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Corrupt, from start to finish

On January 16, 2011, in Uncategorized, by Eapen Thampy

It is a well-documented fact that the asset forfeiture process in American federal and state law is a process wracked by corruption, from the police officers who pocket “their cut” of cash seizures to the police chiefs, sheriffs, and prosecutors who begin focusing on finding and seizing cash or seizable property at the expense of crimes like rape, murder, and drunken driving. Slush funds are common, and we know of many law enforcement officers who have bought luxury yachts, trips to Vegas, tanks, and other expensive toys for their official and personal presences. We know of law enforcement officials who refuse to bow to any elected official, financing their own personal SWAT teams through seizures from unwitting black and Hispanic travelers, college students, and low-income drug addicts (who are easy targets, as they are often unsympathetic victims, being usually of low income, education, and social status).

One of the aspects of the asset forfeiture system that is rarely documented is the corruption at the end of the process. The disposition of most seized property is an auction of some variety; the US Marshals Service is the primary vessel for taking forfeited property to auction at the federal level, and local auctions see what property is disposed of by local and state law enforcement agencies.

As it turns out, the practice and conduct of these auctions has been rank with corruption.  From the NYT:

An arm of the United States Marshals Service undervalued what could amount to untold millions of dollars in assets forfeited by white-collar criminals — including some from the family of Bernard L. Madoff — and sold them for far less than they were worth, according to a lawsuit filed in federal court in Manhattan.

As a result, the lawsuit suggests, crime victims, including some who lost fortunes in the Madoff case, may have been deprived of millions of dollars in restitution.

The complaint filed in the case contains a range of accusations about the actions of Leonard Briskman, the leader of the marshals unit. It says that assets were sold without public notice or competitive bidding, and that Mr. Briskman assessed the value of certain assets, found buyers through his “business contacts,” and kept a secret bank account to which government auditors had no access.

While the lawsuit does not detail the potential losses to the Asset Forfeiture Program and, by extension, to crime victims, it cites Mr. Briskman’s handling in early March of a minority interest in the Delta Fund, which had been held by Ruth Madoff. The fund came under the purview of the complex assets group.

“During the sale, it became evident that the sale price did not have a corresponding valuation by an independent qualified professional, and that it was patently discounted sharply below fair market value,” the lawsuit alleged. “Upon discussion, it also became clear that Briskman had not sought multiple prospective buyers in the open market for this asset.”

Later in March, when Mr. Aryai reported his findings to his superiors at Forfeiture Support Associates and in the Marshals Service, he was transferred so that he reported directly to Mr. Briskman, according to the lawsuit. When Mr. Aryai tried to add his new supervisor to his professional networking profile on the Web site LinkedIn, he found that Mr. Briskman did not list himself as an employee of the Marshals Service, but as the chief executive of Asset Valuation Advisors.

When Mr. Aryai sought to look into Mr. Briskman’s company, he found that it “held itself out as a business with experience in the disposition of distressed assets, with examples that shockingly appeared to be U.S.M.S. forfeiture matters,” the complaint said.

The Assets Forfeiture Fund of the Justice Department was created through the Comprehensive Forfeiture Act of 1984, which did two important things for the purpose of this discussion. First, it allowed the “equitable sharing” of federal forfeiture money with cooperating local and state law enforcement. Second was the creation of the Assets Forfeiture Fund of the Justice Department and the Customs Service Fund (now the Treasury Fund).  The impact of these two provisions fundamentally changed American law enforcement in a variety of ways.

First, the Equitable Sharing program has functionally federalized every state and local law enforcement agency that receives non-appropriated forfeiture money through federal agencies, not Congress or any state or local legislative body. Combined with the independence of forfeiture funds from legislative appropriations and oversight, we find that there is no real check on abuse in the system. In this way, police agencies across the country have become disconnected from the interests of the people they serve in some rather fundamental ways as the financial incentive and structure of the forfeiture system provides them with incentives to militarize domestic law enforcement and enforce laws in ways that communities around the nation are becoming increasingly uncomfortable with. Consider the emergence of SWAT raids, which occurred at the rate of roughly 300 annually in the United States during the early 1980′s. By 2005, that number was estimated at 50,000, and SWAT policing has lately come into public focus as the number of “wrong-door raids” and shootings of innocent bystanders continue to escalate.

And as Bryan Aryai’s lawsuit indicates, the unintended consequences of allowing the Justice Department control of its own forfeiture fund allowed well-connected, protected bureaucrats to plunder wantonly from the public till. From this perspective, the Department of Justice is as corrupt as many third world governments (many of which the DEA supports with surveillance technology, cash, and weapons).

It is not necessary for politicians to cede ground on fundamental checks and balances in government. We can protect society through just and fair laws, as long as the lines of power are clearly drawn. When executive branch agencies control their own funding, they set their own protocol and practices; when these agencies wield the awesome police power of the state, the checks on their actions, their funding, and their independence should be strong and robust.

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4 Responses to “Corrupt, from start to finish”

  1. [...] Thampy first blogged about the problems with the Marshals Service forfeiture program when the lawsuit was filed back in [...]

  2. [...] Thampy first blogged about the problems with the Marshals Service forfeiture program when the lawsuit was filed back in [...]

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