Public reporting on forfeiture activity is poor, but transparency regarding expenditures from forfeiture funds is far worse. Most jurisdictions lack any reporting requirements for forfeiture expenditures, and the limited data the Institute for Justice was able to obtain provide very little insight into what law enforcement does with forfeiture funds.
What little reporting exists only indicates expenditures across broad categories, such as equipment, salaries and “other.” No jurisdictions require agencies to itemize expenditures from forfeiture accounts, so the public and lawmakers have no way of determining whether spending is proper or within legal limits.
At the federal level, reports from the departments of Justice and the Treasury provide the bare minimum, amounting to little more than a basic accounting of monies going into and out of the Assets Forfeiture Fund and the Treasury Forfeiture Fund. Expenditures are reported across a few general categories, such as payments to third parties, equitable sharing payments to states, salaries, joint law enforcement operations, equipment and investigative costs. 1 These reports provide only the broadest sense of how federal forfeiture money is spent, failing to provide any details about individual agency spending.
DOJ and Treasury reports also provide no information about how state and local law enforcement agencies spend equitable sharing money. However, information IJ obtained through public records requests provides a limited window into expenditures from equitable sharing funds. Until August 2014, state and local law enforcement agencies requesting equitable sharing proceeds from the DOJ were required to indicate on a form known as the DAG-71 whether they intended to use the funds for equipment, vehicles, salaries or “other,” and agencies could check multiple categories. Responses were maintained in the DOJ’s CATS database. As shown in Figure 13, from 2000 to 2013, the most popular anticipated uses of equitable sharing money were for equipment—checked on roughly 70 percent of DAG-71 forms each year—and “other”—checked on about 50 percent of DAG-71s annually.
Figure 13: Agencies’ Intended Usages of DOJ Equitable Sharing Funds, 2000–2013
Source: Institute for Justice analysis of DOJ civil and criminal forfeiture data obtained by FOIA.
Of course, the DAG-71s indicated only the intended use of equitable sharing funds. Once state and local agencies receive the money, they are free to spend it as they please within federal guidelines. Equitable sharing records maintained by the DOJ contain agency reports of how funds were actually spent across several categories, but these data are not publicly reported and can be obtained only by Freedom of Information Act requests.
IJ obtained the 2007 equitable sharing records for all participating law enforcement agencies in eight states, as shown in Figure 14. The records IJ obtained are called Equitable Sharing Agreement and Certification forms, and agencies must submit them annually if they wish to continue participating in equitable sharing. The forms require state and local agencies to certify that their equitable sharing accounts have been audited, and they ask agencies how much was spent from the accounts on various general categories during the previous fiscal year. These records provide a better picture of spending than DAG-71s, but obtaining them and compiling them into usable information is prohibitively time-consuming: IJ’s records requests for just eight states produced thousands of forms that required manual data entry before any analysis could be completed.
Results indicate that equipment and “other,” the same popular categories from the DAG-71 forms, accounted for a majority of equitable sharing expenditures by law enforcement in the eight states. Between 15 (Michigan) and 34 (Texas) percent of forfeiture expenditures went to equipment, and between 23 (Michigan) and 40 (Massachusetts) percent went to “other law enforcement expenses.” 2 The other large expenditure areas included transfers to other law enforcement agencies, salaries and overtime, investigations and facilities. Just 1.7 percent of forfeiture expenditures were for community programs, such as drug education, drug abuse treatment, crime prevention and job skills programs—despite the importance civil forfeiture’s defenders often place on such spending. 3
Figure 14: State and Local Law Enforcement’s DOJ Equitable Sharing Expenditures by Category, Eight States, Fiscal Year 2007
|State||Salaries||Equipment||Other||Facilities||Investigations||Training||Community programs||Transfers||Matching grants|
Source: Institute for Justice analysis of Equitable Sharing Agreement and Certification forms obtained from DOJ via public records requests.
