The Smuggling Operation

* See also Smugglers Hideout ( BS1 Level )
* See also Smugglers_Den_MP
* See also Neptune's_Bounty_Shootout
* See also Contraband
* See also Secrecy_For_Rapture
* See also Rapture_Economy
* See also Laws_in_Rapture
* See also Tunnels
* See also Fontaine%26Atlas
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Be On The Lookout For Illegally IMPORTED Goods ? Implies that even when goods were brought/imported into Rapture that there was a 'process' and Restrictions ( Probably built around facilitating the Self-Sufficiency and Secrecy that Ryan was trying to have ).
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How did Fontaine Run His Smuggling Operation ? :
Premium value high-priced items was required for the operation to get sufficient profits, to allow Fontaine eventually to afford to hire the likes of Tenenbaum/Suchong and pay for tech/business research. Rich people will pay for exclusivity - but only so much, and there are only so many (few) of THEM in Rapture.
But what was traded to The Surface to obtain the Contraband ? -- As the Smuggling had major expenses/inefficiencies, and the operation was hamstrung/impaired by its covert nature. Rapture's Money is worthless on the Surface, so objects of value would have to be sold (fenced) probably at a fraction of their real value ( thus yet more difficulty/complications ).
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Contraband Flows Both Ways... :
If people could be smuggled into Rapture, then they could be smuggled out - for the right price.
Probably not people addicted to ADAM, who couldn't leave their only source ( or could you 'lick' a Rapture Sea Slug to get ADAM, like people did those toads/frogs that excrete hallucinogenic toxins ?? )
And since the stuff being smuggled in had to be paid for somehow up 'on The Surface', what besides the usual gems/gold/silver/art, WHAT Rapture-produced thing(s) might have been traded to The Surface to get all those definitely-expensively smuggled items ? And if Fontaine could use the profits to set up whole companies, then there had to be ALOT of stuff traded in the outbound direction for him to make such profits.
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Stacks of Contraband : 
Why would Fontaine smuggle in all this piled up Contraband stuff, IF there was no immediate buyer for it ? The difficulties/expense of smuggling goods would make anything smuggled-in have a Premium Price. Those Crosses could be made locally, literally tons of Bibles and newspapers ( which can be shared and aren't consumed ) - and all (we saw) there were never delivered ? Overused game Assets to make some point ? - Perhaps. You see Booze stolen from Rapture Port Authority ( that path supposedly being shutdown in 1952 ??? - So why is it still here ? As booze seems to sell pretty well in Rapture and Splicers would have long previous nabbed it all ... ). 
We saw all the 'Seized' boxes elsewhere ( including 8 years later at Fontaine Futuristics ) - Probably not any Contraband goodies left in them, OR they would certainly have been pilfered long past ( Wouldn't you think ??? ).
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Smuggling Is Fun ( No It Is Not, It Is Difficult and Risk ) : 
200 miles to the nearest land (Iceland), 20 hours at 10 mph ( a typical small sub speed ON THE SURFACE ), and that is just the ONE WAY trip. To East Coast ports, it is more than 3000 miles ( Edge of Europe 1000+ ). Fuel becomes an issue.
SO Perhaps, a network of surface boats might would be involved for anything that could possibly pay the expenses of its own operation ( let alone to make a profit ). More complexity, more exposure, more trust required for Fontaines lackeys.
There are Surface Authorities looking for Smuggling and other criminal activities.
There are other Surface Criminals who might 'look down' on 'competition'.
Ryan also might have Agents who can 'sniff around' at likely surface world ports, avoidance of which make the operation even more inefficient.
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Neptunes Bounty (Port Neptune) :
* Home to a fleet of dozens of fishing submarines, many which had sufficient range to reach significant distances from Rapture to chase and catch large quantities of fish.
* Large Airlocks (Sea Locks) allowed subs to enter and match pressure with Rapture's one Atmosphere environment.
* A 'ship' tunnel ( half water filled ) connects the Sea Locks to various Docks ( which were built as a shallow simulated 'fake' waterfront ) and facilities ( for Refueling and Repair ) around Port Neptune.
* Fish were transferred to holding pens/tanks to wait for processing and storage.
* Other commercial operations were also located nearby ( Sinclair Scrap, a Seaweed Processing Company, etc ... )
* Neptune's Bounty ( originally having many smaller fishing companies ) was eventually completely controlled by Fontaine (via criminal coercion and/or cheaply buying out of competitors and taking them over).
