DENVER Colo. (Aug. 9, 2017) – Today, a Colorado law goes into effect taking an important first step toward closing a federal asset forfeiture loophole.
A bipartisan coalition of two representatives and two senators introduced House Bill 1313 (HB1313) on April 3. The legislation primarily creates an extensive reporting system related to asset forfeiture that law enforcement agencies now must follow. But important provisions in the new law require the state to stop participating in a lucrative federal asset forfeiture program in a vast majority of situations.
The provisions relating to participation in the federal program are particularly important in light of a new policy directive issued last month by Attorney General Jeff Sessions for the Department of Justice (DOJ).
A federal program known as “Equitable Sharing,” allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government. For example, California previously had some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass these restrictions by claiming cases were federal in nature. Under these arrangements, state officials would simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice.
The new DOJ directive reiterates full support for the equitable sharing program, directs federal law enforcement agencies to aggressively utilize it, and sets the stage to expand it in the future. However, when states merely withdraw from participation, the federal directive loses it impact.
For example, according to a report by the Institute for Justice (IJ), Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender of this program. During the 2016 legislative session, the state closed the loophole in most situations.
Colorado takes a similar step with HB1313 going into effect.
COLORADO OPT OUT
While Colorado asset forfeiture laws don’t provide the level of protection they should, they are stricter than federal law. The IJ gives Colorado forfeiture laws a C. Colorado statutes do include a high bar to forfeit property, but they do not require a criminal conviction. They also provide relatively robust protections for innocent third-party property owners, and law enforcement can only keep up to 50 percent of proceeds.
With these relatively stringent policies in place, police have an incentive to pass cases to the feds in order to circumvent them. Unsurprisingly, the state ranks 15th in the country in the amount of federal asset forfeiture money it brings in, totaling $47.7 million over the 2000 to 2013 calendar years.
The new law prohibits Colorado law enforcement agencies from transferring seized property to a federal agency unless it has a net value of more than $50,000. It also prohibits state and local police from accepting payment or distribution from a federal agency of all, or part of, any forfeiture proceeds resulting from the adoption, a joint task force, or other multijurisdictional collaboration, unless the aggregate net equity value of the property and currency seized in the case is in excess of $50,000, the case is commenced by the federal government, and it relates to a filed criminal case.
Over the last five years, 85 percent of the $2 million in seizures received through the federal equitable sharing program did not meet the $50,000 threshold, according to the Colorado Municipal League, Additionally, IJ reports that 82 percent of proceeds received through the DOJ’s equitable sharing program came from joint task forces and investigations.
Tenth Amendment Center Executive Director Michael Boldin said changes made by HB1313 will be significant.
“While we’d like to see Colorado and every other state completely opt out of this federal program, an 80-85% reduction in seizures through this federal scheme will be a huge step forward to nullify it in practice and effect.”