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Bipartisan Bill in Congress Would Dramatically Reform Civil Forfeiture

On Wednesday, Reps. Tim Walberg (R-MI), Jamie Raskin (D-MD), Thomas Massie (R-KY), Tony Cardenas (D-CA), Tom McClintock (R-CA), and Bobby Rush (D-IL) reintroduced the Fifth Amendment Integrity Restoration Act (FAIR Act), which would enact a sweeping overhaul of federal civil forfeiture laws. Under civil forfeiture, the government can permanently confiscate property without charging anyone with—let alone convicting them of—a crime. Worse, federal law even encourages law enforcement to forfeit property by letting the seizing agencies keep up to 100 percent of forfeiture proceeds.

“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 Darpana Sheth, a senior attorney at the Institute for Justice and who heads IJ’s End Forfeiture Initiative. “The FAIR Act is a bold effort that would enact urgently needed reforms and end many of the appalling practices endemic to current law. Critically, the FAIR Act would end the perverse financial incentives that fuel forfeiture abuse,” Sheth added.

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

  • Ban the U.S. Department of Justice from retaining forfeiture proceeds and instead re-directs all 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, but by 2018, annual deposits had topped $1.3 billion;
  • Abolish the “equitable sharing” program, which violates federalism principles and allows local and state law enforcement to collaborate with federal agencies and collect up to 80 percent of the proceeds, even if that would circumvent state restrictions. From 2001 to 2013, the DOJ distributed more than $4.7 billion in equitable-sharing money, according to a report by the Institute for Justice;
  • Shift the burden of proof from the property owner onto the government, restoring the presumption of innocence;
  • Raise the standard of proof in civil forfeiture proceedings from “preponderance of the evidence” (i.e. more likely than not) to “clear and convincing”;
  • Provide legal representation for those who cannot afford it in civil forfeiture proceedings;
  • Limit forfeiture for currency “structuring” only when funds in question are derived from an illegal source or used to conceal illegal activity, codifying a 2014 IRS policy change in response to documented abuses; and
  • Allow individuals and small business owners to request a prompt hearing to contest the seizure of their funds for alleged structuring violations.

Reforming civil forfeiture is the rare political issue that transcends party lines. The national platforms for both the Democratic and Republican Party have endorsed forfeiture reform, as have the editorial boards for over 130 different newspapers. And last month, the U.S. Supreme Court issued a unanimous landmark decision, which ruled that state civil forfeiture cases are bound by the Eighth Amendment’s ban on “excessive fines.”

On the state level, forfeiture reforms are currently under consideration in 12 states. Missouri and Rhode Island have advanced legislation that would close the equitable-sharing loophole. Most sweeping of all, Minnesota, Nevada, and South Carolina, could completely abolish civil forfeiture, a move that would generally require a criminal conviction to forfeit property and would ban police from self-financing with forfeiture revenue.

Since the Institute for Justice began its End Forfeiture Initiative in 2014, 30 states and the District of Columbia have enacted forfeiture reforms.

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