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April 08, 2023
Those accused of corruption often try to justify their actions in a way that gives them some legitimacy, even if their claims are repudiated by others. Their justifications raise fundamental questions about the motives that lead people to acts of corruption and whether these are solely rooted in self-interest, or might be based on grounds of promoting the public good. Who is more corrupt: those who increase public costs by inefficiency, incompetence, and bureaucratic obstructionism, or those who ride roughshod over bureaucratic norms in order to get things done that benefit the public? And what, in this entrepreneurial context, is the distinction between a gift and a bribe? These are some of the ethical questions raised by the case of John Poulson. This blog will first set briefly set out what he was accused of, and the consequences of the allegations, before focusing on the fascinating justifications Poulson made for his behaviour.
The early 1970s witnessed a string of corruption investigations into the network of councillors, civil servants and politicians linked to John Poulson, an architect and businessman with one of the largest practices in the world. Poulson had systematically built up close relationships with officials who then either brought him work or smoothed his path to bidding for contracts. He flourished in the post-war period when the country needed new hospitals, schools, libraries, swimming pools, civic buildings and homes.
Pontefract library, built by Poulson in the 1970s, still in use (wiki image, creative commons licence).
He built these at a lower cost, and more quickly, than other practices. In the three years between 1959 and 1962 his companies grossed nearly £1m; and at its height he employed 750 people. But revelations that emerged in court and in inquiries led to twenty-one convictions for corruption, including nine councillors, four officials from nationalised industries, three civil servants and three MPs were criticised in a House of Commons select committee report. One of them, Reggie Maudling, the serving Home Secretary who had been a leadership contender for the Tories, was forced to resign his office (though not his seat at Westminster). They were mostly accused of accepting bribes from Poulson whom the judge described as ‘an incalculably evil man’.
There are many striking aspects of the Poulson case: it was the first corruption scandal to be the subject of intensive TV interest; it involved people from both the left and right of the political spectrum; it linked domestic and post-colonial fields; it exposed differences in the law governing local and national politics; and it focused a spotlight on the potential of PR firms to use shady practices in commerce and politics. But the focus here will be on the ways in which Poulson sought to explain his behaviour. I have previously written an article about this in relation to pre-modern corruption cases and many of the arguments used earlier can be found in this much more recent example too, showing how enduring certain mentalities and ideas seem to be across time; but Poulson also extended these in interesting ways that reflected the context of post-war Britain. Indeed, his autobiography, published after his release from his seven-year prison sentence, is one long exercise in self-justification – though the book opens with a denial of this. ‘I seek no self-justification on my own account, but there are those who are more familiar with wrong-doing than ever I was.’ From the start, then, he represents himself as someone who had things done to him by other people, people who he trusted and let him down.
The front cover of Poulson's autobiography
One curious aspect of his case is that he was a devout Methodist whose religious convictions may ironically have increased, rather than curbed, his tendency to his ‘excessive … generosity’. He relates how he read the Bible to his invalid mother who one day took his hand and told him ‘with deep sincerity “John, always remember that the Lord loveth a cheerful giver”. It was to be a maxim I practised and firmly believed in throughout my life’. Religion extolled ‘Christian generosity’. ‘The Good Samaritan in me has much to answer for’, he thought. Other aspects of his upbringing reinforced this notion from a more secular point of view. His grandfather, a local politician who had a ‘formative influence’ on him, ‘was open-handed and generous to an extreme, and in a way which was far more acceptable in his day than it was to be in mine’. Poulson was, this suggests, caught out by moving ethical goalposts; and underlying both religious and familial pressures was an outmoded notion of friendship. His grandfather had set friendship ‘on its highest plane, one from which any sincere demand had to be met wherever possible’.
Poulson claimed that he too prized friendship, and the generosity that underpinned it, above all else. His shower of gifts – money, cars, loans, houses, holidays, and clothes (amounting to £334,722 over eight years) – was, he suggested, entirely innocent. He had ‘no thought of advantage’ when he gave them. ‘I merely followed my grandfather’s dictum by giving where it would bring maximum pleasure and by letting others share what I had and they lacked’ (except that often they didn’t lack for much!). ‘It never entered my head that personal generosity could come under censure.’ The prosecution alleged that Poulson had ‘exceeded all bounds of normal generosity in making gifts, loans and payments to a number of officials and civil servants’; but that was, Poulson thought, because he had a different sense of ‘normal generosity’, not that he was corrupt. ‘Of course, if generosity is a crime, I was guilty of it’; but that was his only true crime. ‘Such gifts by a businessman to any politician or public official can be made to look sinister (as I well know) even when motivated merely by friendship and received without the slightest intention of corruption’. Poulson was ‘a man who has paid the price for misdeeds which I swear were committed largely in innocence of their criminality’.
