Take it away.

Popularized by the war on drugs, asset forfeiture has been expanded to cover more and more offenses - whether proven or not Soon no one's property will be safe.

On the morning of October 2, 1992, Donald Scott, a 61-year-old retired millionaire, and his wife, Frances, were asleep in their house at Trail's End Ranch in the Santa Monica Mountains near Malibu, California. At about 8:30 A.M., the Scotts were jolted awake by the sound of a 27-man police task force smashing through the front door of their home. Frances Scott, racing downstairs, was confronted by a group of men with guns drawn. She screamed in panic: "Don't shoot me! Don't kill me!" In response, her husband rushed to the top of the stairs, holding a handgun above his head. He was ordered to lower the gun. As he obeyed, he was shot to death by Gary Spencer, the Los Angeles County deputy sheriff who led the raid.

Spencer had received what turned out to be a false tip from an informant who said the Scotts were growing marijuana on their ranch. After a five-month investigation of Scott's death, Ventura County District Attorney Michael Bradbury concluded that police not only lacked evidence of marijuana cultivation but had obtained their search warrant by lying to the judge who signed it.

Bradbury also concluded that the raid was in part an attempted land grab. The police hoped to seize the ranch as property that had been used to facilitate a drug crime. There is evidence suggesting that they intended to sell the land to the National Park Service, which had repeatedly tried to buy the property and add it to the adjacent Santa Monica Mountains National Recreation Area. With no legal authority to do so, four Park Service agents took part in the raid in which Donald Scott was killed. Bradbury discovered that at the pre-raid briefing federal agents discussed government seizure of the Scotts' ranch in detail, reviewing a property appraisal and a parcel map showing the value of recent land sales in the area. Bradbury's report stated: "It is the District Attorney's opinion that the Los Angeles County Sheriff's Department was motivated, at least in part, by a desire to seize and forfeit the ranch for the government."

Donald Scott's death flowed directly from a policy condoned and encouraged by the U.S. Congress and by law-enforcement officials from Attorney General Janet Reno down to local police chiefs. Under state and federal civil-forfeiture laws, the government can take property that has been used to facilitate illegal activity or that represents the proceeds of illegal activity. Unlike criminal forfeiture, civil forfeiture does not require that the owner be convicted of or even charged with a crime. The property can be seized on mere suspicion, and the burden is then on the owner to get it back. Such confiscation is now widespread. And although egregious incidents like the raid on Trail's End Ranch have led to some reforms, the reach of civil forfeiture is expanding.

A Bright Idea

Asset forfeiture was rarely used in the United States until the 1980s but has flourished since, originally as a weapon in the war on drugs. It was a 1981 General Accounting Office report, "Asset Forfeiture: A Seldom Used Tool in Combatting Drug Trafficking," that opened the floodgates.

Forfeiture delivers billions of dollars' worth of property to prosecutors and police, and its disposition is subject to little oversight. Nine studies by the GAO in ten years have shown that forfeited property not used or sold by police is usually trashed or stolen - often by the police. A former Los Angeles County deputy sheriff testified in 1993 that narcotics-squad officers stole $60 million in forfeited cash and property in 1988-89. In 1994 a special commission reported a similar pattern of activity by New York City police officers. More than 25 officers were arrested in New York's 30th Precinct, charged with assault, shaking down drug dealers, accepting bribes for protection, and stealing millions of dollars in confiscated drugs and cash.

Even when the assets go into government coffers rather than policemen's pockets, the tendency is to encourage police and prosecutors to target people based on the value of their property rather than the seriousness of their alleged crimes. In 1989 acting Assistant Attorney General Edward Dennis Jr. informed all U.S. attorneys that they were "expected to divert personnel from other activities," including criminal prosecutions, to prepare forfeiture cases for judicial action. Testifying before Congress in 1992, former New York City Police Commissioner Patrick Murphy admitted: "The large monetary value of forfeitures . . . has created a great temptation for state and local police departments to target assets rather than criminal activity."

The total value of the property so far confiscated is enormous. Since 1985 more than 200,000 federal seizures of cash and property have netted assisting state and local police a $1-billion windfall. From 1986 to 1991, the U.S. Justice Department took in a total of $1.5 billion from forfeitures. In 1993 the department had an inventory of more than 32,400 real properties from Hawaii to Maine, including office buildings, luxury waterfront homes, farms, and crack houses in slums, with a combined value of more than $1.8 billion. The U.S. Customs Service seized property worth $708 million in 1992, including the 18-hole Royal Kenfield Golf Course in Las Vegas and the Indian Wells Country Club and Resort Hotel in southern California. These figures do not include property seized under state forfeiture laws.

Law-enforcement officials would like the public to believe that civil forfeiture mainly targets "drug kingpins," but the official figures belie that notion. Only 17 per cent of the 25,297 seizures carried out by the Drug Enforcement Administration in the 18 months ending December 1990 involved property valued at more than $50,000. Moreover, in some 80 per cent of successful forfeiture cases, the owner is never charged with a crime. Since it can take $10,000 to $15,000,in legal fees and months, if not years, to contest a seizure in court, many innocent property owners find that it's easier to let the government keep their assets.

