To Protect and Collect

Taking Cash Into Custody

A Special Report On Police And Drug Money Seizures

POLICE, FEDERAL AGENCIES RESIST CHANGE

For more than 15 years police and federal agencies have perfected the
partnership that allows police to improperly keep millions of dollars
seized in drug busts and traffic stops.

Don't expect change to come easy or soon, a yearlong examination by The
Kansas City Star shows.

A few states have tried without success to stop police, leaving many to
conclude that Congress is the only solution. And indeed Washington could
stem the flow of state seizures to the federal government.

But in April Congress lost its best chance in a decade to do that.

Congress passed legislation last month curbing some federal forfeiture
powers. But the version that reached the White House was missing a
provision that could have blocked the way police across the country use
federal agencies to circumvent their own state laws.

"That's a No. 1 problem," Rajeev Purohit, director of legislation for the
National Association of Criminal Defense Lawyers, said of circumvention.
"If you got rid of that, you would be more than halfway toward solving the
entire problem."

A coalition of liberal and conservative groups plans to push again to ban
the end-run by police, but many agree that it won't be easy, considering
how hard it was to get last month's reforms passed.

"Anything further is going to be very hard fighting," said Julie Katzman, a
key aide on the Senate bill for Sen. Patrick Leahy, a co-sponsor and
Vermont Democrat.

Law enforcement has lobbied hard to maintain the system that allows police
nationwide to keep much of the drug money and property they seize.

The handoff arrangement, in which federal agencies are said to "adopt"
state seizures, works this way:

When police seize money, they avoid taking it to state courts because most
states have passed laws barring seized property from going directly back to
police.

Instead, police call in a federal agency, which accepts the seizure under
federal law, keeps a portion -- usually 20 percent -- for itself and sends
the rest back to police.

"It's not like they are personally profiting from their seizures," said
Gene Zoegtlin, legislative counsel for the International Association of
Chiefs of Police.

"The key to this program is to deprive bad guys of the profits of their
crimes. And at the same time, you can take those profits that were gained
illegally and turn them over to law enforcement so that law enforcement is
better positioned to combat other types of crimes."

But critics say the prospect of keeping seized property gives police an
incentive to make illegal searches and avoid state laws, which generally
provide citizens with more protection than federal laws.

"Police have become addicted to seizure money," said Joseph McNamara,
former police chief of Kansas City and San Jose and now an authority on
policing at the Hoover Institution.

"It is very sad and very dangerous to civil liberties."

It's also very difficult to stop.

Even though the new federal law will curb some forfeiture powers, which
could affect some seizures that federal agencies take from police, many
expect the effect to be muted.

(See accompanying story for analysis of the law.)

The greatest impact is predicted by the Congressional Budget Office, which
estimates that forfeiture money returned to police would decrease by 20
percent.

But that calculation, which was based mostly on information provided by the
Justice Department, was simplified. For example, it includes nonpolice
forfeitures by Treasury Department agencies, such as the IRS.

In fact, many see police revenues decreasing by a much smaller amount, if
at all.

"I don't think numerically it is likely to make a cotton-picking bit of
difference," said Frank Bowman, associate law professor at Indiana
University-Indianapolis and co-author of The Federal Forfeiture Guide, a
monthly analysis of court decisions.

The Justice Department did not respond to questions from The Star about the
new law, but it did reassure at least one national police official that his
organization didn't need to worry.

The Justice Department "is confident that this new law will not make a
great impact on the forfeiture program," Zoegtlin said.

Indeed, some state and local law enforcement officials say they will
continue to hand off seizures to the federal government without any problems.

"I haven't seen anything in the bill that would harm that procedure," said
Neal Childers, deputy director of legal services for the Georgia Department
of Public Safety.

States hit a wall

Don't look to the states to control their own police, even though
theoretically they should be able to.

First, lawmakers in many states remain unaware of the federal hand-offs.

Arkansas Sen. Wayne Dowd, a Texarkana Democrat, explained why his own state
took so long to notice it.

"Everybody trusted law enforcement," said Dowd, chairman of the Senate
Judiciary Committee. "They are the good guys."

In other states, public officials shrink from angering police.

"Last year when we had a hearing on forfeitures, they brought in 200
officers in uniform and just intimidated everybody," recalls Utah Rep. Bill
Wright, an Elberta Republican and speaker pro tem. "As a matter of fact, I
had two ladies who said they were scared to death. I have never been more
intimidated in my life to look out there and see 200 officers in uniforms
with guns on their hips, staring me down."

