworld of Detroit. A

truck driver before he graduated

from high school, Chuckie

dreamed of following in Hoffa’s

footsteps as leader of the Detroit

Teamsters branch, Local 299, from which

Hoffa had vaulted to the union’s presidency. But

he lacked leadership skills, so he settled, with characteristic

loyalty, for becoming Hoffa’s gofer, bag man and confidant.

Mr. O’Brien’s first marriage, Mr. Goldsmith says, was

doomed by her husband’s closeness to Hoffa, and little

wonder: Hoffa’s expansion of Teamsters influence on behalf

of truckers nationwide required an alliance with the Mafia

that resulted in multiple investigations and Hoffa’s conviction,

in 1964, on federal charges, including conspiracy and fraud.

Six weeks before Hoffa’s disappearance, Mr. O’Brien

remarried. Brenda Goldsmith, his second wife, already had

three children; her oldest, Jack, came to adore Mr. O’Brien,

his first real father figure. Mr. Goldsmith recalls a moment

from middle school, when his mother had just received

electroshock therapy for severe depression; Mr. O’Brien took

the boys to the hospital to see her. “‘She will get better,’

Chuckie assured me as he placed his thick arm around me

and kissed me on the head....Cloaked in his physical

strength, I believed him.”

By the time Jack O’Brien, as he became known, attended

Yale Law School in the 1980s, his feelings had changed, a

casualty of the publicity devoted to Hoffa’s disappearance

and the FBI’s focus on Mr. O’Brien as a suspect. “I soon

began to show open disrespect to the man I once idolized...”

Mr. Goldsmith writes. “I started to call him a liar. I also

began to tell the man who had an instinctual hatred of the

Justice Department since his clashes with Bobby Kennedy in

the 1950s that I planned to go to law school and become a

government prosecutor. And I started to make fun of Chuckie

for mispronouncing words and botching grammar.”

The FBI’s interest in Mr. O’Brien was understandable. He

admitted he and Hoffa had parted ways in 1974, when Hoffa,

freed from prison, was scheming to reclaim the Teamsters

presidency. Mr. O’Brien visited the same Bloomfield Town-

ship parking lot, near Detroit, from which Hoffa disappeared

hours later and that day drove a car linked to another

suspect. Early FBI forensics, later discounted, placed Hoffa’s

hair in that vehicle.

But there were reasons to exonerate Mr. O’Brien, too. He

alone among the prime suspects submitted immediately and

voluntarily to FBI interrogation. His alibi, while not air-tight,

made it virtually impossible for him to have had time to

participate in Hoffa’s rendition. His Mafia ties—Mr. O’Brien

considered the top mob suspects, Anthony Giacalone and

Tony Provenzano, his “uncles”—made him an unlikely

person for the mob to conscript in so high-profile a murder.

Mr. O’Brien, now 85, spent decades trying to clear his

name—through tense FBI interviews, inarticulate

appearances on “60 Minutes” and “The Maury Povich Show,”

and a successful polygraph test. But the suspicion lingered,

even if new FBI officers on the cold case privately admitted

that the bureau had targeted the wrong man. For much of

that time, Mr. O’Brien’s adopted son disowned him. Not until

Mr. Goldsmith left the government, in 2004, did he decide to

reconcile; Mr. O’Brien unquestioningly accepted him back.

“In Hoffa’s Shadow” is thus a reckoning, as Mr. Goldsmith

confronts his disloyalty toward his adoptive father, and also

a meticulous reconstruction of “the greatest mystery in

American history.” For that task he reviewed the vast corpus

of Hoffa literature: FBI files, wiretap transcripts, grand-jury

evidence. Unlike other researchers, he had unfettered access

to Mr. O’Brien and conducted hundreds of hours of interviews.

“Provenzano had a lot to do with it,” Mr. O’Brien finally

discloses, referring to one of his Mafia “uncles.” Mr.

Goldsmith adds that, according to his law-enforcement

sources, Vito Giacalone, the brother of Mr. O’Brien’s other

“uncle,” was “directly involved” in Hoffa’s disappearance.

These sources also told Mr. Goldsmith that the actual killer

was probably “a low-level [Mafia] family member in 1975,

someone entirely off the early investigators’ radar screen.”

Although Mr. Goldsmith doesn’t name this individual, he

appears to be Anthony Palazzolo, a Detroit consigliere who

died from natural causes, at age 78, in January. Mr. Gold-

smith omits the fact that Palazzolo eventually came under

investigators’ scrutiny, and his book contains a few minor

errors—e.g., the 1972 Watergate break-in occurred at the

office complex, not the hotel. But these deficiencies scarcely

detract from what is otherwise a monumental achievement.