Poulson also argued that he had acted in the public good. The country, after the ravages of war, desperately needed the buildings he constructed – there was a need for speed and efficiency. But these were impeded by other architects and vested interests, who were wedded to old, inefficient ways of working and were upset by his success and by an official bureaucracy that was ‘like a blanket of fog’. This meant using unconventional means and innovation in providing an ‘all-in-one’ service that catered for all aspects of a job and high-pressure sales techniques. He believed that his ‘search for better, quicker, cheaper and more time-saving methods of building would help Britain as well as myself. This was why I championed industrialised building techniques when others in Britain were clinging to traditional construction in brick and stone’.
Patients and school-pupils, as well as the public purse, thus benefited from his unorthodox methods, he claimed. ‘Hospitals, I maintained, could be built for less, and in a shorter time, than contemporary designers believed possible. But a thicket of dead wood had to be pruned away first’. Sick people needed hospitals but ‘the officials who order these things, drawing their salaries from the public purse, are all too often incapable of decision …[or] of processing their designs either efficiently or economically’. Similarly, he ‘deeply believed’ in the need for better educational facilities (he ‘was convinced that if only the British people were better educated, everything else would follow naturally: a better life for all’) but, he said, the same could not be said of officials: ‘I am today bitterly aware that many of these people are guilty of far greater inefficiency and wastage than those who, like me, have paid the price for so called “crimes”. I am not saying that there was corruption in their field’ but inefficiency was everywhere and it was also costly to the public – ‘my complaint is that too many are Jacks-in-office, with little or no understanding of how best to serve the community’. Similarly, his overseas firm, Construction Promotion, was designed ‘to help put a better face on the world’ and to deliver development at the lowest price: ‘we in Britain were meant to be helping these countries to get on their feet, yet we were asking them to pay through the soles of their boots for the privilege’. His mistake was ‘to try to do too much too fast’ for his vision of Britain and the world.
Poulson had an almost religious, or deeply egotistical, sense of mission and zeal against bureaucratic inefficiency and expense that was hurting the public. ‘I wanted to be a Messiah. I felt I could lead everybody, through efficiency and honesty, towards the promised land’. His sins were ‘primarily those of seeing only virtue in doing what has to be done in order to gain one’s objective. Such unorthodoxy, I have learned at bitter cost, has no place in a hypocritical society which demands scapegoats for its sins’. ‘I not only succeeded where others did not – an inexcusable fault – but I took short-cuts to the power and position which, for more than ten years, my organisation occupied in the world. Against me were ranged the biggest guns of my own profession’ including the Royal Institute of British Architects (to which he belonged, though he never formally qualified as an architect). He was frustrated by ‘the lethargic dreamland of our contemporary planners and authorities’ and sought ways round the obstacles. He was accused of many things in his life ‘but never of wasting public money to such an extent’ as the officials nominally serving the public. He worked with others, like T Dan Smith in Newcastle, who shared his drive to replace ’the shaming ghettoes of Victorian industrial life with clear, modern blocks and fine open landscapes.’ Taking officials on holidays thus got things done: ‘More could be accomplished, I found, sitting in a deck-chair, relaxed by sea and sunshine, than in any busy office’, though these holidays were later held against him as bribes. Such ‘refreshment’ was necessary ‘to win friends and influence those people’ who kept his organisation on the massive projects they were carrying out, and were ‘essential to produce a climate in which we could work most efficiently and effectively.’
T Dan Smith(Wiki image, creative commons licence)
Poulson’s ‘corruption’ was thus, in his eyes, no more than an entrepreneurial, innovative drive for efficiency and economy coming up hard against sclerotic forms of private and public service that hindered rather than promoted the public good. But his views ‘led me to make enemies among senior officials in many of our nationalised fields’ – enemies who were out to get him and bring him down. ‘I had to face the fact that “somebody up there” did not like me.’ Yet Poulson saw himself as on the side of the people: he had never embezzled any money from a client, public or private, so the public had never been hurt.
In any case, local planning departments were corrupt and everyone was profiting from kickbacks from the building boom: ‘it was an everyday method by which all manner of professionals up and down the country were making their personal fortunes’. Indeed, ‘there are well-worn double standards employed in official circles. It is only foolish enthusiast like me who go to the wall for the sins of others and the stupidity of oversight’. The court trying him had been anxious ‘to find a scapegoat for the sins of the many.’
