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IP: Oversight of Federal Asset Forfeiture: Its Role in Fighting
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Sat Oct 9 17:21:16 1999
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STATEMENT of
Roger Pilon, Ph.D, J.D.
Vice President for Legal Affairs
B. Kenneth Simon Chair in Constitutional Studies
Director, Center for Constitutional Studies
Cato Institute
Washington, D.C.
before the
Senate Judiciary Committee
Criminal Justice Oversight Subcommittee
United States Senate
Oversight of Federal Asset Forfeiture: Its Role in Fighting Crime
July 21, 1999
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Mr. Chairman, distinguished members of the subcommittee:
My name is Roger Pilon. I am vice president for legal affairs at the Cato
Institute and the director of Cato's Center for Constitutional Studies.
I want to thank you, Mr. Chairman, and thank Mr. Schumer as well, for
inviting me to testify before the subcommittee today on federal asset
forfeiture law and practice.
Late last month, as we all know, the House of Representatives passed H.R.
1658, the Civil Asset Forfeiture Reform Act. The vote was by an overwhelming
margin of 375 to 48. The bill that passed had been refined over several
years by its author, Henry Hyde, chairman of the House Judiciary Committee,
whose book on American forfeiture law I edited and the Cato Institute
published in 1995. Sponsorship of the House bill was broad and bipartisan.
For some time now an equally broad and diverse range of citizens and
organizations has urged its passage. (I am attaching copies of several
letters indicating the broad support the bill enjoys.) That alone suggests
that there is something fundamentally wrong with our forfeiture law and
practice, which is why these hearings in the Senate are important.
Preliminary Matters
Before discussing the substance and procedure of the matter, however, I want
to make four preliminary points. First, it should be clear that most of
those who support the House bill see a role--and an important role--for
forfeiture in law enforcement. That is why the bill was written to reform
the law, not to abolish it. I say that because some who oppose any changes,
or who advocate only minor changes, sometimes charge that opponents of our
present law want to abolish that law entirely. That is not true.
Second, it is sometimes said, in a related way, that opponents of our
present law are really opponents of the so-called war on drugs, and that the
forfeiture reform movement is a stalking horse, the ultimate target being
the drug war. Here, too, that is not true. To be sure, many of us are of the
view, shared by a growing number of Americans, that the war on drugs, like
Prohibition before it, is an extremely costly failure, and that drug use
should be treated not as a criminal but as a medical matter. But there is no
necessary connection whatever between that view and the view that our
forfeiture law needs reform. Indeed, in the House, many of the most ardent
supporters of the war on drugs are ardent supporters of forfeiture reform.
Third, although the law enforcement community does not speak with a single
voice in opposition to forfeiture reform--indeed, some in that community
strongly support reform--it is fair to say that the majority there oppose
the House bill. And in support of that opposition, they will cite success
after success--the use of forfeiture to deprive drug kingpins of their
ill-gotten gains and the tools of their trade, for example. No one can deny
those successes, whatever their larger effect. But that is not the point.
The point, rather, is that this body of law--because its foundations and
practices are so foreign to our system of justice, as I will demonstrate in
a moment--leads too often to flagrant miscarriages of justice, to the
seizure and forfeiture of property from ordinary, innocent citizens. Given
that stark reality, the law needs to be reformed. Just as a man charged with
a crime cannot put up as his defense all the good deeds he has done in his
life, so too our forfeiture law cannot escape reform simply because it
produces many good results. Those results are to its credit. But it is the
wrongs that result from our forfeiture law that should concern us--and
prompt us to ask just why those wrongs are occurring. After all, it was not
for nothing that the House vote was as overwhelming as it was.
Finally, and closely related to my third preliminary point, law enforcement
often argues that forfeiture is an important tool in the war on crime. They
are right. Forfeiture is an important tool in that effort. And under the
House bill it will continue to be an important tool, for most forfeitures
will occur in the future exactly as they have in the past. But in a free
society, not any forfeiture law or practice will do. To state the point most
generally, in our society, law enforcement officials may not use any means
they wish in their efforts to reduce or remedy crime. After all, a police
state would doubtless reduce crime. But we cannot have a police state in
this nation because we have a Constitution and a body of law promulgated
under it that limits what police, prosecutors, courts, and Congress may
do--both substantively and procedurally.
In fact, it is precisely on that fundamental point--that first principle,
the rule of law--that those of us who urge reform ultimately rest our case.1
Modern American asset forfeiture law, especially civil forfeiture, rests on
animistic and authoritarian principles, leading to practices that are
utterly foreign to our first principles as a nation. Something is terribly
wrong when a body of "law" enables officials to stop motorists and other
travelers and seize their cash on the spot, returning it, if they do, often
years later, only after the person proves his innocence--where such a
defense is possible; when that "law" enables officials to seize and
sometimes destroy boats, cars, homes, airplanes, and whole businesses
because they suspect the property has somehow been "involved" in a crime; or
when it encourages officials to maim and even kill in their efforts to seize
property for forfeiture to the government.2 Lawyers who come upon this body
of law for the first time are often taken aback by the injustice and
irrationality of it all. Imagine what the ordinary citizen must think.
