Public Power, Private Gain

As early as 1795, the U.S. Supreme Court described the power of eminent domain—where the government takes someone’s property for a “public use”—as “the despotic power.” Eminent domain has the potential to destroy lives and livelihoods by uprooting people from their homes and businesspeople from their shops. With eminent domain, the government can force a couple in their 80s to move from their home of 50 years. Eminent domain is the power to evict a small family business, even if that means the business will never reopen.

The danger of such an extreme power led the authors of the U.S. Constitution and state constitutions to limit the power of eminent domain in two ways. First, the government had to pay “just compensation.” And second, even with just compensation, the government could take property only for “public use.” To most people, the meaning of “public use” is fairly obvious—things like highways, bridges, prisons, and courts.

No one—at least no one besides lawyers and bureaucrats—would think “public use” means a casino, condominiums or a private office building. Yet these days, that’s exactly how state and local governments use eminent domain—as part of corporate welfare incentive packages and deals for more politically favored businesses. This is the first report ever to document and quantify the uses and threats of eminent domain for private parties. We have compiled this information from published accounts and court papers covering the five-year period from January 1, 1998 through December 31, 2002. The results are chilling.