Civil asset forfeiture is the ability of the government to seize the implements of and proceeds from criminal activity other than as part of a sentence after a criminal conviction. On its face, this policy is appealing. Criminals should not be allowed to profit from their illegal actions, and how better to ensure that “crime doesn’t pay” than by seizing any and all proceeds from criminal activity? But, in its rush to make sure that no one enjoys the fruits of their ill-gotten gains, civil asset forfeiture legislation in the United States disregarded core constitutional safeguards and created a system with incentives for abuse. Evidence of this abuse has been repeatedly reported on by national news organizations. 1 The stories of Victor Guzman, a church secretary from El Salvador, who was pulled over for speeding and had $28,500 in cash from parishioners’ donations seized; Mandrel Stuart, the owner of a small barbecue restaurant, who had $17,550 in cash to purchase restaurant equipment seized; and George Reby, an insurance adjuster, who had $22,000 seized from him on his way to purchase an automobile, are all examples of law-abiding citizens whose assets were seized (O’Harrow and Sullivan 2014).
These abuses are not the result of rogue agents. They are instead the result of policy decisions that have created a system of perverse incentives for law enforcement agencies. Chief among these was the decision to earmark all revenue generated from the seizure and sale of forfeited assets solely for law enforcement use instead of adding it to the general fund. Reserving all revenue from civil asset forfeiture for law enforcement use (and, later, removing restrictions on the use of that money) created a large number of issues, foremost of which was the incentive for law enforcement agencies to abuse civil asset forfeiture as a revenue-generating tool. This perverse incentive was further cemented through the establishment and amending of the Equitable Sharing Program. The Equitable Sharing Program was designed to provide a framework for dealing with assets that were seized through the efforts of both federal and state agents. Initially, asset forfeiture was the sole purview of the federal government; however, states soon adopted the idea and created civil asset forfeiture programs of their own (Williams et al. 2010). These procedures were generally more stringent than the federal government’s, and many sought to remove the perverse incentives of the federal system by earmarking the revenue for use in the general fund or for other non-law enforcement programs (Williams et al. 2010). While the federal government initially respected each state’s decision on how to use the revenue from asset forfeiture, in 1989 it removed the statutory requirement that forfeited items “[are] not so transferred to circumvent any requirement of State law that prohibits forfeiture or limits use or disposition of property forfeited to State or local agencies” and replaced it with the requirement that transfers of forfeited items simply “will serve to encourage further cooperation between the recipient State or local agency and Federal law enforcement agencies” (Anti-Drug Abuse Act of 1988 §6077(a), 2 The National Defense Authorization Act for Fiscal Years 1990 and 1991 § 1215(a) 3). This allows state agencies to circumvent local restrictions on the use of civil asset forfeiture and, more importantly, also gives them access to federal-level civil asset forfeiture, which is the most favorable (in terms of evidentiary requirements and revenue allotment) to law enforcement in the country (Williams et al. 2010). This is exemplified in the practice of adoption, where assets seized exclusively through the efforts of a state or local agency are “adopted” for forfeiture by a federal agency, which then receives a share of the revenue. Even though adoptions make up a small minority of all forfeitures, they exert a unique ability to prevent meaningful reform on the local level. By giving local agencies the ability to use federal procedures, federal adoptions hamstring local reform efforts, as local restrictions on seizures or revenue usage can simply be side-stepped via adoption. Asset sharing has also fostered the creation of multijurisdictional task forces, law enforcement groups that draw from federal and local agencies’ manpower, yet answer directly to neither. These task forces are fueled primarily by asset forfeiture, and may even become fully financially independent if they seize enough assets (Justice Research and Statistics Association 1993). This financial independence allows task forces to set their own enforcement agenda, which may run counter to local governments’ wishes. 4 Thus, by creating task forces that are subject to no direct budgetary oversight and limited in size only by their ability to seize funds, equitable sharing has severely curtailed the ability of local legislatures to use their appropriations powers to set an enforcement agenda or to rein in abuse by enforcement agencies.
