Why were Customs Houses such swamps of graft and corruption?
March 24, 2021 9:24 AM Subscribe
I don't think I have read any American history of the 18th and 19th centuries that doesn't make some mention of the graft and corruption in Customs House operations. What was it about the way a Customs House operated that made this so?
Customs and taxes are both areas of state operation twhere lots of money changes hands-- which tends to try officials' honesty, probably more so in an all-cash age.
I'm fairly sure tax-collection has been prone to graft and corruption, too, but customs seem particularly opaque and resistant to accountability, since rather than taxing stable things that are visible to the community (windows, land), you're instead assessing duties on an unpredictable and hard-to-track series of cargoes that pass through your relatively private dockside or warehouse space. With such high stakes and low detection risk, why wouldn't an importer try a bribe or two in exchange for a favorable estimate?
posted by Bardolph at 10:03 AM on March 24, 2021 [2 favorites]
I'm fairly sure tax-collection has been prone to graft and corruption, too, but customs seem particularly opaque and resistant to accountability, since rather than taxing stable things that are visible to the community (windows, land), you're instead assessing duties on an unpredictable and hard-to-track series of cargoes that pass through your relatively private dockside or warehouse space. With such high stakes and low detection risk, why wouldn't an importer try a bribe or two in exchange for a favorable estimate?
posted by Bardolph at 10:03 AM on March 24, 2021 [2 favorites]
You've also got so many players involved that someone is bound to crumble (or put pressure on others to crumble): the owner of the ship; the seller of the cargo; the recipient of the cargo; the crew of the ship who want to get paid/go home; the captain of the ship; the dock owner; the warehouse owner; &c. If the cargo has a limited shelf life that increases the pressure as well.
posted by oneirodynia at 10:22 AM on March 24, 2021
posted by oneirodynia at 10:22 AM on March 24, 2021
Most crimes can be attributed to "motive, access, and opportunity", and customs are connected to all three.
Customs, levying import and export duties, are doing about as thankless a job as the taxman. They are definitely not paid well enough, but they handle a huge amount of goods (thus, money). There is really no incentive for them to do a good job, other than patriotism and duty (not the tax kind)
posted by kschang at 10:46 AM on March 24, 2021 [1 favorite]
Customs, levying import and export duties, are doing about as thankless a job as the taxman. They are definitely not paid well enough, but they handle a huge amount of goods (thus, money). There is really no incentive for them to do a good job, other than patriotism and duty (not the tax kind)
posted by kschang at 10:46 AM on March 24, 2021 [1 favorite]
Customs people are government employees, which makes it very nearly impossible to oppose them or to see them punished for bad behavior. Since they collect money for the government they have further special powers and privileges - basically they can do what they want and are not responsible to anyone.
I've met good customs agents and bad ones, and I've met some bad ones socially. It only took a few minutes to realize that they were the kind of people who should be allowed absolutely no power at all, and that they were customs people specifically so they could have that power.
We live in a culture in which corruption is not acceptable for petty officials, so the desire to display power is taken out in rudeness and in making people suffer. In cultures with a lot of poverty, and which think corruption is just part of life, if people can steal, they will. Give them the power to steal without fear of punishment or opposition, and it'll be worse.
posted by AugustusCrunch at 11:59 AM on March 24, 2021 [2 favorites]
I've met good customs agents and bad ones, and I've met some bad ones socially. It only took a few minutes to realize that they were the kind of people who should be allowed absolutely no power at all, and that they were customs people specifically so they could have that power.
We live in a culture in which corruption is not acceptable for petty officials, so the desire to display power is taken out in rudeness and in making people suffer. In cultures with a lot of poverty, and which think corruption is just part of life, if people can steal, they will. Give them the power to steal without fear of punishment or opposition, and it'll be worse.
posted by AugustusCrunch at 11:59 AM on March 24, 2021 [2 favorites]
Most of my knowledge of this comes from fiction, but I think a major factor here is that customs duties owed often varied dramatically depending on the exact classification of goods, but the categories were vague enough that customs officials could semi-plausibly use their discretion to put a given item into different possible categories or assign dramatically different valuations/duties.
posted by kickingtheground at 1:36 PM on March 24, 2021 [1 favorite]
posted by kickingtheground at 1:36 PM on March 24, 2021 [1 favorite]
Oversight and accountability.
The custom house was often located in a port/city on a major river, near an ocean.These were some of the first buildings built for a specialized purpose and these officials in a custom house essentially had their own fiefdom. (It's not as if there were cameras or other modern surveillance systems to keep track of what was happening inside these buildings.)
In a weird way, customs officials were the analogue of IT people today, the higher ups had no idea what they did on a daily basis; and they had tremendous latitude to do whatever the hell they wanted with little to no consequence.
posted by jeremias at 5:33 PM on March 24, 2021 [1 favorite]
The custom house was often located in a port/city on a major river, near an ocean.These were some of the first buildings built for a specialized purpose and these officials in a custom house essentially had their own fiefdom. (It's not as if there were cameras or other modern surveillance systems to keep track of what was happening inside these buildings.)