No one wants to be called soft on crime, said Eric Sterling, president of
the Criminal Justice Policy Foundation, a Washington think tank.

"It is dangerous to democracy that nonpolice public officials feel
sufficiently threatened that they will not challenge police lawlessness,"
said Sterling, who had been an attorney for the House Judiciary Committee
for 10 years.

A few states have tried to shut down the police//federal pipeline, but it's
difficult:

* In California, tougher forfeiture laws that passed in 1994 to protect
civil liberties succeeded only in sending police even more frequently to
federal agencies.

That circumvention reduces state Sen. John Burton to fury. "There is not a
... thing we can do," said Burton, a San Francisco Democrat and president
pro tem of the Senate.

A bill that is working its way through the legislature this year would use
criminal penalties to stem the hand-offs, which would make it perhaps the
toughest law in the nation.

But when Burton introduced a less severe bill two years ago, police rallied
and helped kill it.

* After Arkansas officials discovered police were handing off large
seizures, lawmakers passed a tougher forfeiture law that went into effect
last summer and added financial penalties if police didn't follow it.

Sen. Dowd said he knows the new law has loopholes "you can drive a truck
full of dope or money through." But he hopes law enforcement will follow it.

At least one police agency has not decided how to deal with the new law.
The Arkansas Highway Police feel like they're caught between the state and
federal governments, said Lawrence Jackson, an attorney for the agency.

"It's really thrown a monkey wrench into the federal-state cooperative
arrangements," Jackson said.

* The Missouri constitution requires in most cases that forfeitures go
to public education, and in 1993 the General Assembly tried to rein in
police as tightly as possible.

That year a law specifically prohibited police from handing off drug money
they seized to a federal agency. Only a judge could make that decision.

But last year The Star reported that police were handing off seizures to
federal agencies and getting back millions of dollars.

Law enforcement officials explained that police were not violating state
law: They weren't handing off seizures, because they really weren't seizing
the money -- they were simply "detaining" it for a federal agent.

As a result, Missouri lawmakers attempted to rewrite statutes this session
to make it clear that a seizure is indeed a seizure, but the effort died
this month.

Massachusetts is trying a different approach. In November, voters may be
able to decide whether to divert the proceeds of most state forfeitures
away from police and prosecutors and into a drug treatment fund. That
includes federal forfeiture money that has been going back to police.

But at least one public official thinks police will continue to find ways
around any laws that states can think to pass.

"Unless the state law mirrors the federal law, you are not going to stop
police from going to the feds, no matter what you do," Claire McCaskill,
Missouri state auditor and a former prosecutor, told a legislative hearing
last year.

Not much help

Many think the answer has to come from Washington.

But some states that have taken action say they receive little federal
cooperation.

Before writing their new law, Missouri legislators asked to meet with the
Justice Department to try to resolve the problem.

After 10 months, Justice officials finally agreed to meet in Washington on
Dec. 1 with Missouri Sen. Harry Wiggins, a Kansas City Democrat, and Rep.
Jim Kreider, a Nixa Democrat. But as they were leaving to catch a plane for
the meeting, Wiggins and Kreider learned the Justice Department had
canceled it with little explanation.

"The simplest solution to this problem at the state level is for the feds
to cooperate and talk to us," said an angry Kreider. "Obviously, they don't
want to talk to us."

The Justice Department referred questions to U.S. Attorney Stephen Hill in
Kansas City.

Hill said he was supportive of the meeting and tried hard to set it up. He
added that he might have worked even harder had he realized that the
primary reason for Wiggins and Krieder to travel to Washington had been to
meet with Justice officials.

Federal officials contend they don't knowingly sidestep state laws.

"It has never been DEA policy to consciously thwart the intent of state law
by adopting seizures contrary to state laws," DEA officials wrote in
response to questions from The Star.

But the DEA does not even follow Justice Department guidelines, which say
federal officials generally should not accept seized money from police when
the defendant is being prosecuted in state court.

In many cases, The Star found, the DEA accepted a seizure when a defendant
was being prosecuted in state court.

For example, a Wisconsin State Patrol trooper stopped two men on Interstate
43 south of Green Bay in 1998 because their car had temporary plates. In a
search, the trooper found 5 grams of cocaine, a joint and roach clip, and
$2,602.