In order to combat and prevent abuse of civil asset forfeiture, then Attorney General Eric Holder issued a memo on January 16th, 2015 entitled “Prohibition on Certain Federal Adoptions of Seizures by State and Local Law Enforcement Agencies.” This memo prevents the adoption of purely state-related civil asset forfeiture cases by the federal government except for public-safety items (i.e., guns, explosives, and child pornography), joint federal-state (i.e., multijurisdictional) task forces or investigations, or when the assets are subject to a federal warrant. On its face, this memo appears to be a good-faith effort to curtail the ability of state agencies to circumvent local regulations; however, the structural deficiencies in federal civil asset forfeiture law as well as the size and scope of the exceptions outlined in this memo will likely prevent it from having the widespread impact that was initially predicted by the news media. 5
Civil asset forfeiture has its roots in England’s Navigation Acts in the seventeenth century (Boudreaux and Pritchard 1996). The Navigation Acts were designed to further the monopoly of England’s shipping industry by criminalizing the shipping of goods to or from England on non-English ships (Boudreaux and Pritchard 1996). These acts drew upon the other common law practices of deodand (government seizure of murder weapons to compensate victims) and attainder forfeiture (laws passed explicitly to strip specific individuals of their property). However, the Navigation Acts differed significantly in that they removed the requirement to prove the guilt of the owner and even explicitly allowed the seizure of innocent individual’s property (e.g., smuggling by a single member of a crew could result in the seizure of the whole ship, regardless of the captain’s knowledge) (Boudreaux and Pritchard 1996). This forfeiture framework of in rem proceedings where the owner’s guilt is irrelevant was adopted by the United States for the limited purpose of “collecting customs revenue” shortly after they gained independence from Britain (Boudreaux and Pritchard 1996). This framework was further cemented by early Supreme Court decisions that formalized these common law principles:
Asset forfeiture was a civil matter under admiralty court and thus did not require a jury United States v. La Vengeance, 3 U.S. 297 (1796).
Probable cause (i.e., enough evidence to lead a reasonable person to suspect a crime occurred) is enough to justify a seizure (Locke v. United States, 11 U.S. 339 1813).
Once seized, the owner (not the government) has the burden of proving the property should not have been seized (The Langdon Cheves, 17 U.S. 103 (1819); Locke v. United States, 11 U.S. 339 (1813)).
Asset forfeiture is a separate issue from criminal liability (The Brig Ann, 13 U.S. 289 (1815); The Palmyra, 25 U.S. 1, (1827)).
These last two decisions would prove to be key in modern civil asset forfeiture. By explicitly separating the procedures for determining the guilt of an object from the guilt of its owner and by setting the burden of proof on the owner, not the government, the Supreme Court removed two key safeguards against abusive seizures of property by government agents.
Another major change in civil asset forfeiture was its application to enforce revenue collection laws unrelated to maritime goods. In Dobbins’ Distillery v. United States, 96 U.S. (1877), the Supreme Court upheld the forfeiture of a distillery for liquor tax violations by its lessee that were unknown to the lessor. This created the precedent for current civil asset forfeiture against non-smuggling related crimes, a precedent that was largely ignored until the passage of the Comprehensive Crime Control Act of 1984 (Doyle 2015).
Modern Civil Asset Forfeiture
The Comprehensive Crime Control Act of 1984 made two substantial changes to civil asset forfeiture. It created a fund for civil asset forfeiture revenue solely for Justice Department use and created the Equitable Sharing Program. Prior to the Comprehensive Crime Control Act, all revenue from civil asset forfeiture was put into the general fund (Doyle 2015). The Comprehensive Crime Control Act of 1984 changed this by creating a special fund where all the revenue from civil asset forfeitures was deposited (28 U.S.C. 524, c). This fund could only be used by the Department of Justice and other federal law enforcement agencies. While the permissible uses of the fund were initially strictly limited, it has been drastically expanded to include travel costs, overtime pay, and even the salaries of the administrators who oversee the fund (Doyle 2015).
