The Sanborn incident or Sanborn contract was an American political scandal which occurred in 1874.
William Adams Richardson, Ulysses S. Grant’s Secretary of the Treasury, hired a private citizen, John D. Sanborn, to collect $427,000 in unpaid taxes. Richardson agreed Sanborn could keep half of what he collected. Sanborn kept $213,000, of which $156,000 went to his various assistants.
On January 10, 1874, Sanborn and two others were indicted for revenue fraud. Sanborn's defense was that he was under contract from the government due to a rider in a 1872 appropriations bill created by congressman William H. Kelsey. This bill allowed the Secretary of the Treasury to hire three persons to "discover and collect" unknown taxes to the United States government. If they collected they would receive 50% commission. What Sanborn did instead was take already existing tax cases, and put them on his contract, so when they came in, he would collect 50%. When the charges came, and congress investigated the documents. In the following testimony, Richardson said he didn't read the contracts, he resigned few months later. Sanborn was acquitted of the charges because he was under contract to collect those taxes, but a scandal still rocked the country from January to May 1874.