This sense of victimhood comes across strongly in the autobiography. His ‘crime’ was over-trusting people, like Smith, who betrayed the trust by giving out ‘bribes and persuaders’. Poulson claims he was personally careless about money and so didn’t know what was really going on. Similarly he says that he knew nothing about the civil service code that made his gifts to officials corrupt ones. ‘At the time, I had no idea of the strict regulations applied to these matters’ as set out in the ‘Estacode’. ‘Why, one wonders, are they not made known to every professional body, every business contractor, operating at the direction of local authorities and government offices?’ Reggie Maudling was another who had abused this trust. ‘In hindsight, I have to face the fact that I was again being taken for a ride, and this time by a master operator’ but, he concluded, ‘that I and my trust were so frequently betrayed was not, I still believe, a failing in me’. Indeed, Poulson thought the establishment came down on him so hard in order to protect Maudling and the precarious Tory government – a not entirely fanciful point of view. Poulson’s trial was, from his point of view, ‘a farce; they were out to get me … I was their scapegoat’. Indeed, he saw himself as a ‘political prisoner’.
As a result, even after his conviction Poulson did not think he was really doing wrong by his ‘open-handed attitude’: ‘It was only the recondite rules of his service which argued that, in official eyes, they were corrupt and improper.’ The rules around what constituted corruption made, he says, ‘diaphanous distinctions’ between licit and illicit behaviour; ‘I still cannot claim an accurate knowledge of where the line runs’. He himself had never taken a bribe and he thought badly of, and dealt harshly with, any employee who did. He was guilty only of stupidity and ‘most unselfish and sincere acts of Christian charity’. This echoes an exchange during his trial. PROSECUTION: 'Do you think you have the capacity to recognize corruption when it stares you in the face?' POULSON: 'It only takes place when there are two parties. I do not believe there has been in this case. We are talking about something which I do not comprehend.'
What do we make of Poulson’s case?
It is possible, as sociologists Steven Chibnall and Peter Saunders do, to see Poulson and his network as operating in an alternative sub-culture with its own set of ethical rules that differed to that of the wider world, something that became visible only when the law intervened and challenged ‘their privately normalized behaviour’. Sub-groups can indeed operate ‘situational morality’ and there was certainly group-think in Poulson’s network. It is also important that corruption has to be understood not just in relation to the formal categorisation by law but also to ‘less rigorous, privately-normalized classificatory schema’.
Private Eye's diagram of Poulson's corrupt network [Private Eye Guide to the Poulson Case (1974)]
Chibnall and Saunders identified a number of key strands to Poulson’s justifications: first, if everybody was doing it, it cannot be wrong; second, that public service was not incompatible with private gain; third, that he and Smith saw their behaviour as ‘foolish, naive, or indiscreet, rather than as illegal and corrupt’; and fourth, that business involved forms of institutionalised friendship that some could see as corrupt but which were necessary to get things done. Poulson and Smith thus had a different concept of morality to those prosecuting them. Whereas the latter saw the gifts as bribes, Poulson commented ‘As far as I was concerned, a gift was a gift.’ The Poulson affair thus highlighted the ‘the existence of two distinct realities, two separate conceptual machineries, which, in the course of routine events, remain “worlds apart”’.
There is a great deal of truth in this analysis. However, there were differences between how Smith and Poulson operated (Smith was much more knowing and worldly-wise, but also probably more animated than Poulson by a desire to improve conditions for working people) that may suggest tensions within the sub-group. Nor was the mentality of the sub-group totally divorced from the establishment: one member of the commission reviewing their cases, Audrey Ward-Jackson (a senior civil servant with a background in planning and local government), wondered aloud whether in some parts of the country it had become impossible for businessmen to get things done ‘unless they grease someone’s palm?’
Moreover, Poulson’s public interest defence is important. His morality was not entirely separate from the world because he saw himself as acting to improve the world. He saw himself as not guilty of corruption not because he didn’t understand what corruption was but because he believed that the methods he deployed were a) innocent generosity and b) much less costly to the public and delivered greater benefits to the community than the officials and professionals who he saw as leeching off the state and pursuing their vested interests. He had an alternative view of what constituted corruption rather than lacking one entirely. This was more than the idea, put forward by Samuel Huntington and others, that corruption can oil the machine, particularly at times of transition; it was a counter-claim about what corruption was, based on shared agreement against private interests pillaging the public purse but differing about who the robbers were and how to achieve efficiency that worked for the public good.
