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Abuses of asset forfeiture money are common and widespread amongst American governmental agencies at all levels. Part of the problem is that an increasing number of federal agencies have access to administrative forfeiture powers and manage to retain the proceeds of those forfeitures, even if the agency’s mandate has little to nothing to do with law enforcement. These forfeitures happen through a process that affords property owners access to few if any real due process protections, and the proceeds of these forfeitures go to funds that have little to no oversight.  As you might guess, federal administrators frequently use these funds for their own personal gain.

Today’s featured federal agency is NOAA, the National Oceanic and Atmospheric Administration. NOAA is a scientific and research agency that exists under the aegis of the United States Department of Commerce. Their staff is primarily civilians, but the reality of representing the US on the high seas is that you do need to have police powers of some kind and NOAA also has roughly 300 commissioned officers who conduct law enforcement actions when needed on the high seas. Sometimes this task includes investigative or police action against violations of the marine resources laws, including particularly the Lacey Act and its 1981 amendments. Often enforcement of these laws necessitates the seizure of ships and other tangible property; in 1986 the laws governing this process were amended to allow proceeds of this seized property to be used to:

“…pay from sums received as fines, penalties, and forfeitures of property for violations of any provisions of this chapter or of any other marine resource law…any expenses directly related to investigations and civil or criminal enforcement proceedings, including any necessary expenses for equipment, training, travel, witnesses, and contracting services directly related to such investigations or proceedings…”

-16 U.S.C. § 1861(e)(1)(C)

The statute is actually a bit more expansive, and contains several other provisions, including one that allows NOAA to pay informants who provide information resulting in a seizure up to 20% of the proceeds. But the provision I’ve excerpted above is the most important, because it allows for NOAA to manage its on forfeiture fund and pay for expenses that NOAA administrators deem appropriate. The law does not have appropriate auditing or reporting requirements, and what requirements do exist have been neglected for years.

This past week, the United States Department of Commerce released an audit of NOAA’s Asset Forfeiture Fund (AFF) performed by the major accounting firm KPMG. The results are fairly outrageous yet very predictable. For instance:

Under broad interpretation of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), OLE (Office for Law Enforcement) has extensively used the AFF to pay for materials and services such as vehicles, vessels, travel, and training, while GCEL (Office of General Counsel for Enforcement and Litigation) uses the AFF to fund over 99 percent of its non-salary operating expenses. In attempting to understand how the AFF has functioned, KPMG was unable to discern the current balance of the AFF because it found that NOAA did not have a consistent definition of the AFF, and indicated the AFF was more of an abstract concept than a tangible entity within NOAA. This is attributable to KPMG’s assessment that no unit or individual within NOAA has a clear understanding of the AFF and how it functions from start to finish. As a result, KPMG was unable to verify the $8.4 million balance provided by OLE and NOAA’s Office of Finance, as cited in our January 2010 report.

Let me run that line by you again. The Asset Forfeiture Fund “…was more of an abstract concept than a tangible entity within NOAA….no unit or individual within NOAA has a clear understanding of the Asset Forfeiture Fund and how it functions from start to finish…”

In other words, no one knows how much money is there, where the money in its entirety is, or even what funds constituted the forfeiture money. It is mind-boggling that a major governmental scientific research agency cannot ensure even the most basic accounting safeguards for a fund that it derives from seizures of property belonging to people may never be prosecuted for a crime.

Where did the money go? The Department of Commerce notes in the audit’s review:

OLE policy authorizes AFF expenditures for vehicle leasing and rentals, but does not include authorization of AFF expenditures for vehicle purchases. OLE’s vehicle inventory as of June 1, 2010, lists 202 vehicles, only two of which are leased. According to OLE, the other 200 were purchased at a cost of about $4.6 million, predominantly with AFF monies. OLE’s 202 vehicles exceed by a substantial margin its staffing of approximately 172 enforcement personnel.

Further, OLE lacks policy for take-home vehicles, which are assigned on a full-time basis to nearly its entire enforcement workforce of 172 personnel—including the Director, Deputy Director, Assistant Directors, and Special Agents-in-Charge. While there is valid justification for OLE’s special agents, enforcement officers, and first-level supervisors in the field to use take-home vehicles based on agency mission requirements, such justification for managers is not clear, particularly those in OLE headquarters. Of note, we learned that the then-Director, who resided approximately 60 miles from OLE headquarters, sometimes parked his daily take-home vehicle (a Chrysler Pacifica) at a commuter rail station and would then ride the train to his office free of charge, by virtue of his status as an armed law enforcement officer. On occasions when he missed the last evening train, he used an OLE headquarters pool vehicle to commute home.

Other abuses documented by KPMG include: roughly $480,000 to fund international travel for purposes unrelated to law enforcement, the purchase of a $300,000 luxury undercover boat that was purchased in a process that circumvented internal review procedures, and cash payments of $2,500 to unidentified individuals without any supporting documentation or approval.

In other words, NOAA’s Asset Forfeiture Fund is a giant cookie jar for NOAA administration and law enforcement personnel, who spend the money for vacations, luxury cars and boats, and under the table cash payments to whoever they want.

This story hasn’t broken in the national media yet, but a Congressman, Walter Jones (R-NC) has already published a outraged statement on the matter:

“The waste, fraud, and abuse revealed by this audit are appalling,” said Jones.  “It further confirms what fishermen have long suspected — NOAA Fisheries Law Enforcement has systematically abused fishermen in order to pad what has in essence become a slush fund for off-budget, inappropriate, and, in many cases, quite possibly illegal expenditures.  The mismanagement of this agency is just outrageous.

“Furthermore, as long as the agency is allowed to keep the proceeds from forfeitures, seizures, fines and penalties against fishermen, I’m afraid it will have every incentive to continue to engage in these abusive practices,” Jones continued.  “That cannot be allowed.  That is why today I introduced legislation – H.R. 5668 – which would eliminate NOAA’s ability to keep these funds, and instead direct that money to the U.S. Treasury where it could only be used to pay down America’s federal deficit.”

Here is the OpenCongress tracking page for HR 5668. Please call your US Representative and Senator in support of this legislation; it is important that this bill passes and the ability of federal agencies be constrained to access slush funds like these.

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3 Responses to “Another day, another obscure federal agency abuses its forfeiture slush fund”

  1. Sam says:

    It’s encouraging to see people like Congressman Jones stand up against the abuses of forfeiture funds like what’s been happening at NOAA, but the real issue is with the procedures and practices that allow these funds to become such large and attractive cookie jars in the first place. Until the very idea of forfeiture is challenged, these abuses will be a natural part of having such a large and murky pool of money in the hands of law enforcement.

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