Please turn on JavaScript

Brooks Wilson's Economics Blog: Property Forfeitures

Monday, October 26, 2009

Property Forfeitures

People in markets and institutional settings respond to incentives.  Many states passed laws allowing enforcement agencies to fund themselves by seizing and selling property of citizens who may have a connections to a crime creating a financial incentive to enforce law. In "Police for Profit," a Wall Street Journal writer describes the case.

With states and cities struggling with deficits, one fertile source of revenue has been money or property seized by police in possible connection with crimes. Not to be left behind, Illinois has pursued this tactic aggressively, using a law which encourages both police departments and prosecutors to take property for forfeiture, long before the accused ever get their day in court.

Under Illinois law, the state has 187 days after property is seized to file forfeiture proceedings. Meanwhile, of forfeited funds seized, 25% lands in the lap of the prosecutor's office. Another 65% goes to the department that seized the property, giving police added incentive to take the property to pad their budgets. Justice Sonia Sotomayor noted this police incentive with concern.

The article provides a couple of possible examples of excessive zeal and legal issues that have been raised.

This practice [seizing and selling property] was challenged at the Supreme Court recently in Alvarez v. Smith, where six people allege that police use of the Illinois Drug Asset Forfeiture Procedure Act violated their right to due process under the Fourteenth Amendment. Though forfeiture laws are designed to strip criminals of ill-gotten gains, three of the six were never charged with a crime. All six had their property or money taken without a warrant and had to wait for months or years without a hearing on the legitimacy of the forfeiture...

The case comes from the Seventh Circuit Court of Appeals, which vindicated the citizens when it ruled that the time between forfeiture and judicial hearing presented an unconstitutional delay. The court required the state to provide property owners with an informal hearing to establish whether there is probable cause to continue to keep the property in custody...

The question for the Supreme Court is whether to uphold what's known as the "Mathews standard," a well-worn method by which courts determine how individuals may challenge government "takings." The standard requires courts to take into account the individual harm caused by a property seizure as well as the risk of mistakes and the cost of additional hearings or other procedures. Illinois prefers a looser standard, allowing the state to continue to delay due process./p>

The size of the problem may be significant.

The numbers can be hefty. In 2008, the Chicago Police Department bragged it took in some $13.5 million in asset forfeitures, nearly double what it had seized the previous year. Golly. Inquiring minds will wonder if there were actually double the situations that called for asset forfeiture last year, or if the Chicago PD is simply more assertive about detaining property when the city is short of money.

I conclude with the article's conclusion that nobody wants crooks to hold onto their ill-gotten gain, but isn't there a better way?  My solution is to more strongly protect the rights of the accused through the Fourteenth Amendment and the Mathews standard.  I would also allow local agencies to recoup 110% of costs.  The remainder would go into the state's general fund.  Does anyone have a better solution to realign law with social interests?

No comments:

Post a Comment