** Later control - after Fontaine's "death", it fell to the City to appoint 'trustees' to run the companies/facilities to continue providing important food to the City.
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The 'Sub' seen in the Smuggler's Hideout looked like a modified Bathysphere done by the level designer.
The rear half had much more added to it. Again, that 'front' door design which few real subs have ( you cannot be floating in water and have it open ).
Exactly how you 'Fish' with this craft is also not explained.
That is Atlas there. So this 'Sub' looks to be a 'scaled-up' from the base model Bathyspheres seen elewhere in the game..
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 The Fishery Submarines Used for Smuggling ??? :
Plausibilities :
* Fishing Subs were constantly coming and going from Port Neptune, which made the subs involved in the smuggling harder to trace.
* Fishing Subs Going all the way, hundreds or thousands of miles, to pickup Contraband (and return) was implausible. Subs are slow - especially when small and minimally streamlined.
* Smuggler boats ( which traversed the majority of the distance from multiple Contraband sources ) would be met at a sufficient distance from Rapture -- to avoid the monitoring stations at the Lighthouse. 
* (My) larger 'Fishing Subs' ( a realistic design extrapolation ) were used for the operation, THEY would go meet the periodic arrival of a hired freighter, and carry down the Contraband loads quickly ( and let the freighter slip away before Ryan's patrols noticed it ).
* "Fontaine's Mini-sub ... allegedly topside twice a week" -- Problem is : What is pictured has not enough interior capacity for the quantities of smuggled goods we saw alluded to in BS1. Range would also be a factor. Even being larger, the short range for shuttling to transfer cargo is much easier to facilitate.
* The FISHING also is perhaps best done mostly by actual surface Ships and not Subs. Automated machinery operations to deploy and work nets and extract fish is far more complex than a Bathysphere shuttling passengers in the Metro.
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 Smugglers Hideout/Cave :
* If you look at Smugglers Hideout in BS1, you will see alot of infrastructure was 'secretly' constructed to facilitate the major smuggling operation ( making it kind of HARD to justify why Ryan's men couldn't find this place long before Fontaine got his Splicer Army ).
* An unmarked/obscured side passage off the Neptunes Bounty 'ship' tunnel, led to a secret submarine dock where untold tons of Contraband were transferred.
* The caverns had sufficient Storage space for large quantities of smuggled goods which would be gradually sold on to the black market. The smugglers also (apparently) stole large quantities of alcohol from the Rapture Port Authority(????). Stolen goods were also warehoused for later distribution.
* A Funny Thing was : Seeing a Pneumo box in the Hideout. That the smuggling operation was so well organized, that they even had Pneumo access for their 'convenience'. This also demonstrated the things that Fontaine could get done either with bribes or threats.
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 The Operation :
* "Fences" : Surface people (criminals) who trade 'stolen goods' (or whatever) for CA$H ( usually at a severe discount as they then had the difficulty of 'selling on' questionably-obtained goods ).
* What would the external (surface) smugglers ( the eventual Contraband source on The Surface ) get in return ?? What would THOSE PEOPLE 'be interested in' ( or even accept in payment ) ??? Gold and other 'valuables' produced by Fontaine's other criminal activities ( usually having higher 'disposal value' ) ???? THOSE types of items would eventually 'run out' for any significant trading up there. SO, What other 'stuff' did Fontaine trade with the Surface ? Did Fontaine's Labs also produce powerful 'recreational' drugs to be traded for ? Medical 'Magic Bullets' WOULD have significant value up there ....
* Because of the complications of 'the Smuggling Operation', Fontaine would have eventually used his own men ( "Cut Out the Middleman" ... ) in some Surface Boats ( possibly THAT original Fishing Fleet he stole ) to obtain the smuggled goods wholesale ( and he STILL would have to use something valuable to Buy that Contraband with ) or obtain some additional working 'goods' via robberies and pirating ( Risking serious intervention by Surface authorities - SO Now perhaps ADD Bribes to the operational overhead ... ).
* Coercion (including Murder) was used to maintain secrecy by Fontaine, as well as to hold his Workers in Thrall"Thrall" : https://www.dictionary.com/browse/thrall for low pay ( SEE THE AUDIO DIARY BELOW ). 
