Edradour: Between the Waters

With thousands of visitors annually, the diminutive, picture-postcard Edradour is one of the most frequently visited distilleries in Scotland; and rightly so. Beautifully set among birch trees and rolling barley fields above the town of Pitlochry in the heart of Highland Perthshire, this farm-style distillery with its whitewashed buildings and red trim was established as ‘Glenforres’ in 1825 before firing up the stills in earnest twelve years later under a cooperative on the Duke of Atholl’s broad estates, and rebranded as Edradour. Coming from the Gaelic language, Eadar dhà Dhobhar means ‘Between two Waters’, and it has all the ingredients to make both a sublime single malt whisky and a bucket-list feature on the tourist trail. 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 the Scottish Highlands to the blood-soaked streets of 1930s Manhattan. For Edradour was once owned by the New York Mafia.

Born in Yorkshire in 1861, William Whitely, son of a stonemason turned wine merchant spent the first forty-two years of his life in utter obscurity, leading a pedestrian life working with his father in the buying and selling game. By the early 1900s he’d left home in Toxteth, Lancashire and was working for the Leith based distilling and blending company, James Munro and Sons, which had recently been bought over by the largest distiller in the United States at the time, Cook & Bernheimer. Munro & Son. had a number of relatively successful blends on their books, particularly the King of King’s brand, which had Dalwhinnie as its core malt, and was doing well in the States. But, with Whiteley on board, they began experimenting with other possibilities, time spent tinkering that would prove useful to the Yorkshireman down the line. The American giants also owned Dalwhinnie directly, having purchased it in 1905 to keep the juice flowing, but had left the day to day running of the place to Munro and Sons, and William it appears, spent some of his time here amid the windswept wastes of the Badenoch mountains, where even the raw haar rolling into Leith from the Forth must have seemed cozy by comparison. But if it was warm he was after, fate would not disappoint and it appears that at some point he was set up as a roving ambassador for the company in Africa, a market he was vaguely familiar with from his days working for the family firm. All would not go well however and having tried to ‘branch out’ with private investments and enterprises off the books so to speak, he was unceremoniously sacked in 1908.

Undaunted, and now based in London, in 1914 he tried again at going solo and acquired the purchase of another Leith based business, JG Turney & Son. Turney had been established in 1891 as ‘distillers, blenders and exporters of Scotch Whisky and other spirits.’ By 1914 however it was to all intents and purposes defunct, and 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.

JG Turney had barrels of spirit sitting in their Edinburgh warehouses, but the timing of the take over was unfortunate for an immediate return on the investment. The obvious problems of the First World War not withstanding, in 1915 the government slapped a two-year minimum age edict on Scotch, raised to three years in 1916. This meant that the new owners had to sit on their stock for a bit longer than had been initially anticipated. Still, Whiteley’s entrepreneurial brain was doing overtime, and the kernel of a blend that would one day become the ‘House of Lords’ began taking shape. But he needed a core single malt to build it around, and the answer would lie with an obscure farm distillery just down the road from his old haunt at Dalwhinnie. The answer was Edradour.

Temperance movements and anti-alcohol leagues had been established in the UK and America through the nineteenth century, with a messianic mission to eliminate the scourge of the demon drink, which to be fair had become a bit of a problem, particularly in the sectors of society which those in ivory towers of wealth loved to patronize with thinly veiled hypocrisy. At one point they had millions of adherents, but even with the tacit support of British Prime Minister, David Lloyd George, their aims never truly materialized in Britain, especially following the absolute horrors of the war. But, if there is anywhere that can take a movement and run with it to an illogical degree, then it has to be the United States, and with the passage of the Eighteenth Amendment in 1919 and the Volstead Act that followed quickly behind it, the making, selling and buying of commercial alcohol for domestic and personal use was prohibited. The philosophy and morality behind the thing was sort of sound, it was genuinely believed that the removal of alcohol from the social equation then other ills and evils, like crime would crumble. But the reality was very different. Domestic crime may well have been reduced, although the evidence is far from empirical, but what is less ambiguous is the obvious fact that organized crime, usually prosecuted from the business end of a Tommy gun, developed, prospered and morphed into a multi-billion dollar enterprise. If you can say anything about Prohibition is that it gave birth to a truly powerful, and uniquely American mafia.

