Asset Forfeiture

Tightening the Law on Civil Asset Seizures

May 23, 2016 By Mike Madrid 1 Comment

Few nightmares can be more frightening to conservatives than the image of government agents running amok and seizing citizens’ property without due process. We like to think it can’t happen here.

But it can happen. And it is happening – on a regular basis.

Civil asset seizure without due process is taking place today across America, to the tune of $2.5 billion in assets taken by the government over the past 15 years.

The reason why Republicans haven’t made this legalized smash and grab an election issue is simple – government agents claim they are grabbing the assets of drug dealers. It’s the perfect cover.

Nobody wants to support drug dealers. The problem is, under federal law, government agents get to define who fits under the drug-dealer label. Agents can take first and ask questions later.

Under current rules of asset seizure, federal agents are asked to produce “clear and convincing” evidence that the assets are tied to drugs. But the evidence isn’t necessarily subject to a jury’s verdict. No judicial finding of guilt is required for federal agents to take your house, car and bank accounts.

Due process is short-circuited. Rule of law is deployed at a minimum threshold.

In other words, citizens can only hope the government gets it right when it comes to civil asset seizure. How comforting is that?

A national movement has begun to tighten the rules and bring due process into the practice. Many conservative organizations, including the Institute for Justice, Heritage Foundation and the Koch Institute, support legislation to bring stronger legal protocols to asset seizure.

In California, the State Legislature can introduce some accountability to the free hand created by federal rules on asset seizure.

Senate Bill 443, introduced by State Sen. Holly Mitchell (D-Los Angeles), would require California law enforcement agencies to bring or obtain a criminal conviction before they seize someone’s assets. The proposed legislation has bipartisan support but needs all the help it can get.

The bill would keep asset forfeiture cases in California courts, rather than handing them over to federal jurisdiction. This is important, and it’s why SB 443 is opposed by many local law enforcement agencies.

Under current rules, local agencies can circumvent California law and send seized assets to the feds for “adoption” under loose federal rules. The feds typically take a 20 percent cut for “adopting” the case. SB 443 would end the dubious practice of “adoption.”

And SB 443 would help prevent guiltless spouses from suffering financially when allegations are made against their partners. Under federal law, if you made the mistake of marrying the wrong person, too bad. SB 443 gives protection to innocent spouses.

No doubt, SB 443 raises difficult questions for conservatives. It exposes Republicans to the charge of being soft on crime, to not exerting maximum leverage on drug dealers.

But the bill speaks to larger questions – the rule of law and the reach of the federal government. If we lose sight of those concerns in rhetoric about drug dealers, another chunk of our democracy will be gone.

Obviously, convicted drug dealers should not be allowed to protect their assets. But before the government grabs someone’s property, we should at least make sure the accused person has committed the crime.

The rule of law requires a trial and conviction. Coincidentally, a trial and conviction is the minimum threshold established by SB 443.

Mike Madrid is a partner at GrassrootsLab, and a nationally recognized expert on Latino voting trends. In 2001, named one of America’s “Most Influential Hispanics” by Hispanic Business Magazine.

This piece was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: Asset Forfeiture, Holly Mitchell, Property, SB443

SCOTUS declines to review CA asset seizure practice

March 7, 2016 By James Poulos Leave a Comment

Photo courtesy Envios, flickr

The U.S. Supreme Court declined to take on a 15-year-old case challenging California’s asset seizure practices.

The justices decided “they would not hear a long-running lawsuit that contends the state does not do enough to notify the rightful owners before seizing their assets,” the San Francisco Chronicle reported. “Under the state’s law, accounts can be seized if a bank or retirement fund has lost track of the owner for three years. But lawyers who sued called the state’s system a ‘recipe for abuse’ because many people are unaware that their assets or those of a relative are being held by the state.”

The suit put the court’s interpretation of fundamental constitutional rights at stake. “Lead plaintiff Chris Taylor filed the class action at issue back in 2001, taking aim at California’s Unclaimed Property Law, which provides for the conditional transfer to the state of unclaimed property such as savings accounts or shares of stock,” Courthouse News reported. “Taylor accused state controller Betty Yee of violating due-process rights by transferring property to the state without providing the potential owners adequate notice.”

“During the intervening years, the challenge brought several amendments to the law’s notice procedures. Chief among them, California now notifies potential owners before the state transfers the unclaimed property, not after.”

Room for abuse

But the state has not changed its passive stance on money “which they freely admit they owe to someone (or that person’s heirs if they are deceased) but are unable to deliver because they can’t find them,” as HotAir noted. Other states, the site observed, had reason to watch the case closely. As CNN Money has calculated, “States, federal agencies and other organizations collectively hold more than $58 billion in unclaimed cash and benefits. That’s roughly $186 for every U.S. resident. The unclaimed property comes from a variety of sources, including abandoned bank accounts and stock holdings, unclaimed life insurance payouts and forgotten pension benefits.”

Critics have charged that governments take advantage of the perverse incentive to keep people in the dark about what they’re owed. California alone has amassed some $8 billion in unclaimed assets, according to the Los Angeles Times; “from this fund, it takes about $450 million a year to add to the state budget,” the paper reported.

Future hopes

Two justices did offer Taylor and his supporters a small consolation prize. In a concurring opinion, Justices Samuel Alito and Clarence Thomas recommended that the court consider “in a future case” how proactive states should be in similar situations.

