DRUG LOOT FUELS DRUG WAR

Editor's note: This is the first part of a two-day series on how the assets
of drug traffickers are distributed and spent.

Mattapoisett Police Chief James F. Moran drives a 1999 Ford Crown Victoria
sedan with all the options, thanks to a trio of South African drug dealers
who happened to set up shop in his seaside town.

His detectives have a 3-year-old Crown Victoria -- the chief's previous
car -- which was also purchased with drug forfeiture money. The department
also has a $100,000 computer system, two mobile data terminals, a marked
cruiser and a DARE van, all thanks to forfeiture money.

"This has been the best thing that has happened to the department,
financially," says Chief Moran. "It helps everybody. It helps the
department, it helps the town, because the town doesn't have to appropriate
the money -- I needed the things that I bought, so it would have been a tax
burden."

He is not alone.

In the decades since drug forfeiture laws first took effect in Massachusetts
and across the nation, revenues from the confiscated assets of drug dealers
have taken on a major role in financing law enforcement.

District attorneys and police departments in Massachusetts receive hundreds
of thousands of dollars annually in revenues from the confiscated assets of
drug dealers -- close to $8.7 million between 1996 and 1998, according to
the state treasury.

And that's just the money from drug cases prosecuted by the state.

Federal cases, such as the one that gave Chief Moran his car, bring in
thousands more dollars -- at least $442,380 last year in Massachusetts,
according to the U.S. attorney's office.

Police and prosecutors argue the money has become an essential tool in their
battle against illegal drugs, as well as in keeping their offices solvent.

But the money flows outside regular budgeting channels and outside public
scrutiny.

Debate over who should get the money and how it should be spent has sparked
national debate. Critics contend a lack of public oversight has transformed
these accounts into slush funds.

In Massachusetts, state Rep. Antonio Cabral, D-New Bedford, has been calling
for reform for several years.

"These are taxpayers' dollars. They should be accounted for and spent
according to the wisdom of the legislature," says Rep. Cabral, who has
sponsored a bill in the Legislature calling for reform.

"I'm not saying anybody is playing games with the money. I just think it is
important for taxpayers' dollars to be accounted for."

An investigation by The Standard-Times of state treasury records and
information provided by nine of the state's 11 district attorney's offices
has found that:

- - District attorneys and their local police departments received more than
$6.7 million from state drug forfeitures in fiscal years 1997 and 1998.

- - The attorney general's office received an additional $269,120.

- - Of the $5.5 million received by the nine district attorneys included in
the survey, $1.2 million was distributed to local police departments or
returned to defendants.

- - Of the approximately $4.3 million kept by the nine district attorney's
offices, about 6 percent was spent on what they defined as community and
prevention programs and about 65 percent was spent on equipment,
investigations and routine office expenses such as telephone bills. The rest
was held over for use in future years.

While state law requires district attorneys to file reports with the
Legislature on the money they spend on community programs, they are not
required to file spending plans on the remaining funds and often do not do
so.

The district attorney's office collecting the largest amount of state drug
forfeiture dollars was Suffolk, which had access to about $1.2 million durin
g 1997 and 1998. The smallest amount was in Franklin and Hampshire counties,
where District Attorney Elizabeth D. Scheibel had about $115,000 to spend
during those years.

When the state's drug forfeiture law first was passed in the 1970s, illegal
drug trafficking was perceived as out of control and law enforcement as
chronically underfunded. The law was designed to help pay for the war on
drugs, while simultaneously taking a bite out of drug profits.

The original intent was to let the people doing the enforcing spend the
money in the areas where they saw a need and to prevent public scrutiny that
might jeopardize undercover operations.

But critics say the external controls are inadequate and argue that the lack
of oversight has had unanticipated consequences.

The desire to collect on drug assets creates wrong incentives for police and
district attorneys, says Mark A.R. Kleinman, a professor of policy studies
at the University of California at Los Angeles.

Investigations of district attorneys in several states, including
Massachusetts, have found instances where they appeared to negotiate lesser
sentences in return for forfeited assets, contends Mr. Kleinman, who was
director of policy and management analysis in the criminal division of the
U.S. Department of Justice under President Ronald Reagan.

Also, he argues that police may delay busting a known dealer until he has
sold his drugs and has the cash on hand.

"I have a big problem with law enforcement becoming self-supporting through
the drug forfeiture process," he says. "The most paranoid vision is that you
wind up with enforcement agencies that cannot afford to solve the problem
because if they wipe out the market, they lose their source of funds."

District attorneys and police adamantly deny those charges.

"The reality is that no particular case ever contains enough money to make a
difference, at least in our experience," says Charlie Grimes, an assistant
district attorney in the Eastern District (Essex County). The average
forfeiture in his district is less than $1,000, he says.

Plymouth County District Attorney Michael Sullivan says he keeps the
forfeiture actions separate from the prosecution in order to remove any
temptation prosecutors might have to use forfeitures as a lever when
negotiating sentences.

