Rand Paul Introduces Asset Forfeiture Reform Bill

Rand Paul introduced a landmark bill last Friday that makes several significant changes to federal asset forfeiture law. It aims to remove the profit incentive by depositing sales proceeds in the Treasury's General Fund instead of giving it directly to the seizing agency.  The government must also show a substantial connection between the property owner and the alleged crime, that the owner "intentionally used the property in connection with the offense" or "knowingly consented or was will-fully blind to the use of the property by another in connection with the offense" before forfeiting property.

It also raises the standard of proof for federal prosecutors to meet before forfeiting property. The bill raises the federal court's standard of proof to "clear and convincing evidence", which makes it higher than many states. Radley Balko reports that the bill also requires states to "abide by state law" when they forfeit property, but that language is not in the current bill so it is hard to know what means exactly and if it applies to both financial and procedural aspects of state forfeiture law.

This is pretty big. Asset forfeiture is a big money maker for actors at all levels of government. The federal asset forfeiture fund had more than $2 billion in net deposits in 2013. The Department of Justice made more than $656 million in equitable sharing payments to law enforcement agencies in the 50 states. Law enforcement in New York and California have received more than $1.2 billion through the program between 2000 and 2013.This is not necessarily a bill that will be greeted with open arms by the law enforcement community.

 These changes have been a long time coming. Henry Hyde proposed raising the burden of proof to clear and convincing evidence almost 20 years ago. His reform efforts were stymied and his bill, passed as the Civil Asset Forfeiture Reform Act in 2000, settled for the lower standard of a preponderance of the evidence, which it stands at today. And while it would curb the problems associated with federal adoption, it would not address the myriad problems of state forfeiture laws. This bill represents a lot of progress though and Senator Paul should be commended for taking up the issue.

News Roundup

• Police in St. Louis are moving in to a new headquarters in the coming weeks. The new building was purchased in 2011 with $2.7 in forfeiture money. “Asset forfeiture money means money we seized from criminal enterprises. So in this case, crime really did pay for the metropolitan police department” said Police Chief Sam Dotson. Though state law directs asset forfeiture money to a fund for schools, that hasn't stopped law enforcement agencies in Missouri from receiving more than $135 million in equitable sharing payments since 2000, more than $14 million of which went to St. Louis Metro PD.
• Mendocino County's District Attorney's office is donating $10,000 in asset forfeiture revenue to a local anti-gang program for schools.
• Newsday chronicles the use of asset forfeiture on Long Island. The article includes some interesting details regarding how forfeiture money was spent in 2013, including $1.3 million for vehicles, $136,000 in out-of-town trips, and $385,000 in weapons and gear.
• A reporter for the Witness out of South Africa details the troubles of the National Prosecutor's Office and its' asset forfeiture unit. An unnamed AFU official blamed the unit's ineffectiveness on the "protracted legal process" that follows a seizure, while others point to infighting within the unit as a source of inefficiency.
• Webpronews discusses the moral quandary of purchasing property seized by police. They close by suggesting "...maybe the Ferrari that you see in that late night ad was once owned by a drug kingpin who now wears an orange outfit and a number. But maybe your local police force pays its salaries with the folding money of innocent out of state travelers."
• MyRecordJournal.com has a piece on how law enforcement in Connecticut use asset forfeiture funds to pay travel expenses. Jonathan Einhorn, a former New Haven police commissioner, is criticizes using forfeiture for travel and says “...[S]tate police have created a slush fund for vacations and travel, and that is just not the purpose.”