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 The 'Secret Tram' to Arcadia :
* Smugglers Hideout is nowhere near Arcadia ( according to the Austen Bathysphere map ), though in BS1 you walk thru a tunnel and you are there.
* Thus, Fontaine built and used a mile long Utility Tram tunnel to transport Contraband direct to Arcadia - A good central location in Rapture, and which offered nice secluded spots for clandestine transactions for smuggled goods.
* A small 'lost' tunnel-boring machine was used to construct the passage thru the bedrock between Smugglers Hideout and Arcadia. The tunnel was laid with the standard prefabricated Tram track to make the transport task easier. The electric 'Locomotives' and cars ( also stolen, or purchased 'Surplus' ) would make transporting the huge amounts of Black Market goods very simple.
* Proximity to Farmers Market and the adjacent Farming establishments allowed many goods to be concealed and 'mixed in'.
* In the MMORPG New Rapture situation, the 'secret' tunnel is still there, and is being repaired/upgraded to facilitate movement of Farm Produce from the Arcadia/Ceres Green area to New Rapture.
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 The Shoot Out Neptune's_Bounty_Shootout:
* Ryan's security men repeated attempted to try to catch Fontaine's smugglers committing their crime, but had no success because of bribery of the City's Constables and unwillingness (or deaths) of potential witnesses.
* Ryan's security raided Fontaine's operations ( 'tipped off' by Peach Wilkins ? ) to prove the crime of Smuggling, but Fontaine was tipped off, and a major battle erupted where Ryan's forces faced large numbers of Splicers ( In the Novel, that story has Ryan foresee the scenario and had Chemical Thrower weapons ready to handle the Splicers ).
* Fontaine faked his death with a 'look-alike' dressed in his clothing and accessories, and made sure the face/body was obliterated/burned beyond recognition.
* Ryan had the City seize control of the Fisheries ( as well as Fontaine Futuristics and other companies Fontaine had controlled ) and discovered and shut down the Smugglers Hideout operation.
* Ryan attempted to use the violent incidents at Smugglers Hideout and Fontaine's illegal operation as proof of the threat and thus Ryan's 'protecting Rapture' from The Surface. Unfortunately the strong measures needed ( and rather odd decisions by Ryan ) gave ammunition to the newly emerged Atlas's propaganda. The Kashmir Incident then later brought %27civil war%27 to Rapture.
* By the time of Jack's arrival, Fontaine's lack of resources ( and dwindling ADAM supplies ) were crippling his forces and Ryan had gained the upper-hand after building a Splicer army of his own. Once the Pheromone Control was working, Fontaine/Atlas had few allies left and was basically in hiding.
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 The NEW Smugglers Hideout ( Atlas/Fontaine's Second Smuggling Site ) :
* When Fontaine was planning his change of identity, when Ryan was closing in on his Smuggling operation, he not only arranged his fake death but also likely created a replacement smuggling operation elsewhere ( if he already hadn't had set it up ). He likely transplanted the best half of his smuggling submarines/equipment, as well as the more valuable/useful Contraband. Arms and supplies would be cached for his 'Atlas' operation. He WOULD need minions to operate it who WOULD know who Atlas really was ( a liability ).
* The new ( and very similar operation ) would have been run with hidden connections to Atlas's base of operations ( Hestia/Apollo Square area ).
* Likely the (new) 'secret' Submarine Dock would have been created to keep part of the Smuggling Operation going. No longer near the Fishing Fleet operations, some other ruse would be needed to escape detection.
* Another (inside) transfer tunnel network would be pre-built/arranged, which would also double to safely move Atlas's forces around despite Ryan's drastically increased security measures. Likely, there would be many connections to 'out of view' points in the 'undercity'/Sewers allowing Atlas to suddenly appear somewhere and then conveniently escape.
* Atlas would use his transplanted (new) Smuggler Operation to bring in weapons, supplies and ammunition to facilitate his 'revolution'. Some of the supplies were used as bribes to convince Rapture's underclass to side with Atlas ( and many to join his 'army' ). 
* As mentioned for Smuggling in general : All this required something to pay for ALL these things. With dwindling resources, Atlas probably had less and less 'loot' to pawn on The Surface, and likely would have relied more and more on outright piracy/robbery to gain supplies ( These were even riskier actions ).
