With ratification by the necessary number of
states, the Constitution of the United States went
into effect on March 4, 1789. A bit more than four
months later, on July 31 of that year, the U.S.
Customs Service started operating, among the very
first of the federal agencies to come to life. It
was given a life-and-death mission.
The young nation was then on the brink of
bankruptcy. After strenuous debate about how to
best deal with this problem, the first Congress and
President Washington agreed that the collection of
duties on imported goods was essential if the
United States were to survive.
Only a few days after Customs drew its first
breath, on August 5, 1789, the power of the service
went from legal theory to concrete reality when
Captain James Weeks sailed his brigatine, Persis,
into New York harbor with a miscellaneous cargo
from Leghorn, Italy. The duty on the cargo -- the
first such payment ever made to the United States
Treasury --was $774.41.
While the payment was modest, it was the initial
fiscal prop for a very young and shaky government.
More was to come. In its first year of operation,
the service reportedly collected over $2 million in
duties. And for the next 124 years -- until that
moment in 1913 when the amendment authorizing the
income tax was approved -- customs remained a major
source of revenue for the federal government.
Thus the Customs Service, especially in the early
years of the nation, proved the truth of that
profound maxim: "the revenue of the state is the
state."
But because no one likes to pay taxes, from the
very beginning there were a good number of citizens
who tried to take the law into their own hands,
bending the system in the pursuit of increased
profits. Two years after the War of 1812 had begun,
for example, the Governor General of Canada wrote
the British foreign office in London that "two
thirds of the army in Canada are at this moment
eating beef provided by American contractors, drawn
principally from the states of New York and
Vermont."
Although Customs seized some of the contraband,
its task was obviously impossible. "Like herds of
buffaloes they [the smugglers] pressed through the
forest, making paths for themselves," a general
wrote the American Secretary of War. "Were it not
for the supplies, the British force in Canada soon
would be suffering from famine, or their government
would be subjected to enormous expenses for their
maintenance."
The reality is that with a small number of
inspectors, thousands of miles of hard-to-protect
borders, and unscrupulous entrepreneurs willing to
fill almost any demand, the Customs Service has
always been something of an underdog.
These inherent conflicts, and the vast profits to
be realized from contraband, have meant that the
Customs Service has been required to wage an almost
continuous battle against corruption. A report from
the solicitor of the Treasury Department in the
middle of the Civil War concluded that Customs
Service clerks in New York with annual salaries of
$1,000 began an eight-year tour of duty with
nothing and left government with what at the time
was "a fortune of $30,000" or more.
While the adoption of the income tax in World War
One would lessen some of these pressures, the
national ban on the sale of liquor during most of
the 1920s-- Prohibition -- created an economic
dynamic in which businessmen and gangsters serving
a thirsty nation were all too willing to set aside
some of their vast profits to assure that those
guarding the borders looked the other way.
When the nation's war on drugs picked up steam
during the Nixon, Reagan, Bush and Clinton
administrations, drug organizations from every
corner of the world presented a new challenge to
the integrity of enforcement officials at all
levels of government. The White House Office of
National Drug Control Policy estimates that federal
agents in 1998 seized 120 metric tons of cocaine
and 1,580 kilograms of heroin. But this is known to
be only a small fraction of these two drugs that
were smuggled in the country that year. While
corruption is only one of many factors explaining
the continuing success of the smugglers, historical
record is clear: bribery is a continuing concern.
In 1998, for example, Congress became sufficiently
worried about such problems in the Customs Service
that it ordered the Treasury Department's Office of
Professional Responsibility to undertake a special
study of corruption within the service and the
efficacy of service's internal affairs system to
combat it. In February 1999, in a little noticed
report, the office concluded that while organized
networks of corruption had not been uncovered
within the Customs Service, that the massive flow
of drugs into the U.S. places "Customs and its
employees at great risk to corruption." OPR also
found serious weaknesses in how the Office of
Internal Affairs "sought to detect and combat
corruption."
As described in the strategic plan of Customs, the
agency now faces five distinct strategic
challenges. They are: the continued threat of
narcotics smuggling, terrorists, the growth of
world trade, the proliferation of trade agreements
and general public resistance to increasing the
budget of the federal government. Thus, the general
pressure against additional funding has developed
at a time when the enforcement demands on customs
are growing.
The first four of these basic challenges are
directly pushed along by the steady growth in the
general economy of the United States. The pressures
on Customs also have been influenced by factors
such as the collapse of the Soviet Union and the
continued world-wide demand for all kinds of
American products. This year, for example, it is
estimated that $2.6 trillion in merchandise will be
imported into and exported from the United States.
Customs believes that the surge in the overall
economy could result in a 2 percent annual growth
in the 450 million people now entering the U.S and
about a ten percent yearly jump in entry and export
declarations.