The Government's License To Steal

Indiana's laws prohibiting police departments from enriching themselves via asset forfeiture would be much more effective if they weren't ignored.

In the February issue of Reason, I wrote a feature story on civil asset forfeiture, the process by which law enforcement groups can seize property, usually in drug cases, sometimes without ever charging anyone with a crime. In particular, the article looked at the case of Anthony Smelley, who had $17,500 in cash taken from him during a traffic stop in Putnam County, Indiana. Smelley was never charged with a crime, but it took well over a year and several court proceedings for him to get his money back.

Indiana is one of several states that require civil asset forfeiture proceeds to go to a fund for public schools. Many states passed such laws in the late 1990s after media and public backlashes against civil forfeiture abuse. The states saw the funds as a way to remedy the incentive problems that arise when police and prosecutorial offices benefit directly from the money they seize. In Indiana, the requirement is actually written into the state's constitution.

But there are ways around these requirements. Among them:

  • "Adoption": Under federal rules, local police departments can simply call the feds when they're about to close a case in which they think there will be a big forfeiture payoff. The investigation then becomes a federal case, governed by federal law. The feds collect the forfeiture proceeds, then redistribute most of them (as much as 80 percent) back to the local police department in question. The school fund gets nothing, and the perverse incentives remain in place. In 1999, The Kansas City Star wrote a series of reports detailing how local police departments in Missouri were using adoption to get around school-funding requirements.
  • Settlement: If prosecutors can negotiate a settlement with the defendant, perhaps by letting him keep some of his allegedly ill-gotten gains, the settlement isn't considered a formal forfeiture, and as such isn't governed by third-party funding laws. That money, too, can then go back to law enforcement.
  • Contracting: In reporting my story last February, I found that many counties in Indiana are contracting out their civil forfeiture cases to private attorneys, who then get to keep a hefty commission (from 25 percent on up) of what they're able to extract from defendants. If forfeiture money going back to general operating funds for police or D.A. offices creates incentive problems, these private attorneys are choosing and helping prosecute cases in which they stand to be personally enriched by the outcome.
  • Operating costs: Counties are also allowed to deduct the costs police departments and prosecutors spend investigating and prosecuting a case from the forfeiture winnings before sending the remainder back to the school fund. The problem is that judges give little apparent scrutiny to the cost estimates, allowing law enforcement to highball their numbers and reap more gain from forfeitures.

Given all of these ways around the law, how much forfeiture money is actually getting back to the school fund in Indiana?

Almost none. This weekend, the Indianapolis Star ran a front-page article looking at where all the forfeiture money is going. I'd like to link to it, but in an apparent effort to keep the paper as irrelevant as possible, the Star has lately adopted a policy of not putting its most important pieces online. But as it turns out, Indiana attorney Paul Ogden actually beat the paper to the story by several weeks. Last month, Ogden put up a post on his blog that came to many of the same conclusions the Star published this weekend. Here's what Ogden found:

  • Of Indiana's 92 counties, just five have paid any forfeiture money into the school fund over the last two years. Three of those made just one payment. One county made a single payment of $84.50. Only one county could arguably be seen as complying with the law: Wayne County made 18 payments totalling $38,835.56.
  • The total amount of forfeiture money paid into the account from all 92 Indiana counties over the two-year period was just $95,509.72.
  • To put that figure into perspective, Ogden notes that attorney Christopher Gambill—the private attorney who, as I noted in my article, handles civil forfeiture cases for three Indiana counties and argued the case for Putnam County to keep Anthony Smelley's money—made $113,145.67 in contingency fees off just a single forfeiture case.

Forfeiture experts Steven Kessler and David Smith told me that the contracting out of these to private attorneys is unquestionably unconstitutional. You have unelected people making public policy decisions who will reap a direct financial benefit as a result. Mark Rutherford, chairman of the Indiana Public Defender Commission, told me last year, "It's just sort of accepted here that this is the way things are. There are attorneys who have amassed fortunes off of these cases." As Ogden notes, one of those attorneys is celebrity lawyer and talk show host Greg Garrison, whose law firm handles forfeiture cases for Marion County, home of Indianapolis. Marion County didn't pay a penny of forfeiture proceeds into the school fund.

Ogden writes:

It is not entirely clear where all the money is going or where the breakdown in the system is that has left only a trickle of money going into the common school fund. Possibly it could be that prosecutors or their hired private counsel aren't closely analyzing law enforcement costs and are simply assuming that on every forfeiture case law enforcement costs and attorney's fees consume the entire amount of the proceeds seized.

Or perhaps judges aren't properly making the determination as to how much the law enforcement costs.