Watch Your Wallet

Police can seize your wallet or your home on a showing of "probable cause" to believe that a crime has been committed, a feeble legal standard satisfied by rumor, gossip, a police hunch, or self-serving statements made by anonymous paid informants, accused criminals seeking leniency, or jailed convicts eager for early release. Until 1993, when the Supreme Court imposed some restrictions, the mere suggestion of "probable cause" secretly presented to a judge allowed instant seizure of property without notice or prior hearing. After seizure, the owner can reclaim his property only by showing that it was not involved in a criminal act. Even if indigent (a status that asset seizure often confers), the owner is not entitled to a court-appointed attorney. For the privilege of contesting the seizure, he must immediately post a cash bond equal to 10 per cent of the property's value. He is allowed only ten days to file a claim, after which time he automatically forfeits the property. Even if the owner is successful in his challenge, the government is not liable for property damage or for storage costs.

In most cases there is little or no proportionality between the crime alleged and the forfeiture imposed. Hotels are seized because one room was said to have been used for a drug transaction, and landlords lose apartment houses because tenants allegedly conducted drug deals in their apartments. Three fraternity houses at the University of Virginia were seized by local police in 1991 because of alleged sales of small quantities of drugs by students. The alumni association of Tau Kappa Epsilon, the owner of one house, was forced to buy the property back from the police.

Under the Federal Government's "zero tolerance" policy in the 1980s, the oceanographic research vessel Atlantis was seized in Massachusetts because a single marijuana cigarette was found in the crew's quarters. In California a Scripps Oceanographic Institute research vessel was seized because of a marijuana roach in the locker of a sailor who had been fired long before. On June 8, 1994, federal agents seized a run-down 621-room residential hotel near Gramercy Park in New York City because of alleged drug dealing and violence. The building was valued at $2.5 million.

The seizure of real estate is so attractive that police routinely arrange arrests so as to maximize seizure possibilities. In setting up an undercover drug buy, police will aim to have the transaction occur inside a valuable building or on a high-priced tract of land, which they can then confiscate. When a small part of a parcel of land is the location of an alleged drug crime, the entire tract is subject to forfeiture. When a drug deal takes place in a driveway, the government can seize the house and thirty acres of land as well. In 1991, marijuana found growing in a remote corner of a five-hundred-acre farm in Indiana justified confiscation of the entire farm, though the owner knew nothing about it.

The threat of forfeiture forces property owners to act as police agents and incriminate others. Innocent owners are defenseless unless they can prove not only that the illegal activity occurred without their knowledge or consent but also that they did all they "reasonably could be expected to do to prevent the proscribed use of the property." Consider what this means in practice. A teenager uses the family car, and a roach left in an ashtray by one of his passengers can mean goodbye to the BMW. Owners who lease out apartments, cars, or boats risk losing their property because of renters' illegal conduct. In Minnesota and Connecticut, police seized homes because a child or grandchild of the owner was found to have pot stashed in his room. Until a federal court ordered it returned, the home of an elderly widow in Alabama was confiscated even though she repeatedly tried to get police to stop her adult children from selling drugs in and near her house.

Under civil-forfeiture theory, when property is used for an illegal purpose, title immediately passes to the government, which can retroactively assert ownership. Until the Supreme Court limited this rule in 1993, so-called "tainted property" acquired by good-faith purchasers could be confiscated at any time, even though the buyer had no knowledge of the alleged prior criminal use. In 1994, when a New York financier was accused of fraud in one of his many businesses, the government sought forfeiture of his entire $400-million corporate empire, including an auto dealership, real estate, a gold mine, and other legitimate enterprises, with no regard for the rights of numerous creditors who were owed millions of dollars.

The Hazards of Cash

The victims of forfeiture also include motorists and air travelers who commit the offense of carrying cash. For several years in Volusia County, Florida, Sheriff Bob Vogel's "drug squad" preyed upon motorists on Interstate 95 near Daytona Beach. Police assumed that any person found in possession of $100 or more was a drug trafficker. From 1989 until 1992, Sheriff Vogel's squad seized more than $8 million in cash, and in only four cases did the victims get all their money back.

Blacks and Hispanics are especially likely to be targeted, because of the "drug-courier profiles" that police use. In 1992, for example, 75 per cent of air travelers who were stopped by police in the Memphis airport on suspicion of drug possession were black, whereas only 4 per cent of the flying public is black. The DEA maintains full-time confiscation squads at major airports and pays a 10 per cent bounty to airport employees who report "suspicious" people carrying cash. In 1992 60 Minutes had a well-dressed black undercover reporter buy plane tickets with cash in several major cities. Within minutes of each purchase, DEA agents accosted the reporter and confiscated his remaining cash.