Poulson’s position shows that ‘corruption’ has to be seen as a deeply complex problem, since the public good argument makes it the stuff of politics rather than, or as much as, morality. When Poulson said he was a political prisoner it was not just because he was the fall-guy for a government worried about one of its ministerial stars but may also have been because the architect/businessman had a politically charged notion of how to achieve the common good, an approach that rode roughshod over vested interests in its pursuit of capitalistic efficiency and/or lifting places out of poverty by stretching the normal processes of local and national government until they delivered progress. Poulson and his friends (from both the left and right) offered different ways of thinking about serving the public interest
The Poulson scandal led to the establishment in 1974 of a Royal Commission on Standards of Conduct in Public Life, which reported in 1976. But it was a missed opportunity. With a staff of just three, it gathered no detailed evidence; argued against the need for new legislation on misconduct in public office; endorsed the view that standards were generally high; did not think it was necessary to set up a permanent body to review standards in public life; and its remit precluded consideration of the practices of private enterprise (something two of its members lamented in addenda to the report). A register of interests for MPs was established in 1974 but until 1995 there was no requirement to disclose the amounts of remuneration; and it was not until the Nolan committee (set up in the wake of yet another scandal) in 1994 that a much more wide-ranging set of recommendations were offered and a clearly stated set of ethical principles that still apply today.
Further reading: John Poulson, The Price: The Autobiography of John Poulson, Architect (1981); Peter Jones From Virtue to Venality: Corruption in the City(2013), chapter 4; Jones, ‘Re-thinking Corruption in Post-1950 Urban Britain: the Poulson Affair, 1972–1976’, Urban History, 39:3 (2012), 510-528; Raymond Fitzwalter and David Taylor, Web of Corruption: The Story of J.G.L. Poulson and T. Dan Smith(1981); Steven Chibnall and Peter Saunders, ‘Worlds Apart: Notes on the Social Reality of Corruption’, British Journal of Sociology 28:2 (I977) – I am grateful to Mark Philp for this reference; Michael Pinto-Duschinsky, ‘Corruption In Britain’, Political Studies, 25 (1977): 274-284; Private Eye: A Guide to the Poulson Case, special issue (1974).
February 11, 2023
Corrupt Life? No.2: Elihu Yale
What is a ‘conflict of interest’? How can it be recognised, both by those experiencing it and the government or public whose interest may be being infringed? And how do companies prevent conflicts of interest, especially if their agents are operating far away from the scrutinising eyes of the company bosses? How do those lower down the hierarchy, who have some authority to restrain misbehaviour, prevent it when they are disempowered and bullied by the person immediately superior to them? Is it possible to distinguish between competing claims, when two sides of a dispute both accuse each other of corruption? And what should we do with cultural institutions with ties to corrupt individuals – is this a ‘crime’, like slavery, that merits ‘cancellation’ or one that has to be seen in the context of different norms and standards?
These are some of the questions raised by the life of Elihu Yale (1649-1721), after whom Yale University is named. Towards the end of his life he made a bequest to a struggling, dissenting college in Newhaven, a colony which his family had helped to found, in return for which it was renamed to honour his ‘munificence’.
Yale was indeed born in America; but he lived most of his childhood in London which he left as a young man to make his fortune in India, where he rose in the East India Company [EIC] to become Governor and President of Madras (modern Chennai). Madras had access to the Golconda diamond mines ‘where there are, many times, good bargains to be made, and money got by our Governors’, according to one traveller’s account. Yale certainly traded in diamonds and became very wealthy through them and other goods. He is said to have made £200,000 (equivalent to about £2m today) and the sale of his amassed pictures (over 5000 of them, including a Rembrandt), jewels, watches, several hundred snuff-boxes, 116 pairs of cuff-links, many books, and a range of furniture took no fewer than thirty auction sales. How much of this unusually large fortune was legitimately acquired was disputed even in his own lifetime. An inscription on his tomb describes him as having done ‘much good, some ill’, adding optimistically ‘so hope all’s even’. This blog seeks to explore whether all was even. The story involves allegations of ‘vast, ill-gotten treasure’, a bitterly divided group of officials, and even suggestions of attempted murder.
A portrait of Yale (centre), by John Verelst, with his son-in-laws Dudley North (right) and James Lord Cavendishtogether with David Yale and a young black ‘servant’ with a metal collar and padlock: courtesy of Yale University Art Gallery (via Wikipedia)
Much of the discussion about Yale has focused, for understandable reasons, on the claim that he owned slaves or encouraged the slave trade in India and the links in the ‘further reading’ explore this. The focus of what follows is nevertheless on how Yale acquired his wealth and exercised his power in the EIC, which he joined in 1670. In 1681 he became a member of the Council at Madras, one of the company’s administrative bases, and rose steadily through the ranks until in 1687 he became Governor and ‘President’. He also oversaw its incorporation as a self-governing town with its own mayor, aldermen and burgesses, and its own legal court. Madras was becoming, as an EIC document claimed, a mini ‘Sovereign State in India’. As Governor, Yale thought he had largely unrestrained ‘absolute’ power. Although there was a Council to help manage the Company affairs (and this was to be the source of much conflict), the governor had extensive military, religious, and legal powers that could be exercised somewhat arbitrarily: Yale allegedly hung his groom ‘for riding two or three days’ journey off to take the air’.
