The Abuse of Civil Forfeiture

The price of liberty is eternal vigilance

We need to repeat this warning twice every day. Today’s example comes from a three-part series in The Washington Post on the use and abuse of civil forfeiture by the police. Our free press is an essential pillar of our liberty.

The police, whose job is to protect us and enforce the law, can catch criminals more easily if they can freely search our private properties (our homes, cars, email, etc). It is more difficult to get away with unwanted crimes in a totalitarian state than in a liberal democracy that respects privacy as an important protection against the abuse of state power. We have wisely chosen not to live in a totalitarian state and have struck a balance between privacy and state/police intrusiveness that favors privacy. This makes it more difficult for the police to find criminals, but reduces the number of innocent citizens falsely accused. This is the way we like it, and we need to remain vigilant to keep it that way.

We also understand the importance of incentives for influencing and motivating behavior. If we want to encourage more of a particular activity, rewarding it financially can be effective. If those who find stolen (or illegally earned) money get to keep some of it, more will be found. That is what bounty hunting was (is) all about. But what if those finding the money are also given the authority to judge its legality? That would constitute a clear-cut conflict of interest. A bounty hunter could increase his financial take by declaring money illegal in questionable cases without due process to protect the innocent.

Our sacred principle of “innocent until proven guilty” is being undermined by the civil forfeiture of private property by police who are allowed to keep part of what they take. “Civil forfeiture is the government power to take property suspected of involvement in a crime. Unlike criminal forfeiture—used to take the ill-gotten gains of criminal activity after a criminal conviction—with civil forfeiture, police can take property without so much as charging the owner with any wrongdoing.” http://www.ij.org/inequitablejustice

“Cash seizures can be made under state or federal civil law. One of the primary ways police departments are able to seize money and share in the proceeds at the federal level is through a long-standing Justice Department civil asset forfeiture program known as Equitable Sharing. Asset forfeiture is an extraordinarily powerful law enforcement tool that allows the government to take cash and property without pressing criminal charges and then requires the owners to prove their possessions were legally acquired.” http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/

The practice of “equitable sharing” encourages police to circumvent state laws on civil forfeiture in order to share in the proceeds of property confiscated under federal law. This financial incentive encourages the police to seize more private property but suffers from an unacceptable conflict of interest. The results, as revealed in The Washington Post’s three article series, can be ugly. We should not be surprised, but we should be indignant.

Here is one of many examples: “Mandrel Stuart, a 35-year-old African American owner of a small barbecue restaurant in Staunton, Va., was stunned when police took $17,550 from him during a stop in 2012 for a minor traffic infraction on Interstate 66 in Fairfax. He rejected a settlement with the government for half of his money and demanded a jury trial. He eventually got his money back but lost his business because he didn’t have the cash to pay his overhead.
“I paid taxes on that money. I worked for that money,” Stuart said. “Why should I give them my money?”” http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/

“Last year, equitable-sharing agreements funneled $600 million to police budgets. Clearly, with the size of the federal Asset Forfeiture Fund exceeding $2 billion in 2013, civil forfeiture is big business for the government.” http://www.washingtonpost.com/opinions/tim-walberg-an-end-to-the-abuse-of-civil-forfeiture/2014/09/04/e7b9d07a-3395-11e4-9e92-0899b306bbea_story.html

“The Post found:
• There have been 61,998 cash seizures made on highways and elsewhere since 9/11 without search warrants or indictments through the Equitable Sharing Program, totaling more than $2.5 billion. State and local authorities kept more than $1.7 billion of that while Justice, Homeland Security and other federal agencies received $800 million. Half of the seizures were below $8,800.
• Only a sixth of the seizures were legally challenged, in part because of the costs of legal action against the government. But in 41 percent of cases — 4,455 — where there was a challenge, the government agreed to return money. The appeals process took more than a year in 40 percent of those cases and often required owners of the cash to sign agreements not to sue police over the seizures.
• Hundreds of state and local departments and drug task forces appear to rely on seized cash, despite a federal ban on the money to pay salaries or otherwise support budgets. The Post found that 298 departments and 210 task forces have seized the equivalent of 20 percent or more of their annual budgets since 2008.

“Since 2001, police have seized $2.5 billion in cash from people who were never charged with a crime.”  http://www.washingtonpost.com/blogs/wonkblog/wp/2014/09/08/civil-asset-forfeitures-more-than-double-under-obama/

This has gone much too far for the health of our Republic.

About wcoats

Dr. Warren L. Coats specializes in advising central banks on monetary policy, and in the development of their capacity to formulate and implement monetary policy. He is retired from the International Monetary Fund, where, as Assistant Director of the Monetary and Financial Systems Department, he led missions to over twenty countries. Before then, he served as Visiting Economist to the Board of Governors of the Federal Reserve System, and to the World Bank, and was Assistant Prof of Economics at the Univ. of Virginia from 1970-75. Most recently he was Senior Monetary Policy Advisor to the Central Bank of Iraq; an IMF consultant to the central banks of Afghanistan, Kenya and Zimbabwe; and a Deloitte/USAID advisor to the Government of South Sudan. He is currently a member of the Editorial Board of the Cayman Financial Review and until the end of 2013 was a member of the IMF program team for Afghanistan. His most recent book is entitled "One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina."
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3 Responses to The Abuse of Civil Forfeiture

  1. Mike Burnaugh says:

    Thank you Warren!

    Mike Burnaugh

  2. John Sainsbury says:

    Warren, your most excellent commentary on our decline of liberty run rampant by yet another means (namely, civil forfeiture) brings to mind a commentary of St. Augustine’s City of God (426 AD) with the rejoinder of the captured pirate.
    http://copticliterature.wordpress.com/2011/04/05/st-augustine-remove-justice-and-what-are-kingdoms-but-gangs-of-criminals-on-a-large-scale/

  3. Laura S. Walsh says:

    Well, this is scary!

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