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Reining in Forfeiture: Common Sense Reform in the War on Drugs by Kyla Dunn

 


Dunn was an Associate Producer for FRONTLINE's "Drug Wars" series
Rudy Ramirez never expected to become a statistic in the War on Drugs when he set off to buy a used car, $7300 in cash at the ready, in January 2000. Ramirez, who lives in Edinburg, Texas near the border with Mexico, had spotted a listing for the used Corvette in a magazine and wanted it badly enough that he talked his brother-in-law into accompanying him on a thousand mile road trip to Missouri to make the purchase. When Ramirez was pulled over by police in Kansas City, however, the tenor of the trip changed.

"They asked if I had any money with me, and I said yes," recalls Ramirez. "I didn't think they would take it away. I had nothing to hide." But the trajectory of the rental car, and the piles of cash, suggested otherwise to police--who suspected him of trafficking drugs from the Mexican border. As Ramirez tells it, he was detained at the side of the road for hours while his car was thoroughly searched and inspected by a drug dog. "They kept asking me, `Where are the drugs?'" he recalls. "I told them they had the wrong guy."

The Drug Enforcement Agency's file on the case indicates that Ramirez gave officers confused statements about both the money and his destination, and that his extremely brief stay in a Missouri motel looked suspicious. What's more, the drug dog "alerted" on parts of the car, indicating that drugs could have been there at one time--which, since it was a rental car, may or may not have anything to do with Rudy Ramirez.

Still, the search turned up no drugs of any kind, and the officers finally told Ramirez that he was free to go--but not before confiscating $6,000 of his money in the name of the federal war on drugs in a process known as "forfeiture." Despite check stubs that he says prove that the money came from a car accident settlement reached several months before, and bank records showing that it was withdrawn from his account just prior to the Missouri trip, Ramirez has, to this day, been unable to get his money returned. He shakes his head as he describes it. "All I want is my money back," he says.

Last year, almost a billion dollars worth of cash, cars, boats, real estate, and other property was forfeited to the federal government--most of it labeled as drug-related. And while much of this property was taken from bona fide criminals, critics of the nation's forfeiture laws say that too many innocent people have fallen through the cracks in a system that, until recently, has been far too heavily slanted in the government's favor.

Watch a special video report on small businessman Clay Waterman, who believes he was an innocent victim of the forfeiture laws.

Retreat is rare in our nation's drug war--which makes recent roll-backs to the forfeiture laws all the more remarkable. In their scramble not to appear "soft on crime," lawmakers normally seem able only to get tougher, even amidst widespread agreement that a policy is flawed.

But on August 23rd, 2000, after a difficult seven-year campaign by Republican Congressman Henry Hyde from Illinois, the Civil Asset Forfeiture Reform Act finally went into effect--making it more difficult for the federal government to seize property without evidence of wrongdoing. It took a remarkable coalition of conservative and liberal lawmakers, to change a law that everyone from the American Civil Liberties Union to the National Rifle Association has recognized as flawed. And while the reforms come too late to help Rudy Ramirez, they will help to make cases like his rarer.

Law dictionaries define forfeiture as "loss of some right or property as a penalty for some illegal act," and its role as a tool in the war on drugs is clear: to hit drug dealers where it hurts most...in the wallet. The forfeiture laws allow the government to seize property from people it believes to be involved in drug-related activity, and then to use that revenue to bolster the efforts of law enforcement. The concept is simple. If you use your car, plane or boat to transport drugs, you will lose your car, plane or boat. And if your cash was acquired through illegal drug sales, you will lose that cash and anything bought with it.

Forfeitures, however, can fall into two categories--criminal or civil--and due to some high-profile abuses, civil asset forfeiture has become extremely controversial. Under criminal law, the government can seize property as punishment only after its owner has been convicted of a crime, and our justice system ensures that they are considered innocent until proven guilty. But under civil law, it is the property itself--not the owner--that is charged with involvement in a crime. What's more, that property is considered "guilty" until proven innocent in court by its owner, thus turning our usual system of justice on its head.

According to a report prepared for the Senate Judiciary Committee, at least 90 percent of the property that the federal government seeks to forfeit is pursued through civil asset forfeiture. And although forfeiture is intended as punishment for illegal activity, over 80% of the people whose property is seized under civil law are never even charged with a crime according to one study of over 500 federal cases by the Pittsburgh Press. For this reason, critics say, the system can run roughshod over the rights of innocent property owners--and fail to distinguish them from the guilty.

