On November 5, I posted a blog about a pending forfeiture reform bill, Forfeiture reform bill H.R. 5212 does not go far enough.
This blog is about another forfeiture reform bill. On July 23, 2014 Senator Rand Paul (R. KY) introduced the FAIR Act, a forfeiture reform bill that is in most respects better than H.R. 5212, but it does not contain some of HR 5212’s reforms, and there are still many problems with forfeiture law that the bills do not address.
FAIR Act stands for “Fifth Amendment Integrity Restoration Act of 2014.”
S. 2644 is now pending before the Senate Judiciary Committee. On September 17, Congressman Scott Garrett (R. NJ) introduced an identical bill, H.R. 5502 (also The FAIR Act), in the House. On October 28 it was referred to the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations – the same committee that is considering H.R. 5212, which I blogged about three days ago. Congressman Tony Cardenas (D-CA) is co-sponsoring the FAIR Act.
Govtrack.us gives these two companion bills a 7% chance of getting past committee and only a 2% chance of being enacted.
Here is the bill text for S. 2644.
Features:
1. Raises the government’s burden of proof to “clear and convincing”
Like the Civil Asset Forfeiture Reform Act of 2014 (H.R. 5212), the FAIR Act raises the burden of proof on the government from preponderance of the evidence to clear and convincing evidence. See my comments about that in my previous blog about H.R. 5212.
In facilitation cases, the clear and convincing evidence standard would also apply to the government’s burden of proving a substantial connection between the property and the offense.
Like H.R. 5212, the FAIR Act puts the burden of proving the owner’s knowledge or consent to the illegal use on the government. The FAIR Act goes a little farther, requiring the government to prove by clear and convincing evidence that the property owner: “(i) intentionally used the property in connection with the offense; or (ii) knowingly consented or was willfully blind to the use of the property by another in connection with the offense.”
2. It amends the Innocent Owner defense
Even with the government having to show the owner was not innocent — in most cases — the innocent owner defense would still still exist for owners who learn of the illegal use of the property.
With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—
(i) did not know of the conduct giving rise to forfeiture; or
(ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.
This isn’t bad. It actually makes sense that owners who learns of crimes being committed with their property have the burden of proof on this issue.
3. Abolishes Equitable Sharing with state and local law enforcement agencies, and prohibits federal law enforcement agencies from keeping the proceeds of forfeitures.
The FAIR Act would revise § 981(e) to completely abolish the Equitable Sharing (a/k/a “Federal Adoption”) process, which currently allows state and local police to seize property under federal law (even if they couldn’t under their state’s own law, or even if it defied state law) and turn it over to the feds in exchange for up to 80% of the proceeds of the federal forfeiture case. It also bars the property or forfeiture proceeds from being transferred to a federal agency.
(e) Notwithstanding any other provision of the law, except section 3 of the Anti Drug Abuse Act of 1986, the Attorney General, the Secretary of the Treasury, or the Postal Service, as the case may be, is authorized to retain property forfeited pursuant to this section, or to transfer such property on such terms and conditions as he may determine—
(1) to any other Federal agency;
(2) to any State or local law enforcement agency which participated directly in any of the acts which led to the seizure or forfeiture of the property; may forward to the Treasurer of the United States any proceeds of property forfeited pursuant to this section for deposit in the General Fund of the Treasury or transfer such property on such terms and conditions as such officer may determine—
(3) (1) in the case of property referred to in subsection (a)(1)(C), to any Federal financial institution regulatory agency—
(A) to reimburse the agency for payments to claimants or creditors of the institution; and
(B) to reimburse the insurance fund of the agency for losses suffered by the fund as a result of the receivership or liquidation;
(4) (2) in the case of property referred to in subsection (a)(1)(C), upon the order of the appropriate Federal financial institution regulatory agency, to the financial institution as restitution, with the value of the property so transferred to be set off against any amount later recovered by the financial institution as compensatory damages in any State or Federal proceeding;
(5) (3) in the case of property referred to in subsection (a)(1)(C), to any Federal financial institution regulatory agency, to the extent of the agency’s contribution of resources to, or expenses involved in, the seizure and forfeiture, and the investigation leading directly to the seizure and forfeiture, of such property;
(6) (4) as restoration to any victim of the offense giving rise to the forfeiture, including, in the case of a money laundering offense, any offense constituting the underlying specified unlawful activity; or
(7) (5) In the case of property referred to in subsection (a)(1)(D), to the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or any other Federal financial institution regulatory agency (as defined in section 8(e)(7)(D) of the Federal Deposit Insurance Act).
The Attorney General, the Secretary of the Treasury, or the Postal Service, as the case may be, shall ensure the equitable transfer pursuant to paragraph (2) of any forfeited property to the appropriate State or local law enforcement agency so as to reflect generally the contribution of any such agency participating directly in any of the acts which led to the seizure or forfeiture of such property. A decision by the Attorney General, the Secretary of the Treasury, or the Postal Service pursuant to paragraph (2) shall not be subject to review. The United States shall not be liable in any action arising out of the use of any property the custody of which was transferred pursuant to this section to any non-Federal agency. The Attorney General, the Secretary of the Treasury, or the Postal Service may order the discontinuance of any forfeiture proceedings under this section in favor of the institution of forfeiture proceedings by State or local authorities under an appropriate State or local statute. After the filing of a complaint for forfeiture under this section, the Attorney General may seek dismissal of the complaint in favor of forfeiture proceedings under State or local law. Whenever forfeiture proceedings are discontinued by the United States in favor of State or local proceedings, the United States may transfer custody and possession of the seized property to the appropriate State or local official immediately upon the initiation of the proper actions by such officials. Whenever forfeiture proceedings are discontinued by the United States in favor of State or local proceedings, notice shall be sent to all known interested parties advising them of the discontinuance or dismissal. The United States shall not be liable in any action arising out of the seizure, detention, and transfer of seized property to State or local officials. The United States shall not be liable in any action arising out of a transfer under paragraph (3), (4), or (5) (1), (2), or (3) of this subsection.
This reform alone would probably put an end to abusive civil forfeitures, because the police would likely stop seizing property if they didn’t get to keep the proceeds. For that reason it is probably too much a political hot potato for Congress to pass.
4. Effective immediately on passage
The FAIR act would be applicable to any civil forfeiture case pending on or after the date of enactment, and any amounts received from forfeiture after the date of enactment. So if this takes effect, all Equitable Sharing payments to state and local police and all payments to participating federal agencies would immediately cease.
More reforms should be added to the bill
Law enforcement opposition to this bill will virtually guarantee that it cannot be passed as written. They will want to strike the third feature, for after all, why would they bother seizing property for forfeiture if they don’t get to keep the proceeds?
The bill needs to add additional provisions, so that when these two key provisions are struck from the bill there will be something left to address the current abuses of civil forfeiture law.
