“FAIR”ness and Forfeiture: New Bill and Justice Department Order Seek to Reign in Controversial Police Practice

Matt Dearmond, KLJ Staff Editor

To the pleasure of Fifth Amendment advocates, a thirty-year federal policy may be coming to an end. On Tuesday, January 27, Senator Rand Paul (R-KY) reintroduced a bill known as the Fifth Amendment Integrity Restoration (FAIR) Act. The bill would greatly limit law enforcement’s ability to seize the assets of individuals without a warrant or charging them with a crime, and would redirect proceeds from these “civil asset forfeitures” to the Treasury Department’s General Fund. This bill comes less than two weeks after departing Attorney General Eric Holder announced that local and state police would be barred from using federal law to seize cash, cars and other property without warrants or criminal charges, using a Justice Department program known as “equitable sharing.”[1]  

Civil asset forfeiture is controversial for several reasons. For one, the very idea seems repugnant to many basic notions about property rights, as the owner of the property need not be arrested or convicted of a crime to have his or her property taken. Even those supportive of the general concept, however, harbor concerns about the policy’s application, pointing to the disparate impact borne by racial minorities and the poor. For instance, the ability of property owners to legally and effectively reclaim their property is often dependent upon their means and access to resources, such as a lawyer.[2] Representation by legal counsel is often necessary because in all but six states, the burden is on the owner, not the government, to prove that they are “innocent,” and that their property is not otherwise subject to forfeiture.[3]

Under the equitable sharing program established in 1984, local and state law enforcement are able to circumvent state law that might have restricted their ability to seize certain assets by working with the Department to “federalize” or “adopt” the investigation, whereby they get to keep the forfeited property and split the proceeds with the Department.[4] In general, there are two forms of forfeitures under the equitable sharing program: “joint investigative” forfeitures, and “adoptive” forfeitures.[5] The first form concerns forfeitures that are the result of cooperative investigative activities between federal and state or local law enforcement agencies, where the percentage of funds shared with state/local agencies is determined by the amount of their involvement.[6] “Adoptive” forfeitures, the more controversial of the two, occur when, as a result of their investigation into a state crime, state/local agencies transfer seized property to federal law enforcement who can then “adopt” the seized property for purposes of federal forfeiture proceedings.[7] Police departments are able to keep up to 80 percent of the proceeds of such seizures, with the rest going to federal agencies.

Holder’s announcement, impactful though it may be, is merely a change in Justice Department policy. As such, it lacks the force of law and is perfectly capable of being rolled back altogether by subsequent administrations. The FAIR Act, on the other hand, would codify this denunciation of prior federal forfeiture policy into law, for presidential administrations and executive agencies to come. What’s more, the FAIR Act goes farther than the new policy guidelines issued by the Attorney General in several ways. First, the new guidelines issued by Holder prohibit only “adoptive” forfeitures, while the Act would impose stronger limits on federal authorities’ ability to share forfeited assets with state/local law enforcement, regardless of whether they participated in the seizure.[8] The order explicitly provides that its prohibition does not apply to “seizures by state and local authorities working together with federal authorities in a joint task force,” or “seizures by state and local authorities that are the result of joint federal-state investigations or that are coordinated with federal authorities as part of ongoing federal investigations.”[9] Because of this, commentators have questioned the extent to which Holder’s order actually changes the status quo, citing the fact that between 2008 and 2013 approximately 86 percent of the money state/local agencies got from federal forfeitures were not of the kind covered by this new restriction.[10]

Second, though Holder’s order will virtually eliminate all cash and vehicle seizures made by state/local law enforcement for purposes of the federal program, the order contained an exception for seizures of property “directly related to public safety concerns.”[11] This includes seizures involving illegal firearms, ammunition, explosives and property associated with child pornography.[12] The FAIR Act provides no such exception, but requires law enforcement to prove by “clear and convincing evidence” that there was a substantial connection between the property and the offense, and that the owner intentionally or knowingly consented to the use of the property in connection with the offense.[13] This “clear and convincing” standard marks an increase from current law, which merely requires that the government establish by a preponderance of the evidence that an asset is subject to forfeiture.[14]

Additionally, the Act seeks to remove the profit incentive from the equation by requiring that money or proceeds from seizures go to the General Fund of the United States Treasury, rather than to a special fund known as the “Department of Justice Assets Forfeiture Fund” for use only by the Justice Department.[15] This is an understandable concern, given how proceeds from civil asset forfeitures are undeniably a large source of funding for law enforcement agencies (sometimes up to 20% or more of a department’s entire annual budget).[16] It was apparently a concern as well for Holder (or at least an incidental benefit), according to an anonymous Justice Department official who said that Holder “believes that the new policy will eliminate any possibility that the adoption process might unintentionally incentivize unnecessary stops and seizures.”[17]

