Suspension of Federal Asset Forfeiture Equitable Sharing Program Poses Substantial Risks to Property Owners, Congressional Action Necessary

On December 21, 2015, M. Kendall Day, Chief of the Asset Forfeiture and Money Laundering Section of the United States Department of Justice, issued a letter of notice that payments from the Equitable Sharing program were deferred after Congress rescinded a combined $1.2 billion dollars from the program (in other words, Congress used its appropriation power to use public funds for its own purposes). 

It's worthwhile to note that the Audit of the Assets Forfeiture Fund and Seized Asset Deposit Fund Annual Financial Statements FY 2014 (published in January 2015) indicates on page 6 that the: 

Net position, an indicator of the AFF’s future capability to support ongoing operations, increased to $2,560.8 million in FY 2014 from $1,855.8 million in FY 2013, an increase of 38.0 percent.

With a recission of $1.2 billion from program funds, the net position of the fund would be roughly $1.3 billion. The FY 2014 audit also notes the annual costs facing the Asset Forfeiture Program were $1.775 billion dollars in 2013 and a little over $3 billion dollars in 2014. These costs include "the costs of seizing, evaluating, inventorying, maintaining, protecting, advertising, forfeiting, and disposing of property seized for forfeiture. These costs are necessary to support the AFP and fluctuate in direct relation to the forfeiture activity levels of the investigative, prosecutive, litigative, and administrative participants of the Fund." 

Facing similar levels of operating costs on an annual basis, along with a substantially diminished fund balance, the Department of Justice made the decision that it was in the best interests of federal law enforcement for the federal government to keep ALL of the proceeds from asset forfeiture, rather than continue making arrangements to share distributions with state and local law enforcement. 

However, reformers should not allow the perception that this temporary deferment of Equitable Sharing arrangements represents a victory to proliferate unchecked. Federal prosecutors now don't have to worry about working forfeiture actions that don't have 100% payoffs. Indeed, increased budgetary pressure from Congress makes it more likely...not less...that federal forfeiture prosecutions will continue to be aggressively pursued in more venues than ever before.

Counterintuitively, this policy directive *may* compound issues related to federalization of local law enforcement by increasing the option value of participating in a federal task force. Under the January 16, 2015 Holder order previously governing participation in Equitable Sharing, forfeiture actions stemming solely from state or local law enforcement activity were generally disfavored in lieu of forfeiture actions stemming from activities or organizations with a federal component. Under this latest directive, federal forfeiture dollars will exclusively remain with federal agencies, making the federal agents leading, directing, or facilitating participation with state or local law enforcement the sole brokers of federal agency resources accessible by non-federal agencies participating in task forces, etc. As state and local law enforcers look to maintain baseline access to expensive surveillance, targeting, and military equipment, these federal connections will increase in value, especially if they can be used to start investigations where state and local law enforcement pursue asset forfeiture under state law.

It should be noted that these federal policy directives don't result in substantial real or de facto protections for the rights of American property owners. They exist variously in response to Congressional budgetary pressures, and we have yet to solidify a commitment from an Attorney General or President to curtail practices and incentive structures that result in executive branch misconduct. Ultimately, no system that allows the executive branch to fund itself is desirable in our Constitutional republic; such a setup makes executive overreach inevitable and pervasive. 

Without significant further action by Congress to re-assert its Constitutional "power of the purse", we will continue to see escalating forfeiture payouts to federal agencies continue to set the tone for executive overreach and Constitutional violations. To this end, reformers must make significant inroads both within the insular world of law enforcement special interests as well as the broader world of voter awareness.

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  • commented 2015-12-28 06:55:39 -0600
    I’m with Kenny here. The suspension of the asset forfeiture sharing program disincentivizes local LEO (especially in those states with stronger protections against asset forfeiture) from forwarding asset forfeiture cases to the feds. Yes, it gives the feds more incentive when they DO pursue a forfeiture, but it will drastically limit the number of incidents in which the feds are called on for asset forfeiture ’’services."
  • commented 2015-12-27 14:59:38 -0600
    If Feds aren’t sharing with local enforcement anymore, and you are under investigation by the state, not Feds, isn’t it less likely now that the state will try to prosecute you if the money they possess doesn’t go to them?