A few years ago, the Justice Department agreed to provide

Mr. O’Brien with a letter of absolution, only to renege at the

last minute. “In Hoffa’s Shadow” makes a fitting substitute.

Mr. Rosen, an investigative reporter for the Sinclair

Broadcast Group, is the author of “The Strong Man:

John Mitchell and the Secrets of Watergate.”

The memoir of a son’s troubled relations with

his adoptive father and a careful re-examination

of ‘the greatest mystery in American history.’

Trump’s Pen Limits Executive Power

P

resident Trump signed
two executive orders
curbing executive power
Oct. 9. They’re a good start,
but more is needed.
The first order targets
“guidance”—agency decrees
that are neither written into
law by Congress nor put
through the formal rule-mak-
ing process established by the
Administrative Procedure Act.
That’s how the Obama admin-
istration pressured schools
nationwide to vitiate due pro-
cess in disciplinary proceed-
ings for sexual misconduct
and to accommodate trans-
gender students demanding to
use opposite-sex restrooms.
The second Trump order
reins in enforcement that
twists regulations away from
their original purpose—such
as the Environmental Protec-
tion Agency’s habit of levying
fines designed for industrial
polluters on private citizens.
These changes are urgently

necessary but insufficient. For

one thing, it’s unclear if they

prevent agencies from using

their power of the purse to

force state and local compli-

ance with their guidance.

That’s potentially a major loop-

hole, and the White House

should move fast to close it.

Hundreds of programs fun-

nel federal funds to state cof-

fers, giving federal agencies a

powerful lever over state and

local officials. The Obama ad-

ministration used it to impose

a variety of federal initia-

tives—from the sexual-mis-

conduct and transgender-

bathroom policies to the

Medicaid expansion under

ObamaCare. Any agency deci-

sion to withhold funds from

states and school districts

should be considered an “en-

forcement action,” but will

agencies see it that way and

limit their own power? The

question could be addressed

by revising a Clinton-era or-

der on federalism.

The new executive orders

don’t touch even more-infor-

mal tactics, such as the inter-

nal agency memorandums that

have become the main avenue

for the insidious use of “prose-

cutorial discretion” as a tool

of national policy. Mr. Obama’s

“dreamer” amnesty measures,

known as DACA and DAPA,

were only a series of internal

memorandums from the home-

land security secretary to divi-

sion heads, instructing them

to stop enforcing immigration

and employment-eligibility

laws against illegal aliens who

were brought to the U.S. as

children, and later against

their parents. It was an object

lesson in how to enact na-

tional policy while shielding it

from legal challenge. Despite

the exceeding legalism of their

text, the documents were so

legally informal that federal

courts considering challenges

to them struggled even to cite

them properly.

Any executive order can be

withdrawn by a future presi-

dent, but there’s a bipartisan

wisdom to reining in executive

abuses. President Reagan put

formal agency rule-making

under White House oversight,

and that was politically polar-

izing at the time. But Presi-

dent Clinton built upon his re-

forms, which are now the

bedrock of the rule-making

process. Mr. Trump’s execu-

tive orders should likewise

serve as a foundation. The

American system of checks

and balances is weakening,

and much work remains to

shore it up before it’s too late.

Mr. Loyola, a former White

House environmental policy

adviser and speechwriter, is a

senior fellow at the Competi-

tive Enterprise Institute, and

president of Loyola Strategies.

By Mario Loyola

But it’s still too easy

for agencies to abuse

their authority.

OPINION

Does technol-
ogy provide a
competitive
advantage?
Companies are
counting on it.
In March
McDonald’s
spent $
million buying
an Israeli arti-
ficial-intelli-
gence startup to personalize
menus based on weather and
trending items. Now they’re
considering license-plate recog-
nition systems for drive-through
lanes. Based on your history
they might offer to supersize
your order, or just hand you
your usual Happy Meal. CEO
Steve Easterbrook says, “Tech-
nology is a critical element of
our Velocity Growth Plan.”
The problem is that adopting
a useful technology doesn’t
mean your advantage will last.
I’ve long been amused by a suc-
cession of Harvard Business Re-
view pieces that demonstrate
this point. In 1985 Michael E.
Porter wrote “How Information
Gives You Competitive Advan-
tage,” then in 1990 came Max
Hopper’s “Rattling SABRE—
New Ways to Compete on Infor-
mation,” and finally in 2013 we
got Rita Gunther McGrath’s
“The End of Competitive Advan-
tage.” Each of these takes de-
scribes a different stage in the
life cycle of corporate tech.
Hopper was, as Harvard
professor James Cash noted,
“the first person who really de-
fined the marketing leverage
that could come from using
technology.” In the late 1950s
Hopper helped build Sabre, an
automated flight-reservation

Tech Treadmill Wears Firms Out

system, and in 1981 he helped

design the first major fre-

quent-flier program to give

American Airlines a competi-

tive“AAdvantage.”Yetby

he worried that the game was

over, suggesting that technol-

ogy was “table stakes for com-

petition.” Hopper noted that

“SABRE’s real importance to

American Airlines was that it

prevented an erosion of market

share.”

