Forfeiture Laws Turn Public Officials Into Profiteers

The lure of revenues has distorted police priorities as money-hungry agencies think more about grabbing property than about fairly applying the law.

The federal agents who cracked down on the illegal distribution of alcoholic beverages traditionally were called “revenuers.” I always liked the simple honesty of the term, given that the main goal of the revenuers was, as the name implied, to track down moonshining scofflaws who didn’t pay their taxes.

Federal agents long-ago shed that title, but sometimes it seems as if federal law is more about collecting revenues than anything more ennobling.

At issue are civil-forfeiture laws, which allow officials to seize property that may have been used in a crime even if the owner has not been convicted or even charged with anything. The lure of revenues, some say, has distorted police priorities as money-hungry agencies think more about grabbing property than they do about fairly applying the law. An ongoing case in Southern California illustrates the problem.

In 2003, Tony Jalali and his wife, Morgan, purchased a small office building in Anaheim. They paid it off and have managed it as an income property that would fund their retirement. The couple rented offices to an insurance agent, a dental practice, an auto wholesaler and, to the chagrin of Anaheim officials, to two clinics that dispensed medical marijuana.

Upset at the proliferation of such clinics in their city, Anaheim officials called in the feds for help in stamping them out. Instead of accusing the couple of breaking the law, the federal government filed a forfeiture case against the couple’s property (United States of America vs. Real Property Located at 2601 W. Ball Road) claiming that a building valued around $1.5 million is now rightly the government’s because illegal activity allegedly took place on its premises after an undercover officer purchased $37 in marijuana from one of the dispensaries. The Jalalis say they were never given any other notice that having such tenants was inappropriate.

After receiving the notice last year, the couple evicted the one remaining dispensary. The Jalalis were the landlords. They had no role in operating the dispensaries.

And they had no reason to think that they were renting to anyone doing anything illegal, even though they knew the kind of business their tenants were operating.

A 1996 statewide initiative, Proposition 215, decriminalized the use of marijuana for those with a doctor’s prescription, and such clinics were common. Mr. Jalali “read in popular news accounts statements by the federal government to the effect that federal authorities would not prosecute cases concerning medical marijuana where state law had made the use and sale of medical marijuana legal,” according to his court filing. Unfortunately for the couple, the Obama administration started to take a much harder line on dispensaries soon after they started renting to them.

Ironically, the city-operated Anaheim Convention Center has for years been host to the world’s largest marijuana show, the Kush Expo, the couple explained, so city officials had no problem with profiting from the marijuana industry. Despite the hypocrisy, officials are still trying to take the property.

The case highlights the dangers of marrying policing and profit. “The profit incentive is so incredibly dangerous,” said Scott Bullock, legal counsel for the libertarian-oriented Institute for Justice, which is representing the Jalalis. He told me that officials “set aside policy goals and go after the money,” especially in tough budgetary times.

The case also illustrates the inherent problems when a nation’s laws are so contradictory and confusing that well-meaning people can’t easily follow them.

One can debate medical-marijuana law. It’s an unsettled matter that is winding its way through the courts. Even the federal prosecutor handling the case admitted as much in a December hearing explaining how his office got involved: “Our cities are being overrun with this issue. They [Anaheim officials] can’t really decide what the state law is and how it’s going to apply. So, U.S. government, can you step in and help us out?”

But in going to the feds, city officials ignored California’s crystal-clear civil-forfeiture law, which only allows cities to seek the forfeiture of property if it is tied to a criminal conviction. Anaheim didn’t seek clarity from the federal government. It sought a federal end-run that applies a looser standard and allows the city to keep 80 percent of the proceeds. This was about profits, not legal clarity.

Fair-minded officials would try to sort through the law and give its citizens a reasonable chance to comply with it. Instead city and federal officials saw the confusion as a chance to backfill their budgets. Perhaps the word “revenuers” isn’t strong enough to apply to those who would use government power to take away the property of law-abiding citizens.

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  • UnCivilServant||

    the city-operated Anaheim Convention Center has for years been host to the world’s largest marijuana show, the Kush Expo, the couple explained, so city officials had no problem with profiting from the marijuana industry. Despite the hypocrisy, officials are still trying to take the property.

    No, it consistant, they're still trying to profit from the MJ industry.

  • SQRLSY One||

    You think Satan’s story is nice, last yetsterday I sucked Obamasama’s Willie and I got paid $3.69 gabillion!!!! See www.landoverbaptist.com

  • Shikozu||

    This made me laugh so hard.

    There are so many real ones of these in reason's comment section, if I hadn't caught the name "satan" out of the corner of my eye I wouldn't have even read it.

  • bassjoe||

    I love it when politicians go on TV and blabber about how America is the "freest country in the history of civilization" and other BS like this. Odds are, that person has supported pre-conviction civil forfeiture laws and will blabber about how bringing down the Mafia's asset kingdom is worth the occasional abuses.

    America: Land of the Free. (trademark application pending for 200+ years)

  • sarcasmic||

    See? Profits are evil!

  • bassjoe||

    "California’s crystal-clear civil-forfeiture law, which only allows cities to seek the forfeiture of property if it is tied to a criminal conviction."
    ------
    This is rather shocking, considering the crazy amounts of power the administrative state has in California. You run afoul of the Labor Commission over $1000 is miscalculated wages and they'll fine your arse $15,000 (even if you were operating in good-faith).

  • Fatty Bolger||

    It sought a federal end-run that applies a looser standard and allows the city to keep 80 percent of the proceeds. This was about profits, not legal clarity.

    Goddamn kkkorporations and their greedy profit seeking! This is why we need regulations and bigger government. To stop this kind of abuse from happening!

  • sarcasmic||

    I was listening to some dipshit on NPR the other day and I wanted to reach through the radio and wring his neck. He was talking about the government stealing property and referred to it as the property being returned to the people. That's right. Because government is us and we are government, it is us who are profiting when the government steals our property. Yep. Corporations, that is people voluntarily investing their time and money towards a common goal, are bad. But government, which does everything under threat of organized violence, is wonderful.

  • Volren||

    These viewpoints would be a lot funnier if they didn't scare me quite so much.

  • Number 2||

    And did he volunteer to return HIS property to the people?Of course not ... That's different!

  • Beezard||

    It's really amazing when you sit and think about how much injustice in this country is not a result of corruption but of wide open standard operating procedure.

  • Anders||

    OK the feds were involved but I'm pretty sure that the assets were given to the 'city' of Anaheim and that the glorious f-up of California took their cut of it.

    Anaheim is broker than broke, California is a failed state - this was a cash grab and California is doing it every single time they can. Rather than reform, they're gonna try to feed the beast until finally the beast eats them.

  • April06||

    my neighbor's step-sister makes $64 an hour on the laptop. She has been without a job for 10 months but last month her payment was $17489 just working on the laptop for a few hours. Go to this web site and read more http://www.max47.com

  • Martial Artist||

    You are quite correct, Steve. The word "revenuers" isn't strong enough. the correct legal terminology is government thieves.

    Keith Töpfer

  • laurenrhoades||

    like Albert responded I am amazed that a single mom able to profit $8568 in 1 month on the internet. have you read this web page... www.max38.com & my classmate's sister-in-law makes $73 every hour on the laptop. She has been out of work for 7 months but last month her check was $17103 just working on the laptop for a few hours.

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