Guest Post: Civil Asset Forfeiture Unjustly Targets the Poor

by Julian Adorney

Income mobility in the United States has stagnated, a fact that hurts the poor most of all. If President Trump wishes to keep his promises to help low-income Americans escape poverty, he should instruct his administration to jettison, rather than expand, non-criminal asset forfeiture.

Non-criminal asset forfeiture lets government agents seize Americans’ assets (cash, but also cars and even houses) on the mere suspicion that they were involved in a crime. Asset forfeiture is intended to deprive criminals of their ill-gotten gains, but frequently enables police to take the property of Americans who remain innocent in the eyes of the law.

According to a Department of Justice report, they’ve seized $29 billion from 2007-2016 on the federal level. Twenty-three percent of this has been administrative asset forfeiture, meaning that the seizure was less than $500,000 and the victims were never convicted of—or often even charged with—a crime.

Administrative asset forfeiture alone thus translates to takings of $667 million per year. Because asset forfeiture has risen dramatically in the past decade, administrative asset seizure is likely to pass $4 billion during Trump’s first term if left unchecked.

This Injustice Hurts the Poor Most
Asset forfeiture primarily targets the poor. Most forfeitures are for small amounts: in 2012, the Institute for Justice, a libertarian law firm that has focused heavily on asset forfeiture, analyzed forfeiture in 10 states and found that the median value of assets seized ranged from $451 (Minnesota) to $2,048 (Utah). Given that law enforcement routinely takes everything they find in a forfeiture case, these small values suggest the relative poverty of the victims.

The procedural hurdles for challenging asset forfeiture also mean that poor people are less able to get their money back. The average forfeiture challenge requires four weekdays in court; missing four days of work can be a prohibitive expense for Americans living paycheck to paycheck. Additionally, claims are challenged in civil court, where the right to counsel doesn’t apply, meaning that claimants need to hire their own lawyer.

Asset forfeiture is especially dangerous for the unbanked, because police and federal agents consider high amounts of cash to be suspect. 

In 2013, half of all households with incomes of less than $15,000 were either unbanked or underbanked. In a report on non-criminal asset forfeiture, the Center for American Progress argues that “low-income individuals and communities of color are hit hardest” by forfeiture.

Asset forfeiture functions as a regressive tax, which reduces low-income Americans’ economic mobility. A family that sees their savings wiped out has to start again from the bottom. A person whose cash rent payment is seized may turn to payday loans or the black market, or simply be evicted—none of which are conducive to upward mobility.


Civil Asset Forfeiture Is Just Cruel
Regressive taxation can also reduce high school graduation, as teens are forced to leave school to help make ends meet. In their book “Taxing the Poor,” Newman and O’Brien argue, “For every $100 increase on taxes at the poverty line, we saw…a quarter of a percentage point decrease in high school completion.” Taking money from poor families erodes teens’ futures and reduces intergenerational mobility.

Civil and administrative asset forfeiture also seizes cars, which can rob the poor of their ability to work. According to the Institute for Justice, Texas and Virginia seized 17,000 cars from 2000 to 2017–or about 1,000 per year. The average value of the car was $6,000, again suggesting that this tactic targets the poor.

When families lose their vehicles, their earning potential suffers. In a study on transportation access and economic opportunity, the Urban Institute, a leading liberal think tank, found that “keeping or gaining access to automobiles is positively associated with the likelihood of employment.” Without a car, many people cannot show up to work on time, so they often lose their jobs. Workers without cars also have a smaller geographic range in which they can find a new job.

Asset forfeiture also targets low-income business owners. In 2013, more than half of small business owners only accepted cash payments. These owners are more likely to be low-income, because a greater percentage of the poor are unbanked. A business that caters to white-collar workers is more likely to pay the substantial fees required to accept credit cards, because that’s the payment method its clientele prefers. A business in a poor neighborhood is more likely to get away with only taking cash.

