Morris and Connolly had no way of knowing the extent to which Ciulla had implicated Bulger and Flemmi. But O’Sullivan knew. In debriefing sessions in Sacramento, California, with agent Tom Daly, before the grand jury and, later, at the federal trial itself, Ciulla had been consistent and convincing. He’d described exactly how Winter and his six key associates—John and James Martorano, James Bulger, Stephen Flemmi, Joseph McDonald, and James Sims—shared the proceeds. “Profits were divided from this illegal scheme as follows: 50 percent to Howard Winter and his six abovementioned associates; 25 percent for Ciulla and 25 percent for Ciulla’s partner, namely William Barnoski.” He’d described the various duties: “Mr. Winter said that him and his partners would finance the situation, would be responsible for placing bets outside with illegal bookmakers, also supplying runners to the racetracks and various parts of the country. He would be responsible for collecting money with bookmakers.”
Most troubling, he’d put Bulger and Flemmi right in the middle of the whole scheme. “I had them dead to rights,” Ciulla recalled. Bulger and Flemmi might have left before Ciulla and the gang began partying and snorting coke, but they were around when it mattered. “Did I hang out with him?” Ciulla said about Bulger. “Socialize after the day’s business? Go with him to Southie? No.
“But there was always money for him and Stevie.”
The visit to O’Sullivan was stealth: without permission from FBI headquarters, the agents had no business confiding in a prosecutor. In addition, the identity of an informant was considered a palace secret; disclosure, even to a prosecutor, violated FBI rules. But that didn’t stop Morris and Connolly from telling O’Sullivan about their arrangement with Bulger and Flemmi.
“We went to the prosecutor,” Morris recalled, “and we told him that they had represented to us that, first of all, they weren’t in it, that it was not their scheme.”
Just as important, the two agents brought up a matter they knew was dear to the intense prosecutor’s heart—Gennaro Angiulo. Morris said they told O’Sullivan, “These guys were in a position to help us in what was our number-one priority, the Mafia, and we asked O’Sullivan to consider these facts and consider not indicting them based on this.”
The prosecutor did not press the FBI agents for the basis of their trust, why they took the gangsters at their word or whether they had undertaken any investigation to corroborate the claims of innocence. But Morris knew that for O’Sullivan to go along the prosecutor was going to have to find a way around his star witness. The entire prosecution was being built around Ciulla. His credibility was paramount to winning at trial, and here were Bulger and Flemmi pitting their word against his.
Though still not happy that the agents had waited so long—it was virtually the eve of the indictments—O’Sullivan listened intently to their pitch. When they finished, he said he would get back to them. “He would consider it,” Morris recalled O’Sullivan saying. “He was favorably inclined toward it, but he wanted to discuss it with Tom Daly, who was the case agent.”
Morris and Connolly left the meeting feeling encouraged. It would not be the first time that informants had been held out of harm’s way in a criminal case—and properly so—in order to nurture them for bigger payoffs in the future. Indeed, at this time in the history of the FBI’s ties to Bulger and Flemmi, they believed they had a strong argument for cutting the informants some slack. There was, as they’d told O’Sullivan, their potential value in developing the mega-case against Gennaro Angiulo. Moreover, Bulger and Flemmi were not the primary targets in the race-fixing case. Howie Winter was the main man. Bulger and Flemmi were midlevel, not the top dogs, and as such ideally positioned to help the FBI. O’Sullivan, the FBI could argue, should go ahead and topple the Winter Hill gang, but amid the rubble, he should just let the two lieutenants stand.
Within days O’Sullivan sent word to Morris at his FBI office that Whitey Bulger and Stevie Flemmi would be dropped from the indictment. There was some talk about how, with Bulger and Flemmi, he didn’t have the kind of corroborating evidence in place, like telephone records and hotel receipts, that would buttress Ciulla’s account, as they did for the other defendants. But this was simply taken as prosecutorial spin to cover their tracks. Morris quickly passed along the good news to Connolly, who was pleased. Connolly later recalled his own conversation with O’Sullivan. “He hoped they [Bulger and Flemmi] appreciated this, and that the FBI appreciated this, because he felt we waited a little bit too long in telling him their identities,” Connolly said. It turned out, added Connolly, that the government had the goods on Bulger and Flemmi. “Ciulla had actually buried them, apparently, in his grand jury testimony.”
Nothing, however, comes without a price. Fat Tony was now beside himself. “They tried to con me,” he said. O’Sullivan “tried to justify Stevie’s not being in the indictment by the fact he was a little bit on the lambrooskie. Then he said they couldn’t correlate certain dates.
“I said, ‘Fuck that. That’s not true.’” Bulger and Flemmi had rounded up bookies to unwittingly take bets on fixed races. After suffering huge losses, the bookies would be indebted to—and controlled by—Winter Hill. “And Whitey was there all the time.” Ciulla fought O’Sullivan. “Things didn’t add up, and I’m not a total buffoon. Why are these guys being left out? They were partners. Why leave them out when I had direct dealings with them?” O’Sullivan kept up the double-talk, but his FBI handlers finally told Ciulla the truth.
“They had to tell me because I was going fuckin’ nuts.” To Ciulla it was about self-preservation, not justice. “The more of them left out on the street,” Ciulla said he realized, “the more likely I get killed.”
After getting back to the FBI with the good news, O’Sullivan, continued Connolly, required that Bulger and Flemmi promise not to even think about taking out Ciulla. “He told me that as a condition of their being cut loose from the race-fix case they had to give their word that they would play no role in hunting down Anthony ‘Fat Tony’ Ciulla.”
Ciulla, still dissatisfied, felt reassured. “I wasn’t okay about Stevie and Whitey, but I had to swallow that load.
“That’s how it was.”
Several weeks later, and amid much anticipation, federal indictments in the celebrated case were handed up. It was Friday, February 2, 1979, and the news was splashed across the front pages of the city’s two daily newspapers.