Prohibition Bureau (Bureau of Prohibition) was a Troubled Agency Riddled with Corruption

The Prohibition Bureau. Eliot Ness. The Untouchables. “Izzy” Einstein and Moe Smith. Fascinating stories. But not always accurate. The truth is far less glamorous.

Overview

I.   The Prohibition Bureau

II.  Notable Prohibition Agents

III. Prohibition Bureau Reorganization

I. The ProhibitionBureau

The Bureau of Prohibition was commonly called the Prohibition Bureau. Enforcement of National Prohibition (1920-1933) was its purpose. It replaced the Bureau of Internal Revenue of the Treasury Department. That bureau was originally responsible for enforcing Prohibition. The Volstead Act gave it that authority.

Bureau of Internal Revenue agents supervised the Prohibition Bureau departments. These, in turn, created state organizations. And a federal prohibition director supervised these.

Prohibition Bureau

Jouett Shouse

Corruption of Prohibition agents and other employees was widespread. Abuses committed against citizens was also common. Courts convicted a substantial number of Bureau employees for a variety of crimes. So this led to much criticism of the Bureau.

As Assistant Secretary of the Treasury, Jouett Shouse supervised the new Bureau of Prohibition. In that role, he became convinced that Prohibition was both ineffective and counterproductive. This led him to become president of the Association Against the Prohibition Amendment.

II. Notable Prohibition Agents

Eliot Ness

Prohibition Bureau

Eliot Ness

One of the most famous Prohibition Bureau agents was Eliot Ness. The Untouchables became a best selling book in 1957. Later there was a TV series. There was a movie in 1987. And there was another TV series in 1993. Ironically, even among the elite handful of “untouchable” agents, at least one was corrupt.

Izzy and Moe

Isador “Izzy” Einstein and his partner Moe Smith were very popular. Time reported that Einstein and Smith were the most effective team of Prohibition agents in the country. They disguised themselves as vegetable vendors, gravediggers, streetcar conductors, fishermen, icemen, opera singers, and many others. They even passed themselves off as Democratic National convention delegates.

Prohibition Bureau

Izzy Einstein and Moe Smith in Disguise

Their work led to 4,932 arrests and the confiscation of an estimated 5,000,000 bottles of illegal alcohol. A TV film, “Izzy and Moe,” portrayed Izzy and Moe’s story.

Ironically, after a busy day arresting Prohibition offenders, Izzy and Moe enjoyed sitting back and enjoying their favorite beverages. These were beer and cocktails.

“Kinky” Thompson

The most infamous, but much more typical agent, was William H. Thompson. “Kinky” Thompson was a “blackjack artist.” He once used one on a non-violent man.

A jury hearing the resulting case denounced Thompson for his brutal beating of the defendant. The judge at the trial later called Thompson’s supervisor into his chamber. He warned him about Thompson’s behavior. But the supervisor defended Thompson. He said “No bootlegger gets rough treatment unless he deserves it.” Indeed, he told Thompson and his partner to be tough. He said “to beat the hell out of them and drag them out by the feet.”

On one occasion, Kinky Thompson and his partner, Agent Earl Corwin, entered a pool hall.

“Vaulting the counter Kinky sapped the cook. When the waiter protested, Kinky bludgeoned him to the floor. Kinky then demanded to know the location of the joint’s liquor cache. When the owner said there was no cache, Thompson broke a bottle over the owner’s head, cutting him severely. Then Kinky and Corwin set to work with axes demolishing cash registers, coffee urns, light fixtures, pool tables, even the long wooden counter. When they finished the floor was littered with meat and flour, cigars and candy, and the remains of a crate of eggs. Only a ventilation fan and a clock on the wall continued to turn, and these the agents destroyed with cue balls thrown like grenades.”

Prohibition Bureau Agent Corwin defended the violence. He said that “Anyone who has been hit by Thompson had it coming.” And he insisted that “There is no more violence in this office than in any church in the city.”

Two weeks later Thompson blackjacked a twelve year old boy, the boy’s mother, and his one-legged father. But the Prohibition Bureau administrator assured reporters that it was all just “bootlegger propaganda.”

Thompson went on to pistol-whip a manacled prisoner in full view of a crowd of onlookers. His behavior outraged them. Yet the Prohibition Bureau again defended his violent behavior.