Accusations and Counter-accusations of corruption
In 1690 and 1691 Yale fell out with the Council, whose members accused him of corruption. He was said to have made Madras ‘miserable’ by his ‘Oppression and Avarice’. Abusing the Company’s recent relaxation of its earlier ban on its servants pursuing their own trading interests, the councillors claimed that he had ‘gotten a vast Treasure at the loss of thrice as much to the Company whose Enemies have ever had his favour and Protection while their honest Servants have been discountenanced and ruined by him’. His heart and soul were ‘bent agst the Company’s Interest’ and he had taken company goods for his own ‘Profitt’. He ‘studys nothing but self Int[eres]t & private gaine’, they claimed. He applied his ‘great Knowledge and Experience’ to ‘ye Company’s Damage and his own profit’. He extorted money from the ‘Black [ie Indian] Merchants’ (using two or three ‘black servants’ as ‘petty Governors’ to oppress them) but they dared not complain against him. He lowered the morals of junior East India Company men, encouraging their ‘Pride, Idleness, Disrespect to their Superiors & Debauchery; and the last thereof by his owne Example’ (he had two mistresses, and at least one illegitimate child). He laboured ‘to prepossess the Company at Home with false Storys to discredit’ the councillors who opposed him; and he harboured his brother, Thomas, from prosecution for his ‘dishonesty’ and ‘Notorious, faithflessness, Corruptions’ – the councillors thought Thomas owed the Company at least 10,000 pagodas (about £3500 in C17th terms, over £400,000 now). When they threatened prosecution, the governor raged ‘like a mad man’ and physically threatened them. Yale had, they said, doctored accounts and habitually written ‘things as contrary to truth as black is to white’. Yale’s avarice would destroy the company interests on the Coromandel coast and they claimed he even planned a military coup to seize power in Madras. The councillors thought that Yale sought to ‘blacken & discredit’ them but declared ‘in the presence of the Omniscient God & as we shall answer at ye great tribunal, [tha]t what we have writ your Honours is of oure owne knowledge or what hath been assured us by most substantiall men, & what we really believe’. They wanted an independent judge sent out to arbitrate, but one who would resist Yale’s bribes.
detail, Herman Moll, "A Map of the East Indies" (ca. 1715)
Norman B. Leventhal Map Center – Public Domain License via Creative Commons. ‘Black Town’ is marked on the map in the bottom centre
Yale, in turn accused the councillors of corruption, incompetence and obstruction of good governance. He remonstrated against their unjust ‘reflections and affronting oppositions’; claimed that his enemies had been intimidating witnesses into making statements against his brother; and that those who aided them were ‘corrupt, prejudict and littigious’. Yale sought to vindicate himself so that the ‘world may judge betwixt me and you’. The governor stoutly defended his brother, whose arrest was ‘violent injustice’, and said that the councillors’ ‘abusive, malicious and senceless’ cavils at his proceedings had weakened his desire to meet with them. Even so, he said, he had no desire to exercise sole authority, as they had suggested: it was the councillors who seemed ‘rather encline to a Separation’ from him than he from them. He refuted their suggestion that he had used company money for his own purposes ‘which the Allmighty knowes is as false as he is True’ and offered to show them the monthly accounts. By contrast, he said, his critics had ‘irregular’ accounts. If he had used ‘ill language’ it was only to call them ‘ignorant’ and as a result of his being ‘bearded and affronted with huffing Language’ from them. He hoped they did not intend ‘Rebellion or the seeking my life and estate, which, if you doe,’ he warned them, ‘will cost you deer’. Yale could not resist boasting that in his twenty years’ service of the company he had traded more than 500,000 pagodas of goods [£170-200,000], something he thought had aroused their jealousy. He regarded his own actions as having been ‘just and honourable’.
It was difficult for the directors of the EIC, back in London, to know what to make of all this. Sir John Child (the EIC’s chief governor in India) is reported to have said that Yale was surrounded by ‘bad people’ who spoke ill of him, and that the ‘scandalous’ reports were not believed by the Company bosses. Yet government at Madras had clearly become divided to the point of disfunction. The EIC therefore replaced Yale as governor, asking him to stay in India until the charges against him had been cleared.
