And the House Said: Let There Be Justice, Forfeiture and H.R. 1658

Posted by Asset Forfeiture Attorney Steven Kessler.

By Steven L. Kessler | Article Posted 9/20/99

On June 24, 1999, by a lopsided vote of 375 to 48, the House of Representatives passed H.R. 1658, the first major revision bill to the federal laws of civil asset forfeiture in more than 30 years. The importance of the measure and the gravity of the wrongs being remedied is reflected in the unlikely and uncommon bedfellows who joined togther to overwhelmingly approve the bill and reject government efforts to pass a watered down version which would have worsened the abysmal laws currently on the books.

Facing the realization that civil forfeiture has lost its primary purpose as a potent weapon in the war on drugs and has, instead, become nothing more than fund-raising on the part of federal, state and local governments, Regan Republicans such as Henry Hyde and Bob Barr joined Carter Democrats such as John Conyers and Barney Frank in sponsoring these much needed changes. The sentiment and support for the bill is reflected by the breadth of the coalition supporting it: the American Bar Association, the National Rife Association, the ACLU, the American Bankers Association, the National Association of Criminal Defense Lawyers, the U.S. Chamber of Commerce, and pilot, boating, hotel and housing organizations. If adopted by the Senate and signed into law, the provisions of the new bill will go a long way toward correcting the abuses experienced under the current structure and remedying injustices under the today’s laws.

Some of bills more important provisions are:

  • Placing the burden of proof on the government to prove that, by clear and convincing evidence, the property is subject to forfeiture.
  • The current burden is that of probable cause, the same minimal standard required to secure a search warrant and one which can be satisfied on the barest of facts.
  • Providing for the appointment of counsel for property owners who cannot afford lawyers to challenge forfeitures, paid for from the Federal Asset Forfeiture Fund.

Currently, claimants in civil forfeiture cases are faced with the strange reality of having their assets seized or frozen and having to pay an attorney to litigate the recovery of their property. As a result, more than 80 percent of all forfeitures go uncontested.

  • Clarifying the “innocent ownership” defense, most specifically to state that an owner who takes “reasonable steps” to prevent others from using the property for criminal activity can get his property back.

At present, there is no uniform standard for “innocent ownership”, and the Supreme Court has not clarified the standard.

  • Eliminating the requirement that owners post a bond before being allowed to challenge the action.

What a concept! Your house has been seized, your business has been shut down, all of your money has been seized or frozen, and, before you are permitted to challenge the seizure, you have to post a bond of $5,000 or ten percent of the property’s value, whichever is less. In effect, you are paying extra for the right to challenge the government’s seizure of your property. Preposterous.

  • Extending from 10 to 30 days after receiving notification of the government’s intent to forfeit the time for property owners to file a claim for the return of their property.

The current 10 day limitation is simply insufficient for most people, especially when the cost bond must accompany the claim. Thirty days is a more reasonable time period.

  • Requiring the government to institute judicial forfeiture proceedings within 90 days after the filing of a claim.

Today, the government can wait for months, even years, after receiving a claim before commencing the forfeiture action. This delay gives the government even more leverage atop what it already has in these primarily one-sided proceedings.

  • Permitting property owners to sue the government for negligence in handling or storage of their property, if the property is not ultimately forfeited.

Currently, the government is immune from suit. So, when you pick up your formerly brand new car which was seized as you drove it off the dealer’s lot and it looks like it was totaled in a seven car collision, you have no one to sue. The provision would change that.

  • Providing federal courts with the ability to grant possession of the contested property to the owner during the pendency of the forfeiture proceeding, if possession by the government during the action would cause the owner to suffer substantial hardship (such as preventing the functioning of a business or leaving an owner homeless).

Currently, the government can shut down a business and keep it shut for as long as the forfeiture proceeding takes. This provision would give the court discretion to reopen the business or release the property to the claimant following a showing of hardship.

Not surprisingly, for six years, the Department of Justice has fought — and fought hard — to change the bill, introducing its own version of a reform measure. No hearings were conducted regarding the DOJ-drafted H.R. 1965, nor has the bill been subjected to public scrutiny or intensive committee review. At 69 pages, it is 54 pages longer than H.R. 1658. Quite simply, it mocked the reform effort of H.R. 1658, a fact reflected by the House’s 268-155 rejection of the DOJ proposal.

It is noteworthy that the government’s proposal is supported by no organizations other than the Department of Justice and its “client” agencies, all of whom have a direct interest in expanding their forfeiture powers. Some law enforcement agencies are funded solely from the assets seized for forfeiture. In fact, the U.S. Attorneys offices in Manhattan and Brooklyn reported that their take of the funds from forfeitures in the most recent fiscal year surpassed their entire operating budgets!

In 1990, Attorney General Dick Thornburgh warned all federal prosecutors that the department was far short of its projection of $470 million in forfeiture deposits with only 3 months remaining in fiscal 1990, and that they must increase the volume of forfeiture actions:

We must significantly increase production in order to reach our budget target . . . Failure to achieve the $470 million projection would expose the Department’s forfeiture program to criticism and undermine confidence in our budget projections. Every effort must be made to increase forfeiture income during the remaining three months of [fiscal year] 1990.

Even federal prosecutors realized the conflict of interest and skewing of priorities created by the forfeiture statutes. In 1993, after a new administration was installed at the Department of Justice, the former director of the DOJ Asset Forfeiture Office, Michael Zeldin, remarked:

The intelligent thing to have done would have been to pick our cases more carefully and not overreach. We had a situation in which the desire to deposit money into the asset forfeiture fund became the reason for being of forfeiture, eclipsing in certain measure the desire to effect fair enforcement of the laws as a matter of pure law-enforcement objectives.

Passage of H.R. 1658 is a major step toward protecting the property rights of ordinary citizens, not involved in criminal activity, who are caught in the web of the ever-expanding war on drugs. The House should be commended for its vote. The Senate would do well to follow its lead.

Steven L. Kessler, a former prosecutor and current defense attorney in Manhattan, is the author of a three volume treatise, Civil and Criminal Forfeiture: Federal and State Practice (West Group), and a one volume handbook, New York Criminal and Civil Forfeitures (Gould 1999), and is a member of the Forfeiture Abuse Task Force of the National Association of Criminal Defense Lawyers.

Mr. Kessler is a principal with the Law Offices of Steven L. Kessler, 60 East 42nd Street, New York, N.Y. and can be reached at 212-661-1500.

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