* In The MMORPG, A bunch of Fontaine's henchmen continued to use this facility after his final demise, and continued supporting themselves by pirating surface ships and extorting other factions ( ex- being paid to not interfere with fishing operations ). They were another Faction that Sofia Lamb failed to control. New Rapture in the MMORPG is trying to end this group's depredations, particularly because of the outside (Surface World) attention their activities continue to bring towards Rapture.
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Fontaine's Smuggling Ring's Demise :
Did The Arrests made at Neptunes Bounty ( after the 'Shootout' ) 'Break the Back' Of Fontaine's Smuggling Operation ? :
Depending on how much the Novel is taken as Canon - it mentions that previously Ryan's law enforcers really couldn't get any solid evidence on Fontaine, so Ryan couldn't really do anything. They kept losing any witnesses they needed for the case ( 'The Rapture Council' would hear the prosecution case ?? So there HAD to be law courts of some kind. )
We see this in the actual game with "You don't fuck Fontaine, He fucks you" said by his employees Ghost Vision (in Smuggler's Hideout) : "Ghost #1: You can't quit, Fontaine will find you. Ghost #2: Hey, fuck Fontaine. Ghost #1: You don't fuck Fontaine, Fontaine fucks you!" or when Sullivan (?) torturing a guy for evidence/information Audio Diary : Timmy H. Interrogation , he says : What the cops are doing to him is nothing compared to what Fontaine will do to him if he squeals ...
Only when Fontaine was 'dead', and his 'smuggling den' was discovered, was THAT smuggling operation finished. ( Was it ever ??? By Ryan's security guys ?? -- Remember Ryan allegedly sends Splicers when YOU get there ... Maybe Ryan was using YOU as a bird-dog to discover its location ??? ) This is not to say there weren't several other operations in Rapture, or that Fontaine pre-positioned his Second smuggling 'Operation' elsewhere to be resumed on his 'death' -- to bring in goodies for 'Atlas' ( as long as there was something to buy the Contraband with. Remember there's 'overhead' costs in Smuggling, so it isn't cheap. ) 
IDEA -- MMORPG Flashback (interactive..) where Atlas/other 'smugglers' are attacking and STEALING contraband from the Surface (from ships/boats or on land) - some Splicer goodness of them terrorizing small port towns. 
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The Prohibition Effect :
After Fontaine's criminal Smuggling Ring was actually proved ( Note - subject to law enforcement due process - which Ryan apparently believed in following ) and was 'shut down', there would be all the evidence and documentation of customers/victims, and possibly of bribes, etc ... being found and investigated.
How far did further legal actions then go, as many people in Rapture had knowingly bought the contraband ( and sold it on to others - including to Ryan himself, if he ate at the Kashmir - for example ). One of the issues with the 1920 Prohibition laws (in the US) were that they turned many people into 'scofflaws' and others into Hypocriters and corrupted officials involved in enforcement.
There's no evidence (in-game) of the official prosecutions/repercussions going further than Fontaines organization. It is possible that it could be rationalized that once the actual act of the actual smuggling was done that the goods being available was just an opportunity, and with relaxed 'ethics' THAT indirection was sufficient excuse for leniency. Already consumed smuggled goods also largely could no longer exist to be used as evidence.
As usual in the game, there isn't a clear Authoritative Narration, and the provided evidence to the Player is generally vague.
Death Penalty for Smuggling - When was this issued ? - It is not clear if it is before Fontaine dies or was in response to something like Atlas getting supplies and weapons by continued smuggling operations ( We see the corpses of those crudely executed for Smuggling -- Implying (?) it was while the 'civil war' was in progress ).
Likely was after Fontaine is dead, else why the 'Guns Blazing' commentaries as he was 'Destined for a hangman's rope' anyway ??
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Contraband Flows Both Ways ... :
If people could be smuggled into Rapture, then they could be smuggled out - for the right price.
And since the stuff being smuggled in has to be paid for somehow up 'On The Surface', then besides the usual gems/gold/silver/art, what Rapture-produced things might have to have been traded to the Surface to get all those expensively smuggled items ?? And if Fontaine could use the profits of his smuggling ring to set up whole companies, then there had to be AN AWFUL LOT of stuff traded in the outbound direction (The Profits remember are after subtracting ALL the expenses). 