That insight comes to mind

watching the Streaming War of

2019. Netflix and Amazon have
      a huge lead in streaming video.
      But eventually everyone uses
      the same technology.
      Tim Cook wants in, so Apple
      TV+ launches Nov. 1 with
      (probably overpaid) Jennifer
      Aniston and Reese Wither-
      spoon. Robert Iger wants in,
      and Disney paid (probably too
      much) for control of BAMTech,
      the streaming-video technology
      developed by Major League
      Baseball, which it is deploying
      for streaming services Disney+,
      ESPN+ and Hulu + Live TV.
      AT&T wants in and paid (again
      likely too much) for Time War-
      ner to create HBO Max. NBC-
      Universal wants in too. See the
      trend? Google ought to rename
      its streaming service YouTube
      TV Max+.
      Yet when a company adopts
      a new technology, it can’t set
      it and forget it. Staying ahead
      requires new features and con-
      stant upgrades. Hopper de-
      scribed a “technology tread-
      mill” and said “companies will
      either master and re-master
      the technology or die.” He was
      right. As Intel competed
      against the Japanese in semi-
      conductors, it sold its micro-

processors at a high margin so

it could afford more research

and development to maintain

its advantage.

Amazon and Google lead the

world in R&D spending. Apple

and Facebook are in the top 25.

Disney and AT&T are not.

Google’s capital spending,

mostly on data centers, totaled

$25 billion last year—a 91%

year-over-year increase! Ama-

zon spent $28 billion, though a

lot of that was on warehouses.

Disney? Barely $5 billion.

Does Mr. Iger even know

what’s coming? Disney spends

large sums on studios and rides

that last decades (the Haunted

Mansion opened in 1969). Its

streaming service on the other

hand will require—well, you

gotta feed the beast.

So it’s spend, spend, spend.

Plus, the best coders want to

work somewhere that’s growing

and has a hot stock—the oppo-

site of Hollywood, where stu-

dios strike high-cash deals like

Sony paying Dwayne “The

Rock” Johnson $23 million to

star in “Jumanji: The Next

Level.” Sure, Disney’s stock has

done well, but it isn’t near tech’s

trillion-dollar valuations.

In 2000 Hopper told Com-

puterworld, “I can’t envision

too many years when compa-

nies will run anything of their

own. It will be outsourced to

specialists that have the scale

and scope to do it, and do it a

lot better than they can afford

to do it for themselves.” I

worry Disney and even AT&T

don’t have the margin struc-

ture to afford the yearly costs.

Remember showman Billy

Rose’s quote: “Never invest

your money in anything that

eats or needs repainting.”

So yes, technology can pro-

vide a competitive advantage,

but you have to have the right

margin structure to maintain

that advantage—to afford the

food and paint.

Who has the right setup?

Google has a gross margin of

56%. It can afford a lot of R&D

and spending. Facebook’s is

80%. Amazon’s is 29%, but I’d

wager its cloud service has a

60% or 70% gross margin.

AT&T’s is 54%—not bad, but

most will be eaten up by its 5G

rollout. What about Disney?

Only 37%. True, Netflix’s is also

37%, but it may soon sag under

the weight of content and distri-

bution costs. Oddly, McDonald’s

is a healthy 53%.

Today every company wants

to reinvent itself as a tech firm,

but they should be careful what

they wish for. The surefire ap-

proach is using data to capture

and keep customers, even for

Big Macs. Once a company

steps on the technology tread-

mill by investing in a new sys-

tem, it better run fast. Tech in-

vesting used to be about chips

and software, but as it becomes

more about using technology

more innovatively than your

competitor, more companies

are vulnerable to the Hopper

syndrome of remaster or die.

Write to [email protected].

Once a company jumps

on a new trend like

streaming, it has to

spend to stay ahead.

