This piece originally appeared at State Capacitance.
In the scandal-plagued Truman administration, the most corrupt agency was the Bureau of Internal Revenue (now IRS). After a series of lurid scandals, involving officials being bribed with luxuries such as fur coats, the Bureau of Internal Revenue’s commissioner was sentenced to five years in prison. More than 150 other bureau officials were fired.
Nor was the public much impressed by the routine work of the bureau: corporate tax investigations were two years in arrears, while income tax refunds took more than twelve months to arrive. This agency, with its 19th century organization and procedure, was obviously not up to the job in postwar America.
Congress was inclined to pile on new procedural controls in response to the corruption. But Truman’s Treasury Secretary, John Snyder, saw that corruption and inefficiency were symptoms of the same problem: bad management. Better management would allow the agency to root out corruption while also modernizing its archaic business methods. To strengthen management, the Bureau needed fewer procedural controls, not more.
If Snyder wanted to convince Congress to go along with this, he needed to demonstrate that trusting the agency could pay off. The Treasury, therefore, needed put its own house in order. It turned to work simplification.
My previous post discussed work simplification: the federal government’s approach to management, which they developed during WWII. Although this approach was invented during the war, the Truman administration was the first to apply it to an entire department. Treasury Secretary John Snyder aimed to straighten out his department through, as a guide to work simplification put it, taking advantage of “the great reservoir of unused practical knowledge” of frontline managers.
Within five years, the Bureau had brought its work up to date and cracked down on corruption. They had been so successful at adopting better management that the once-decrepit Bureau had become a world leader in adopting computers! Congress changed its mind about new procedural controls and instead accepted the administration’s wholesale reorganization proposal, which finished the job of abolishing corruption in the Bureau.
