Indiana Senate Passes Constitutionally Dubious Scheme to Let Police Profit from Civil Forfeiture

On Tuesday, the Indiana Senate approved SB 99, which would distribute at least 90 percent of civil forfeiture revenue to contingency-fee lawyers, police, and prosecutors. In Indiana, not only can the government use civil forfeiture to confiscate private property without filing criminal charges, law enforcement agencies have routinely funneled millions in forfeiture funds to pad their budgets.

That scheme violates the Indiana Constitution, which states that “all forfeitures which may accrue” are supposed to be sent to the state’s Common School Fund. On behalf of civil forfeiture victims and concerned Hoosiers, the Institute for Justice has filed a constitutional challenge to Indiana’s current system of policing for profit. Oral arguments in the case are set for mid-March.

“Simply put, SB 99 would double down on a grave constitutional defect,” said Institute for Justice Attorney Sam Gedge, who represents plaintiffs in the lawsuit and testified on the bill last week. “Further entrenching a profit incentive in Indiana’s civil forfeiture laws would compromise Hoosiers’ rights to private property and due process.”

Under the bill, any proceeds received from forfeiting property would first pay for any contingency fees, if outside counsel is employed. After that, one-third of the remainder would be deposited in the prosecutor’s forfeiture fund. Following that deposit, 85 percent of the remaining proceeds would be sent to a drug task force’s county law enforcement fund or either the local or state general fund of the agencies involved with the seizure. Any residual money—no more than a tenth of what was originally forfeited—would be deposited into the Common School Fund. A similar version of those provisions was vetoed in 2011 by then-Gov. Mitch Daniels, who blasted the proposal as “unwarranted as policy and constitutionally unacceptable.”

“Letting law enforcement agencies keep what they seize creates a powerful incentive to pursue profit instead of public safety,” noted Lee McGrath, senior legislative counsel at the Institute for Justice. “Free from legislative oversight, civil forfeiture demonstrates the dangers of letting the same agencies hold both the purse and the sword.”

SB 99, however, does contain several worthwhile improvements to Indiana’s civil forfeiture laws. Those provisions would address a separate federal court ruling that struck down parts of the state’s vehicle seizure law as unconstitutional. If enacted, the bill would:

  • Require prosecutors to file an affidavit of probable cause within seven days of a seizure. If a court finds there was no probable cause, the property would be returned to its owner;
  • Allow owners who have vehicles or real estate seized to file for provisional release of the property, pending the forfeiture case; and
  • Shorten deadlines for prosecutors to file a forfeiture complaint to 21 days within receiving an answer from a claimant (currently 90 days) or 90 days after the seizure (currently 180 days). Failure to file a complaint will result in the property’s return to its owner.

Since 2014, 25 states and the District of Columbia have tightened their forfeiture laws. Currently, 15 other states are considering reforms, ranging from boosting transparency to abolishing civil forfeiture outright.

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