History of corruption in Latin America: the scandals.
Early colonial period and the limit: Great Potosi Mint Fraud of 1649 and practices of Francisco de Sande.
One of the most notorious scandals of corruption (under the modern standards) occurred in the early colonial period. Nevertheless, at the time, it was understood only as a fraud: The Great Potosi Mint Fraud. Meanwhile, the accounts of the life of the infamous Francisco de Sande exemplifies the life in disregard of the required equilibrium between the royal treasure and individual finances. Whereas Sande was among the most veteran officials in the early colonial empire, as Juan Rojas’ article demonstrates, his governance record could only be qualified as “mal gobierno.”
The article, Corrupción y Dominación Colonial: El Gran Fraude a la Casa de la Moneda de Potosí en 1649, presents a detailed account of the geographies, dynamics, and people that made possible the Potosi Fraud. These descriptions are fundamental to understanding the limits of royal tolerance to illegality in the New World and the practices unleashed in the Americas and its relations to the present-day corruption.
The first Potosi Royal Mint was established in 1572, taking advantage of Potosi mountain, which soon gathered international recognition due to its immeasurable silver reservoirs. Hence, the mountain and the newly organized town constituted an attractive point for fortune seekers in the Peninsula and the Americas. The greed for higher profits would be the detonator of everything to happen in Potosi.
Specifically, Professor Lane highlights how dynamic and institution exclusives to the Americas fueled this corruption scheme to exist and expand as much as it did.
- First, power and money-seeking individuals were ready to travel long and unsafe to make money regardless of the method.
- Secondly, the widespread use of slaves to work in the Mint. While the official presupposed that having slaves would increase profitability, it serves as an excuse to impose more control over the workers (slaves). Hence, they would corrupt the silver as requested by the “owner”.
- Lastly, the concentration of political and economic power in the hand of a small elitist group, whose network expanded from Potosi to Lima’s audience, the institution supposed to do provide oversight on the Royal mint. Therefore, the early colonial system in Peru generated the right incentives for the Potosi Mint Fraud generation.
One of the arguments presented by Prof. Lane is that, despite the blurry frontiers among the punishable and unpunishable crimes, people in the colonial period acknowledged that some actions were against the values and customs that upheld the social, political, and civil life. Some behaviors, they noticed, violated the moral and political codices that their culture defended in practice and rhetorically. Hence “corruption” could have been the grease that lubricated the State’s engines, or the tool to stop it*. This widespread acknowledgment of “corrupt” conduct happening is no better exemplified by the trajectory of Francisco de Sande through several colonial posts from Mexico to the Philippines and New Granada.
The significance of the work of Juan Camilo Rojas, on Francsico de Sande, is that he contributes to the discussion of early colonial corruption-like behavior with a study of one of the earliest recorded cases of “bad governance” in the Hispanic empire. By gathering the letters of the Philippines’ Governor Francisco Sande, its supporters and opponents alike, plus other primary sources, Rojas, presents a detailed account of his practices and crimes in the Philippines and New Spain and why these practices were considered mal gobierno (bad governance), but never described as corruption.
Francisco Sande is the archetype of the early Spanish colonial proto bureaucrat (Rojas, 2019). An individual whose insatiable ambition form richness and power guide him to make the trip to the Americas. First, as one of the Crown representatives in Mexico and then, thanks to his network of connections, rise to Governor’s position in the Filipinas Islands. In this region, the farther from Madrid, where he is still remembered, and not for the glory but its misfortunes and his mismanagement.
Bureaucrats responding only to their interests were expected in any Government during colonial times. However, it was a constant concern to find equilibrium among the personal objectives and those of the central State. The lack of attention to the equilibrium proved fatal for the aspirations of Francisco Sande. The equilibrium in the case of Sande deserves more attention because, during his time in the Philippines, he managed to amass a large personal fortune while virtually eliminating the newly created commercial line with the Viceroyalty of Peru and eliminating the possibilities of a commercial line with China after declining the good favors of the Chinese imperial envoys.
As Rojas argues, Sande was accused of focusing only on his monetary interest, perpetrating several frauds, and leaving the archipelago with a reduced population of natives. Later they accused Sande of leaving the Philippines with “200 tons of Chinese goods” under the name of Francisco Paolo, his front-man. It was expressly prohibited for the Philippines’ Governor to transport such a large amount of merchandise in the galleons. Most merchandise was later confiscated and sold in auction as petitioned by the residents of Manila. Moreover, affirms Juan Rojas, Sande was found guilty for bribing (dádivas) a Judge expecting a favorable sentence, this being one of the uses of the word corruption in the colonial legal jurisprudence.
Even though the accumulation of accusations and grievances addressed to the King about Sande only grew bigger, he continued his upward trajectory in the Spanish colonial administration ranks. He died in 1602 months before becoming the new President to the Real Audience de Santafe and Governor of Nueva Granada. Similarly, to what Kris Lane describes in his 2015 article, the system favored the top-ranked officials in cases of corruption-like behavior because the sentence of Sande’s Juicio de Residencia was lost and never reached the Audiencia de Indias hands. Whereas Sanded and his accomplice were found guilty, he was never separated from service to the crown.
In light of the argument exposed by the articles above-mentioned, it can be safely concluded that before the Bourbonic reform, corruption-like behavior was prosecuted in the region. However, the punishment and prosecution of those behaviors were much less frequent than after the reforms. Besides, the royal “anti-corruption” response came only when the personal interest of the King was at stake (Lane, 2015) while in other cases, it was used as remedies to maintain the equilibrium among the other actors in the Metropolis and the colonies (Rojas, 2019)
*Maryvonne Génaux, “Early Modern Corruption in English and French Fields of Vision.” En Arnold Heidenheimer y Michael Johnston (eds.), Political Corruption: Concepts and Contexts. New Brunswick, Transaction Publishers, 2002, pp.107–21.
