Asset Forfeiture

Here Is How Rand Paul's Bill Would Curtail Civil Forfeiture

The FAIR Act gives owners more protection and reduces law enforcement's profit motive.

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Jacob Sullum

Today Sen. Rand Paul (R-Ky.) and Rep. Tim Walberg (R-Mich.) reintroduced the Fifth Amendment Integrity Restoration (FAIR) Act, which would revise federal civil forfeiture law to give property owners more protection and reduce the profit incentive that encourages law enforcement agencies to seize assets. "The federal government has made it far too easy for government agencies to take and profit from the property of those who have not been convicted of a crime," Paul said. "The FAIR Act will ensure that government agencies no longer profit from taking the property of U.S. citizens without due process, while maintaining the ability of courts to order the surrender of proceeds of crime." 

Here are some of the FAIR Act's provisions:

Profit motive. The FAIR Act abolishes the Justice Department's Equitable Sharing Program, which allows police to evade state limits on forfeiture by using federal law to confiscate people's property. That option is appealing because federal law requires less evidence and gives cops a bigger share of the proceeds than many state laws do. While Attorney General Eric Holder's new forfeiture policy deals with a relatively small part of equitable sharing, Paul's bill would eliminate it entirely. The FAIR Act also reduces the Justice Department's incentive to pursue forfeitures by assigning the proceeds to the general fund instead of the department.

Standard of proof. The FAIR Act requires the government to prove by "clear and convincing" evidence that property is subject to forfeiture. The current standard is "preponderance of the evidence," which amounts to any probability greater than 50 percent.

Innocent owner defense. In cases where the government argues that an asset is forfeitable because it was used to facilitate criminal activity, the FAIR Act puts the burden on the government to show, by clear and convincing evidence, that the owner himself used the property for illegal purposes or that he "knowingly consented or was willfully blind to the use of the property." Current law puts the burden on innocent owners to show they did not know about the illegal use or "did all that reasonably could be expected under the circumstances to terminate such use." In other words, property owners are guilty until proven innocent, turning an ancient principle of justice on its head.

Structuring. It is a federal crime to make bank deposits of less than $10,000 "for the purpose of" evading the reporting requirement for amounts above that threshhold. That law has led the IRS to seize money from small-business owners whose only offense was making insufficiently large deposits, a.k.a. "structuring." The FAIR Act would allow forfeiture only when the owner "knowingly" sought to avoid bank reports of "funds not derived from a legitimate source." It requires a hearing within 14 days of the seizure at which the government must show probable cause to believe the money was involved in structuring.

Proportionality. In determining whether a forfeiture is constitutionally excessive, a court is supposed to consider not only "the seriousness of the offense" (as under current law) but also "the extent of the nexus of the property to the offense," "the range of sentences available for the offense," "the fair market value of the property," and "the hardship to the property owner and dependents."

Legal representation. The FAIR act expands the current guarantee of legal representation for property owners who cannot afford it from forfeitures involving primary residences to all forfeitures.

Reporting. In its annal report to Congress on forfeitures, the Justice Department would have to provide separate numbers for criminal forfeitures (which require a conviction) and civil forfeitures (which do not).

"The FAIR Act would provide essential protections for innocent property owners who have for decades lost their cash, cars, homes and other property without being convicted of or even charged with a crime," says Scott Bullock, a senior attorney at the Institute for Justice, which has been fighting forfeiture abuse for years. "This legislation would also go a long way toward stopping the perverse practice of policing for profit."

I discussed the 2014 version of the FAIR Act in a column last year.