Forfeiture in a Nutshell
The very styling of the relatively few cases that make it to court tells
much of the story: United States v. $405,089.23 U.S. Currency;3 United
States v. 92 Buena Vista Avenue4; United States v. One Mercedes 560 SEL.5
Civil forfeiture actions are brought against the property, not against the
person. They are in rem proceedings--not for the purpose of gaining
jurisdiction over a real person but for the purpose of seizing property for
forfeiture to the government. Fantastic as it may sound, it is the property
that is charged.
How can that be? Finding its origins in the Old Testament and in medieval
doctrine, in the idea that animals and even inanimate objects involved in
wrongdoing could by sacrificed in atonement or forfeited to the Crown,
modern forfeiture law, filtered through early American admiralty and customs
law, has simply carried forward, uncritically, the practice of charging
things.
Thus, officials today can seize a person's property, real or chattel,
without notice or hearing,6 upon an ex parte showing of mere probable cause
to believe that the property has somehow been "involved" in a crime. Neither
the owner nor anyone else need be charged with a crime, for the action,
again, is against the thing. The allegation of "involvement" may range from
a belief that the property is contraband to a belief that it represents the
proceeds of crime (even if the property is in the hands of someone not
suspected of criminal activity), that it is an instrumentality of crime, or
that it somehow "facilitates" crime. And the probable cause showing may be
based on nothing more than hearsay, innuendo, or even the paid, self-serving
testimony of a party with interests adverse to the property owner.
Once the property is seized, the burden is upon any owner who wants to get
his property back to prove its "innocence"--not by a probable-cause but by a
preponderance-of-the-evidence standard. Yet that is possible only where
innocent-owner defenses have been enacted or allowed.7 In defending the
innocence of his accused property, the owner must prove a negative, of
course. Moreover, he must do that against the overwhelming resources of the
government. And if he has been involved in activity that in any way might
lead to criminal charges--however trivial or baseless those charges might
ultimately prove to be--he has to weigh the risk of self-incrimination
entailed by any effort to get his property back against the value of the
property. As a practical matter, the burden is simply too high for many
innocent owners, who end up walking away from their loss.
That, in a nutshell, is the state of much of our modern civil asset
forfeiture law, despite periodic efforts in the House to reform some areas,
and despite court challenges in recent years that have succeeded, when they
have, only in chipping away at the doctrine. It is a body of law that
enables prosecutors to go directly against property--a ruse that permits the
abandonment of elementary notions of due process. And it does so, most
notoriously, on the ground that the property is guilty of "facilitating" a
crime--a doctrine that is infinitely elastic.
The Procedure of the Matter
To illustrate more fully how this law works in practice, however, it may be
useful to distinguish three procedures--administrative, civil, and
criminal--through which the government moves to complete a forfeiture after
seizing a person's property.8 Administrative forfeiture is essentially a
default proceeding: if no one files a claim to the seized property, it
forfeits by default to the government. The Justice Department's principal
spokesman for forfeiture has claimed that 80 percent of forfeitures "are
uncontested because in most cases the evidence is so overwhelming that
contesting the forfeiture would be pointless."9 That may be true in many
cases. But there are also many other cases that involve amounts too small to
make it worth the owner's contesting the forfeiture, especially in light of
the legal fees and the extraordinary burden of proving one's innocence.
But if an owner does contest the seizure, he has to file a claim and post a
"cost bond" amounting to ten percent of the value of the property or $5,000,
whichever is less. That does not release the property to the owner, however;
incredibly, it is designed to defray the government's litigation and storage
costs. Once the owner files a claim and posts a cost bond, the government
has to file a complaint in federal district court. But it can wait up to
five years--the statute of limitations--before doing so, whereas the owner
has a mere ten days to answer the complaint, failing which the property
forfeits to the government. Except in a criminal proceeding, there is no
right of counsel, which means, again, that many small seizures end by
default to the government.
Worse still, when the owner contests the seizure and posts a cost bond, his
situation is perilous; for under many statutes the government has a choice.