In smaller cases, some prosecutors say they include forfeiture actions in
plea bargains or sentencing agreements.

When more money is at stake, or automobiles, the prosecutors must file
separate civil forfeiture cases. Often those cases are not decided at the
same time as the criminal cases, prosecutors say.

The most heated local and national debates over drug forfeiture concern who
should control the funds and how the money should be spent.

In Missouri, a legislative subcommittee in Missouri has been investigating
how state and local police handle the money in the wake of reports that the
local agencies were circumventing a state law requiring all revenue from
seized assets go to education.

In Arkansas, legislation was introduced to revamp the state law requiring
all forfeitures in excess of $250,000 to be deposited into a state fund for
anti-drug efforts.

Nebraska state law requires an even split between police agencies and
schools.

Under Massachusetts law, district attorneys may use the money to defray the
costs of "protracted investigations," to provide "additional technical
equipment or expertise," matching funds for federal grants, or "such other
law enforcement purposes as the district attorney or attorney general deems
appropriate."

The federal spending guidelines are similar, as are the guidelines for local
police.

In addition, the state law allows the district attorneys and attorney
general to use up to 10 percent of the funds for "drug rehabilitation, drug
education and other anti-drug or neighborhoods crime watch programs which
further law enforcement purposes."

The Standard-Times asked district attorneys around the state to provide
breakdowns of their spending over the past four years.

Most argued that confidentiality and the need to protect undercover
investigations prohibited complete disclosure.

Those that did itemize spending listed items ranging from routine costs,
such as office supplies and telephone bills, to advertising and maintenance
and storage fees for forfeited property.

For example, the Northwestern District, which encompasses Franklin and
Hampshire counties, reported spending $13,797 on telephone bills during 1997
and 1998 and $3,821 on office supplies. Bristol County spent $46,468 on
undercover maintenance and storage of forfeited assets, such as cars, an
additional $21,513 on vehicle insurance, and $9,317 on administrative
supplies.

Mr. Grimes readily acknowledges the money has become indispensable.

"If the Legislature funded us at an adequate level, we'd be glad to spend
the money on other things, but until then, we cannot," he said.

A 1994 state audit revealed about 5.8 percent of the money was spent on drug
education and rehabilitation, 52 percent on investigation, about 6 percent
on equipment, and almost a third on other law enforcement purposes.

Those other expenses included leased cars for district attorneys, insurance,
office supplies, parking, furniture, renovation, utilities and office rent,
according to the audit.

While such expenditures do not violate the spirit of the law, national
criminal justice analyst Eric Sterling questions why they should not be part
of an agency's regular budget.

President of the Washington, D.C.-based Criminal Justice Policy Foundation,
Mr. Sterling helped write the federal forfeiture statute in the early 1980s.
Since then, he has switched sides to become a vocal opponent of drug
forfeiture laws.

"The problem is that these are public moneys and the decision on how much
money should be spent ultimately is a legislative decision, not an
administrative one," he says.

And audits that occur after the fact are not adequate, he says.

"No enterprise operates on an after-the-fact review of spending -- you begin
with a budget because it is a priority-setting technique," he says.
"Forfeiture very often quickly becomes a slush fund for police departments
and other law enforcement agencies."

The term slush fund enrages Bristol County District Attorney Paul F. Walsh
Jr.

His says the funds are tracked closely and that his office files reports
with the state auditor and the Legislature, in addition to annual internal
audits.

"I don't know who else we could report to," he says.

Plymouth County's Mr. Sullivan agrees. He says oversight of the drug
forfeiture account is just as tight as for the office's general operating
budget.

"The drug forfeiture account seems secretive to a lot of people, but it's
not nearly as secretive as the public perception might be," he says. "Every
single penny is accounted for."

District attorneys are required to file annual reports on their drug
rehabilitation, prevention and education spending with both the House and
Senate ways and means committees, and annual compliance forms with the U.S.
attorney's office on their handling of the federal money.

But neither district attorneys nor police departments are required to file
detailed public breakdowns of their drug forfeiture expenditures.

Federal guidelines call for annual audits only when an agency receives more
than $500,000 in a single year.

State law requires the agencies to keep records, but does not call for
annual state audits. Glenn Briere, a spokesman for state Auditor A. Joseph
DeNucci, says his agency routinely audits each district attorney's office
every three or four years, and at that time also reviews spending in the
forfeited drug asset accounts.

A 1994 state audit on the adequacy of local controls over state and federal
forfeiture funds revealed general compliance with state and federal
guidelines, but cited the need for improvements in certain district
attorney's offices, including Bristol, Essex, Norfolk and Worcester.

Those offices were cited for co-mingling state and federal funds. Bristol
also was cited for not filing annual reports with the House and Senate
committees on ways and means detailing its spending on drug rehabilitation,
education and other programs. Plymouth County was cited for a $147,734
overdraft.

Norfolk, Plymouth and Middlesex counties all were cited for putting their
funds under the control of one individual, instead of segregating control to
prevent misuse.