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Audio Diary - "Putting_the_Screws_On" :
Peach Wilkins : "Fontaine's putting the screws on us, and double. He's squeezing us out of 80 points of our cut with the threat of turning us in to Ryan if we don't play ball. Son of a bitch. Sammy G. comes and tells me he's thinking of going to the constable, and the next day, Sammy G. was found in a sack in the salt pond. We got no choice here. We stay on Fontaine's crew, and we're gonna catch the gallows. We take a powder, and we end up like Sammy G. There's gotta be another way ... "
THIS Hints how Fontaine was finally 'fingered' ( an informant went to the Rapture Authorities to incriminate Fontaine with perhaps evidence of all the Smuggling ) which precipitated/justified that [Neptune%27s_Bounty_Shootout|Neptune's Bounty engagement and Shootout]], and Fontaine's alleged demise.
(( Amazing, that so many of Fontaine's victims did not simply blow his head off with a Shotgun -- ( Perhaps the MMORPG would have Flashback presentations of more than one such attempt being made. ) ))
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So You (Fontaine) Are Gonna Smuggle Beef Into Rapture ?
How large a freezing compartment do you have in your fishing Submarine ? Ones better/bigger than the teeny Subs seen ( at Smugglers Hideout ) in-game, so to have to have sufficient Range to go hundreds/thousand of miles and back ). 
It takes a week to transport(Smuggle) Contraband from any 'Topside' source, so you (the buyer) WILL be getting Freezer Burnt meat anyway. This is discounting 'Beef' grown in Rapture, which could possibility be a viable ( I doubt Ryan would have expected Rapture to have to eat Fish Kelp Salami and Fruits forever. ) Rapture-grown Beef probably will still be expensive ( the quantities of grass/grain and such to feed them costs, as does the time/effort ). Fresh chicken ( which these days are much faster growing, with less feed required per pound of edible meat produced ) would be much more common - AS IT IS in Our World. Rabbits, ditto.
So Beef Smuggling done ? - Not so much (no profit).
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Those Big Machines Seen In Smugglers Hideout :
Power generators for the secret ( Ssshhhhhhhhh ... ) criminal smuggling base - It was not a small operation -- They didn't want unusual patterns of electricity use to give it away. Fontaine might have been able to bribe the City Constables, but the Meter Readers would have got him ( just like they got Al Capone ). Fontaine had similar equipment in place for his second 'new' Smuggling Operation for after his 'death'.
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Smugglers Den #2 ?? :
MP level of Smugglers Hideout was a better representation of how large Fontaine's facilities would have to be as he expanded. Perhaps this is the Smugglers Den #2 which Fontaine had operating or transferred alot of resources to when he was planning to 'die'. It really should have more than the one Bathysphere/dock ( actually THAT should have been a sub like what was shown in the original Smuggler's Hideout in BS1 ), many more to handle the scale of Fontaine's Smuggling operation.
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That 'Smuggling' ( Oops, Realities Strike Again ) :
A bit too much of a contrived story : How ALL the stuff Fontaine was allegedly smuggling could never seem to ever be noticed by the Authorities ( it WAS seriously illegal ), AND for so long. This couldn't be just some little a package ( of Contraband ) being delivered each trip by a Fishing Sub.
Lots of people knew about the Smuggling ( Fontaine had to sell the stuff to many people ), and THEY had to supply the CASH/Whatever it is he traded to The Surface/Outsiders as required to buy/get the stuff/Contraband ( even if some was only legally BUYING it at nearby ports on The Surface ). Money/whatever has to Flow out of Rapture in exchange. Because it is smuggling with added complications, the good are now further expensive/priced at a PREMIUM.
(( Note - They don't accept Rapture dollars OUTSIDE of Rapture, unless it was made of precious metals. A major drain ( the scale of the alleged smuggling ) on Rapture's money supply WOULD eventually be noticed. ))
It sounded like this stuff wasn't just Canned Sardines and the Local Hooch from some small Icelandic fishing village. That meant bringing alot of it from a distance ( more than the ~300 miles to the shore of Iceland ).
The AMOUNT of Contraband smuggled had to be enough to raise Fontaine all that Rapture money which they portrayed him as obtaining to afford that whole later ADAM industry setup ( Reality IS : you have to pay to develop that product BEFORE you earn dollar one back ). 
The transport/transfer into Rapture is a significant expense. Sure you can use the fishing subs which either have to go a great distance ( instead of fishing ), OR make a delivery boat rendezvous -- and THOSE added parts of the Smuggling Operation have to be paid for now instead. 