Ogden's being charitable. It's apparent that prosecutors and judges in Indiana know they're gaming the system. For example, in a follow-up to my Reason piece, Gambill told me that he was suspicious of the motives of Putnam County Circuit Court Judge Matthew Headley in Anthony Smelley's case because Headley had once asked for $5,000 from the county forfeiture fund to purchase new audio-visual equipment for his courtroom (he was turned down). Headley conceded to me that he had asked for the money, but denied that getting turned down affected the way he presided over forfeiture cases. But whether or not Headley is biased glosses over the larger point: In a state where all proceeds from forfeiture cases are supposed to go to a school fund, why would Judge Headley (himself a former prosecutor) have assumed there would be $5,000 in forfeiture proceeds available to upgrade his courtroom in the first place?

The most obvious answer is that judges and prosecutors, at least in some parts of Indiana, know that there's wholesale disregard for the school fund requirement.

Civil asset forfeiture is an unjust, unfair practice under any circumstance. The idea that the government can take someone's property on the legal fiction that property itself can be guilty of a crime is an invitation to corruption, and provides a way for the government to get its hands on private goods under a lower burden of proof than it needs to actually convict someone (criminal forfeiture, different from civil forfeiture, requires an actual conviction). What's happening in Indiana, where the entire legal system is essentially ignoring the spirit if not the outright letter of state law, only confirms that once you give government license to steal, it's very difficult to wrest it back.

Radley Balko is a senior editor at Reason magazine.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    The day the Court said that asset forfeiture laws were constitutional was a bad day indeed. Because they so obviously are not.

  • ||

    Over the last two years, just five of Indiana's 92 counties have given any forfeiture money to the schools fund at all.

    I'll bet that police departments and DA offices got a big hunk. I'll go RTFA now and see if I'm right.

  • ||

    Golly gee, much to my non-surprise I was correct. The guys who steal the money keep it.

  • Jeffersonian||

    No conflict of interest there, eh?

  • slayer of berries||

    The police and prosecutors performed the hard work of stealing, therefore they should get the benefits, not the schools. By using the government to redistribute wealth from police departments to schools, the government is turning those schools into lazy, government-dependent welfare parasites -- and since they use the threat of law (and thus state-backed force) to take those funds, it's little better than if the schools had stolen it directly from the police at gunpoint.

    If the schools want more money, they should work harder to confiscate property from students and parents, not just beg for a handout.

  • ||

    ProL, I agree. SCOTUS needs to end this state sanctioned piracy.

  • Invisible Finger||

    The teachers' union ought to be pissed off about this.

  • slayer of berries||

    As much as I despise them, they are the one group motivated, organized, and greedy enough to really make a big stink about it. Not that actually getting the funds to the schools would solve the underlying problem of violating people's due process, but hopefully police would stop bothering if there's no payoff.

  • Amakudari||

    Aye. And it would distract both the teachers' and cops' unions, so it's something of a win-win. I know nothing about Indiana, but I'm assuming these are both powerful.

  • juanita||

    You must remember, however, that much of the property seized was actually used for marijuana gardens. Kids play in garden's. We must keep our kids safe.

  • Mark||

    DRINK!!!!

  • ||

    If we are drinking for sarcasm now, someone better call the paramedics.

  • skr||

    That would be for, think of teh childrun.

  • ||

    Or when someone spoofs juanita

  • Greer||

    Putnam County

    Great song by Tom Waits

  • Greer||

    "... sing the entire Hank Williams songbook, whether you like it or not."

  • ||

    Is that a state fund for public schools? Why isn't the law being enforced?

    At least this law addresses the bad incentives built into letting the cops keep whatever they can haul off.

  • Federal Dog||

    "Why isn't the law being enforced?"

    Well, you'd have to find a prosecutor to do so.

  • ||

    Not necessarily. The AG would be the right person to bring the case, but whatever agency is supposed to be overseeing that fund could conceivably hire an outside lawyer.

    On contingency, of course.

  • Federal Dog||

    AG offices split the take too (if they are involved in the seizure).

    I guess it comes down to what agency is responsible for oversight (which has been pointedly negligent in that regard). What explains such gross negligence? Does it have an incentive not to insist on proper disbursement of seized assets?

  • ||

    It isn't being enforced because no one knows about it. You can bet police departments aren't very anxious to spread the word either.

  • ||

    If they make them give all those ill gotten gains to the schools I imagine the local cops will just go back to the old timey shakedown... On the upside perhaps getting roughed up and having your stash and cash stolen might be better than having your stash and cash "confiscated" AND 5 years in prison...

