FBI Special Agent John Connolly and his supervisor John Morris felt that Bulger and Flemmi were much too valuable as informants to lose them to a race-fixing conviction. The FBI's focus was on the Mafia, and they felt that Bulger and Flemmi would be instrumental in their investigations into New England underboss Gennaro "Jerry" Angiulo, who had controlled the mob's rackets in Boston for nearly 40 years. After many years of passing off the Mafia as minor hoodlums unworthy of their attention, the FBI officially declared war on the mob after the death of Director J. Edgar Hoover who had preferred nabbing bank robbers and kidnappers. Connolly and Morris convinced their superiors that Boston's Irish gangsters were small potatoes compared to the looming threat of La Cosa Nostra. But by keeping Bulger and Flemmi out of the race-fixing case, the FBI inadvertently created a power vacuum in the Winter Hill Gang when Howie Winter was convicted. Whitey Bulger quickly filled that void, assuming leadership of the gang. The gang's most vicious enforcer was now sitting on the throne with the unofficial blessing of the Bureau.

Whitey Bulger's relationship with the FBI began in the fall of 1975 in the front seat of a worn-out Plymouth parked on Wollaston Beach in Quincy, Massachusetts, just south of South Boston. Special Agent John Connolly had been pursuing him for some time, urging him to become a Top Echelon Informant, using Whitey's ice-cream argument to convince him: they were both Irish, both from Southie, and had both gone to church at St. Monica's. They'd known each other since Connolly was a kid. Whitey could trust him. Besides, Whitey's partner, Stephen Flemmi, had already been recruited by the Bureau and had been feeding them information for some time.

Bulger didn't like the idea of becoming a rat for the government, but Connolly presented a convincing argument. He knew that the Winter Hill Gang and the local Mafia had interests in competing vending-machine companies, and they were feuding over the placement of those machines. Connolly warned Bulger that if the two sides went to war over this, the Irish gang would lose, because underboss Jerry Angiulo had the police in his pocket.

"'Why don't you use us to do what they're doing to you?'" Connolly said to Bulger, according to the Boston Globe. "'Fight fire with fire.'"

Connolly assured Bulger that the FBI's mission was to take down Angiulo's empire, and if Whitey helped them with insider information, they would basically leave him and his rackets alone.

Bulger didn't give Connolly an answer that night on Wollaston Beach, but after several more clandestine meetings, Whitey made up his mind. He agreed to become a TE for the Bureau, saying that the Mafia "can play checkers. We'll play chess."