How to improve H.R. 5212, the Civil Asset Forfeiture Reform Act of 2014. Part II. Equitable Sharing

Over the next few weeks, I'll be posting thoughts on what Representative Tim Walberg's proposed legislation, H.R. 5212, the Civil Asset Forfeiture Reform Act of 2014, promises, and how the legislation might be improved. I encourage our readership to suggest further improvements by emailing me (scott at forfeiturereform dot com), commenting on our Facebook page, or commenting on the blog page. 
Today, I'll cover equitable sharing.

II. Equitable Sharing.

Seeing inherent danger in asset forfeiture, various states have enacted laws governing the availability of forfeiture and the distribution of asset forfeiture proceeds. The laws of Nebraska and Wisconsin, for instance, largely treat forfeiture as a criminal punishment, requiring that the states prove beyond a reasonable doubt that seized property was used in violation of its laws before a forfeiture can take place. Other states have chosen to address the implicit danger in asset forfeiture by removing the incentives that may motivate agencies to seize stuff for the enrichment of the departments. The constitutions of North Carolina and Missouri, for instance, direct forfeiture proceeds towards education. 

Under current law, state and local law enforcement can, however, evade these restrictions by requesting that a federal agency adopt the case and initiate a federal forfeiture action against the property. If the federal forfeiture action is successful, the forfeiture proceeds go into a DOJ-controlled asset forfeiture fund. The asset forfeiture fund is subsequently tapped to give state and local law enforcement agencies payments of up to 80% of the proceeds resulting from such adoptions, through the DOJ's equitable sharing program. 

Use of the equitable sharing program thus frustrates the various restrictions states have placed on local asset forfeiture.

Like Senator Paul's FAIR Act, H.R. 5212 attempts to rein in these circumventions of state laws. The two bills differ, however, in approach and efficacy.

H.R. 5212 would amend 28 U.S.C. § 524(c) by inserting ‘‘(12) The Attorney General shall assure that any equitable sharing between the Department of Justice and a local or State law enforcement agency was not initiated for the purpose of circumventing any State law that prohibits civil forfeiture or limits use or disposition of property obtained via civil forfeiture by State or local agencies.’’ 

Adoption of such language would constitute an improvement over current law by expressing a Congressional wish that the DOJ not use the equitable sharing program to facilitate circumventions of state laws governing asset forfeiture. Our worry, though, is that the language lacks any teeth to compel enforcement of its aim. First, if H.R. 5212's anti-circumvention language were adopted, the Office of the Attorney General could continue to knowingly facilitate circumventions of state and local asset forfeiture laws by pointing to any other purpose as the purpose for which federal adoption of the forfeiture was initiated. Because the federal government uniformly enjoys superior resources and greater expertise for prosecuting forfeitures, alternative explanations will always be available. Second, even if a party were able to prove that a forfeiture was adopted by a federal agency for the express purpose of circumventing a state law that prohibited civil forfeiture or limited the use or disposition of property, it's not clear that H.R. 5212 would provide the means for a party to recover the asset or to sue to stop the disbursement of an equitable sharing award.

A better approach, we think, would be to adopt the FAIR Act's proposal of directing all federal forfeiture proceeds to the Treasury fund, disbanding the equitable sharing program, and giving Congress discretion over how to appropriate forfeiture proceeds.

Barring that, H.R. 5212 would be improved by removing authorization for the award of any equitable sharing if the forfeiture proceeds were either (a) derived from a civil forfeiture in a state where civil forfeiture is unavailable under state law or (b) where local law enforcement would be ineligible to receive forfeiture proceeds, but for the existence of the federal equitable sharing program--that appears, after all, to be the intent of H.R. 5212. Moreover, H.R. 5212 should (if the FAIR Act proposal is shunned) expressly grant standing to forfeiture claimants and stipulated forfeiture proceeds beneficiaries (such as the school districts of Missouri and North Carolina) to sue on theories that such circumventions are unlawful, if the parties can show direct harm.

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