Equitable sharing is the practice of “shar[ing] federal forfeiture proceeds with cooperating state and local law enforcement agencies” (Guide to Equitable Sharing 2009). Funds are split based on the relative amount of work performed by each agency, with the federal agency receiving a minimum of 20% of the net revenue (Guide to Equitable Sharing 2009). Equitable sharing also created a practice known as adoption. Adoption refers to the federal forfeiture of property seized exclusively through the efforts of state or local agencies (The Attorney General’s Guidelines on Seized and Forfeited Property 1990). Equitable sharing and adoption were initially created to allow seizure of illegal goods in states that lacked civil asset forfeiture laws; however, some agencies began to abuse equitable sharing schemes in order to generate revenue for themselves (Williams et al. 2010). These worries about the abuse of equitable sharing led some states to introduce laws limiting civil asset forfeiture (Williams et al. 2010). The federal government soon formally recognized these restrictions by adding a provision that forbade the use of equitable sharing as a means to avoid state laws (Anti-Drug Abuse Act of 1988 §6077 (a)). However, this provision was soon replaced by the requirement that the transfer of funds need only to “encourage further cooperation between the recipient State or local agency and Federal law enforcement agencies” (The National Defense Authorization Act for Fiscal Years 1990 and 1991 §1215(a)). By removing this formal ban on state agencies using the federal government to circumvent local regulations, this law severely undermined the appropriations power of state governments and likely contributed to the well-documented abuses that led to the creation and the passage of the Civil Asset Forfeiture Reform Act in 2000 (Doyle 2015).
The Civil Asset Forfeiture Reform Act substantially changed the procedural basis for civil asset forfeiture in order to provide greater protections for citizens whose property was seized. Among other things, this act
Shifted the burden of proof for forfeiture from the owner to the government (and increased that burden from probable cause to preponderance of the evidence).
Provided for the collection of attorney and litigation fees for successful challenges to civil asset forfeiture.
Required warrants for all civil asset seizures (with the caveat that warrants were not required in instances where a search would otherwise be legal or where the seizure was performed by a state agency).
Expanded the scope of civil asset forfeiture to include money laundering and RICO; and
Mandated tracking and reporting of all equitable sharing payments.
While these changes were intended to reduce civil asset forfeiture use by making it more difficult for federal agencies to perform, they also greatly expanded the scope of civil asset forfeiture. The inclusion of RICO and money laundering charges made “virtually every kind of property, real or personal, tangible or intangible … subject to confiscation under the appropriate circumstances” (Doyle 2015).
The most recent substantial change to civil asset forfeiture was the amending of Section VIII of the Department of Justice’s “Equitable Sharing for State and Local Enforcement Agencies.” Section VIII outlines the permissible uses of equitable sharing funds by local agencies. Prior to 2009, Section VIII explicitly made equitable sharing funds “subject to laws, rules, regulations, and orders of the state or local jurisdiction governing the use of public funds available for law enforcement purposes.” This policy prioritized local laws governing civil asset forfeiture over those of the federal government; thus allowing local governments to set their own policies on civil asset forfeiture. However, this policy was amended in 2009 to withhold equitable sharing funds from “any state or local law enforcement agency where the governing body, state or local law, regulation, or policy requires or directs (1) specific expenditures of shared funds, (2) the transfer of federal equitable sharing funds to non-law enforcement agencies, or (3) expenditures for non- law enforcement purposes;” thus expressly preventing local jurisdictions from exercising any control over the usage of funds received through equitable sharing. By removing language that acknowledged and allowed local jurisdictions to dictate the permissible uses of seized assets and replacing it with language that directly forbade the transfer of funds for non-task force purposes, this amendment formalized the use of equitable sharing as an end run around local regulations on asset forfeiture and reduced local governments’ appropriations power over law enforcement.
