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.