Mr. Briere said the problems were not serious enough to merit great concern.

Still, Rep. Cabral would like to see more accountability for the funds. His
bill would require district attorneys, the attorney general and police
chiefs to submit detailed annual drug forfeiture spending reports to the
Legislature. It would require police departments to file similar reports
with the Department of Revenue.

"I have tried to get information on spending in the past and been told this
is not public information," he said.

Another focus of Rep. Cabral's bill is to create a distribution formula that
would give 40 percent each to police departments and district attorneys and
earmark the remaining 20 percent for drug treatment, education and
prevention.

Enforcement alone will not win the war on drugs, Rep. Cabral argues. He
wants to see more of the money used to address the addictions that drive
people to commit crimes and fuel the profits lining drug dealers' wallets.

While some district attorneys spend a portion of their funds on drug
prevention and education programs such as youth sports leagues, at least
one, Essex County, uses all its money for investigations, prosecutions and
miscellaneous expenses. Others, including the Berkshire and Norfolk district
attorneys, spends less than $1,000 on drug prevention and education
programs.

The Standard-Times survey found district attorneys identified about 6
percent of their expenditures as either donations or support for drug
prevention, education and rehabilitation efforts.

Many of them say they support education and prevention out of their regular
budgets.

But Rep. Cabral questioned some of the donations, particularly in Bristol
County.

Mr. Walsh said he supports organizations that keep youths off the streets.

His forfeiture expenditures for 1998 included donations to the Falmouth
Hockey Boosters, Maplewood Babe Ruth League, Black Professionals
Association, New Bedford American Legion, National Association of District
Attorneys and New Bedford Gridiron Club.

"Those all may be good causes," Rep. Cabral said. "But I don't think they
qualify as drug education and prevention."

The Criminal Justice Policy Foundation's Mr. Sterling said such donations
appeared to be geared more for political gain than toward solving a
community problem.

"It is the giving away of public money for political purposes," he said.
"You don't select a district attorney based on his or her judgment of the
worthy charities in your county."

Rep. Cabral also wants to require district attorneys to advertise for grant
applications for the drug treatment, education and prevention money and to
more clearly define what qualifies. His legislation calls for the creation
of advisory boards, including treatment providers and advocates, to help
award the grants.

Several Massachusetts district attorneys, including Suffolk's and
Plymouth's, have a similar system in place. They advertise the availability
of the funds and have a panel of community representatives select the
winning applications.

Organizations funded by Suffolk County District Attorney Ralph Martin in
recent years have included East Boston Social Center, Boys and Girls Club of
Boston, A New Beginning, South Boston Neighborhood House the Dorchester
Youth Collaborative and the Codman Square Health Center.

Plymouth County has helped build seven playgrounds in and around Brockton,
among other projects.

Rep. Cabral would like to see all the district attorneys handle their funds
in this way.

The district attorneys, for their part, oppose Rep. Cabral's 20 percent
spending mandate for drug treatment, education and prevention. If the
Legislature wants to fund prevention and treatment, says Mr. Walsh, it
should allocate budget funds for those programs.

The uncertain nature of forfeitures, which can be high one year and low the
next, make budgeting that money difficult, he adds.

In the decades since forfeiture laws first took effect, drug dealers have
become more savvy about hiding assets. They drive leased cars and work out
of rented apartments, which cannot be seized.

Still, Mr. Walsh and his colleagues defend the law as an important lever.

"It's a classic tool to make people pay for the crimes they commit and take
the money to do good things," Mr. Walsh says.

For his part, Rep. Cabral does not object to punishing drug dealers in their
pocketbooks. He just wants to take another look at the law and see if it can
be refined.

"We ought to be able to step back and take a second look now that we have
some years under our belt," he said. "It's time for reform, and as part of
that reform, accountability is appropriate."

FIT TO BE SEIZED Forfeiture of property falls under Chapter 94C: Section 47
of the Massachusetts General Laws. According to the statute, the following
property shall be subject to forfeiture to the commonwealth:

- - All controlled substances that have been manufactured, delivered,
distributed, dispensed or acquired in violation of this chapter.

- - All materials, products, and equipment used, or intended for use, in
manufacturing, compounding, processing, delivering, dispensing,
distributing, importing or exporting a controlled substance.

- - All conveyances, including aircraft, vehicles or vessels used, or intended
for use, to transport, conceal, or facilitate the manufacture, distribution
or possession of a controlled substance.

- - All books, records, and research, including formulas, microfilm, tapes and
data that are used, or intended for use, in violation of this chapter. All
monies or valuables furnished or intended to be furnished by any person in
exchange for a controlled substance, as well as all proceeds traceable to
such an exchange.

- - All drug paraphernalia

- - All real property, including any right, title, and interest in the whole
of any lot or tract of land, which is used in any manner or part to commit
or facilitate the commission of a violation of drug laws.

- - All property which is used, or intended for use, as a container drugs and
drug paraphernalia.