Although these data are likely the best available for equitable sharing expenditures, they probably have errors. The federal government rarely audits agencies receiving equitable sharing funds to verify compliance with DOJ guidelines and proper accounting practices, and when it does, it usually turns up problems. The DOJ’s Office of the Inspector General conducts only three or four audits each year across thousands of participating agencies. In 2011, the DOJ’s Asset Forfeiture and Money Laundering Section conducted 11 audits and found that a majority of agencies were not in compliance. Agencies failed to “properly account for equitable sharing receipts and expenditures[,] … comply with the allowable uses of equitable sharing funds” and complete required audits of their equitable sharing accounts. 4 A 2015 review by the Drug Policy Alliance of nine cities in Los Angeles County found similar results: Most agencies failed to properly comply with federal forfeiture regulations. 5
At the state level, only 11 states require the reporting of forfeiture expenditures to either a local or state agency. 6 Of those states, IJ obtained 2012 state forfeiture expenditure information from just seven, 7 five of which provided data so limited as to be unusable. 8 Data from Arizona and Texas provided enough detail to understand how forfeiture funds were used, as did data provided by Oklahoma and Pennsylvania, even though they do not require expenditure reporting (see Figure 15). 9
Salaries consumed a larger portion of spending from these states’ forfeiture funds than from equitable sharing funds, likely because these states do not have the same restrictions on forfeiture expenditures as the federal government. 10 Texas law enforcement agencies, for instance, spent 14 percent ($5.9 million) of 2012 forfeiture expenditures on salaries, a significant proportion that nevertheless pales in comparison to the 23 percent ($4.8 million) spent in Arizona, the nearly 30 percent ($4.2 million) spent in Pennsylvania and the remarkable 70 percent ($2 million) spent in Oklahoma. As with equitable sharing spending, only a small fraction—between 0.7 and 4 percent—of state forfeiture funds went toward substance abuse and crime prevention programs.
Beyond salaries, Arizona spent 35 percent ($7.5 million) of state forfeiture funds on “other” and 23 percent ($4.9 million) on equipment. After salaries, the bulk of Pennsylvania law enforcement’s state forfeiture expenditures were for equipment—nearly 43 percent, or $6 million. Law enforcement agencies in Texas spent their state forfeiture proceeds much like their federal proceeds: In fiscal year 2012, Texas law enforcement used 37 percent ($15.7 million) of state forfeiture expenditures for equipment and 13 percent ($5.5 million) for “other.”
Figure 15: State Forfeiture Expenditures by Category, Four States, Fiscal Year 2012
|Salaries||Equipment||Other||Facilities||Investigations||Training||Community programs||Transfers||Matching grants|
Source: Institute for Justice analysis of civil and criminal forfeiture data from online reports and public records requests.
This latter category—“other”—is particularly problematic. It is used frequently, with the result that the public has no indication of how tens of millions of dollars are being spent. Indeed, in fiscal year 2012, Arizona, Oklahoma, Pennsylvania and Texas spent a total of nearly $13.7 million of state forfeiture money on “other,” and, in fiscal year 2007, eight states spent more than $42 million in equitable sharing payments on “other.”
In the rare event that the public catches a glimpse of what “other” means, the impression they might get is one of off-the-books slush funds for toys, travel and salaries. Both federal and state forfeiture monies have been spent on luxurious travel, 11 high-end dining, 12 fancy equipment, 13 salaries 14 and a host of questionable purchases. A former district attorney in Brooklyn, for example, was accused of spending more than $1 million on a political consultant. 15 In Romulus, Mich., police officers were charged for using forfeiture proceeds on alcohol, marijuana, prostitutes and a tanning salon. 16 A former Dallas County district attorney used forfeiture funds to pay a $50,000 settlement following a car wreck he was involved in while looking at his phone. 17
Perhaps the most egregious example comes from Bal Harbour, Fla., a small village of 2,500 that in 2012 had an estimated $30 million in equitable sharing forfeiture funds frozen after a routine inquiry by the Office of the Inspector General uncovered misuse of funds and missing records. The hamlet, it turned out, had a vice unit that had been crisscrossing the country, seizing money—without making a single arrest—and using it to pay for expensive equipment, like a $100,000 35-foot boat and a $108,000 mobile command truck; festivities, including a $7,000 banquet for the police chief and a $21,000 anti-drug beach party; and salaries. Even worse, three years into the investigation, the DOJ uncovered a money laundering scheme that ran from 2009 to 2012 and was worth well over $70 million, with upwards of $28 million not accounted for in agency reports. 18
Continue Reading: Sidebar:Best Practices: Forfeiture Reporting