It can file a civil complaint, initiating a civil forfeiture action; or it
can include a forfeiture count in a criminal indictment. Think about the
dilemma that puts the owner in. If the government initiates a civil action
in response to his contesting the seizure, not only can it wear him down
through long and costly discovery but, through that very process, it can try
to generate evidence for a subsequent criminal prosecution. Thus, the effort
to get his property back exposes the owner to the risk of
self-incrimination--even when the actions that led to the seizure in the
first place prove ultimately to be trivial or innocent. And even if he is
not indicted, the procedural hurdle the owner faces is daunting: whereas the
government has to show the court simply that there is probable cause to
believe that the property is subject to forfeiture--which it can do using
rank hearsay evidence, inadmissible in a normal trial--the owner, once the
burden shifts, has to prove the property's "innocence" by a preponderance of
the evidence, with no hearsay allowed.
But on the other hand, once the owner contests the seizure the government
can respond with an outright indictment. In some ways, of course, the owner
would be better off under those circumstances: the burden of proof would be
on the government; the standard of proof would be beyond a reasonable doubt;
and forfeiture, where it is included as a count in the indictment, would
follow only upon conviction. But who wants to face a criminal indictment and
trial just to get his property back? At the same time, who wants to go
through a civil action either, against the government, just to get his
property back, especially at the risk of ultimately being indicted? Faced
with that dilemma, is it any wonder that owners often simply walk away from
their loss when the government seizes their property? Is that the kind of
dilemma we want to put often innocent citizens in? As Chairman Hyde put it,
"the system is stacked against innocent citizens and in favor of
government"?10 After all, prosecutors are not empowered simply to score
victories and enrich government coffers. They have an obligation to do
justice as well. Regrettably, the conflict of interest is so stark under our
forfeiture laws that it is all too easy to shirk that obligation.
>From this much, then, it should be clear just why the House bill puts the
burden of proof on the government--where it should have been all along--and
why it requires the government to discharge that burden by clear and
convincing evidence. In a free society, if government takes a person's
property, it had better have good reason for doing so, not simply probable
cause, not even a mere preponderance of the evidence, but clear and
convincing evidence. These are, after all, quasi-criminal proceedings: the
allegation is that the property is ill-gotten, or contraband, or that it
facilitated a crime. Even though they may be styled "civil," these are much
closer to criminal proceedings than to any ordinary civil action involving a
private dispute or even a dispute with the government. If the government is
going to allege criminal activity as the ground for its taking private
property, it should at least have clear and convincing evidence to support
that allegation.
Returning to Substance
We return, finally, to the substance of the matter and to a point made at
the outset, namely, that under the House bill, most forfeitures will
continue exactly as they have until now. For if Justice is right about most
forfeitures not being contested due to the overwhelming evidence that
supports them, that will not change even if the government does carry the
burden of proof and carries it by a higher standard of evidence. Drug
dealers will still not contest a seizure if it means running the risk of an
indictment: it's simply too easy to recoup that loss through another deal.
And where there are parallel criminal proceedings, there too the process
will continue as it does today; for if there is enough evidence to prosecute
a criminal action, there is probably more than enough evidence to effect a
civil forfeiture.
What will change is that innocent owners will finally get a break. Here, we
are not talking about contraband but about the other two most common
substantive rationales for forfeiture--ill-gotten gain (or the proceeds of
crime) and "facilitation." Taking first the proceeds rationale, with the
burden on the government to prove, by clear and convincing evidence, that
the money or property it seized was derived from crime, it will be more
difficult to turn a seizure into a forfeiture, especially if the owner is in
fact innocent--which is exactly as it should be. Does that mean that some
innocent owners may still lose their property--and that some guilty owners
may keep theirs. Of course it does. Justice can never be perfect, but it can
be better than it is today. Again, we cannot fight crime by any means. In a
free society, we err on the side of the innocent, not against them.
In the case of facilitation forfeiture, the issues are not as easy because
the rationale is not as rational. The idea that property that "facilitates"
a crime is thereby forfeitable to the government takes us to the darkest
roots of forfeiture and to the greatest abuses in our own time. For the
"instruments" of crime can be read so broadly as to include anything even
"involved" in a crime. Indeed, for the crime of failing to fill out a
customs form saying that he was taking more than $10,000 in U.S. currency
out of the country, Mr. Hosep Bajakajian and his family, fearful of making
such a declaration, would have forfeited the legally-acquired $357,144 they
had in their possession as they waited to board an airplane in Los Angeles
in 1994--but for the five-to-four decision of the Supreme Court last year
saying that the statute allowing the forfeiture of anything "involved" in
the crime violated the Excessive Fines Clause of the Eighth Amendment.11
Whole bank accounts have been lost due to a single questionable deposit: the
account "facilitated" the laundering of money. And stories of a home lost
when one member of a family made an illegal phone call from it are too
numerous to recount.12
No one has ever offered a satisfactory justification for facilitation
forfeiture, although a Justice Department spokesman, attempting recently to
explain why the Department did not limit itself to criminal forfeitures,
inadvertently exposed the irrationality of the doctrine. The "most
important" reason for doing civil forfeitures, he said, is because "criminal
forfeiture is limited to the property of the defendant. If the defendant
uses someone else's property to commit a crime, criminal forfeiture
accomplishes nothing [for the government]. Only civil forfeiture will reach
the property" (original emphasis).13
That is a striking admission. Proceeding "normally," against the accused, we
can't reach the property of someone else. Thus, when Billy Munnerlyn, who
ran a charter jet service, accepted a fare from a man who turned out,
unknown to Mr. Munnerlyn, to be carrying drug money, the government could
not have seized his plane unless it had brought a civil action--not against
the drug dealer, nor even against Mr. Munnerlyn, who did no wrong, of
course, but against the plane.14 For the plane, you see, was "guilty" for
having "facilitated" the crime. Yet the same Justice official who tells us
how to reach property of people who haven't committed a crime says also that
"property doesn't commit crimes; people do."15 Just so. Then why charge the
plane? Why? Because that's the only way the government can get the property
of someone who's not guilty--by personifying the property and charging it
with "facilitating" a crime. We're right back with the "goring ox" of
antiquity and with a rationale that no one any longer believes, if anyone
ever did.
