New Federal Legislation Would Drastically Overhaul Civil Forfeiture

Today, Sen. Rand Paul (R-KY), and Rep. Tim Walberg (R-MI) announced the Fifth Amendment Integrity Restoration Act of 2017 (S. 642 and H.R. 1555) a comprehensive reform bill designed to protect innocent property owners from federal civil forfeiture. Civil forfeiture has sparked a firestorm of controversy in recent years, earning criticism from figures and organizations as diverse as John Oliver, nearly 100 different editorial boards, both the Democratic and Republican Party platforms and, most recently, U.S. Supreme Court Justice Clarence Thomas.

Under civil forfeiture, law enforcement agencies can seize property merely suspected of involvement in criminal activity. Unlike criminal forfeiture, civil forfeiture allows the government to permanently keep property without charging anyone with—let alone convicting them of—a crime. And federal law allows the seizing agencies to keep up to 100 percent of the proceeds from forfeited property.

“For too long, tens of thousands of Americans have lost their hard-earned savings, cars, businesses, and even their homes to an unjust civil forfeiture system,” said Scott Bullock, president and general counsel of the Institute for Justice, a public interest law firm that fights civil forfeiture nationwide. “The FAIR Act is a bold effort that would enact many urgently needed reforms and end many of the appalling practices endemic to current law,” he added.

The FAIR Act would enact the following changes to federal civil forfeiture:

  • Bans the U.S. Department of Justice from retaining forfeiture proceeds and instead re-directs forfeiture proceeds to the General Fund of the Treasury. In 1986, the DOJ’s Assets Forfeiture Fund took in $93.7 million in forfeiture revenue. By 2014, annual deposits topped $4.5 billion, according to a report by the Institute for Justice.
  • Abolishes the “equitable sharing” program, which allows local and state law enforcement to collaborate with federal agencies and pursue forfeitures under lucrative federal law, even if that would circumvent state restrictions. From 2001 to 2013, the DOJ distributed more than $4.7 billion in equitable-sharing money.
  • Shifts the burden of proof from the property owner onto the government, restoring the principle of “innocent until proven guilty”;
  • Raises the standard of proof in civil forfeiture proceedings from “preponderance of the evidence” (i.e. more likely than not) to “clear and convincing”;
  • Provides legal representation for those who cannot afford it in civil forfeiture proceedings;
  • Limits forfeiture for currency “structuring” only when funds in question are derived from an illegal source or used to conceal illegal activity, codifying a recent IRS policy change in response to documented abuses; and
  • Allows individuals and small business owners to request a prompt hearing to contest the seizure of their funds for alleged structuring violations.

“Critically, the FAIR Act would end the appalling financial incentives that fuel forfeiture abuse,” noted Darpana Sheth, a senior attorney at the Institute for Justice and who heads IJ’s End Forfeiture Initiative. “But despite overwhelming public and bipartisan support, the FAIR Act did not even receive a vote last session. Safeguarding constitutional rights cannot be delayed. We urge leadership in the House and the Senate to give the FAIR Act swift consideration on the floor,” Sheth said.

Reform efforts are also active in statehouses across the country. In less than three years, 19 states and Washington, D.C. have enacted reforms (including Ohio, Michigan and Mississippi just this year). Further forfeiture reforms are currently pending in more than 20 states.

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