John Locke Update / Research Newsletter

North Carolina Has Always Been a Leader When It Comes to Asset Forfeiture, but That Doesn’t Mean We Have Nothing to Learn

posted on in Law & Regulation, Property Rights

Leading in a Good Way

Civil asset forfeiture is a legal process that empowers law enforcement agencies to confiscate property without having to charge the owner with—let alone convict the owner of—a crime. As regular readers of this newsletter know, I’m not a fan. In a newsletter devoted to the topic in January I said:

Civil asset forfeiture is inherently unjust, not to mention a violation of due process. What’s worse, it tends to pervert the proper relationship between the police and the public by turning the former into predators and the latter into their prey.

As regular readers also know, I’m very proud of North Carolina’s record when it comes to asset forfeiture. Unlike most states, North Carolina has steadfastly resisted the temptation to use civil forfeiture as a way of funding law enforcement without raising taxes. Instead, our General Statutes have generally required that a criminal conviction must be obtained before property can be forfeited, and our Constitution has consistently required that the proceeds of forfeitures must be used for “maintaining free public schools.” These features of state law have earned North Carolina high marks in repeated editions of the Institute for Justice’s “Policing for Profit” report, and last year they also earned us the top score in a report by Freedom Works entitled “Civil Asset Forfeiture: Grading the States.”

And in a Bad Way

Unfortunately, when it comes to asset forfeiture, North Carolina has also been leader in another—less positive—way. The IJ report cited above notes that, “When civil forfeiture is more difficult and less financially rewarding under state law, law enforcement agencies turn to federal asset sharing instead.” This is exactly what has happened in North Carolina. North Carolina law enforcement agencies have been particularly active participants in programs like the Department of Justice’s “Equitable Sharing” program that returns to state agencies most of the proceeds from assets seized under federal civil forfeiture laws. In fact, IJ ranks North Carolina among the ten worst states in terms of asset sharing, and it notes that:

Law enforcement agencies in the Tar Heel State received more than $162 million in DOJ proceeds between the 2000 and 2013 calendar years [and] over $42 million from the Treasury Department.

Other States Have Followed Our Lead (in a Good Way)

About this time last year I reported some good news from New Mexico—namely, that the legislature had passed and the governor had signed a bill abolishing civil asset forfeiture under state law and establishing a new statutory regime under which property may only be forfeited when the owner has been convicted of a crime. “Let us hope,” I said at the time, “That many other states follow.”

Today I’m pleased to report that one state has finally done so. On 4/19, Nebraska Governor Pete Ricketts signed a bill abolishing civil asset forfeiture in the Cornhusker State. That’s definitely something to celebrate. As the Institute for Justice said in a press release:

Civil forfeiture is one of the most serious assaults on due process and private property rights in America today. Today’s decision to abolish civil forfeiture will ensure that only convicted criminals—and not innocent Nebraskans—lose their property to forfeiture.

Now It’s Time for Us to Follow Theirs

As I have noted, because they make it possible for our law enforcement agencies to evade our statutory and constitutional protections, federal asset sharing programs are a big problem in North Carolina. The best solution for us (and for the rest of the country!) would be for the federal government to cut back or even abolish those programs, and over the past year or so I’ve reported on several developments that seemed to suggest that something might eventually be done along those lines.

In January of 2015, for example, I reported that Attorney General Eric Holder had announced a cut-back in the DOJ’s “equitable sharing” program, which, while not the largest, was nevertheless one of the federal government’s principle asset sharing programs. A week later I reported that Rand Paul had introduced a bill in the US Senate that would have made much more substantial and permanent cuts. Sadly, however, the policy change announced by Holder had little effect, and Paul’s bill went nowhere. And while, in February of this year, I was able to report that the DOJ had suspended its equitable sharing program altogether, just two months later I was sorry to to have to report its reinstatement.

All of this suggests it would be a mistake to wait for reform to happen at the federal level. Instead, we need to think about what we can do at the state level to curtail or even prevent federal asset sharing, and New Mexico and Nebraska can serve as examples. Reformers in both states had the wisdom to see that their citizens would not be safe from asset forfeiture abuse unless something was done to limit federal asset sharing.

In New Mexico, the bill that ended civil asset forfeiture under state law also provided that:

A law enforcement agency shall not directly or indirectly transfer seized property to a federal law enforcement authority or other federal agency unless: (1) the value of the seized property exceeds fifty thousand dollars ($50,000), excluding the potential value of the sale of contraband; and (2) the law enforcement agency determines that the criminal conduct that gave rise to the seizure is interstate in nature and sufficiently complex to justify the transfer of the property; or (3) the seized property may only be forfeited under federal law.

The law enforcement agency shall not transfer property to the federal government if the transfer would circumvent the protections of the Forfeiture Act that would otherwise be available to a putative interest holder in the property.”

The bill that ended civil asset forfeiture in Nebraska provided that:

No law enforcement agency or prosecuting authority of this state or its political subdivisions shall transfer or refer any money or property to a federal law enforcement authority or other federal agency by any means unless: (1) The money or property seized exceeds twenty-five thousand dollars in currency or value; (2) The money or property is physically seized by a federal agent who is employed by the federal government; or (3) The person from whom the money or property was seized is the subject of a federal prosecution or the facts and circumstances surrounding the money or property seized are the subject of a federal prosecution.

The measures adopted by New Mexico and Nebraska go a significant way towards protecting innocent property owners from asset forfeiture abuse, but neither is perfect. North Carolina can continue to lead the way by adopting measures that go even further. Ideally, we should eliminate federal asset sharing altogether. The North Carolina General Statutes and the North Carolina Constitution do an excellent job of protecting the due process and the property rights of our citizens. Why should we allow the federal government to undermine those protections?

Jon Guze is Director of Legal Studies at the John Locke Foundation. Before joining the John Locke Foundation, Jon practiced law in Durham, North Carolina for over 20 years. He received a J.D., with honors, from Duke Law School in… ...

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