Sorry, Its just the Simple Realities of Non-Fantasy/Non-Magic/Non-Wave of the Hand business and economics.
So the upshoot of all this is either : Fontaine WASN'T as ridiculously 'rich' as he is shown ( taken even further in the BaSx DLC ), OR there had to be more involved for him to get sufficient funds to start that ADAM Genetic Business ( more thuggery and criminal activities -- Which have their OWN reality checks - as in the size of Rapture limiting THAT ).
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Various Stacks of Contraband Seen in BS1 :
Why would Fontaine smuggle this stuff IF there was no buyer for it ? The difficulties/expense of smuggling goods would make anything desirable have a premium price. 
Crosses/Crucifixes could be made locally, literally tons of Bibles and newspapers ( which can be shared, passed hand to hand/copied and are NOT consumed ) - and a whole lot of them are seen never delivered (as seen in BS1). Simply Overused Assets / Objects, used by the writers to make some clumsy point ? 
Booze stolen from the 'Rapture Port Authority' ... ( that legal import path supposedly shutdown in 1952 - So why is that valuable Booze still here MANY years later -- as Booze seems to sell pretty well in Rapture and would simply get pilfered by Splicers in the Chaos ). 
All the 'Seized' boxes seen elsewhere ( including 8 years later at Fontaine Futuristics in BS2 ) - Probably not any tasty/useful contraband goodies would be left -- Those would have been pilfered long past.
Likewise, many stacks of The Daily Post are in "Room 5" of 'The Fighting McDonaghs' ( in the Neptunes Bounty level ), piled with boxes of contraband, also apparently unsold. ( Newsprint paper is heavy to smuggle, and likewise gets handed around once read, AND makes perfectly acceptable toilet paper ). 
The items selected of this Contraband type were not the best thought out.
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To The Surface and Back - A Smugglers Tale :
Fontaine could have smuggled people out of Rapture without too much trouble considered the number of trips his subs made and amount of goods he was obtaining ( and the bulk goods had to be obtained from Surface locations ).
Rich people could pay him sufficiently with valuable assets in Rapture, and maybe use some up on The Surface which they still possessed ( communications to arrange this would be easy to get to Surface contacts ). Perhaps he took their money and they just disappeared ( killing them - like so many 'border smugglers' do ) -- Particularly IF his larger plans might have been endangered by people getting out and spreading knowledge about Rapture's existence.
External (The Surface) resources might also have assisted Fontaine's smuggling, as something had to be used to purchase the goods smuggled in. Ships are required to transport the cargoes 'part (most ?) of the way' ??? ...
Rapture's Technology might have been something Fontaine sold on The Surface ( to raise CASH for his plans ).
Fontaine obviously smuggled Jack out ( full grown by then ? ), and stashed him somewhere until it was time to bring him back ( that demonstrates some Surface operation existing ). The 'Ace in the Hole' plot was arranged long before the Neptune's Bounty Shootout, and the Plane Hijacking was a rather risky method of bringing Jack back to Rapture. A boat or even one of the smuggling subs might have been originally planned, but perhaps Atlas's resources were severely dwindled by Ryan's actions. Of course, hijacking a plane, flying it to specific coordinates ( somehow having the required training to do so ), crashlanding precisely without killing oneself ( and no one else conveniently surviving ) is a bit of a stretch. Alternate ways might've been done more believably, with the same result ( except for the 'scene', but then some other 'scene' probably could have been contrived just as well ).
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Interesting issue : Were there other survivors of the crash, and WHERE are they ? OR what did Jack do to them ? Not quite so nice to have Jack been even more of a cold-blooded killer, BEFORE we became him ...
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If there was a Booker P.I. (in Rapture) Would he Have Tried Proving Fontaine's Smuggling ??? :
A logical method under Libertarianism/pseudo-Objectivism would be for the City to offer a general Bounty for information leading to the arrest of Smugglers ( and more pay the bigger the exposed operation was ).
Anonymous tips can often be useful (and thwart Fontaine's thuggish coercion) -- it just takes one good tip-off.
So would Booker (allegedly a tough guy), have worked an investigation from the 'unofficial' side ( versus Sullivan and the Constables ). Fontaine murdered potential witnesses and coerced a 'closed mouth' from his employees. And Fontaine's many customers didn't want their profits eaten into ( even the Kashmir Club bought 'contraband' ... ).
