Asset Forfeiture and Equitable Sharing: Is the Federal Government Encouraging Police to Steal?

Jaba Tsitsuashvili*

The War on Drugs has spawned a lot of debate and a lot of unintended consequences. One such unintended consequence is the perverse incentive structure created by federal asset forfeiture laws. The current state of federal law is based on the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”). CAFRA established a “preponderance of evidence” burden of proof on the government where virtually no burden existed before. The problem is that this remains a low threshold for the government to meet, and the onus is still on property owners to bring the court action. The Act does not provide for appointment of counsel unless the owner is simultaneously charged with a crime, which is not usually the case. And although section 2 of the Act does provide an “innocent owner defense,” the “substantial connection” standard that governs the extent to which the property need be “tainted” gives police and courts tremendous discretion, usually at the expense of property owners.[1]   

Practically speaking, asset forfeiture creates perverse incentives for police departments to misappropriate people’s cash and property. Without getting into the effectiveness or the desirability of the War on Drugs, I think most people would agree that its purpose is not to fill police coffers. But forfeiture laws permit (and encourage) police departments to make attenuated (read: fabricated) claims that link cash and property to drug transactions in order to seize them. The problem is that the owner need not ever be charged with a crime, and the burden is on the owner to sue to prove that the money was obtained legitimately. These cases are inadequately contested because usually such  property owners cannot afford the attorney fees that litigation would require, which would often exceed the value of the assets forfeited.

It is these circumstances that led to police in Wisconsin confiscating the cash that a mother scraped together from her disability payments and tax return to bail her son out of jail, the justification being that a police dog alerted to  the scent of drugs on the cash. The cash, which had just been withdrawn from ATMs, was likely part of the estimated 90 percent of cash in the United States which contains traces of cocaine.

One stated purpose of asset forfeiture laws is to catch and prevent the sale of drugs. But it is hard to take that claim seriously when police have a habit of waiting until drugs are sold and then busting the criminals because they would rather take the cash than the drugs. Or worse yet, police often simply rely on racial profiling to pull over black and Latino drivers, take their cash, and tell them that unless they sign forfeiture waivers they will be prosecuted for drug charges (in this case even after a police dog did not alert to any drugs).

Earlier this year in Massachusetts, a motel owner won a years-long legal battle to keep his property and his livelihood. The government was trying to seize the Caswells’ motel because 15 drug-related crimes were committed on the premises over a 14-year period. But as the judge properly noted, there was no evidence that the Caswells had reason to know of the crimes or that they ever did anything to interfere with law enforcement.

One could compile volumes of similar anecdotal evidence of the abuse perpetrated by police throughout the country. A March 2010  study by the Institute for Justice gave every state a grade based on the level of protection afforded to property owners, with only three states receiving a B or better (New York got a D). Fortunately, some states have safeguards to disincentivize abuse, such as requiring that at least a significant percentage of the money go into a general state fund, education, or drug rehab programs, rather than directly to the departments and agencies that make the raids. However, the federal government has undermined these reforms and increased the potential for abuse with a program known as equitable sharing.

Under the equitable sharing scheme, state police merely turn the case over to federal law enforcement, such as the DEA, which then handles the paperwork and allows the state police to keep 80 percent of the value of the confiscated property. Section 5 of CAFRA stipulates that when property is first seized by state authorities, no warrant is required for federal seizure. It is this nifty end-around that allows police to evade state law limitations on abuse.

One would think that the Fourteenth Amendment’s prohibition against depriving any person of property without due process of law would render these abuses unconstitutional. Unfortunately, the Supreme Court upheld their constitutionality in Bennis v. Michigan. Chief Justice Rehnquist relied on the airtight logic that these actions are “too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced.” The Chief Justice may have been relying on Justice Oliver Wendell Holmes’s tongue-in-cheek observation that sometimes “a page of history is worth a volume of logic.” If only he had instead heeded Holmes’s warning that “certitude is not the test of certainty. We have been cocksure of many things that were not so.”

So even if a state passes a reform like the one recently proposed in Tennessee, which would require a warrant before seizure and a criminal conviction to allow seized property to be kept, the federal government’s equitable sharing program ensures that police will continue to commit highway robbery. It is time for comprehensive reform of this broken system. Criminals should obviously be stripped of their ill-gotten fortunes. But innocent people should not be subject to the whims of corrupt police departments.

[1] This Miami Law Review article by Brant Hadaway provides a clear and thorough analysis of CAFRA.

*Jaba Tsitsuashvili is a J.D. Candidate at New York University School of Law, Class of 2015