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Testimony Before the Indiana Senate Committee on Corrections and Criminal Law on Civil Asset Forfeiture

January 10, 2017

In this testimony, Jesse Hathaway discusses how civil asset forfeiture reform will help Indiana lead the nation in criminal justice reform and set an example states can use to implement similar reforms.

Testimony Before the Indiana Senate Committee on Corrections and Criminal Law
Jesse Hathaway, Research Fellow, The Heartland Institute
Tuesday, January 10, 2017

Chairperson Young and members of the committee, thank you for giving me the opportunity to testify today.

My name is Jesse Hathaway. I am a research fellow for the Center on Taxes and the Economy at The Heartland Institute, a 32-year-old national nonprofit research and education organization. Our mission is to discover, develop, and promote free-market solutions to social and economic problems. The Heartland Institute is headquartered in Illinois and focuses on providing national, state, and local elected officials with reliable and timely research and analyses on important policy issues.

Civil asset forfeiture is an issue an increasingly larger number of people across the country are becoming aware of. Civil asset forfeiture, also called civil judicial forfeiture, is a controversial legal fiction, in which law enforcement agencies take ownership of personal assets from individuals or groups suspected of a crime or illegal activity. In some cases, this can be done even without bringing criminal charges against those whose assets are taken.

Proponents of forfeiture argue it allows law enforcement agencies to use seized assets toward their enforcement efforts, transforming property illicitly gained by criminals into resources to be used for public benefit. Critics of the process note it gives government agencies economic incentives to take property, corrupting them and penalizing innocent property owners. Many states impose no penalties on law enforcement agencies for wrongful seizures, and when property is deemed to have been taken illegally, taxpayers usually have to pay for the returned assets.

The standard of proof used to determine whether a seizure may occur differs from state to state.

In civil forfeitures in Indiana, property owners are presumed guilty and lose their property unless they contest forfeiture, proving they were not aware their property was being used illegally. Unless an owner actively works to recover his or her property, it will be lost.

Property owners are often given very little opportunity to challenge the seizures, and when they do challenge, the process is expensive for those whose property is seized, as they must pay for attorneys and legal fees to prove their innocence. In many instances, property owners must meet with prosecutors, not a judge or jury, to regain their property.

Indiana’s burden of proof is very low – “a preponderance of the evidence”– but, regardless of the standard, the cost of violating citizens’ civil liberties is still too high.

Scott Bullock, senior attorney at the Institute for Justice, says forfeitures should be eliminated entirely, except in cases of maritime and customs law.

He also offers five recommendations for states unwilling to halt all forfeitures: place seized revenues in neutral funds; increase the standard of proof for seizure, to require “clear and convincing evidence” of a crime; move the burden of proof to the government; make the tracking of seized assets more transparent; and eliminate equitable sharing arrangements.

Indiana has made some of those reforms over the years, but it’s time to go all the way. As introduced, this bill would actually make Indiana the best state in the nation on asset forfeiture. Senate Bill 8 does away with civil asset forfeiture, requires a conviction before forfeiture actions, and increases the government’s burden of proof during those actions.

Instead of sending the money to the law enforcement agencies doing the seizing, proceeds would go to local government schools.

Under Indiana law, law enforcement agencies can use forfeiture funds to reimburse themselves, but only for the cost of the investigation that led to the property seizure. However, the agencies get around the requirement by wildly overestimating the cost of those investigations, or they simply don’t try to justify their actions at all.

According to the Indianapolis Star, “In nox County, after council members started trying to keep a closer watch on Sheriff Stephen Luce’s spending, Luce simply circumvented them.

“‘The sheriff at that time felt like it was his money and his slush fund,’ County Council President Tim Ellerman said. ‘He was wanting to buy sniper rifles. Down here we don’t really need sniper rifles with lasers because very seldom do we have hostage situations. Once we started scrutinizing, then all of the sudden the money stopped coming in.’”

The money hadn’t stopped coming in, though. The government in Luce was simply taking the money straight from law enforcement officers and giving it to his creditors, bypassing the county council.

Some here may say civil asset forfeiture reform is about making law enforcement’s job more difficult. That is not the case. Civil asset forfeiture reform is not about punishing law enforcement officers. In fact, its goal is the opposite: By removing the economic incentives that exist in the current system, we can help ensure citizens have trust in the system, leading to improved community-police relations.

As lawmakers, it is your responsibility to defend the rights of the citizenry against harm, both intentional and unintentional. Although the intentions of civil asset forfeiture may have originated with a principled purpose, we can ensure that “crime does not pay” without violating due process and private property rights. Requiring a conviction before forfeiture and giving the proceeds to local government schools are great ways to fix the problem at hand.

Indiana lawmakers should implement reforms removing incentives for police to seize assets and require clear evidence a person has committed a crime before property is taken. Civil asset forfeiture reform will help Indiana lead the nation in criminal justice reform, setting an example so other states can implement similar reforms.

Thank you for your time today. 

Author
Jesse Hathaway is a policy advisor for budget and tax issues at The Heartland Institute.
media@heartland.org @JesseinOH