Swartwout Embezzles $1.2 Million, Exposing Spoils System Corruption

Samuel Swartwout, Jackson’s political appointee as Collector of the Port of New York, absconds with $1,225,705.09 (equivalent to $36.2 million in 2024 dollars) after his term expires, fleeing to England in what becomes the most spectacular embezzlement scandal of the era. Swartwout, an old army comrade and political sycophant of President Jackson, received the appointment in April 1829 despite strong opposition from Secretary of State Martin Van Buren and other advisors who warned against placing him in the position. The New York customhouse collected nearly half the federal government’s annual revenue, making it one of the most financially critical positions in government, yet Jackson awarded it purely on the basis of personal loyalty and political service during the 1828 presidential campaign rather than qualifications or fiscal competence.

The embezzlement demonstrates the direct line from Jackson’s spoils system to institutional corruption and financial crime. Swartwout served two consecutive four-year terms (1829-1838) during which he systematically falsified records so cleverly that he deceived even a politically hostile congressional committee as late as 1836. After leaving office in 1838, Swartwout retained $201,096.40 ostensibly to pay pending claims, then departed for England to “raise money on his coal property” before his account was properly closed. The subsequent House investigation in 1839, published as “The Defalcations of Samuel Swartwout and Others,” exposes widespread misappropriation of federal funds and reveals how patronage appointments create opportunities for massive theft by placing unqualified political loyalists in positions of fiduciary responsibility without adequate oversight or accountability mechanisms.

The Treasury never recovers the stolen funds, though Swartwout forfeits some American property under a compromise agreement that assures him he will face no criminal charges for embezzlement. He returns to the United States and dies in New York in 1856, having escaped meaningful consequences for one of the largest thefts from the federal government in the 19th century. The scandal creates the term “Swartwouted out” to describe embezzling large sums from the U.S. government and fleeing to a foreign nation to escape punishment. Ironically, President Van Buren appoints Jesse Hoyt to replace Swartwout and implement corrective measures, but in 1841 allegations emerge that Hoyt has also been embezzling, and Van Buren removes him. The Swartwout scandal exemplifies kakistocracy’s predictable outcomes: when political loyalty supplants competence and oversight, public resources become targets for private enrichment, and the worst elements gain positions of greatest responsibility and opportunity for corruption.