Not content with applying forfeiture to drug offenses, eager legislators have expanded its reach to a whole range of other areas. A growing number of states, including Texas, Florida, and New Jersey, apply civil forfeiture to any criminal activity. In one New Jersey case, the state seized a company and its assets based on the allegation that it had bid on and obtained three contracts for which it was not eligible - even though the contracts were all performed properly.

In addition to the Justice Department, the DEA, and the Customs Service, federal agencies with statutory forfeiture power include the Internal Revenue Service, the FBI, the Coast Guard, the Postal Service, the Bureau of Land Management, the Fish and Wildlife Service, the Securities and Exchange Commission, the Department of Health and Human Services, the Food and Drug Administration, the Immigration and Naturalization Service, and the Department of Housing and Urban Development. More than one hundred federal statutes include forfeiture provisions.

In the wake of the S&L scandal, Congress tried to curb loan fraud by making it a crime to give false information on a loan application. Using this law years after the loans were made, the feds have begun confiscating real estate bought with the proceeds. In one case, a residence in La Habra, California, was forfeited because the co-owner had falsely stated his place of employment on a mortgage-loan application, even though the loan payments were kept current and the mortgage company had suffered no harm. Asset forfeiture is now applied to health-care professionals suspected of Medicare and Medicaid fraud, even allowing government seizure of patients' records.

In January 1993, federal authorities seized more than $2.5 million in business property, including new cars, from 11 auto dealerships in the Maryland and Virginia suburbs of Washington, D.C., after 19 salespeople were charged with accepting cash payments in excess of $10,000 for purchases made by undercover agents. No use of drug money or tax evasion was alleged. The only crime was the failure to file currency-transaction reports with the IRS, as the Money Laundering Control Act of 1986 requires for cash transactions of $10,000 or more.

In April 1994, U.S. Fish and Wildlife agents in Bakersfield, California, confiscated a farmer's new $50,000 tractor and disk harrow after he allegedly plowed over and killed several Tipton kangaroo rats, a rodent protected by the Endangered Species Act. The local U.S. attorney said the farmer's actions made the equipment "an instrument of crime." The farmer, an elderly immigrant from Taiwan, speaks no English and did not know the rats were on his land. (The agents did know and had failed to warn him.)

There have been some moves to rein in the use of forfeiture. In 1993 the California legislature replaced a fairly broad forfeiture law with a much more restrictive version, and Missouri followed suit that same year. Other states, including New Jersey, are considering doing likewise. But reform at the state level may simply push more forfeiture cases into federal courts, where state and local agencies generally get 85 per cent of the booty. That's why the real solution is in the hands of the Supreme Court and Congress.

In 1993, after nearly three decades of acquiescence in police confiscation, the U.S. Supreme Court established important constitutional limitations on forfeiture. The Court abolished the quaint theory that title to property allegedly involved in a crime automatically passes to the government. It held that until a court renders judgment, an owner has good title and the right to defend it. The Court also ruled that civil forfeiture is subject to the Eighth Amendment prohibition against excessive fines and cruel and unusual punishment. Specifically, it said that a forfeiture could be so disproportionate to the alleged crime that it would be unconstitutional. By holding forfeiture in federal drug cases to be "punishment," the Court opened the door to future due-process challenges asking that presumption of innocence and proof beyond a reasonable doubt apply to forfeiture. Finally, the Court ruled that an owner of real property has to be given notice and a hearing prior to seizure.

Innovative Expansion

Police and prosecutors responded to the new rules with defiance. Lee J. Radek, director of the Justice Department's Asset Forfeiture Office, conceded in the May/June 1993 issue of Asset Forfeiture News that the decisions created problems for the forfeiture program. But he predicted the Justice Department and police would come up with new methods of "innovative expansion" to get around the Court's holdings.

Consistent with this view, Janet Reno's Justice Department fought a quietly successful battle to keep forfeiture reform out of the 1994 Omnibus Crime Act. The Justice Department also opposed a bill introduced in 1993 by Representative Henry J. Hyde (R., Ill.), the leader of a 56-member bipartisan coalition for forfeiture reform. The Justice Department's own proposed "reform" legislation, leaked to the press last summer, would greatly expand police confiscation powers. David B. Smith, a former head of the Asset Forfeiture Office who now supports major reform, called the department's legislation overwhelmingly a prosecutor's wish list."

There is reason to hope for action by the 104th Congress. Representative Hyde, the author of a new book on forfeiture published by the Cato Institute, is now chairman of the House Judiciary Committee. Republicans have already promised to present their own crime bill, which could serve as the vehicle for forfeiture reform. Senator James Jeffords (R., Vt.) is leading a similar forfeiture-reform effort in the Senate.

Their efforts seem to have broad support. In the House, Representative Hyde was joined by liberal Michigan Democrat John Conyers, a leading member of the Congressional Black Caucus. In California, the battle for reform was led by Assemblyman John Burton, a liberal Democrat; he was assisted by Assemblyman David Knowles, one of the most conservative Republicans in the legislature. Knowles summed up their position: "This isn't about law and order. This is about police kicking down people's doors and taking their money. It's tyrannical government run amok."