  • JohnK||

    Good point.

  • ||

    The old timey shakedown didn't have cameras.

  • A is Awesome||

    Why exactly does a small state like Indiana need 92 counties?

    Oh right, so all the scummy politicians can get their scummy friends a job!

  • Invisible Finger||

    It's actually an example of how much mistrust of large government there was 150 years ago. Lots of small governments was seen as better than a few large ones.

  • .||

    Or maybe everyone wanted their own piece of the action.

  • ||

    Don't forget that each county has several townships, each of which comes complete with its own adminstrative staff and budget. We tried eliminating our township through a referendum but it failed.

  • Spoonman.||

    Georgia has 159. It's bigger than Indiana, but still.

    Texas has 254, one of which is the least populous in the country.

  • ||

    I suppose it might be an artifact of times when most folks lived in rural areas. Much easier to get to the county seat (often the only nearby town of any size) to conduct business if said town wasn't 100+ miles away. If it was close, you could get there and back on horseback or wagon in a day or two.

  • Hates Children and Old People||

    "Indiana is one of several states that require civil asset forfeiture proceeds to go to a fund for public schools. Many states passed such laws in the late 1990s after media and public backlashes against civil forfeiture abuse."

    It's okay for the government to rob you if they're "doing it for the children." I didn't make the kids, but I'm supposed to line up for every unconstitutional, hare-brained scheme that is allegedly in their favor.

  • EscapedWestOfTheBigMuddy||

    I suspect that it was a move by the pro-forfeiture side to save the "tool" in general.

    The reasoning goes like this: we can divide the voters into three groups those in favor of being tough on crime, those wackos who care about the constitution, and a few wishy-washy wimps who'll take exceptions to the obvious corruption of letting the enforcers keep their take.

    The last two might be enough to kill our little party, but if we can peel off the wimps we can keep getting our way...

    And the ducking of the rules that followed was only predictable if you were willing to presume some bad faith on the part of the government, which many of the fence sitter are not willing to do.

  • Ted S.||

    I'd argue that if you're working to undermine the rule of law, as those proposing such "unconstitutional hare-brained schemes" are, you don't care about the children.

    After all, how can you care about the children when you're teaching them it's OK to break all the rules to get the outcome you desire, and to exploit the children while you're at it?

  • ||

    You are missing the icing on the cake. In Kansas City, the police department Charges the schools to run the D.A.R.E. program. How much more crooked can you get?

  • Some Guy||

    Throw the sheriffs of all counties except that one in prison for embezzlement and see if this behavior improves the next year.

  • Shoeless Chris||

    But the judge needs some new window dressing for his chamber, you wouldn't deny a respected community leader the indignity of out of style drapery would you, you monster?

  • Federal Dog||

    "And the ducking of the rules that followed was only predictable if you were willing to presume some bad faith on the part of the government"

    No: All you had to presume was human nature.

  • JohnK||

    Those who are deemed acceptable for government service are above human nature.
    They place the law first and foremost above anything in their lives.
    They are immune from human nature.
    They are chosen because they have demonstrated that they have progressed past such silly things.
    They are better than us.

    Now let us pray.

    Our government, who art in Washington, hallowed by thy name...

  • ||

    Government workers behave like a blue collar guy who gets a free night in a 5 star hotel. He takes home the soap, shampoo, maybe the towels and even more. When you bunk at Uncle Sam's Chateau, the stolen trinkets are worth thousands and even millions, which are of inconsequential trinkets in the context of trillions.

  • Federal Dog||

    "Government workers behave like a blue collar guy who gets a free night in a 5 star hotel."

    Their role model in that regard is apparently Obama's wife.

  • mr inventory||

    Show me a mechanic who works for the federal government and I'll show you a guy with a ten thousand dollars worth of Snap On tools at home that didn't cost him a dime.

  • Spoonman.||

    Shit, I take home the soap and shampoo. It's already paid for.

  • ||

    "Why exactly does a small state like Indiana need 92 counties?"

    Isn't Indiana like Georgia, with the old-country requirement that the county seat be a half-day ride from anywhere in the county? This was so that citizens could do their business (like vote and serve on juries) in one day.

  • Mustaf Herod Apyur Poupr||

    wait, what? local governments could serve the citizens, and, perhaps, be responsive to said citizens? the devil you say...I am several hours drive from DC (thank your gods, I do), thus reinforcing the insulation between that fuckstained douche repository and I.

  • Shoeless Chris||

    OOOF! Right square in the frank and beans.. Radley's aim is still spot on.

  • ||

    Was there ever a time when the USA had a justice system? I'm about fed up with this legal system posing as a justice system.