In a weird way, customs officials were the analogue of IT people today, the higher ups had no idea what they did on a daily basis; and they had tremendous latitude to do whatever the hell they wanted with little to no consequence.
posted by jeremias at 5:33 PM on March 24, 2021 [1 favorite]
If you have access to an academic library, Gautham Rao's National Duties: Custom Houses and the Making of the American State (2016) has some information about corruption in customs from the American Revolution to Jackson. I didn't read the whole book or anything, but this is my understanding of what he says.
In the early days of the republic, corruption was understood as misusing the office to the harm of the commonweal. Over time, the concept drifted and took on individualized meaning (i.e., using the office for personal benefit). Early on, local customs officials were given enormous latitude in their governance of local customs, typically interpreting federal law in ways that would appease local merchants. Over time, the local officials' discretion was increasingly scrutinized, and the federal government over time tried to build a wall between the officials and the merchants, as the federal government was losing large sums of money due to this type of corruption.
Rao's monograph ends at the Jacksonian era, which in my limited understanding saw an even-greater increase in this individualized corruption. There's a 1989 work published by the Treasury Department and written by Carl E. Prince and Mollie Keller, The U.S. Customs Service: A Bicentennial History, that's available online via the Internet Archive.
Chapter IV, "Customs in the Age of Jackson, 1825-1850," picks up the story where Rao leaves off. Again, I didn't read the whole book and only skimmed this chapter, but my understanding is that there was an explosion in the number of goods passing through ports that led to many more customs personnel being employed. These factors provided many more opportunities for exploitation of the system for personal gain. On top of that, despite being aware of the problems, the federal government failed to effectively reform the system at the time. Also, as others have mentioned, the civil service at the time was politicized and exploited through nepotism and cronyism.
As the book summarizes it, "politicization and peculation . . . went hand in hand. . . . [P]olitics, lack of communication, and an absence of financial accountability combined to take on the proportions of an unredressed major national dilemma" (96). Finally, the Customs Service also lacked close leadership as an "underadministered arm of the Treasury Department" -- a Commissioner of Customs, responsible for administration of the agency and enforcing financial integrity, was not appointed until as late as 1849 (97). The chapter closes by noting that the Civil War delayed some of the much-needed administrative and political reforms to the Customs Service.
Interestingly, the chapter also discusses at length Nathaniel Hawthorne's career in the Customs Service in Salem, MA, including a dissection of "The Custom-House," the lengthy introduction Hawthorne wrote to The Scarlet Letter. There's lots of great info on how Hawthorne's post was seen as a sinecure that would allow a man of letters to ply his craft on government time. It may tell you something about the attitude toward customs oversight at the time that Hawthorne's political removal in 1849 was publicly decried as the federal government's failing to show sufficient regard for the nation's artists!
posted by mnumberger at 4:39 PM on March 25, 2021 [2 favorites]
In the early days of the republic, corruption was understood as misusing the office to the harm of the commonweal. Over time, the concept drifted and took on individualized meaning (i.e., using the office for personal benefit). Early on, local customs officials were given enormous latitude in their governance of local customs, typically interpreting federal law in ways that would appease local merchants. Over time, the local officials' discretion was increasingly scrutinized, and the federal government over time tried to build a wall between the officials and the merchants, as the federal government was losing large sums of money due to this type of corruption.
Rao's monograph ends at the Jacksonian era, which in my limited understanding saw an even-greater increase in this individualized corruption. There's a 1989 work published by the Treasury Department and written by Carl E. Prince and Mollie Keller, The U.S. Customs Service: A Bicentennial History, that's available online via the Internet Archive.
Chapter IV, "Customs in the Age of Jackson, 1825-1850," picks up the story where Rao leaves off. Again, I didn't read the whole book and only skimmed this chapter, but my understanding is that there was an explosion in the number of goods passing through ports that led to many more customs personnel being employed. These factors provided many more opportunities for exploitation of the system for personal gain. On top of that, despite being aware of the problems, the federal government failed to effectively reform the system at the time. Also, as others have mentioned, the civil service at the time was politicized and exploited through nepotism and cronyism.
As the book summarizes it, "politicization and peculation . . . went hand in hand. . . . [P]olitics, lack of communication, and an absence of financial accountability combined to take on the proportions of an unredressed major national dilemma" (96). Finally, the Customs Service also lacked close leadership as an "underadministered arm of the Treasury Department" -- a Commissioner of Customs, responsible for administration of the agency and enforcing financial integrity, was not appointed until as late as 1849 (97). The chapter closes by noting that the Civil War delayed some of the much-needed administrative and political reforms to the Customs Service.
Interestingly, the chapter also discusses at length Nathaniel Hawthorne's career in the Customs Service in Salem, MA, including a dissection of "The Custom-House," the lengthy introduction Hawthorne wrote to The Scarlet Letter. There's lots of great info on how Hawthorne's post was seen as a sinecure that would allow a man of letters to ply his craft on government time. It may tell you something about the attitude toward customs oversight at the time that Hawthorne's political removal in 1849 was publicly decried as the federal government's failing to show sufficient regard for the nation's artists!
posted by mnumberger at 4:39 PM on March 25, 2021 [2 favorites]
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