Ryan followed the common law and couldn't "go after" Fontaine unless he had sufficient proof. So was this proof eventually found, and was it someone like Booker P.I. who accomplished it ( or made it possible )?
Might it have been logical in Rapture to have a good-sized reward offered for evidence of Smuggling ( leading to the arrest of the criminals involved ... ) ?
It is also possible that Booker PI was employed by Fontaine to frame his competition and to search out and 'nullify' informers. 
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'Film Reels' are supposedly of what significance ??? ( I guess they couldn't ALL be "crucifixes" in those piles of Contraband ). I haven't ascertained whether you get to 'view' them (reels) to see some *NEVER BEFORE SEEN* something or other.
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Smuggling Was Expensive and thus more than a little exclusive ( who could afford the goodies ) :
* Covert operations always cost more.
* Costs of the basic transport hundreds of miles by Submarine at the closest ( any surface ships in the operation had to stay sufficiently far away to avoid Ryan's detection And submarines generally HAVE surface ships to support them if they go any significant distance as fishing subs likely would to find the amounts of fish they are required to collect. ). Just operating the subs costs money - fuel, maintenance, etc...
* Coercion costs/inefficiencies. Forcing people to do something they might face the Death Penalty for causes a great deal more effort to be employed over simple ordinary 'legal' operations. Many people will refuse, leading to employing some inept/inexperienced personnel to work the operation.
* Fontaine may not have had competent lieutenants to work the operation for him, leading to all kinds of mishandling and inefficiency.
* Labor costs ... ( simply more to do, more labor required - adding to expenses ).
* Profit - the whole thing has to make a profit or wouldn't be done. Big Expenses means more Profits required to overcome the RisksMany people these days think that Money 'Grows on Trees' ( They don't understand about it ) or that its given to them by the Government. That is the type of person Ryan wouldn't likely welcome into Rapture..
* Bribes for various people to 'turn the other way', especially as rewards were offered by The City Council.
* Facilities needed/required ( costs alot more for it having to be hidden ). Lots of extra overhead costs.
* Competition from other Smugglers. Fontaine would need to find THEM to put them out of operation and he might run into people tougher than he was ( or ready to finger HIM to Ryan and put HIM out of business ).
* Operatives on 'The Surface' have to be maintained to do the buying, and whatever facilities the Subs interact with need to be maintained. Whoever they 'interact with' ( If convert as the most likely were ) needed to be paid off or cause additional expenses/difficulties ( Fontaine might not be able to toy with the ruthless type of people he would have to deal with ).
* Whatever Fontaine is using to pay the Surface people, it is not going to be 'Rapture Dollars'. If they directly won't take things traded from Rapture, then there are additional 'Fencing' overhead expenses involved converting what items Fontaine can obtain into money his contacts do accept. As time went on 'liquid' assets from Rapture would dwindle in availability to be used as payment.
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So, the result of all this is : that the smuggling costs so much that the price in Rapture will be exorbitant, even for mundane things, and most people would not be willing (or could not) pay for them. This leads to the whole operation not being quite as large as the Prohibition era schemes that mobsters had ( everyone wanted a drink ... ). High prices meant more likelihood of potential production in Rapture itself.
It is part of the game author's Contrived fiction forcing the plot along, that such an operation could ever be hidden for so many years without sufficient 'proof' available to Ryan to shut it down and lock Fontaine up ( doubly so after the Smuggling Death Penalty was in effect ).
It is actually unlikely that someone wouldn't have done a 'shotgun takeover' of Fontaine's little criminal empire.
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So All In All, Levine and his Writers Do Not Seem To Know Even The Basics OF Smuggling :
Really it is just an idea 'tossed into' the Game's Story haphazardly, with some assets and level details. It would not have been hard to make the details a bit more Correct. But then, the difficulties involved in Real Smuggling just would not fit the Story they already had already concocted. 
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The Game Designers seem to imply that Ryan had these men killed.
Fontaine 'died' and his smuggling operation shut down in September 1958.
The Game is set in ~1960. These corpses seem rather Fresh for that amount of Time.
The %27civil war%27 took place in between, with the Pheromone Control mostly ending that.
Atlas/Fontaine was still committing Terrorist acts ( seeking to disrupt order in Rapture ).
Smuggling endangers Rapture in a Cold War bound World, and others in Rapture may not like those who do it.
We were not really told what was happening HERE.
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