'Underworld' was the US semi-official government designation for a series of mafia operations intended to counter German saboteurs along the US eastern seaboard (February 1942/May 1945).
In the first three months after the Japanese 'Ai' attack on Pearl Harbor and the German declaration of war on the USA, the US merchant marine lost 120 ships to U-boat attack, most of them off the eastern seaboard of the USA. On 9 February 1942 the ocean liner Normandie, an impressed French ship which was being refitted as a troop ship in New York harbour, was allegedly sabotaged and capsized in the Port of New York. The Mafia boss Albert Anastasia claimed responsibility for the sabotage, but after the war’s end an examination of Axis records indicated that no sabotage operation had existed and no evidence has ever been produced on the Allied side to indicate there had been underworld sabotage. The fire and capsizing of Normandie was in fact almost certainly an accident.
Even so, fears about possible sabotage or disruption of the waterfront led Commander Charles R. Haffenden of the US Navy’s Office of Naval Intelligence (3rd Naval District) in New York to set up a special security unit. He sought the help of Joseph Lanza, who ran the Fulton Fish Market, to get intelligence about the New York waterfront, control the labour unions, and identify possible refuelling and resupply operations for U-boats with the help of the fishing industry along the Atlantic coast. To provide cover Lanza’s activities, he was recommended to approach Charles Luciano who was an important boss of the five New York Mafia crime families, and Luciano agreed to co-operate with authorities in hopes of consideration for early release from prison.
Luciano was currently serving a sentence of 30 to 50 years for running a prostitution ring, and his co-operation was initially rewarded by a transfer from Dannemora to the more convenient and comfortable open prison in Great Meadows in May 1942. Any influence which Luciano may have been able to exercise in stopping sabotage remains unclear, but the authorities did take note of the fact that strikes on the docks stopped after Luciano’s attorney, Moses Polakoff, contacted underworld figures with influence over the longshoremen and their unions.
In 1946 Luciano’s sentence was commuted, after he had served 9.5 years, and he was deported to his native Italy.
'Underworld' also involved the Office of Strategic Services, which sought the help of the gangster Meyer Lansky, controller of several dock workers' groups. Francis Cardinal Spellman, Archbishop of New York and military vicar of the US armed forces, served as the intermediary between President Franklin D. Roosevelt and the mafia bosses Luciano and Frank Costello.