“As advances in technology make it easier and easier to identify and locate property owners, many states appear to be doing less and less to meet their constitutional obligation to provide adequate notice” prior to seizure, Alito reasoned. “Cash-strapped states undoubtedly have a real interest in taking advantage of truly abandoned property to shore up state budgets. But they also have an obligation to return property when its owner can be located.” Alito said “the convoluted history” of Taylor’s suit “makes it a poor vehicle for reviewing the important question it presents[.]”

Legislative divisions

More broadly, asset forfeiture laws have become a target for reformers in both political parties, with bills attracting controversy in states across the country. Last year, a divided Legislature in Sacramento saw Senate Bill 443 sail through the Senate but sink in the Assembly. State Sen. Holly Mitchell, D-Los Angeles, and Assemblyman David Hadley, R-Torrance, “would have reformed the state’s asset forfeiture regulations to require that police and prosecutors actually convict citizens of crimes before seizing ownership of their assets to spend on themselves,” as Reason magazine noted. Between the Senate’s vote and the Assembly’s, state police and prosecutors mobilized effectively to prevent the bill from becoming law.

Originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: Asset Forfeiture, CalWatchdog, David Hadley, James Poulos, SCOTUS

Legislature gives in to lobbyists, fails to reform asset forfeiture

September 12, 2015 By James Poulos 4 Comments

Government agencies will continue to have the power to confiscate private property in California – without a criminal conviction – after lawmakers bowed to intense lobbying pressure by agencies with a vested interest in maintaining California’s civil asset forfeiture system.

“No one should lose his or her property without being first convicted of a crime,” said Scott Bullock, a senior attorney with the Institute for Justice, which has pushed for a nationwide reform of asset forfeiture laws. “That’s a basic tenant that most Americans are shocked to learn is being violated daily by law enforcement officials nationwide.”

On Thursday, the state Assembly rejected legislation on a 24-44 vote that would have reformed the state’s rules for seizing assets of those suspected of criminal activity.

A bipartisan coalition of lawmakers urged their colleagues to defend the due process and property rights of those not yet convicted of a crime.

“We have today the opportunity to restore a core principle of American justice, and that is that no person’s property can be taken from him or her without due process of law, without a trial and a conviction,” said Assemblyman David Hadley, R-Torrance, who carried the bill in the lower house. “In California in the last 20 years, tens of thousands of people have had property taken and that property has not been returned – even though those individuals have neither been charged with a crime nor convicted of a crime.”

Asset Forfeiture: Controversial Tool for Targeting Criminals

Under the country’s asset forfeiture system, law enforcement agencies have the legal authority to confiscate property of anyone suspected of a crime. Those agencies are then entitled to keep a percentage of the assets – providing a direct financial incentive for government agents to seize personal property.

Law enforcement agencies defend the practice as a vital tool for stopping organized crime and prosecuting drug dealers.

“Is there anyone who could seriously argue that that dealer should be able to still keep the dirty money derived from those illegal sales?” asked Chula Vista Police Chief David Bejarano, who also serves as president of the California Police Chiefs Association, in a recent Sacramento Bee op-ed piece. “How about the low-level criminals frequently paid by drug dealers to transport dirty money?”

Critics of the practice say it has been widely abused, indiscriminately punishing average citizens alongside criminal masterminds. A multi-year investigation by the Drug Policy Alliance, “Above the Law: An Investigation of Civil Asset Forfeiture Abuses in California,” found that the average value of a state seizure in California in 2013 was $8,542.

“Unfortunately, forfeiture has become a widely abused practice,” explains Steven Greenhut, the San Diego Union-Tribune’s California columnist. “Instead of targeting drug kingpins as intended, police sometimes target average citizens who haven’t been convicted or even accused of a crime.”

California law enforcement agencies circumvent state law

Each state has its own rules governing asset forfeiture. Under federal law, any amount can be seized without a conviction. In California, assets valued at less than $25,000 are exempt from seizure. To evade California’s basic legal protections, law enforcement agencies have partnered with federal agencies, who keep a cut and pass along some of the seized assets to their local counterparts.

Senate Bill 443, authored by Senator Holly Mitchell, D-Los Angeles, would have required a conviction for most asset forfeiture cases and blocked law enforcement agencies in California from using federal agencies as a middleman for circumventing state law.

According to a legislative analysis of the bill, “Under federal law, 20 percent of revenue from forfeited assets is retained by the federal agency involved, and 80 percent is allocated to the local agencies involved in the seizure in proportion to their involvement in the case.”

In the past decade, California law enforcement agencies have seen their share of seized assets more than triple to more than $100 million per year. California law enforcement agencies received $89.6 million in funds from the Federal Equitable Sharing Program in 2014 — on top of approximately $28 million in assets seized at the state level.

Law enforcement lobbying to maintain vested interest

Public safety groups that have a vested interest in maintaining civil asset forfeiture rules waged an intense lobbying campaign to defeat the bill. The California District Attorneys Association launched an effort targeted at individual members.

In one flyer, the group targeted Assemblyman Phil Ting of San Francisco, claiming his support for the measure would cost his district $2.1 million in law enforcement funding.

The scare tactics included dire warnings that Sen. Mitchell’s legislation would jeopardize hundreds of millions of dollars in federal law enforcement funding.

“These requirements would violate federal forfeiture guidelines, and would thus end all federal equitable sharing for over 200 law enforcement agencies and task forces in California,” wrote Sean Hoffman, director of legislation for the California District Attorneys Association. “SB443 will severely reduce valuable resources obtained through drug asset forfeiture that fund investigation and prosecution, drug treatment and prevention, training, and community based organizations.”