This potential for abuse is compounded by the strong financial incentive that law enforcement has to make seizures--since they benefit directly from forfeited property. It was the passage of the Comprehensive Crime Control Act of 1984, part of the Reagan-era ramp-up in the war on drugs, that first made this possible. At a federal level, the law established two new forfeiture funds: one at the U.S. Department of Justice, which gets revenue from forfeitures done by agencies like the Drug Enforcement Agency and the Federal Bureau of Investigation, and another now run by the U.S. Treasury, which gets revenue from agencies like Customs and the Coast Guard. These funds could now be used for forfeiture-related expenses, payments to informants, prison building, equipment purchase, and other general law enforcement purposes.

But equally important, local law enforcement would now get a piece of the pie. Within the 1984 Act was a provision for so-called "equitable sharing", which allows local law enforcement agencies to receive a portion of the net proceeds of forfeitures they help make under federal law--and under current policy, that can be up to 80%. Previously, seized assets had been handed over to the federal government in their entirety.

Immediately following passage of the Act, federal forfeitures increased dramatically. The amount of revenue deposited into the Department of Justice Assets Forfeiture Fund, for example, soared from $27 million in 1985 to $644 million in 1991--a more than twenty-fold increase. And as forfeitures increased, so did the amount of money flowing back to state and local law enforcement through equitable sharing.

Some say that because of the resulting windfall, state and local law enforcement has become as addicted to forfeiture as an addict is to drugs--making property seizure no longer a means to an end, but an end in itself. In 1999 alone, approximately $300 million of the $957 million that the Treasury and Justice Department funds took in went back to the state and local departments that helped with the seizures. And since 1986, the Department of Justice's equitable sharing program has distributed over $2 billion in cash and property. Additional revenue comes from forfeitures done under state law, which adds to the total intake. According to a study by the Bureau of Justice Statistics, state and local law enforcement reported receiving a total of over $700 million in drug-related asset forfeiture revenue in 1997 alone--with some departments single-handedly taking in several million dollars for their own use.

The potentially corrupting influence of this flow of cash is apparent from a situation currently unfolding in the state of Missouri--where, in what has become a highly controversial practice, mirrored across the country, police are circumventing their own state law in order to continue reaping the financial rewards of civil asset forfeiture.

In 1993, in response to some widely-publicized police abuses, the Missouri State Legislature passed a sweeping reform of the state's civil asset forfeiture laws. The new state law, one of the most stringent in the nation, required that a property owner be convicted of a felony in court before property related to that crime can be forfeited. What's more, the law required all proceeds from the forfeitures to go to a state education fund--not back to law enforcement. The reforms provided strong protection to innocent property owners, making it much harder to forfeit property under Missouri law than under federal law, and eliminated the police profit motive for making seizures.

In the face of these restrictions, however, Missouri's law enforcement has implemented what critics call an elaborate shell game that allows it to continue doing forfeitures under the laxer, federal laws--and to continue receiving a share of the profits. The practice walks a very thin semantic line, relying on the distinction between "discovering" and "seizing" cash. Upon discovering cash during a traffic stop that they believe to be drug money, for instance, a local policeman or Missouri Highway Patrol officer will not actually attempt to "seize" it. Instead, they call a federal agent to the scene to perform the seizure, virtually guaranteeing that the case will be processed under federal law and that their department can receive a share of the proceeds instead of sending those proceeds to the state education fund.

A 1999 report by Missouri State Auditor Claire McCaskill, in fact, found that in spite of the reforms to Missouri state law, 85% of the money and property seized on investigations involving Missouri law enforcement is still handled under federal forfeiture laws. "Forfeiture is as American as apple pie," says McCaskill, who strongly supports its use as a tool in the war on drugs. "The problem is when law enforcement starts circumventing state law in the process." Missouri's legislature has been considering reform bills that could end the practice--an issue that will most likely be revived in the coming session--and the Kansas City School District has filed a lawsuit against all of Missouri's law enforcement.

Bob Boydston, the Sheriff of Clay County, Missouri, says that he has never had to make a decision between using the state versus the federal system--and has followed the state statutes since he took office in 1993. He can definitely understand, however, why his colleagues opt for the federal system when faced with the choice. "One system will ultimately mean that the proceeds leave the agency, while the other returns some of the money to be used to fight illegal drug dealing," he explains. "After law enforcement spends long, hard, dangerous hours working a case, it seems natural to me that they make the choice to go the federal route. It's depicted as some kind of sinister plot and plan to circumvent statutes and keep money from the schools. That's not the case at all."