In order to reduce civil asset forfeiture abuse, Eric Holder issued a memo banning the federal adoption of cases initiated solely by state agencies (Holder 2015). However, this memo does not apply to seizures of items that pose a threat to public safety, multijurisdictional task forces or investigations, or when the assets are subject to a federal warrant. According to the “The Attorney General’s Guidelines on Seized and Forfeited Property,” adoption refers to “property seized exclusively through the efforts of state or local agencies [emphasis added].” Thus, any federal involvement at any time before the seizure technically exempts an adoption from this memo. This exception has been narrowed by Policy Directive 15–2, which provided explicit criteria for evaluating if the degree of federal involvement is “sufficient” to put the seizure under the multijurisdictional task force exception (Kendall 2015). However, these criteria still center around the requirement for “oversight or participation” by a federal agency prior to the seizure, an ambiguous phrase that appears relatively easy to justify. Further, the proliferation of federal task forces and liaisons whose sole aim is establishing state-federal partnerships makes this exception more likely to incentivize increased explicit partnerships between federal and state agencies than to reduce the usage of civil asset forfeiture. This increased proliferation is particularly worrying as these task forces are subject to significantly less oversight than purely state or federal law enforcement agencies. While the budgets of purely state or federal agencies are directly controlled by their respective legislatures, multijurisdictional task forces are not subject to the same degree of direct oversight. According to a report by the Justice Research and Statistics Association, “one ‘big bust’ can provide a [multijurisdictional] task force with the resources to become financially independent … [and] once financially independent, a task force can choose to operate without federal or state assistance” (Justice Research and Statistics Association 1993). Thus, this exception serves to further weaken state legislatures’ control over the use of asset forfeiture and any revenues generated from its use.
More worrying is the exception for all seizures made pursuant to a federal warrant. Warrants for object seizure can be sought even after an object has already been seized by state authorities. Thus, the warrant exception can be used as an end run around this memo’s restrictions. Further, warrants only require probable cause and occur ex parte (i.e., the prosecution presents their case alone) (Doyle 2015). While the additional oversight of a federal judge reduces the likelihood of illegal seizures, it does not reduce the abuse of equitable sharing as a means of avoiding state regulations on civil asset forfeiture.
Finally, even without these exceptions, adoption makes up a small portion of federal asset seizure. The Justice Department reports that adoptions make up only 3% of the value of assets seized each year (Sullum 2015). Further, adoptions also make up only 14% of equitable sharing cases (Sullum 2015). Thus, this policy will do little to affect the overall trend of overuse of civil asset forfeiture at the federal or state level.
Other Opportunities for Civil Asset Forfeiture Reform
There is a large literature on reforms that would reduce civil asset forfeiture use and abuse. The driving force behind the explosion in the use (and abuse) of civil asset forfeitures is the perverse incentives created by the seizing agency receiving the forfeited goods (Williams et al. 2010). These incentives could be eliminated by returning to the practice of putting civil asset forfeiture revenue into the general fund or by reducing the percentage of revenue kept by the seizing agency. Analyses of states that have implemented these reforms show a significant reduction in the usage of civil asset forfeiture (Williams et al. 2010).
Similarly, reintroducing restrictions on the uses of civil asset forfeiture funds appears to be a route worth pursuing. Currently, the revenue from civil asset forfeiture can be used almost without restriction (Doyle 2015). This lack of restrictions leads to clear conflicts of interest; for example, the salaries of the administrators who oversee the distribution of the civil asset forfeiture fund are paid by the very fund they oversee (Doyle 2015). Further, this lack of restrictions erodes the ability of the legislature to control law enforcement agencies by reducing their budgets or constraining their spending (Moores 2009).
Another avenue for reform is to explicitly ban the practice of federal adoption in order to avoid local regulations on civil asset forfeiture. This can be achieved by amending 21 U.S.C. 881(e)(3)(B) (the statute that enumerates the conditions under which equitable sharing is permitted) to its wording under the Anti-Drug Abuse Act of 1988, which categorically banned using adoption or equitable sharing as an end run around state-level regulation. While adoptions make up a small portion of all asset forfeiture, they are the most direct means by which local jurisdictions can abuse equitable sharing to circumvent local limits on asset forfeiture. Though this reform would not prevent abuse of state or local level civil asset forfeiture, it would allow local reforms aimed at reducing abuse of asset forfeiture to be implemented with fidelity. Thus, banning the use of adoptions is the best option to reduce instances of abuse of equitable sharing while ensuring that meaningful cooperation between local and federal agencies can continue unhindered. Further, reverting to the wording under the Anti-Drug Abuse Act of 1988 will have the added benefit of reducing the prevalence of multijurisdictional task forces, which will increase the power of legislative and civilian oversight of law enforcement by making agencies more reliant on legislative appropriations for funding.