Opponents of civil asset forfeiture policy were encouraged by Attorney General Holder’s order, and further encouraged by the introduction of the FAIR Act. However, because Sen. Paul’s bill and the Attorney General’s order apply only to federal law enforcement and the use of federal law, putting a stop to the practice is unlikely to happen without significant reform at the state level.[18] And though many states require seized proceeds to go into the general fund, according to at least one law professor who has studied the subject, at least 26 states allow police to keep 100 percent of the assets they seize.[19] As for Kentucky, 85% of the proceeds from seized property is paid directly to the law enforcement agency which seized the property, to be used directly for law enforcement purposes, while the remaining 15% is paid to the Office of the Attorney General.[20]

While it may be tempting to view this populist proposal by Sen. Paul as simply political posturing on the eve of a presidential run, such a characterization probably does not do justice to the deeper issue of changing perceptions about the relationship between communities and law enforcement. Certainly the renewed interest in the issue and the apparent bipartisan support would lend support to that observation.[21] In fact, the goals of the bill that I’ve mentioned are in themselves manifestations of some of the more salient issues regarding law enforcement in America. The redirecting of proceeds to the General Fund rather than the pockets of police departments reflects the recent concern over the militarization and out-of-control spending on the part of law enforcement.[22] There is also an underlying racial component to be considered. As the sponsor of the bill himself has observed, the disparate treatment of minorities under asset seizure policy and by the criminal justice system as a whole is at least partially to blame for increasing racial tension in the U.S.[23]

Regardless of one’s opinion on the underlying motivation behind the bill, for those that have long tried to raise these issues from the depths of social media punditry and into actual positive law, the FAIR Act would certainly signal a welcomed legislative victory.

[1] Robert O’Harrow Jr., Holder limits seized-asset sharing process that split billions with local, state police, The Washington Post, Jan 16, 2015, http://www.washingtonpost.com/investigations/holder-ends-seized-asset-sharing-process-that-split-billions-with-local-state-police/2015/01/16/0e7ca058-99d4-11e4-bcfb-059ec7a93ddc_story.html?hpid=z1.

[2] Marian R. Williams et al, Policing for Profit: The Abuse of Civil Asset Forfeiture, Institute for Justice, March, 2010, http://www.ij.org/images/pdf_folder/other_pubs/assetforfeituretoemail.pdf.

[3] Id. at 23.

[4] David McCabe, Rand Paul: Stop feds from seizing property, The Hill, Jan. 27, 2015, http://thehill.com/blogs/blog-briefing-room/news/230871-rand-paul-pushes-bill-to-block-the-feds-from-seizing-property.

[5] Williams et al, supra note 2, at 25.

[6] Id.

[7] Id.

[8] S. 255, 114th Cong. § 3(b) (2015) [hereinafter FAIR Act].

[9] Office of the Attorney General, Prohibition on Certain Federal Adoptions of Seizures by State and Local Law Enforcement Agencies, (2015), available at http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/01/16/attorney_general_order_prohibiting_adoptions.pdf.

[10] Jacob Sullum, Cops Are Still Robbers: Eric Holder’s new forfeiture policy affects only a small share of seizures, Jan. 26, 2015, http://reason.com/archives/2015/01/26/cops-are-still-robbers.

[11] Office of the Attorney General, supra note 9.

[12] Id.

[13] FAIR Act, supra note 8, at § 2(3).

[14] 18 U.S.C. 983(c)(1).

[15] Compare 21 U.S.C. 881(e)(2)(B)), and FAIR Act, supra note 8, at § 3(b)(1)(A).

[16] Michael Sallah et al., Stop and Seize, The Washington Post, (2014), http://www.washingtonpost.com/sf/investigative/collection/stop-and-seize-2/.

[17] O’Harrow Jr., supra note 1.

[18] Leon Neyfakh, Helicopters Don’t Pay For Themselves: Why Eric Holder’s civil forfeiture decision won’t stop civil forfeiture abuse, Slate, Jan 16, 2015, http://www.slate.com/articles/news_and_politics/crime/2015/01/will_eric_holder_s_civil_forfeiture_announcement_change_anything.html.

[19] Id.

[20] KRS § 218A.420(4) (2007).

[21] McCabe, supra note 4.

[22] See Sallah, supra note 16.

[23] Ashley Killough, Rand Paul: Civil Forfeiture part of racial problems in U.S., CNN, Jan. 27, 2015, http://www.cnn.com/2015/01/27/politics/rand-paul-bill/.