Boydston's county of 15 towns and 180,000 people just north of Kansas City has experienced the benefits of forfeiture proceeds first-hand. Assisting in just one federal forfeiture, of which Clay County's share was $94,000, has allowed the sheriff's department to train a drug dog, and maintain a military surplus helicopter that it uses for surveillance work, highway pursuits, and support for the efforts of the department's SWAT team. These are expenses that Boydston says the department could never have afforded otherwise over the past three years--but that are crucial to helping combat the county's extensive methamphetamine problem.

Financial incentives aside, many of Missouri's law enforcement officers say that they choose to process forfeitures under federal law for another reason as well: while federal law gives them a fighting chance of taking the profits out of drug dealing, state law does not. They feel strongly that, due to the felony conviction requirement, the new state law allows too many drug dealers to walk free, unpunished, with piles of cash, when there is not enough concrete evidence to convict them of a drug-related felony.

But it is the laxer provisions of the federal law that, until recently, have created enormous hardships for innocent people caught up in the system. Many property owners have faced years of difficult and costly litigation before winning back money, cars, homes and businesses that were never involved in a crime. And others have never had their property returned at all. It is these cases, tracked by groups like the American Civil Liberties Union and the National Association of Criminal Defense Lawyers, and highlighted in congressional hearings, that have fueled the drive for reform at a national level.

In many cases, people like Rudy Ramirez have been suspected of involvement in drug trafficking for no more reason than its being "unusual" in this day and age to possess a thick wad of cash. Take the example of Willie Jones, a landscape architect who was carrying $9,600 through the Nashville airport on his way to buy shrubbery. Or the case of physician Richard Lowe who--distrustful of banks, and with vivid memories of the Great Depression--stockpiled $317,000 in his home in Alabama before finally depositing it in a bank, leading the government to confiscate a full $2.5 million of his life savings for this suspicious behavior.

Of particular importance to conservative lawmakers, small businesses have suffered under these laws as well. In one well-publicized case, federal agents sought to forfeit the Red Carpet Inn in Houston, Texas when, despite the hotel staff's frequent contact with police, the local U.S. attorney said the owners had "tacitly approved" of drug dealing on their property and not done enough to prevent it. The hotel's owners were not charged with any crime, but had rejected police "solutions" to the problem such as raising their room rates to deter drug dealers from staying there.

Henry Hyde has called stories like these "Kafkaesque," and recalls that when he first learned of the nation's civil forfeiture practices, he considered them "more appropriate for the Soviet Union than the United States." What's more, he's said, "People take their due process rights for granted...they have no idea that these laws exist."

Critics agree that the main problem with the civil asset forfeiture laws, before the recent reforms, was the low burden of proof required to seize property. A seizure could be made on the basis of mere suspicion, known as "probable cause", that the property was involved in a crime--and that is no more evidence than is required to obtain a search warrant. No arrest, let alone conviction, was needed. It was then up to the property owner to prove by "a preponderance of the evidence", a more difficult standard to meet, that their money, or car, or home, was not bought with drug money or used to commit a drug-related crime, and should be returned.

Furthermore, the high cost of contesting a forfeiture often posed an insurmountable problem, as it did for Rudy Ramirez. In order to take his case to court, Ramirez would have had to post a "cost bond" of 10% of the value of the property seized--and if he lost the case he would lose the bond. But for a landscaping truck driver who is barely getting by, scraping together another $600 was no minor hurdle. "I don't have money to be wasting," says Ramirez. What's more, unlike a defendant in a criminal trial, Ramirez was not entitled to a government-appointed attorney if he could not afford a private lawyer. He would have had to hire the attorney at his own expense--and as Bruce Simon, a Missouri lawyer to whom Ramirez went for help, explains, no lawyer in the country would likely take that case.

"Generally speaking, it's not worth it unless you've had twenty-five to thirty thousand dollars taken away," says Simon. It would have cost a minimum of around $10,000 to take a case like Ramirez' to court, says Simon, so the $6,000 he would have gotten back wouldn't even cover his lawyer's fees. As a result of these blunt financial realities, Simon has seen many innocent owners simply give up without a fight when faced with a system that provides "no effective remedy" for them.

