LANSING, Mich. (May 16, 2019) – Last week, Michigan Gov. Gretchen Whitmer signed a package of bills to reform asset forfeiture laws to prohibit the state from taking property without a criminal conviction in most cases. But the legislation leaves a loophole allowing police to circumvent stricter state laws by passing cases off to the feds that could minimize the practical effect of the reforms.
Sen. Pete Lucido (R-Shelby Township), Rep. Jason Wentworth (R-Clare) and Rep. David LaGrand (D-Grand Rapids) sponsored a package of three bills — House Bill 4001 (HB4001), House Bill 4002 (HB4002) and Senate Bill 2 (SB2). Together, the three bills reform Michigan law by requiring a criminal conviction before prosecutors can proceed with asset forfeiture in cases involving an aggregate net equity value of property less than $50,000. Under former law, the state can seize assets even if a person is never found guilty of a crime.
The $50,000 threshold would cover most forfeiture cases in Michigan. According to the Mackinac Center for Public Policy, “The typical forfeiture in Michigan is just a few hundred dollars or a car valued at less than $2,000.”
All three bills passed the House by a 107-3 vote and cleared the Senate by similarly wide margins. With Gov. Whitmer’s signature, all three laws went into immediate effect.
According to the Institute for Justice, the state of Michigan earned a D- grade for its civil asset forfeiture laws. Michigan law enforcement agencies could keep up to 100% of all the forfeiture proceeds that from seized assets.
Enactment of this legislation significantly reforms the state’s asset forfeiture laws, but it fails to address a loophole that allows state and local police to get around more strict state asset forfeiture laws in a vast majority of situations. This is particularly important in light of a 2017 policy directive issued by then-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 through a process known as adoption. The 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.
Law enforcement agencies can circumvent more strict state forfeiture laws by claiming cases are federal in nature. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds. However, when states merely withdraw from participation, the federal directive loses its impact.
Until recently, California faced this situation. The state has some of the strongest state-level restrictions on civil asset forfeiture in the country, but state and local police were circumventing the state process by passing cases to the feds. According to a report by the Institute for Justice, Policing for Profit, California ranked as the worst offender of all states in the country between 2000 and 2013. In other words, California law enforcement was passing off a lot of cases to the feds and collecting the loot. The state closed the loophole in 2016.
Michigan couild close this loophole in most situations by effectively withdrawing from the federal program. We recommend the following language.
A local, county or state law enforcement agency shall not refer, transfer or otherwise relinquish possession of property seized under state law to a federal agency by way of adoption of the seized property or other means by the federal agency for the purpose of the property’s forfeiture under the federal Controlled Substances Act, Public Law 91 513-Oct. 27, 1970.under the federal Controlled Substances Act or other federal law.
In a case in which the aggregate net equity value of the property and currency seized has a value of $50,000 or less, excluding the value of contraband, a local, county or state law enforcement agency or participant in a joint task force or other multijurisdictional collaboration with the federal government (agency) shall transfer responsibility for the seized property to the state prosecuting authority for forfeiture under state law.
If the federal government prohibits the transfer of seized property and currency to the state prosecuting authority as required by paragraph (1) and instead requires the property be transferred to the federal government for forfeiture under federal law, the agency is prohibited from accepting payment of any kind or distribution of forfeiture proceeds from the federal government.
Failure to withdraw from the equitable sharing program could render these forfeiture reforms virtually meaningless.
As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. The feds clearly want the policy to continue.
We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its unconstitutional “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.
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