News Roundup

• Police in Meriden, Connecticut used their asset forfeiture fund to purchase new mountain bikes and uniforms for a neighborhood patrol unit.
• The Taranaki Daily News has an article about New Zealand's uptick in asset forfeitures in since the passage of the Criminal Proceeds Recovery Act in 2009. The bill introduced the use of civil asset forfeiture to New Zealand. Previously forfeitures were limited by the requirement for a criminal conviction.
• The Treasury Department's anti-money laundering unit FinCEN had to rescind 11 job offers and temporarily freeze hiring after an Office of Personnel Management investigation determined that the agency was illegally screening job candidates. Federal agencies can only screen job candidates by the criteria given in the job listing and FinCEN reportedly targeted lawyers for open positions without ever stipulating that the positions were open only to lawyers.
• Over at Business Insider, Ethan Burger suggests asset forfeiture could be used to add some bite to recent sanctions against Russia.
• Authorities in the Philippines are auctioning off assets recovered after 27 years of litigation. The properties, valued at over $5 million, are connected to two associates of former president Ferdinand Marcos. Marcos was removed from office in 1986 after ruling the Philippines for 21 years. The properties include several homes and a sports club.
• Rep Kendall Kroecker has announced that he will be running for re-election in the Wyoming legislature. Rep. Kroecker sponsored HB0076, which would have increased the standard of proof required before law enforcement could forfeit property. The bill passed in the House but failed to make it out of Senate committee.
• Police in Downey, California financed the construction of a new training room using asset forfeiture funds. The new facilities will be used to train officers "who have been accused of using excessive force" in lethal and non-lethal arrest techniques.
• The Department of Justice has filed a civil forfeiture complain the Central District of California in an attempt to recover $700,000 in corruption proceeds. The money was seized from the sale of house formerly owned by Korea's ex-president Chun Doo-hwan's son. Doo-hwan's son, Chun Jae Yong, allegedly purchased the home using proceeds "traceable to his father's corruption." The US is working on the investigation in conjunction with South Korea's Supreme Prosecutor's Office, Ministry of Justice, and the Seoul Central District Prosecutor's Office.
• The Inquisitr tells the story of the man who had $50,000 in casino winnings seized during a traffic stop in Nevada. Tan Nguyen was never charged with or convicted of a crime and had to sue the Humboldt County Sheriff's Office to recover his money.
• The Pttsburgh Post Gazette has an excellent piece on law enforcement's use of confidential informants. They note that the federal government spent more than $26 million in asset forfeiture cash in 2013 on confidential informants.  
• Authorities in Jamaica have spent nearly four years searching for  the assets of drug kingpin Christopher 'Dudus' Coke and have only been able to link a small fraction of assets to his criminal activity.

Research Update

I've fully compiled the available data on equitable sharing payments from the Department of Justice's website. The dataset includes more than 34,000 payments made to state and local law enforcement agencies between 2000 and 2012. I've begun cleaning up and verifying the data, making sure it was all copied correctly. Due to differences in rounding, some of the totals in the data set are different than the totals listed on the DOJ site, so I've begun the process of double checking the totals to make sure nothing was copied incorrectly. I've also begun coding agency locations, cleaning up typos from the source data, and consolidating cases where the same agency appears under multiple names. Here are a few quick takeaways from first glances at the data.

• The DOJ made more than $4 billion in equitable sharing payments between 2000 and 2012.
• California has by far been the largest recipient of equitable sharing revenue, recording more than $600 million dollars in the time period covered, nearly 15% of the total. Over that time period payments exploded from $29 million in fiscal year 2000 to over $82 million in 2012, an increase of more than 181%.
• The top 10 recipient states are California, New York, Florida, Texas, Georgia, Illinois, North Carolina, Missouri, Ohio, and Michigan, raking in a combined $2.6 billion.
• The largest payments to individual departments were paid out to the agencies in Virginia and West Virginia, which was revenue from a federal settlement with Purdue Pharmaceuticals regarding their marketing and sale of oxycontin. 
• There are a number of puzzlingly small amounts paid out, which are particularly confusing given the stated requirements for a case to be federally adoped. For exampe, Marion Police Department in Indiana received a payment of $4 from sales proceeds. In fact, there were 151 equitable sharing payments made that totaled less than $100 dollars, begging the questions how and what kind of seizures and forfeitures taken on by federal agencies would result in such small pay outs.

All told, I have barely scratched the surface of this massive pile of data and will be periodically updating the site with observations as I make my way through the correction and clean up process. Stay tuned for some big news coming up as I seek to expand the scope of my research and build a proper website and develop a real online presence. 

News Roundup

• Federal prosecutors are attempting to seize $25 million in assets from notorious mobster and FBI informant Whitey Bulger. This is in addition to the $822,000 already seized from Bulger's Santa Monica residence, with the feds contending that all proceeds of his illicit activities must be forfeit, not just his profits.
• A US District Judge has ordered the forfeiture of a building in New York City estimated to be worth between $500 and $700 million. The value of the property has soared since the government moved to seize it in 2008 and it is being billed as the “the largest real property forfeiture” in United States history. - Link to the Judge's Order
• Law enforcement agencies in Rhode Island are deciding what to do with an expected $230 million payday. The payments stem from Google's forfeiture of $500 million to the federal government in 2011. The award to the North Providence Police Department is 10 times its annual budget and the payment to Rhode Island's Attorney General is double its yearly budget. 
• Business Week details how federal agencies auction seized property.
• The Jacksonville, NC police department and the Duplin County Sheriff's Office received a combined $366,000 through the equitable sharing program.
• Agencies in the Philippines are seeking the forfeiture of money connected to the 'pork barrel' graft probe that lead to protests throughout the country.
• Two departments in Texas received a combined $699,000 in forfeiture proceeds connected to a case involving a web-based pill mill.
• The Mendocino county DA and Auditor-Controller are battling over the use of $315,000 in asset forfeiture funds. The Auditor's office is disputing DA Eyster's planned use of the revenue to "pay for basically all of his office expenses", which would be a violation of forfeiture spending guidelines.