Unfortunately, the House bill does not do away, once and for all, with
facilitation forfeiture. Nevertheless, it does mitigate the effects of the
doctrine by incorporating in all federal forfeiture statutes a fairly robust
innocent-owner defense. Here again, the bill may not be perfect--and that
defense may need to be strengthened--but the breadth of coverage is much
greater than under current law.
Conclusion
In sum, the House has presented the Senate with an opportunity to help
correct the considerable injustices that have been taking place for too long
in this nation under the banner of forfeiture law. As I noted earlier, under
the House bill, most forfeitures will go on as they have in the past. The
illegitimate forfeitures, the ones that should never have taken place to
begin with, will mostly fail--as they should--assuming they are even
undertaken. Those, however, are a small fraction of all forfeitures, yet
they have given the law enforcement community--to say nothing of the
victims--the greatest problems; for they have given all of forfeiture a bad
name, which is why this bill should be welcomed even--indeed, especially--by
law enforcement. But above all, it should be welcomed by every American who
wants to see our law and legal institutions grounded on our first principles
as a nation. Forfeiture has a place in law enforcement, but like every tool
in that effort, it must spring from principles of justice if it is to serve
justice.
Thank you, Mr. Chairman and Mr. Schumer, for the opportunity to testify
before the subcommittee today.
----------------------------------------------------------------------------
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NOTES:
1. I have discussed the issues that follow more fully in Roger Pilon, "Can
American Asset Forfeiture Law Be Justified?" 39 New York Law School Law
Review 311 (1994).
2. For those and many more examples of abuses perpetrated under our
forfeiture law, see Henry Hyde, Forfeiting Our Property Rights (1995).
3. 518 U.S. 267 (1996).
4. 507 U.S. 111 (1993).
5. 919 F.2d 327 (5th Cir. 1990).
6. In the case of real property, that changed after 1993 when the Supreme
Court ruled that owners had to be given notice and an opportunity to be
heard before their real property could be seized. United States v. James
Daniel Good Property, 510 U.S. 43 (1993).
7. Thus, in Bennis v. Michigan, 516 U.S. 442 (1996), a case the Supreme
Court decided under state law, Mrs. Bennis lost her half-interest in the
family car when officials seized the car after her husband used it for an
assignation with a prostitute. Although Mrs. Bennis was given "due process,"
nothing she could have said in any proceeding would have made a difference
since the law provided no innocent-owner defense. Wronged by her husband,
she was wronged again by the Michigan law.
8. For a detailed discussion of forfeiture law, see David B. Smith,
Prosecution and Defense of Forfeiture Cases (1998).
9. Stefan D. Cassella, "Forfeiture Is Reasonable, and It Works," Criminal
Law and Procedure News (The Federalist Society), vol. 1, no. 2 (Spring
1997), at 8.
10. Hyde, supra note 2, at 8.
11. United States v. Bajakajian, 524 U.S. 321 (1998). See Roger Pilon, "High
Court Reins In Overweening Government," Wall Street Journal, June 23, 1998,
at A20.
12. See, e.g., United States v. Real Estate Known as 916 Douglas Ave., 903
F.2d 490 (7th Cir. 1990), cert. denied, 111 S. Ct. 1090 (1991).
13. Cassella, supra note 9, at 4. For a critique, see Roger Pilon,
"Forfeiting Reason," Criminal Law and Procedure News, supra note 9, at 1ff.
14. For a discussion of this case, see Hyde, supra note 2, at 12.
15. Cassella, supra note 9, at 4.
http://fear.org/menuidx2.html
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"... however it may deserve respect for its usefulness and antiquity,
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