While he was elected as a Progressive,[1] he was frequently accused of being a communist or fellow traveler[2][3][4][5] who urged others to join the party.
In 1936, Costello was elected as a Progressive from the Assembly's 2nd Kenosha County district (the Towns of Brighton, Bristol, Paris, Pleasant Prairie, Randall, Salem, Somers, and Wheatland; the Village of Silver Lake; and the 1st, 5th, 6th, 7th, and 11th Wards of the City of Kenosha), unseating Democratic incumbent Matt G. Siebert in a three-way race, with 5,144 votes to Siebert's 4,712 and Republican Jay Rhodes' 3,539.
[7] In 1937, he was one of a group of labor activists who led a breakaway movement, taking the Simmons local of the UIU and several others out of the Upholsterers and forming a new union, the United Furniture Workers of America (UFWA) which advocated industrial unionism, and affiliated immediately with the Congress of Industrial Organizations.
He was again accused of "holding communist views",[9] and lost in the general election to Siebert, who took his old seat back with 4,730 votes to Costello's 3,420 and Republican James Brook's 3,152.
[10] Costello ended up working for the CIO's Steel Workers Organizing Committee and the successor United Steelworkers until 1947.