His removal unleashed a spate of prosecutions. In December 1692 the Council received information that Katherine Nicks – Yale’s mistress and the wife of one of his side-kicks - had committed ‘severall notorious frauds’ at Conimere whilst her husband was chief there: she broke open the company’s warehouse and stole ‘great Quantitys’ of the best cloth which she then ‘applied to Mr Elihu Yale’s Private use’. She was ordered to be arrested. In January 1693 Yale was tried in Madras’s Admiralty Court for ‘wrongs and damages’ done to the Company and judgement went against him, Katherine Nicks, John Nicks and two Indian merchants. Yale was ordered to pay almost 5000 pagodas, and his ship the Diamond was seized in order to secure its payment. Further demands of repayments, and more investigations into payments and seizures made by him when President, were also made. He was accused of having used his position to evade paying customs duties and of threatening corruption allegations against at least one of his enemies in order to extort money from him. Yale’s brother was also imprisoned and prosecuted for embezzlement.
In 1694 Yale protested to the EIC about what he claimed was his ‘unlawful imprisonment’ in India. His enemies, he claimed, had ‘procured Blacks and Infidells to swear … false accusations against’ and had seized £30,000 of his money, five times the sum that even their ‘Arbitrary Court’ had imposed as a fine. He had, he said, been ‘intolerably opprest’ and had suffered a ‘slavish imprisonment’ to stifle his complaints and to ‘bring on him some distemper that may hasten his Death, which not long since by poison was very near Effected.’ But in January 1695 it was his chief surviving critic, Thomas Gray, who feared being poisoned. Gray noted that his fellow critics, Wavell and Cheney, had been ‘strangely rub’d out of the world’ and feared the same fate. In 1697 Yale petitioned the Privy Council in London, again complaining about his treatment, and repeating that there had been attempts to poison him – but the new Governor, Nathaniel Higginson, said Yale ‘would have been hard put to clear his own reputation’ for using poison against his enemies. It was not until 1699, when most of his enemies were dead, that Yale finally set sail for England.
A detail of a print showing the diamond mine at Golconda from 'La galerie agreable du monde (etc.). Tome premier des Indes Orientales.', published by P. van der Aa, Leyden, Leyden, c. 1725
Continuing to trade in Indian diamonds from London, one visitor thought he cared only for his ‘Diamond closet, the repository of his heart and soul’. He was certainly wealthy enough to marry one daughter to James (Lord) Cavendish, the younger brother of the second duke of Devonshire.
What, then, do we make of Yale’s case?
The case shows how corruption cases could be viewed in very different ways. Yale saw himself as a successful merchant who preserved and extended the EIC’s interests, despite the carping of jealous officials who sought to ruin his reputation. It is possible to see him as a successful merchant whose wealth provoked the opposition of men who were equally loose with company money; or, if he was corrupt, that he was simply part of a corrupt culture (governors before and after him were accused of malfeasance) and therefore not particularly culpable. His critics, however, saw him as arrogant, arbitrary, deceitful, mendacious and greedy, pursuing his own interest rather than (and often against) the interest of the Company. Both sides accused the other of corruption – a word that became part of an extended power game. Both sides also felt that the stakes were very high, believing that the other was trying to kill them.
The word ‘self-interest’ appears in the accusations against Yale. ‘Self-Interest’ was a relatively new term. Coined in the late sixteenth century and popularised in the mid-seventeenth century, it had become a useful way of talking about what advantaged anyone. Hence the clash between ‘public’ and ‘private’ interests, and, although the phrase is not used until later, ‘conflicts of interest’. Yale saw the pursuit of his private interest as compatible with his public office; and could point to the fact that the EIC agreed, since it had relaxed its earlier ban on ‘private trade’ by its officials, a reversal that almost guaranteed the types of disputes that revolved around Yale. The company had blurred the boundaries between its interest and that of its servants, seemingly because this led to increased profits and lower costs to shareholders. Some historians have seen the freedom given to private trade as key to the EIC’s ‘success’, since it fostered an economic infrastructure and network on which the company also relied. Clearer boundaries between private and public interests only came a century or so later, though even today they remain problematic distinctions, not least because liberal economics sees the free pursuit of private interest as the key to wealth creation.
An example of a textile from the Coromondel coast in the late C17th: V&A https://collections.vam.ac.uk/item/O121308/fragment-unknown/
Company oversight of Yale was weak. This was almost inevitable, given that letters took many months to travel between London and Madras, and the Directors gave considerable powers to their officials, despite the repeated instances of misbehaviour. There was a council that was in some way a check on Yale; but he did his best to minimise its control, belittle and bully its members, ignore its cautions and refute its allegations. It was only in the late eighteenth and early nineteenth centuries when Parliament, in response to a flood of corruption allegations, introduced regulations on the company and tightened oversight mechanisms. It is difficult to believe that this failure of leadership was not itself the result of vested and private interests. So long as the company made money, there was no real incentive to ask difficult questions about culture and structure. And it valued strong leaders in complex and difficult contexts, even if this meant that they abused their authority.
