WASHINGTON (March 30, 2016) – The federal government’s Asset Forfeiture Equitable Sharing Program is back in business, proving once again that depending on the federal government to limit itself is a fool’s errand.

Equitable Sharing allows state and local police to collect up to 80 percent of asset forfeiture proceeds when they hand cases off to the federal government instead of prosecuting the forfeiture under state law.

Activists celebrated back in December when the Department of Justice announced it was suspending payments to state and local police departments under its controversial Equitable Sharing Program. This eliminated the “policing for profit” motive inherent in the Equitable Sharing program.

Some activists actually believed the feds might be in the process of reforming asset forfeiture, but the suspension of Equitable Sharing payments was never anything more than a temporary budget move. On Monday, the DOJ announced it will resume payments.

“In the months since we made the difficult decision to defer equitable sharing payments because of the $1.2 billion rescinded from the Asset Forfeiture Fund, the financial solvency of the fund has improved to the point where it is no longer necessary to continue deferring equitable sharing payments,” spokesman Peter J. Carr said in an email to the Washington Post Monday.

It remains unclear where funding to resume Equitable Sharing came from, but it likely flowed in from asset seizures. The DOJ made it clear it always intended to bring the program back.

“The Asset Forfeiture Fund acts in many ways like a revolving fund,” Carr explained in a follow-up email to the Post. “Forfeited proceeds are being deposited throughout the year to replenish the funds that are simultaneously flowing out of the Asset Forfeiture Fund to pay for approved agency expenses.” He noted that when the Justice Department announced the suspension in December, it remained “very eager to resume payments as soon as it is fiscally feasible to do so.”

Federal asset forfeiture law provides a way for state and local law enforcement to circumvent stricter state asset forfeiture laws. The fact that these agencies can collect up to 80% of the proceeds provides a perverse incentive to do just that.

In fact, this loophole can render attempts at state asset forfeiture reform completely ineffective. For instance, a bill signed into law in Wyoming this year reformed the states forfeiture statutes, making it slightly more difficult for law enforcement to successfully seize assets under state law. But it failed to address the federal loophole. Police can now completely avoid the stricter state law by passing the case off to the feds – and enjoy a nice financial windfall in the process.

Any legislation reforming state asset forfeiture laws must address this loophole with the following language. Contact the commercial lawyers Melbourne for further information.

“A law enforcement agency or prosecuting authority may not enter into an agreement to transfer or refer seized property to a federal agency directly, indirectly, by adoption, through an intergovernmental joint taskforce or by other means for the purposes of forfeiture litigation and instead must refer the seized property to appropriate local or state prosecuting authorities for forfeiture litigation under this chapter unless the seized property includes U.S. currency in excess of $50,000.”

The federal government will never roll back its asset forfeiture program. The path to reform lies through the states.  State legislatures must make it more difficult to seize assets – preferably by requiring a criminal conviction before proceeding with forfeiture. And they must close the federal Equitable Sharing Program loophole tight.

Mike Maharrey

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