Three weeks later the patrol mailed a check for that amount to the DEA,
which then paid back about $2,000 to the patrol. Meanwhile, however, the
driver pleaded guilty in state court to possession of cocaine and received
10 days in the county jail.

In such cases, DEA officials blame police officials for turning over
forfeitures when criminal cases go to state court.

"DEA field personnel rely on the state or local agencies presenting the
adoption to ensure that relevant state law and policy are being followed,"
they wrote.

The Justice Department says it is trying to encourage local law enforcement
to follow state laws by offering a new training curriculum in a couple of
states.

"We will adopt cases in appropriate circumstances," said Jerry McDowell,
director of the Justice Department's money laundering and asset forfeiture
division. "But the long-term goal is to get them doing it for themselves
when they can."

He added that the training itself -- Justice officials would not provide
the curriculum to The Star -- could take years and may never be over.

In fact, Justice officials at a seminar last winter in Tennessee were still
encouraging police to use adoptions.

A Justice official "was letting us know how their asset forfeiture laws
could help the local agencies," said Carleton Bryant, legal counselor for
the Knox County Sheriff's Office.

Last chance

If states can't block adoptions, and the Justice Department doesn't appear
likely to, that leaves Congress.

But the construction of the new federal bill offers little encouragement.

Rep. Henry Hyde, an Illinois Republican and chairman of the House Judiciary
Committee, had long been concerned about forfeiture abuses, holding
hearings and writing a book in 1995.

Last year Hyde and his committee took note of the federal hand-offs after
The Star published its Missouri findings.

The House Judiciary Committee already was working on a broad forfeiture
reform bill, so Hyde introduced an amendment to prohibit the Justice
Department from returning forfeiture proceeds to state and local police
when that circumvented state law. Some called it the "Missouri provision."

Hyde's leadership officers were swamped by faxes from law enforcement
protesting the provision, said William T. Waren, until recently a senior
fellow of the National Conference of State Legislatures who helped the
committee with the bill.

The reform bill passed the House with a large majority, but the amendment
was not included because of a glitch -- a committee staffer who was
supposed to attach the amendment to the bill on the House floor was called
away on a family emergency.

The bill moved to the Senate side, where Sens. Leahy and Orrin Hatch, a
Utah Republican and chairman of the Senate Judiciary Committee, took up
Hyde's fight.

Hyde kept pushing for the Missouri provision, even in a March meeting with
Attorney General Janet Reno and others the day before the Senate committee
voted on the bill.

But Justice officials were strongly opposed because of the cost to law
enforcement, congressional staffers and lobbyists say.

"It takes money away from law enforcement, and you'd have to make up your
state funds someplace else or decrease your law enforcement," said James
Polley, legislative consultant for the National District Attorneys
Association who was working with the Justice Department on the bill.

The reform bill passed the Senate committee without insertion of the
Missouri provision.

(Sen. John Ashcroft, a Missouri Republican and committee member, would not
comment on the provision. His staff said circumvention was a state problem,
not federal.)

Several critics praise Hyde for his efforts, and say the Senate greatly
weakened the bill.

"Justice should come under some criticism for the very reasonable reforms
that were in the original Hyde bill," said Purohit of the defense lawyers
association.

Staff for Leahy pointed out that reform supporters had to fight not only
the law enforcement community but also members of the Senate committee.

"This reform bill is a major first step, but there is certainly more to be
done," Katzman said. "Reform advocates have done everything they could do
with some amount of consent on the other side."

Katzman agreed nothing now in the law will prevent police from continuing
to circumvent state laws.

"In a lot of states where the money is required to go to education or just
to the treasury," Katzman said, "those can be totally circumvented by
taking it federally, and it will continue to be that way."

Katzman called that problem "perhaps the most disturbing part of federal
civil asset forfeiture."

Hatch and Hyde would not comment on the reform bill or the possibilities of
passing another one to stem the flow of adoption money, but in his 1995
book, Hyde wrote this about the lure of money:

"I have been around Capitol Hill long enough to know that no legislation
has a realistic chance of becoming law that will take hundreds of millions
- -- indeed, billions -- of dollars away from the Justice Department and
state and local police agencies -- away from the war on drugs."

Part 2b, http://www.mapinc.org/drugnews/v00/n681/a03.html