    -jcr

  • ||

    http://openjurist.org/91/f3d/1.....of-indiana
    Here's one of Garrison's scams.

    An easier to read copy has already been pulled from the Fed Reporter FTP site, probably one of many pulled in response to Balko's article.

    Greg Garrison is on the radio at WIBC telephone 317-266-9422.

    This business owner (Blanton) got accused of receiving stolen goods. (This would seem to be an easy offense to artificially create using a willing thief who has accepted a plea deal)
    The warrant was for one residence but others were included in the search.
    While the trial was ongoing, Greg Garrison was already auctioning off the still innocent defendants liquor license.
    While in custody, the man has a heart attack and is left on the jail floor for 2 hours.
    If I read this right, all kinds of laws are violated, but nothing happens to any one in this police state organized crime syndicate and the man is left crippled and destitute.
    None of Blanton's stolen treasure went to public schools as required. Garrison is still a local Radio personality on WIBC, call in to his show.
    This is a much greater offense than Stagliano, involving physical injury and neglect can Reason stand up to the Hoosier mafia?

  • ||

    I may be our only hope. Check out the Fully Informed Jury Association on the web. We helped stop Prohibition, we can stop this nonsense.

  • ||

    Is it possible that the forfeiture funds are being stolen? Perhaps there should be a statute requiring a COMPLETE ACCOUNTING of forfeiture funds.

  • Spartacus||

    It doesn't matter how many statutes there are if nobody will enforce them.

  • ||

    There's a greater point that I think you missed, but that the nation as a whole may be catching on to.

    The question should not be, "What is the best or most fair way to distribute property taken by forfeiture in drug cases?"

    The question, of course, is, "Why is the government taking property at all?"

    The case can be made that the only place drug dealers really feel the pinch is in the wallet. Granted. But if forfeiture is the only deterrent, then forfeited property should be destroyed publicly, after appeals have been exhausted, so that no one have even the appearance of conflict. No one's property should ever be "redistributed" on the whim of any government official, whether that property be the preferred stock of Chrysler shareholders, my health insurance, or the cash of a suspected drug dealer.

  • ||

    Property should not be forfeited until a criminal conviction of its owner has been obtained.

    Why is that so hard?

  • ||

    Because there's still motivation other than justice. The police now have another reason to arrest you. The courts have another reason to try you. A judge has another reason to convict you.

    Any other motive, other than justice, must be removed from the equation.

  • ||

    Here is the case everyone should know about.

    Donald P. Scott

    If the link does not work it is to a wikipedia article. Search for the name.

  • ||

    My dad was a circuit court judge in Illinois, so he was involved in local politics and he, my brothers and I would debate all the time.

    Even as a punk teenager, I argued the tremendous incentive for abuse when law enforcement becomes a profit making enterprise. The old man of course felt that taking away those drug dealers' ill gotten gains was perfectly reasonable.

    Turns out I was right Dad !

  • Al||

    Here is the IndyStar article... http://www.indystar.com/apps/p.....0108220301

  • ||

    Only two comments at indystar, and one will make you puke (the police are heroes !)

    My brother the lawyer lives in Indy, and he says this was all news to him.

    ack

  • fendi||

    Not necessarily. The AG would be the right person to bring the case, but whatever agency is supposed to be overseeing that fund could conceivably hire an outside lawyer.

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  • mike||

  • ||

    I don't find it hard to believe at all. Kansas City police set the precident for corruption. They harrass those who do anything that may offend them and let those go who support them. I know where several officers live and am amazed that they could afford the $250,000 + homes they live in. They would come into the hotel where I worked and watch television and if they got a call, they would stand and argue over who was going to respond....with their seargent. Good, law abiding citizens in KC fear the police because we all know how dishonest, corrupt and violent they are. I come from a city where the cops are polite and helpful, rather than being so violent that the show, "Cops" isn't allowed to film here for fear of exposure of their nasty tendencies. I am sickened by it.

  • Hillary||

    The government seems to have no problem "stealing", as this article puts it, from its citizens. How unfortunate that because of mere suspicion your possessions can be taken away. In the case of cash, how are you supposed to afford an attorney to get your money back if the police take it from you? Oh right, you're not. Here is a page on civil forfeiture if you want to read more:
    http://www.relentlessdefense.c.....orfeiture/

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  • SDB||

    I have witnessed the thievery of the police. They had taken many items froma home, with some contrived warrant that had no legitimacy, they took books on art, collectibles, and items that were never returned to their owner, although no charges were ever filed against the owner for any reason.

  • دردشه عراقية||

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