The Perverse Forfeiture Incentives Created by Equitable Sharing

The DOJ program allowed police and prosecutors to bypass state limits on asset seizures.


Institute for Justice

As Scott Shackford noted earlier today, the Justice Department is scaling back its Equitable Sharing Program, which enabled local police and prosecutors to bypass state restrictions on civil forfeiture. The program was appealing largely because it let law enforcement agencies keep up to 80 percent of the proceeds from asset seizures. According to a 2010 report from the Institute for Justice, that was bigger than the shares allowed by 15 states.

In many cases, equitable sharing also let police and prosecutors evade procedural safeguards that property owners enjoyed under state law. The most extreme example was North Carolina, where civil forfeiture essentially does not exist because property can be taken only after the owner is convicted of a crime. Even then, law enforcement agencies do not get any of the money. Not surprisingly, I.J. found a high level of "evasion" in North Carolina, as measured by the state's participation in equitable sharing.

Counting North Carolina, 16 states make it relatively hard to take people's property by imposing a higher standard of proof than federal law does: either proof beyond a reasonable doubt or "clear and convincing evidence," as opposed to a "preponderance of the evidence," which is the federal standard and amounts to any probability greater than 50 percent. By seeking forfeiture under federal law, police and prosecutors could take advantage of that weaker standard.

Another benefit of equitable sharing was that the feds took on the task of pursuing the forfeiture, which was especially helpful if the owner happened to put up a fight. A couple of years ago, for instance, the Justice Department tried to seize the Motel Caswell, a family-owned business in Tewksbury, Massachusetts, based on drug offenses committed by a tiny fraction of its guests. The case, which the feds ultimately lost, was instigated by a forfeiture specialist at the Drug Enforcement Administration who enlisted the help of the Tewksbury Police Department, which stood to enjoy a windfall—more than it would have gotten under state law—without having to bear the cost of litigation. Eliminating equitable sharing in drug cases should mean fewer attempted thefts like that one.

The perverse incentives created by equitable sharing were so glaring that its detractors included not only reform-minded Democrats like Rep. John Conyers (Mich.) and libertarian-leaning Republicans like Sen. Rand Paul (Ky.) but drug warriors like Sen. Charles Grassley (R-Kan.) and Rep. F. James Sensenbrenner (R-Wis.). Last week Grassley and Sensenbrenner joined Conyers and Sen. Mike Lee (R-Utah) in urging Holder to eliminate equitable sharing. "We are concerned that these seizures might circumvent state forfeiture law restrictions, create improper incentives on the part of state and local law enforcement, and unnecessarily burden our federal authorities," they wrote. "We also recommend that you implement additional procedural safeguards to make sure the property of innocent Americans is not being swept up in overzealous asset forfeiture." 

Update: A closer look at the new DOJ policy shows that it leaves most of the Equitable Sharing Program untouched.