This post appears here courtesy of the John Locke Foundation
. The author of this post is Jon Guze
North Carolina's Approach: Criminal Asset Forfeiture
- Compared with most states' laws, North Carolina's asset forfeiture laws do an excellent job of protecting innocent property owners and discouraging abuse
- Unfortunately, the federal government's equitable sharing program makes it possible for North Carolina law enforcement agencies to circumvent those protections
- Eight states and the District of Columbia have already imposed restrictions on equitable sharing; North Carolina should follow their example
Depriving criminals of their ill-gotten gains is clearly desirable. The challenge is to do it in a way that protects the rights of innocent property owners and discourages abuse by law enforcement agencies. North Carolina successfully meets that challenge in two ways.
First, under North Carolina's criminal forfeiture laws property may be forfeited only if the state can prove it was acquired as a result of a felony, and only after the owner has been convicted of that felony. These provisions protect the rights of innocent property owners.
Second, under the North Carolina State Constitution, forfeiture proceeds must be used exclusively for maintaining public schools. This provision removes the incentive for asset forfeiture abuse and discourages the kind of predatory policing that has poisoned relations between the police and the public in many parts of the country.
Both of those provisions have elicited high praise from public policy experts and have made our asset forfeiture regime a model for other states. Currently, the Institute for Justice's asset forfeiture scorecard has us in a five-way tie for third place with Maine, Maryland, Missouri, and Washington, D.C.
State Asset Forfeiture Laws as Graded by the Institute for Justice
Federal Equitable Sharing Facilitates the Circumvention of State Forfeiture Laws
The federal government's approach to asset forfeiture is very different from North Carolina's. Because the charges are brought against the property itself rather than the owner, under federal civil asset forfeiture laws there's no need to convict - or even charge - the owner with a crime. Because it is a civil rather than a criminal proceeding, the standard of proof is not "beyond a reasonable doubt"
; instead, all the government must do is show it is more likely than not that the property was somehow connected to a crime. And under federal law agencies are not just allowed to keep and use forfeiture proceeds, they are required to do so.
It would be bad enough if federal forfeiture laws applied only to federal agencies. Unfortunately, a federal program called "equitable sharing"
makes it possible for state and local agencies to process seized assets under federal law and thereby circumvent any relevant state laws. In North Carolina more than 100 agencies regularly process seized assets through the equitable sharing program. Between 2000 and 2019, those agencies collected almost $300 million's worth of equitable sharing proceeds.
Total Equitable Sharing Proceeds In North Carolina, 2000 to 2019
There are two forms of equitable sharing. The first occurs when a state or local agency participates in a "joint investigation"
with a federal agency. When that happens, the local law enforcement agency receives a share of any forfeiture proceeds based on its level of participation. With the second, a state or local law enforcement agency seizes property on its own and refers it to a federal agency for "adoption."
The federal agency then processes the assets under federal law, returns the bulk of the proceeds to the state or local agency that made the seizure, and keeps 20% of the proceeds as a processing fee.
Joint investigations can play a legitimate and valuable role in law enforcement by facilitating the sharing of information, expertise, and resources. Adoptions, on the other hand, serve only one purpose: to give state and local law enforcement agencies a way to circumvent state asset forfeiture laws. It is galling, therefore, that adoptions account for the bulk of equitable sharing in North Carolina.
Anti-Circumvention Legislation in the States
Despite equitable sharing's manifest faults, states have been reluctant to ban the practice completely, and indeed no state has done so. This, no doubt, is mostly because the prospect of taking money from drug traffickers and other criminals and using it to fund law enforcement is almost irresistibly attractive to legislators. However, it is also because no one wants to stop participating in joint investigations, which can play a valuable role in law enforcement. Rather than banning equitable sharing entirely, therefore, reformers have experimented with various ways of mitigating its worst aspects without entirely cutting off the flow of shared revenue and without losing the benefits of joint investigations. Eight states and the District of Columbia have enacted anti-circumvention legislation.
In 2014, the District of Columbia was the first jurisdiction in the country to enact anti-circumvention legislation. In addition to reforming the district's own asset forfeiture regime, the legislation included an outright ban on federal adoptions. In 2016, California passed an asset forfeiture bill that included a provision that effectively banned adoptions within the state. Other state bans have followed, and the Institute for Justice (IJ) has incorporated an adoption ban into its Anti-Circumvention Model Act.
The ban of federal adoptions was not the only anti-circumvention provision included in the District of Columbia's 2014 legislation. While the act did not restrict the district's law enforcement agencies' ability to participate in joint investigations with federal agencies, it did restrict the use of shared proceeds derived from such investigations by requiring that all such proceeds be deposited in the General Fund.
In theory, diverting forfeiture proceeds from law enforcement to the General Fund would appear to be a very sensible requirement to impose. Diverting proceeds to the General Fund would remove the profit motive from the forfeiture process and ensure that it is used - not to generate revenue - but for its proper purpose, which is to punish criminals and discourage crime. In practice, however, there was a problem with the diversionary approach. The problem was not immediately apparent, because the District of Columbia's reform act did not become effective at the time of passage, but it was recognized the following year when New Mexico enacted asset forfeiture legislation that also diverted forfeiture assets to the General Fund. New Mexico's law took immediate effect, and, when it did, the federal government's reaction was swift and brutal: the Department of Justice (DOJ) refused to participate in any future joint investigations in New Mexico. DOJ could have simply stopped sharing the proceeds of assets seized during joint operations, but it evidently wanted to send a message, and that message was received. No anti-circumvention legislation since 2015 has diverted forfeiture proceeds away from law enforcement.
With the diversionary approach effectively off the table, reformers were forced to look for an alternative way of taking the profit motive out of the forfeiture process. In the end, they settled for an approach that takes the profit motive out of most forfeiture cases by limiting equitable sharing to cases in which the value of seized assets exceeds a minimum monetary threshold. IJ's Model Act, for example, sets a $50,000 threshold.
As "second best"
solutions go, this one is not too bad. Because most forfeiture cases involve small seizure amounts, the imposition of a threshold ensures that most forfeiture decisions will be made on public safety grounds alone. At the same time, because most forfeiture revenue comes from cases involving large seizure amounts, the imposition of a threshold accomplishes this goal with a minimal loss of shared revenue.
Lessons for North Carolina
The experience of the states that have already enacted anti-circumvention legislation teaches three broad lessons about what works and what doesn't. North Carolina policymakers should adopt anti-circumvention legislation that would:
- Ban or severely restrict federal adoptions
- Avoid diverting equitable sharing proceeds away from law enforcement
- Forbid equitable sharing unless the value of seized assets exceeds a minimum monetary threshold
Applying those lessons in North Carolina would make North Carolina's asset forfeiture regime the best in the country.