Alcohol production in the States may have ground to a virtual standstill, but the opportunities it presented to other countries like Canada and of course Great Britain were enormous, and mostly facilitated by crime syndicates in the US itself. The borders were as leaky as a sieve, and billions of gallons of foreign made hooch poured through. Gangsters like Al Capone or Johnny Torrio in Chicago made absolute fortunes. By the late 1920s, having reconstituted the city’s criminal underworld into a coherent and structured business, the king of New York was Charles ‘Lucky’ Luciano – a man powerful enough to make sure Capone took jail time to take the heat off the rest of the families. His restructure created the modern Mob, constituted in the fashion of the old Sicilian Cosa Nostra, and one of his top lieutenants or consiglieri was the crafty and ruthless operator, Frank Costello, supposedly the inspiration behind Mario Puzo’s character, Vito Corleone from The Godfather.

Frank Costello

Born Francesco Castiglia in Calabria, Italy in 1891, Frank Costello and his mother moved to New York four years later to join his father who ran a small Italian grocery store. By the age of 13 he was already baptized and blooded into the brutal world of widespread and vicious gangland activity rampant in pre-war Manhattan, involved in racketeering and protection. The city was rife with rival factions all trying to carve out petty empires amid the grinding poverty of places like the Lower East Side or Hell’s Kitchen and it was the breeding ground for some of the most influential criminals and mobsters in American history including Al Capone and Owney Madden and Mayer Lansky. Before he’d even celebrated his 28th birthday, Costello had seen the inside of a jail cell four times, but his rise though the Luciano organization was meteoric to say the least.

In 1925 Costello, along with Irish gangster, ‘Big’ Bill Dwyer, had been indicted on charges of rum-running or bootlegging, but after a quiet word in the right ears, the charges against them were dropped, while around thirty others caught in the same sting would be found guilty, convicted and sent to jail. His main interests in the organization were slot machines, of which he ran over 25,000 in the city, gambling and in the bar-restaurant trade, but with so much money to be made in illegal alcohol sales, it was hard to stay away for too long. By 1930 it was reckoned that of the most successful bootleggers in the United States around 50% had an Eastern European Jewish background, and among them was a mid-level crook from Philadelphia called Irving Haim. The pair had gotten to know each other well during the twenties, and at no point, unlike Costello, had Haim ever been caught, far less convicted of running supplies along the east coast either out of Canada or the Caribbean (Haim was in partnership with a bootlegger from Minneapolis, and had opened their own distillery making whisky in Havana, Cuba); indeed, he never seemed to even register on the radar of the authorities, and Frank Costello wanted to know his secret, or better still, take advantage.

Haim was born in Romania in 1905, and had become a naturalized US Citizen in 1912, and through the 1920s had, along with his brother risen through the ranks of organized crime in Philadelphia, and was recorded in 1923 as being the general manager of the Sherwood Distillery Co., based in Maryland, which had just hit the skids as its Federal Alcohol Permits were rescinded due to prohibition violation. With this avenue closed, the Haims moved deeper into the world of rum-running, but they were 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. Although he would deny it at a hearing in 1948, Haim and Costello were already working together by the late twenties along with a couple of other underworld characters including fellow Jewish drink-runner with dreams of gangland stardom, ‘Dandy’ Phil Kastel.