For many Prohibition Bureau agents it was a case of “do as I say, not as I do.” For example, Thompson often became highly intoxicated. While driving drunk one night he sideswiped another car. Then he snapped off a telephone pole, and careened through a plate glass window into the middle of a store.

When he died, officials eulogized Thompson as a martyr for the dry cause. They ironically blamed his death on societal disrespect for law and order. Prohibition Bureau officials later praised Thompson’s “zeal.” They never acknowledged that he had ever used excessive force.

The Prohibition Bureau promoted a culture of unnecessary violence. They victimized innocent citizens. This increased opposition to Prohibition.

III. Prohibition Bureau Reorganization

Prohibition Bureau

Lincoln C. Andrews

In 1925, retired General Lincoln C. Andrews became Assistant Secretary of the Treasury. He reorganized the Prohibition Bureau. Federal judicial districts, rather than states, became the its geographic units.

During a Senate investigation in 1926, Andrews testified that the major sources of illegal alcohol were these.

  • Smuggling.
  • Diversion of medicinal and industrial alcohol.
  • Moonshine ( illegally produced alcohol).

The investigation also revealed many very serious problems in the Prohibition Bureau and its operation.

Subsequently, in 1927, Congress passed the Bureau of Prohibition Act. This again re-organized the bureaucracy. It creating within the Treasury Department the Bureau of Customs and the Bureau of Prohibition. A separate commissioner headed each. Civil Service laws had to guide all hiring or re-hiring. Fifty-nine percent of existing employees failed their exams.

Wiretapping
Prohibition Bureau

Roy Olmstead

The Prohibition Bureau pioneered in the use of wiretapping evidence. Former police officer Roy Olmstead was a major bootlegger. A jury convicted him for violating the Volstead Act (Prohibition) and for conspiracy. Wiretapping evidence was the basis for the latter. Olmstead unsuccessfully appealed use of wiretapping evidence in Olmstead v. United States. It’s a landmark Supreme Court case.

Budget

The budget of the Prohibition Bureau in its various forms increased five-fold between 1920 and 1930. Yet corruption continued to plague it.

Even with the infusion of new employees and a new organizational structure, the Prohibition Bureau failed. It moved to the Department of Justice in 1930. Early in 1933, the Bureau of Prohibition became the Alcohol Beverage Unit. It briefly moved to the Federal Bureau of Investigation (FBI). However, it operated as an independent bureau there. That was because the head of the FBI, J. Edgar Hoover, did not want his agents subject to corruption. Organized crime had vast sums of money it could use to bribe officials.

Wikersham Commission

In 1931, the Wikersham Commission found that two-thirds of the total federal law enforcement budget was for Prohibition. The Bureau of Prohibition worked in cooperation with the individual states. But even together, they couldn’t adequately enforce Prohibition. Local and state law enforcement officers were also commonly corrupt.

Repeal

Repeal of National Prohibition was in December of 1933. Following that, the Alcohol Beverage Unit returned to the Treasury Department. It was then the Alcohol Tax Unit of the Internal Revenue Service (IRS). It next became the Bureau of Alcohol, Tobacco and Firearms (ATF). After 9/11, it moved to the Department of Justice under the Homeland Security Act. Its current name is the Alcohol and Tobacco Tax and Trade Bureau.

Prohibition was a dismal failure. It also caused serious problems. Yet almost one in five adults in the U.S. favor making drinking illegal. In addition, tens of millions support neo-prohibition ideas. Therefore, they defend the many aspects of Prohibition that continue.

Resources on the Prohibition Bureau

Bureau of Prohibition Alters Name, Not Work. New York Times, Aug 10, 1933.

Einstein, I. (“Izzy”). Obit. Time, Feb 28, 1938.

Goldstein, R.  Albert Wolff, last of Ness’s men, dies at 95. New York Times, March 25, 1998, (Wolf reported that at least one of the “untouchables” was corrupt.)

Schneckebier, L. The Bureau of Prohibition. Its History, Activities, and Organization. Washington, DC: Brookings, 1929. (Reprinted. AMS Press, 1974.)

Smith, Moe. Obit. Time, Dec 26, 1960.