Legal business owners who only accept cash are more likely to be victims of non-criminal asset forfeiture. They are more suspicious to police because of the large amounts of money that they carry. An asset seizure will also probably cost them more than it would a customer; one asset seizure could rob a business owner of a week’s worth of revenue. When every dollar of revenue matters for escaping poverty, asset forfeiture can trap the poor.

Trump promised to drain the swamp and reduce funding for federal agencies in order to help working-class Americans. Civil asset forfeiture enriches agencies like the Internal Revenue Service (which can wipe out citizens’ bank accounts) and the Drug Enforcement Agency (which took in $3.2 billion in civil forfeiture assets since 2007) at the expense of low-income Americans.

Rather than expand the practice, Trump’s Department of Justice should end an institution that punishes the poor and erodes due process.

Reprinted from The Federalist.

Julian Adorney is a Young Voices Advocate. His work has been featured in dozens of outlets, including National Review, Fox News’ Nation, and Lawrence Reed’s best-selling economics anthology Excuse Me, Professor.

This article was originally published on FEE.org. Read the original article.

Guest Post: Good News About Civil Asset Forfeiture

by Daniel J. Mitchell

Some types of theft are legal in America.

But there’s a catch. You can only legally steal if you work for the government. It’s a process called “civil asset forfeiture” and it enables government officials to confiscate your property even if you have not been convicted of a crime. Or even charged with a crime.



I’m not joking. This isn’t a snarky reference to the tax system. Nor am I implying that bureaucrats can figuratively steal your property. We’re talking about literal theft by the state.

And it can happen if some government official decides – without any legal proceeding – that the property somehow may have been involved in criminal activity. Or maybe just because you have the wrong skin color.


What Happened to Due Process?
A column in the Wall Street Journal explains this grotesque injustice.

…thousands of Americans have had their assets taken without ever being charged with a crime, let alone convicted. Russ Caswell almost lost his Massachusetts motel, which had been run by his family for more than 50 years, because of 15 “drug-related incidents” there from 1994-2008, a period through which he rented out nearly 200,000 rooms. Maryland dairy farmer Randy Sowers had his entire bank account—roughly $60,000—seized by the IRS, which accused him of running afoul of reporting requirements for cash deposits. …A manager of a Christian rock band had $53,000 in cash—profits from concerts and donations intended for an orphanage in Thailand—seized in Oklahoma after being stopped for a broken taillight. All of the property in these outrageous cases was eventually returned, but only after an arduous process."

These abuses happen in large part because cops are given bad incentives.

Any property they steal from citizens can be used to pad the budgets of police bureaucracies.

Today more than 40 states and the federal government permit law-enforcement agencies to retain anywhere from 45% to 100% of forfeiture proceeds. As a result, forfeiture has practically become an industry."

And real money is involved.

…data on asset forfeiture across 14 states, including California, Texas and New York. Between 2002 and 2013, the revenue from forfeiture more than doubled, from $107 million to $250 million. Federal confiscations have risen even faster. In 1986 the Justice Department’s Assets Forfeiture Fund collected $93.7 million. In 2014 the number was $4.5 billion."

In other words, there’s a huge incentive for cops to misbehave. It’s called “policing for profit.”


Hope on the Horizon
Fortunately, there is a move for reform at the state level.

Since 2014 nearly 20 states and the District of Columbia have enacted laws limiting asset forfeiture or increasing transparency. Nearly 20 other states are considering similar legislation. …lawmakers in Alaska, Connecticut, North Dakota and Texas have sponsored legislation that would send confiscated proceeds directly to the general fund of the state or county. Similar measures in Arizona and Hawaii would restrict forfeiture proceeds to being used to compensate crime victims and their families. …Last fall California Gov. Jerry Brown signed a bill that, in most cases, requires a criminal conviction before any California agency can receive equitable-sharing proceeds. In January Ohio Gov. John Kasich approved legislation to ban his state’s police and prosecutors from transferring seized property to federal agencies unless its value is more than $100,000. Similar reforms have been introduced in Colorado, New Hampshire and a handful of other states."