Finally, increasing the legal burden of proof to forfeit from the current standard of a preponderance of the evidence to clear and convincing is another viable candidate for reform. In addition to simply eliminating cases with marginal evidence, raising the government’s legal burden would also likely reduce the high rate of unchallenged forfeitures. The government’s low burden of proof currently discourages owners (and more importantly, lawyers who represent those owners) from challenging seizures due to their low chances of prevailing (Moores 2009). Increasing the burden of proof will make owners more likely to challenge forfeitures, which will in turn reduce abuse in the system, as abusive seizures will be more likely to be challenged in court and thus exposed. Further, more challenges by owners would likely make seizing officers more “honest,” (i.e., reduce the number of seizures that lack sufficient evidence to hold up in trial), as officers have an incentive to avoid unsuccessful seizures, which waste both time and money. This change in officers’ actions can be achieved formally (e.g., through a departmental policy change increasing the standard for seizure) or informally, as officers increase their individual threshold for seizure to avoid unsuccessful attempts.
While Eric Holder’s memo on the “Prohibition on Certain Federal Adoptions of Seizures by State and Local Law Enforcement Agencies” was an important first step in curtailing civil asset forfeiture abuse, its narrow scope and large number of exceptions will prevent it from having a significant impact on the proliferation and use of civil asset forfeiture. However, there are still a large number of viable and easily implementable reforms available to both the Attorney General and Congress to reduce civil asset forfeiture abuse.
Boudreaux, Donald J., and A.C. Pritchard. 1996.“Civil Forfeiture and the War on Drugs: Lessons from Economics and History.” San Diego Law Review 33 (79):79–137. Google Scholar
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“Guide to Equitable Sharing for State and Local Law Enforcement Agencies (2009).” 2009. “Department of Justice, Asset Forfeiture and Money Laundering Section.” Accessed April 2009. http://www.justice.gov/sites/default/files/usao-ri/legacy/2012/03/26/esguidelines.pdf
Holder, Eric H. 2015. “Prohibition on Certain Federal Adoptions of Seizures by State and Local Law Enforcement Agencies.” Department of Justice. Accessed January 16, 2015. http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/01/16/attorney_general_order_prohibiting_adoptions.pdf
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Officer Larry Bates: Liar, Thief, and the Face of “Asset Forfeiture” in Tennessee, Republic Magazine. http://www.republicmagazine.com/videos/officer-larry-bates-liar-thief-and-the-face-of-asset-forfeiture-in-tennessee.html
O’Harrow, Robert, and Michael Sallah, 2014. They Fought the Law. Who Won?, Wash. Post. Accessed September 8, 2014.http://www.washingtonpost.com/sf/investigative/2014/09/08/they-fought-the-law-who-won/
“The Attorney General’s Guidelines on Seized and Forfeited Property, July 1990.” Department of Justice. Accessed July 1990. http://www.justice.gov/ag/attorney-generals-guidelines-seized-and-forfeited-property-july-1990#administration
Williams, Marian R., Jefferson E. Holcomb, Tomislav V. Kovandzic, and Scott Bullock. 2010. “Policing for Profit.” Institute for Justice. Accessed March 2010. http://www.ij.org/images/pdf_folder/other_pubs/assetforfeituretoemail.pdf
See, for example, the Washington Post’s six part series and seven follow-ups stretching from September 2014 to February 2015 on civil forfeiture that was the catalyst for Eric Holder’s memo. (http://www.washingtonpost.com/sf/investigative/collection/stop-and-seize-2/)
Full text available at https://www.govtrack.us/congress/bills/100/hr5210/text
Full text available at https://www.govtrack.us/congress/bills/101/hr2461/text
See, for example, the Tennessee inter-agency task force that heavily patrolled only the outbound portion of known smuggling routes, which allowed them to seize the proceeds from drug sales at the cost of allowing drugs to enter the city and be purchased. http://www.scrippsmedia.com/newschannel5/news/newschannel-5-investigates/policing-for-profit/265578741.html
See, for example, New York Magazine’s coverage available at http://nymag.com/daily/intelligencer/2015/01/cops-can-no-longer-just-seize-your-money.html