Abuse of authority had very political overtones in the wake of the revolution of 1688, since James II (friend to the EIC) had been pushed off his throne for his ‘arbitrary’ actions and failure to work with the body of advisers who sat in Parliament. Something similar was at stake in Madras and it produced its own mini-revolution. The abuse of power, whether for financial gain or not, often ends dramatically.
The company lacked independent means of verification so that it had very little means of deciding who was telling the truth. Even the independent official eventually sent to hear the two sides, Sir John Goldsborough, didn’t really get to the bottom of things. For all the mass of paper accumulated by the company, the company’s knowledge was in some ways distinctly limited.
Yale’s personal life was unconventional. Whether his lust for women was part of his lust for power and money is open to debate. Contemporary critics saw his ‘debauchery’ as part of a character flaw that infected others. Today we might see things differently. Catherine Nicks was a fiercely independent woman – a highly unusual female trader who rejected rules governing both her private and business affairs. She may even have been using Yale for advantage – his role certainly protected her and offered opportunities for enrichment - just as much as he used her.
Yale made an unusually large amount of money in ways that were considered by many of his contemporaries to have been corrupt. Yet he was convicted of relatively minor offences, fined a small amount and retained a fortune which he then spent on extravagant display at his house in London. His case was hardly a deterrent to others.
And he used part of his fortune for charitable bequests. The problematic nature of these – and, more broadly, other uses made of corrupt money - need to be acknowledged. Where there is a cultural legacy of corruption, this has to be examined and explained. This applies to houses, estates, objects and even universities. Yale University does not need renaming; but it should be more open about the problematic source of its bequests and perhaps seek to open a dialogue with Chennai and its region.
Elihu Yale (1717) by Enoch Seeman, courtesy of Yale University Art Collection and via Wikipedia
Further Reading: Mark Knights, Trust and Distrust: Corruption in Office in Britain and its Empire 1600-1850 (2021); Hiram Bingham, Elihu Yale: the Nabob of Queen Square (1939); Fort St. George, Madras; a short history of our first possession in India : Penny, F. E. (Fanny Emily), d. 1939 : Free Download, Borrow, and Streaming : Internet Archive; Elizabeth Lee Saxe, Fortune’s Tangled Web: Trading Networks of English Entrepreneurs in Eastern India 1657-1717’ Yale PhD 1979; Bodleian Rawl D747, ff.215-21, ‘Abstract of ye Charges’; ibid, ff.234-50; Records of Fort St. George; Diary and Consultation Book of 1690 : India. Madras. Fort St. George Records : Free Download, Borrow, and Streaming : Internet Archive; Records of Fort St. George; Diary and Consultation Book of 1691 : India. Madras. Fort St. George Records : Free Download, Borrow, and Streaming : Internet Archive; H.D Love, Vestiges of Old Madras (1913); BL, IOR/H/36 : 1658-1699 pp. 67-8; Joan Mickelson Gaughan, The 'Incumberances': British Women in India, 1615-1856(Delhi, 2013; online edn, Oxford Academic, 23 Jan. 2014), 78-81.
On Yale and slavery:
November 09, 2021
The debate over Tory MP Owen Paterson’s lobbying activities, following on from former Tory prime minister David Cameron’s lobbying on behalf of Greensill Capital, and the large number of Covid-related contracts awarded to friends of Tory MPs, has turned attention to the measures preventing MPs from indulging in the pursuit of their own interests or the interests of private companies rather than of the public that elected them. In particular, the rules governing MPs’ financial interests have come under scrutiny, something seemingly made more urgent by the disclosure that another serving Tory MP and former cabinet minister, Sir Geoffrey Cox, allegedly earned almost £1m working for the offshore tax haven, the British Virgin Islands, reportedly to defend the island’s authorities against a corruption probe.
In the House of Commons debate about Paterson on 3 November 2021, Chris Bryant, the chair of the Committee on Standards, and a number of other MPs invoked 1695 as the year in which rules on lobbying were first formulated. The key resolution came on 2 May 1695 when the House of Commons resolved that ‘the offer of money, or other advantage, to any Member of Parliament for the promoting of any matter whatsoever, depending or to be transacted in Parliament, is a high crime and misdemeanour and tends to the subversion of the English constitution’. So this blog will explore why 1695 deserves to be remembered. One reason is that, just like now, it involved a combination of domestic and colonial interests.
The first MP to fall in the scandals of 1695 was no less than the Speaker of the Commons, Sir John Trevor (who was also a prominent lawyer and judge). On 7 March the House heard that it ‘was said both public and private business came to market there and neither could be done unless paid for’, so the Commons appointed a committee in order to investigate. When the committee reported its findings, Trevor was expelled from the House for accepting 1000 guineas from the City of London. This was to facilitate the passage of a bill which essentially sought to protect the City after it had repeatedly raided a fund for orphans and used the money to cover its own financial deficits. A smaller sum had also been paid to another MP, John Hungerford, who chaired the orphans bill committee. He, too, was expelled from Parliament. But these attacks were related to another scandal which was the one that pushed the Commons into making its resolution.