Eighty percent of forfeitures, in fact, go uncontested in court--a statistic that the government feels suggests that the owners are guilty, and do not wish to force the issue, but some others feel shows that the system is stacked too heavily in the government's favor. According to a Justice Department source, the average value of a DEA seizure in 1998 was around $25,000. And lawyers say this confirms that many seizures are small enough to fall below the amount they would consider worthwhile to contest.

In the absence of a court case, the only recourse left to someone like Rudy Ramirez is to petition the DEA directly to return the money--a so-called "administrative" solution. But Bruce Simon asks, how likely is the DEA to believe that its agents have made a mistake? "That would mean the agency passing judgement on itself," he explains, saying that most of those claims "never get anywhere." According to the DEA's own estimates, in fact, only 3-5% of such petitions are ever granted.

This bleak picture began to change in April of this year, however, when the Civil Asset Forfeiture Reform Act was finally signed into federal law. The success caps a nearly decade-long crusade, and is the result of cooperation between some truly unlikely allies who, only by working together, could overpower Congress' fear of looking "soft on crime". Henry Hyde, a conservative Republican from Illinois and chairman of the House Judiciary Committee, was joined by the House Judiciary Committee's ranking Democrat, John Conyers of Michigan, to spearhead the effort--which united politicians as diverse as outspoken conservative Bob Barr of Georgia with Democratic liberal Barney Frank of Massachusetts. An equally impressive coalition formed in the Senate around the issue.

Joining in support were organizations as wide-ranging as the American Civil Liberties Union, the National Rifle Association, the American Bankers Association, the National Association of Criminal Defense Lawyers, the United States Chamber of Commerce, the Americans for Tax Reform, and organizations representing groups like pilots, boaters and hotel owners.

The new law requires the government to have much stronger evidence of wrongdoing before it can seize a person's property--raising the burden of proof from "probable cause" to "a preponderance of the evidence" that the property is linked to a crime. What's more, it shifts the burden of proof to the federal government, meaning that the government must now prove in court that the property was involved in crime...instead of the property owner needing to prove the opposite.

Equally important for people like Rudy Ramirez, the new law removes many of the onerous financial hurdles involved in contesting a forfeiture. It refunds lawyers' fees to property owners who successfully challenge a seizure in court, and in some cases provides government-paid lawyers to the indigent. Furthermore, it eliminates the requirement that property owners post a sometimes hefty bond before they can fight to get their property back.

The Justice Department and national law enforcement groups lobbied furiously to prevent passage of the original bill put forward by Henry Hyde, concerned that it jeopardized a key weapon in the war on drugs. Hyde's original version, in fact, contained much stronger provisions--and sought to raise the burden of proof on the government to "clear and convincing evidence" that the seized property was criminally-linked.

Ray Dineen, Director of the Treasury Department's Forfeiture Fund, voiced concerns early on about the potential weakening of a valuable law enforcement tool. He says that the country must not forget the purpose of seizing cars, offshore bank accounts, planes, boats, and other property that supports the drug trade, which is to dismantle a criminal infrastructure that was illegally acquired in the first place. He adds, "The fact that revenue generated by this effort is subsequently used to support law enforcement initiatives is smart policy--not a program of unchecked `taking.' We're not looking for money, we're looking for the impact on criminal enterprises."

In the end, both the Department of Justice and the Department of the Treasury have come out cautiously in favor of the final compromise legislation--saying that raising the burden of proof needed to make a seizure is sensible protection for innocent property owners. Still, they predict a loss of revenue, and have concerns about the possibility of frivolous court cases being brought by criminals under the new law.

Civil rights activists like the ACLU aren't entirely satisfied either, which may be the sign of a good compromise. "We think this just begins to address the problem," said Rachel King, legislative counsel of the ACLU, when the law first passed. "The situation is so bad that even modest reforms are important."

Make no mistake about it, the recent reforms do not address the issue that many feel is central to most abuses of civil asset forfeiture: the financial incentive for law enforcement to make seizures. Still, the new law will help ensure that legitimate use of a powerful tool in the war on drugs violates the rights of fewer innocent people.

"This bill is one we can all be proud of," Henry Hyde said of the final version. "It returns civil asset forfeiture to the ranks of respected law enforcement tools that can be used without risk to the civil liberties and property rights of American citizens. We are all better off that this is so." And in the war on drugs, that is a bold step forward--and a kind of reform that is all too rare.

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