During the ridiculously lucrative hey-days of prohibition, William Whiteley had seen an opportunity to make a pile of cash selling his blends under the counter into a very thirsty United States, introducing his House of Lords blend in 1922 and the even more successful King’s Ransom in 1928. It is now assumed that Edradour was at the heart of both. During this period he’d been introduced to Irving Haim by a mutual acquaintance and famous whisky-runner, William ‘The Real’ McCoy, and began smuggling the goods into the US via the French island of Saint-Pierre, and then Canada. It made both men rich, and in 1933 following the repeal of the 18th amendment, Haim, Kastel and their main backer Frank Costello, whose network of speakeasies and drinking dens 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 brands in the United States.

By 1932 Edradour was itself on its knees and so Whiteley quite naturally bought the place, along with Knockandu in Speyside, to ensure supply. He also created another subsidiary, Glenforres-Glenlivet, through which he sold Edradour directly as a vatted malt. By this point his portfolio included over 50 labels, and on more than one occasion either Haim or Costello himself, although he would later deny it, attempted to purchase the whole business enterprise as a going concern, and in each case they were rebuffed. But Whiteley was no spring chicken, and with no children of his own the clock was counting down towards inevitable retirement.

In 1937 the mobsters approached Whiteley again with a view to taking on the business, and this time the old man agreed. A year earlier, mafia boss Luciano was sent down for a long prison sentence for running prostitution and gambling rackets, and his number two, Vito Genovese packed his bags and went into self-imposed exile back in Mussolini’s Italy, leaving Frank Costello as the top dog in the organization with a whole city at his feet, head man in the world of American organized crime. In order for Alliance Distributors to buy JG Turner & Sons and take control over William Whiteley Co. Ltd. in its entirety, Haim and Kastel needed money and they knew exactly who to ask. Although he tried to distance himself at a later Senate hearing, in the spring of 1938 Costello endorsed a note to the pair to the tune of $325,000 to use against a bank draft to purchase the business. Initially, Whiteley 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. While you got the sense Whiteley personally wanted to distance himself from the mob, you’d have to be pretty naïve not to realize what was shaking down; and he was happy to take the man’s money, and retired.

So with suitcases stuffed with mafia money, in 1938 Irving Haim became the legal owner of Edradour Distillery and would remain so until his death in 1977. Alliance would continue, with Haim at the helm, and Phil Kastel as the ‘Good Will Man’, or Brand Ambassador we would call it today for the House of Lords and King’s Ransom whiskies in America, and personally received a commission on every single cask sold. How much the 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 labels in 1940s and 50s America, as “his whiskies”. Interestingly, a good number of cases of King’s Ransom were discovered on board the SS Politician, the famous whisky-laden ship that sank off the coast of the Hebrides in 1941 and the inspiration for the book and film “Whisky Galore”. We may never know the true reason why a whole boatload of Scotch was heading to the States in the early years of the Second World War, and before American participation, but was King’s Ransom a smoking gun pointing at mafia involvement in getting the US involved – even going all the way to the Whitehouse?

King’s Ransom

By the late 1940s Costello was operating several going concerns in the spirits industry, running a couple of distilleries and a distribution company, but he also concerns of another nature to worry about too. In 1950 he was hauled in front of a Senate investigative committee, better known as the Kefauver Committee, to answer for illegal involvement in the drinks industry going all the way back to his bootlegging days during prohibition. It would spend a good amount of time delving into the dealings with William 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. The next day he received 10,000 ordinary shares, and 35,000 preferred shares of stock.” 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 with charges of tax evasion, which of course had been the tool that had ‘got Capone’. He would be imprisoned for contempt of the Senate, and for political corruption – the charge being he was effectively bankrolling and influencing Gracie Mansion. In and out of jail his position weakened, and in 1957 his old associate Vito Genovese returned and a bitter feud ensued for control over the New York mob. After Genovese ordered a hit on his old comrade, which he survived, Costello finally cashed in his chips and retired. Yet, despite the ‘retirement’ powerful men like that don’t vanish completely, and even in his last days was still being called the ‘Prime Minister of the Underworld’. He’d been stripped of his US Citizenship in 1963 but avoided deportation. 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 giant, 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, chequered and yet rarely mentioned history, emerged into the light. It has never looked back.