In the Dec 6, 2011 article “From Minnesota to Mexicali: Connecting the dots with trafficked firearms“, National District Attorney Association staff attorney David Pendle says:

In many jurisdictions, asset forfeiture is a valuable tool for seizing the defendant’s vehicle or even stash home and, as a secondary benefit, generating revenue for local law enforcement or other statutorily designated beneficiaries.

The notion of asset forfeiture providing a “benefit” for law enforcement through increased revenues is antithetical to democratic or constitutional governance. As Brent Hadaway wrote in his October 2000 University of Miami Law Review article “Executive Privateers“:

In recognition of the political reality that drug prohibition is unlikely to end in the near future, it is appropriate to consider some issues for future efforts at reform. Although its purported intent may have been to deprive drug dealers of the fruits and instrumentalities of their activities, as it is practiced by the government, forfeiture is, for all intents and purposes, a means of raising revenue, and it will most likely continue to be so in a post-Reform Act world. Eric Blumenson and Eva Nilsen have argued that this particular feature of the current law of forfeiture, beyond its obvious corruptive potential, violates the constitutional separation of powers as contained in the Appropriations Clause of Article I. This argument is sound, and is worth exploring in a litigation context.

Because 21 U.S.C. § 881(e)(2)(B) mandates the depositing of forfeited proceeds directly into the Justice Department’s Asset Forfeiture Fund, the core congressional power found in the Appropriations Clause is bypassed in favor of an agency of the executive branch raising its own revenue and setting its own budget. But since Congress granted this power to the Justice Department, the question becomes whether this was an impermissible delegation of a core congressional power. The nondelegation doctrine provides that “so long as Congress provides an administrative agency with standards guiding its actions such that a court could ascertain whether the will of Congress has been obeyed, no delegation of legislative authority trenching on the principle of separation of powers has occurred.” However, “[i]f some delegations of legislative power are constitutionally suspect, giving law enforcement agencies the opportunity to set the size of their own budgets through police seizures must be one of them.”

The nondelegation concerns on this point are compelling, and, by themselves, should be sufficient for finding that asset forfeiture in a post-Reform Act world would still be unconstitutional. Nevertheless, implicit in these arguments is an important policy matter which must be examined, one which takes into account the externality effect of funding significant government operations, such as law enforcement, with assets forfeited from individuals.

If indeed it is agreed upon that drugs must be illegal, the logic of making drug trafficking unprofitable is compelling. The power conferred by drug profits is well-known, and has proven to be highly corrosive to the rule of law wherever illegal drug markets exist. Complications arise, however, when a government declares an interest in those profits through forfeiture, especially when the government is not required to pursue a criminal conviction as a prerequisite to forfeiture. Through a perverse irony, the government soon finds that it has a financial interest in the profitability of the drug market, and, therefore, a fiscal stake in keeping drugs illegal. Law enforcement agencies that depend on drug asset forfeiture come to have their own stake in the profitability of illegal drugs. In fact, one of the key measures of the success of drug interdiction efforts[sp2c]|[sp2c]driving up the street price of drugs[sp2c]|[sp2c]has an additional ironic effect of making black market trading in drugs even more profitable for those who remain market players. The end result is that law enforcement develops a stronger stake in not winning the drug war than in winning the drug war.

The second prong of this problem is that, because dependence on forfeiture causes the funding of law enforcement to become detached from legislative accountability, the body politic has no sense of the real cost of enforcing drug laws, and, therefore, the laws themselves are in danger of becoming irrational. Our democracy is founded on a fundamental principle: that freedom allows for a marketplace of political ideas to flourish. However, a political idea cannot be effectively tested by that marketplace if its cost cannot be weighed rationally against its impact or utility.

It flows from this precept that, in order for the body politic to rationally determine which public goods it wants from the government, it must have some sense of the cost of those goods through taxation, duties, user fees, and so on. The body politic must register consent to the cost of public goods by approving or disapproving of the actions of its elected representatives. This is, in part, the essence of “no taxation without representation” upon which our nation was founded. Without this ability to weigh the cost against the utility and effectiveness of public goods, we risk losing the underlying rationality of our system of government to arbitrary exercises of state and federal power.

Even under the best of circumstances, unlike the situation with private goods, taxpayers have “an incentive to give false signals concerning their preferences” as to their demand for public goods. Public goods are not price-rationalized by the market in the same sense that private goods are, so public goods are necessarily funded by a system of externalized costs and benefits. Because individual taxpayer demand has a minimal effect on the supply of a public good, ”by understating their demand they can aspire to enjoy the public good without paying the costs of provision.” In other words, everybody hopes to pay less tax while enjoying more benefits from public goods.

This tension between the promise of public goods and the need to pay for them constitutes, to a large extent, the very essence of politics. Voters tend to scoff at campaign promises precisely because they know that, while the ideal political accomplishment would be to offer the body politic a valuable public good which costs them nothing, every promise to create or expand the availability of a public good has a price which the body politic must eventually bear if that is indeed what it wants. This tension extends not just to government-provided goods and services themselves, but also to the underpinning laws which make them necessary. The cost of law enforcement, for example, ought to be considered in conjunction with the decision of whether or not to criminalize a certain thing or activity. Notwithstanding the litany of campaign promises to the contrary, making something illegal does not, in and of itself, end that thing’s existence. This is only common sense, and one would hope that the tension between costs and political goals would be enough to keep the government from reaching beyond the rational in determining what goods it promises to provide for the body politic’s consumption.

But what if politicians found a way to pay for an expanded public good without having to either raise additional revenue from their constituents or transfer revenue out of other programs? In a very real sense, this is what asset forfeiture has brought us. In explaining the need for a federal power of taxation, Hamilton wrote:

Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of revenue, as far as the resources of the community will permit may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue, either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and in a short course of time perish.That Hamilton put the choice in such stark terms should give us pause when contemplating the revenue raising functions of any activity of the government, for these words express the very inherent danger in externalizing the costs of public goods (and thus government itself) onto individuals. Civil forfeiture, as it is practiced today by our government and the several states, is an exercise in arbitrary will in which individuals are indeed subjected to the very sort of “continual plunder” of which Hamilton warned. By giving law enforcement agencies the power to loot, plunder, and eat what they kill, our laws teeter on the brink of losing their necessary rational relationship with our institutions of democracy.