Goes along with the question of "Why do preachers' kids seem so badly behaved?"
I'm afraid I'd go along with the crowd that would say that if the cousins are as bad as you describe them, the first thing would be to keep them away from those bad examples. It may be a cliche, but "trust but verify".
I don't necessarily agree with the "no spanking" crowd. Depends entirely upon the temperment of the kid; taking away Atari priviledges can be as effective for Kid #1 as a good switching would be for Kid #2. Read to them. Spend time with them.