INSIDE
VIEW
By Andy
Kessler

As Canadians
head to a fed-
eral election
on Monday,
polls have
Prime Minis-
ter Justin
Trudeau of the
Liberal Party
and Conserva-
tive Party
leader Andrew
Scheer in a dead heat.
Mr. Scheer has turned out
to be a more serious contender
than many, including many
conservatives, expected. But
Mr. Trudeau’s biggest head-
aches are on his left, where
Jagmeet Singh, the personally
engaging candidate of the New
Democratic Party, and Bloc
Quebecois candidate Yves-
François Blanchet threaten to
siphon off progressive votes
from the Liberals. This has
greatly increased Mr. Scheer’s
chances of winning a minority
government.
Voter surveys say the race
is too close to call. As Darrell
Bricker of the polling company
Ipsos put on Oct. 15, the multi-
party jockeying “points to an
Election Night which could be
full of surprises and close
calls.”
Some meaningful number of
Canadians appear ready to
punish Mr. Trudeau for his
performance since taking of-
fice in 2015. A carbon tax that
wasn’t supposed to hurt a bit
has harmed consumers in key
provinces. Liberals promised
fiscal discipline but Mr.
Trudeau finishes four years
with a C$20 billion deficit. The
ruling party now counsels Can-

An Exciting Finish in Canada’s Election

ada not to expect a balanced

budget until at least 2040.

The prime minister’s au-

thenticity deficit is his bigger

problem. The self-described

champion of women and mi-

norities took a hit when pho-

tos emerged last month show-

ing that in years past, more

than once, he darkened his

face at costume parties.

Mr. Trudeau has apologized

profusely and by most ac-

counts Canadians don’t brand

him a racist. For good measure

he got President Obama to en-

dorse him last week.

Yet his credibility is dam-

aged. It also has been tarnished

by an ethics commissioner’s re-

port that the prime minister’s

office inappropriately pres-

sured the attorney general to

cut a deal with the Montreal-

based engineering firm SNC-

Lavalin to avoid a potential

criminal conviction concerning

a Libyan government contract

awarded to the company. When

the attorney general resisted,

she was demoted.

The biggest beneficiary of

the public’s crumpling faith in

their prime minister’s charac-

ter has been Mr. Singh. When

the photos from Mr. Trudeau’s

past emerged, the NDP leader

produced a video recalling his

own struggles to overcome rac-

ism and reaching out to minori-

ties who have felt marginalized

in Canada. The performance

won praise for sincerity across

the political spectrum and left

Mr. Trudeau looking like a

sanctimonious phony.

Yet while Mr. Singh scores

well on the likability scale, he

comes up short on the policy

front. The NDP’s hard-left

agenda doesn’t have wide ap-

peal in Canada, and Mr. Singh

isn’t winning converts to his

ideas. He is merely picking up

disaffected Liberals. Some-

thing similar has happened in

Quebec where the French-na-

tionalist Bloc is gaining seats

at Mr. Trudeau’s expense.

Conservatives have also

been gaining ground since Mr.

Trudeau’s claims of moral su-

periority were broadsided, but

for different reasons.

There’s a lot not to like

about Mr. Scheer’s brand of

conservatism-lite, but as Na-

tional Post columnist Terence

Corcoran observed on Oct. 9,

he’s the only candidate who

speaks sensibly about “the

three important issues of debt,

climate and class warfare.”

The message may resonate

with independents, many of

whom are in immigrant com-

munities, in the equivalent of

U.S. battleground states. These

are the suburbs of Vancouver

and Toronto and the province

of Quebec.

As the Journal’s Paul Vieira

reported last week, in the To-

ronto area Mr. Trudeau’s race

troubles are “taking a back

seat to the financial strains,”

with housing prices “up 46%

over the last five years and a

new carbon tax raising the

cost of” commutes.

The Conservative Party re-

jected a nativist platform when

it chose Mr. Scheer as party

leader over Quebec politician

Maxime Bernier. Now the party

is using its pro-immigrant cre-

dentials to boost the effective-

ness of its low-tax, pro-energy

economic message.

Earlier this month Alberta

Premier Jason Kenney, who

was minister for multicultural-

ism and citizenship under Con-

servative Prime Minister Ste-

phen Harper, campaigned for

candidates in immigrant-flush

ridings in the Toronto suburbs.

On Oct. 5, the Toronto Star re-

ported that his weekend sched-

ule would take him to a Coptic

Church, an Iraqi Chaldean

Christian service, synagogues,

a Sikh gurdwara, a Hindu

mandir, a mosque and a Guja-

rati festival. All this followed

by “dim sum with the Chinese-

Canadian community in Rich-

mond Hill on Sunday.”

Rumors are flying that if

Mr. Scheer wins only a minor-

ity government, Mr. Trudeau

plans to ask Canada’s governor

general for the right to form a

government with the NDP. Mr.

Scheer argues that would go

against “modern convention in

Canadian politics.”

Ironically, the Liberals’

threat to try an end run if they

lose may have boosted Mr.

Scheer’s odds—though still

long—of winning a majority

government by energizing

Conservatives. With turnout

the deciding factor, that could

make all the difference.

Write to O’[email protected].

Conservative Andrew

Scheer has pulled

intoadeadheat

with Justin Trudeau.

AMERICAS
By Mary
Anastasia
O’Grady