Legislative reforms are good, though judicial action would be even better.

And, sooner or later, that may happen.

America’s best (but not quite perfect) Supreme Court Justice is justly outraged by these examples of legalized theft. First, some background.

…the U.S. Supreme Court declined to hear a case filed by a Texas woman who says that her due process rights were violated when the police seized over $200,000 in cash from her family despite the fact that no one has been convicted of any underlying crime associated with the money. Unfortunately, thanks to the state’s sweeping civil asset forfeiture laws, the authorities were permitted to take the money of this innocent woman. The Supreme Court offered no explanation today for its refusal to hear the case."

But Justice Thomas is not happy that government officials are allowed to randomly steal property.

Justice Clarence Thomas made it clear that he believes the current state of civil asset forfeiture law is fundamentally unconstitutional. “This system—where police can seize property with limited judicial oversight and retain it for their own use—has led to egregious and well-chronicled abuses,” Thomas declared. Furthermore, he wrote, the Supreme Court’s previous rulings on the matter are starkly at odds with the Constitution, which “presumably would require the Court to align its distinct doctrine governing civil forfeiture with its doctrines governing other forms of punitive state action and property deprivation.” Those other doctrines, Thomas noted, impose significant checks on the government, such as heightened standards of proof, various procedural protections, and the right to a trial by jury. Civil asset forfeiture proceedings, by contrast, offer no such constitutional safeguards for the rights of person or property."

The article continues to explain that Thomas could be signaling that the Supreme Court will address these issues in the future, even though it didn’t choose to address the case filed by the Texas woman.



Let’s hope so. It’s heartening that there’s been a bit of good news at the state level (I even wrote that reform of asset forfeiture was one of the best developments of 2015), but it would be nice if the Supreme Court ultimately decided to prohibit civil asset forfeiture altogether.

But that might be years in the future, so let’s close with a very fresh example of a good state-based reform.


Reform in Mississippi
The Wall Street Journal favorably opined yesterday about reforms that have been enacted in Mississippi.

…it’s worth highlighting a civil forfeiture reform backed by the ACLU that Mississippi GOP Governor Phil Bryant signed last week with bipartisan legislative support."

The editorial reminds us why asset forfeiture is wrong.

…civil forfeiture laws…allow law enforcement agencies to seize property they suspect to be related to a crime without actually having to obtain a conviction or even submit charges. Police and prosecutors can auction off the property and keep the proceeds to pad their budgets. …Perverse incentives…create a huge potential for abuse."

Here’s what Mississippi did.

Mississippi’s reforms, which were pushed by the Institute for Justice and had nearly unanimous support in the legislature, would curb the most egregious abuses. Law enforcers would have to obtain a seizure warrant within 72 hours and prosecute within 30 days, so they couldn’t take property while trying to formulate a case. Agencies would also be required to publish a description of the seized property along with its value and petitions contesting the forfeiture to an online public database. …the public will finally be able to police misconduct by law enforcement in criminal raids. That’s something even liberals can cheer."

It’s nice that there’s been reform at the state level, and the Mississippi example is quite encouraging.

That’s the good news.

But the bad news is that there may not be much reason to expect progress from the White House since both President Trump and his Attorney General support these arbitrary and unfair confiscations of property.

Which is a shame since they both took oaths to protect Americans from the kind of horrible abuse that the Dehko family experienced. Or the mistreatment of Carole Hinders. Or the ransacking of Joseph Rivers. Or the brutalization of Thomas Williams.

However, if the first two directors of the Justice Department’s asset forfeiture office can change their minds and urge repeal of these unfair laws, maybe there’s hope for Trump and Sessions.


Reprinted from International Liberty.

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

This article was originally published on FEE.org. Read the original article.