The roots of the second 1695 scandal lay in the commercial interests of the East India Company which had enjoyed a royal charter giving it a monopoly to trade in the east. Following the recalibration of the powers of the Crown, as a result of the 1688 revolution, the Company now needed a parliamentary charter instead. It had a lucrative trade but faced opposition from commercial rivals who wanted the monopoly abolished. The Company was thus prepared to pay large sums to win MPs over; and MPs were themselves involved in lobbying on the Company’s behalf.
An internal power struggle within the East India Company led to a critical internal report in March 1695 which made damaging revelations about irregular payments at the time of the charter renewal. This sparked a Commons committee that found that £90,000 (worth around £10m in today’s values) had been set aside by the Company for ‘private service’, or, in other words, to buy favours covertly. A joint Commons-Lords committee was set up to investigate the allegations of corruption and this found that in 1693 Sir John Trevor had received 200 guineas for his part in securing a new charter for the East India Company in late 1693. But this sum paled into insignificance compared to the huge amount distributed to, and in part by, other MPs. A key figure in the distribution of this largesse was Sir Basil Firebrace, an unscrupulous wine trader who had previously faced several allegations of corruption.
Firebrace was poacher turned gamekeeper, since he had previously been prominent among the East India Company’s critics; but he had been bought off by the wealthy goldsmith Sir Thomas Cooke, another MP, who also acted as the Company’s Governor during the charter renewal process. Firebrace had set about trying to bribe other MPs. Besides Sir John Trevor, he also paid Henry Guy, the secretary to the Treasury; Thomas Coulson, who had been given an extraordinarily favourable contract (and the suspicion was that this was also intended to profit another MP and leading Tory, Sir Edward Seymour); and in the Lords, via an intermediary, no less a person than the Duke of Leeds, the first man called a ‘prime minister’, one of the founders of the early Tory party, and, in 1695, still a man of influence as the Lord President of the Privy Council. The duke, better known by his earlier title of the earl of Danby, had been accused in the 1670s of systematically bribing MPs in order to create a party of supine members who would do the government's bidding. Now, corruption was to be his downfall.
The duke was said to have been offered almost £6000 (in today’s values, a little short of what Geoffrey Cox is said to have earned working for the BVI) to secure the new charter. Leeds at first denied any wrong-doing; and then clumsily tried to return the money to the Company. The House of Commons, dominated by his political enemies, resolved on 29 April 1695 to impeach him on corruption charges. Three days later the Commons passed its resolution against lobbying. Copies of the parliamentary inquiry were sold on the streets so that ‘patriots’ could read ‘how the country may be bought and sold by those which should preserve us’. Leeds tried to vindicate himself with several pamphlets that put his case, but his long political career was ended.
The scandal successfully smeared the Tories with a charge of corruption; but it did not put an end to lobbying scandals which continued throughout the eighteenth and nineteenth centuries. Perhaps the one with the most obvious contemporary parallels concerned the MP and lawyer, Isaac Butt (later leader of the Home Rule movement in Ireland), who took money from an Indian prince to advocate for the return of territory annexed by the East India Company. Butt denied a breach of privilege, saying that he was the victim of ‘as vile and unprincipled a conspiracy as was ever brought to bear against a Member of this House’ and complained vigorously about the justice of the process being used against him (prompting protracted wrangling about the proper procedure to investigate an MP) [BREACH OF PRIVILEGE. (Hansard, 22 February 1858) (parliament.uk)]. Although exonerated from influencing parliamentary proceedings, Butt’s case raised concerns about the role of lawyers acting as advocates at Westminster rather than in the courts. As The Times put it on 8 March 1858 ‘Can we wonder that our wealthy subjects in Asia are filled with a profound conviction that our boasted purity of Parliament is but a farce?’ The result of such pressure was a further Commons resolution on 22 June 1858 ‘That it is contrary to the usage and derogatory to the dignity of this House, that any of its Members should bring forward, promote, or advocate, in this House, any proceeding or measure in which he may have acted or been concerned, for or in consideration of any pecuniary fee or reward.’ Two resolutions, over a hundred a fifty years apart, essentially affirmed the same principle against lobbying Parliament. Over a hundred and fifty years on from the last one, we seem to need it said again by the House (rather than just set out in a Code of Behaviour) and extended to cover lobbying ministers and accepting a second job that creates, or is seen to create, a conflict of interest with the public good.