Asset forfeiture WTF?

New Zealand's civil asset forfeiture regime still isn't as bad as America's. Seized assets don't go directly into the pockets of the police department making the seizure.

But this is a bit odd:

It was not fair and just in a community if people saw someone they knew was spending more money than they would have legitimately.

Most of the cases the unit dealt with were about disrupting organised crime, especially drug dealing, but it also looked at the proceeds of other types of crime such as tax cases, fishing offences, customs scams, and social welfare fraud.

One was about seizing the proceeds from people who had been making and fitting dentures but were not properly qualified.

Asset forfeiture as a backup to an occupational licensing regime? Really?

Blowing a gaping hole in the Asylum Wall

America's civil asset forfeiture regime has led to evil. Because police there get to keep a good chunk of what they seize, some local governments have allowed their police to fund themselves by stealing from people. I am not exaggerating. 

New Zealand brought in civil asset forfeiture in 2009. It is not good. But it is not as bad as America's.

I wrote in last year's Outside of the Asylum essay:

Incentives in New Zealand are not nearly as perverse as in America. Police here do not directly profit from asset seizures. But they can apply to the pool of funds established by seizures. In 2016, Prime Minister John Key gave millions to anti-meth efforts from seized assets.

If the seized proceeds of crime are not used to compensate victims, those proceeds should be part of general government revenues. If police drug enforcement activities become self-financing because of asset forfeiture, police attention may plausibly shift towards drug crime – at the expense of less profitable lines of policing.

But it's worse than I'd thought then. I did not know that National had set police a KPI for gang asset seizures of $400m by 2021. And Stuart Nash has just increased that target to $500m.

A Cabinet paper seen by Stuff shows Police Minister Stuart Nash and Police Commissioner Mike Bush have set four new "high-level outcome targets", while also retaining most of the previous government's nine performance targets at an operational level.

The targets include $500m in cash and assets seized from gangs and criminals by 2021.

Nash said a small number of key targets would help focus police on priority areas, and since taking on the job, he has been clear about his plan to focus on gang-related crime.

KPIs on seizures can provide similar bad incentives for police, depending on what the rewards and penalties are for hitting those KPIs.

Here's the snapshot of the Cabinet paper from Stuff.

Asset seizures should never ever ever be a KPI target. At best they could be an intermediate target towards some actual KPI of, say, reducing overall criminal activity. But targeting it directly seems an exceptionally bad idea.

In case it is less than obvious why it is an exceptionally bad idea, here are some examples.

• If gangs own less than $500m in total assets, the police have strong incentive to deem more people as being gang-affiliated so that they can steal more stuff from them. The same holds true regardless of how much gang-affiliated people own. What matters is how easy it is to seize assets from different people, and how easy it is to claim that those people are gang-affiliated. 
• It encourages seizing the easiest-to-seize stuff, which may not be the assets that are either most directly tied to actual criminal activity or the assets most critical to continued criminal activity;
• Police always have choices about how to spend their time. Those choices depend on the KPIs. Should police be prioritising work leading to potential seizures over other work? Shouldn't they be instead trying to minimise the overall burden of crime, and figuring out what measures work best toward those ends?

As a general rule, whenever NoRightTurn and I agree that a policy is terrible, we should have a joint veto on it. 

The Battle of Athens

I hadn't heard of this one before. After the Second World War, a bunch of returning veterans used force of arms in Athens, Tennessee, to break a corrupt party machine that was controlling the elections and local government.

The local police were using predatory ticketing to fund the local party machine; it reads a lot like current U.S. asset forfeiture practice.

A state law enacted in 1941 reduced local political opposition to Crump's officials by reducing the number of voting precincts from 23 to 12 and reducing the number of justices of the peace from fourteen to seven (including four "Cantrell men").^[5] The sheriff and his deputies worked under a fee system whereby they received money for every person they booked, incarcerated, and released; the more arrests, the more money they made.^[5]Because of this fee system, there was extensive "fee grabbing" from tourists and travelers.^[7] Buses passing through the county were often pulled over and the passengers were randomly ticketed for drunkenness, whether guilty or not.^[5] Between 1936 and 1946, these fees amounted to almost $300,000.^[7]

...

During the war, two service men on leave were shot and killed by Cantrell thugs.^[7] The servicemen of McMinn County heard of what was going on and were anxious to get home and do something about it. One veteran said he "thought a lot more about McMinn County than he did about the Japs. If democracy was good enough to put on the Germans and the Japs, it was good enough for McMinn County, too!"^[7] The scene was ripe for a confrontation when McMinn County's GIs were demobilized. When they arrived home the deputies targeted the returning GIs, one reported "A lot of boys getting discharged [were] getting the mustering out pay. Well, deputies running around four or five at a time grapping up every GI they could find and trying to get that money off of them, they were fee grabbers, they wasn't on a salary back then."^[10]

The Battle centers around the jail where the Sheriff has retreated, with the ballot boxes, and a pile of hired-in armed men, to rig the vote counting.

Polls Closing

As the polls closed, and counting began (sans the three boxes taken to the jail), the GI-backed candidates had a 3 to 1 lead.^[5][13][20] When the GIs heard the deputies had taken the ballot boxes to the jail, Bill White exclaimed, "Boy, they doing something. I'm glad they done that. Now all we got to do is whip on the jail."^[19]

The GIs recognized that they had broken the law, and that Cantrell would likely receive reinforcements in the morning, so the GIs felt the need to resolve the situation quickly.^[21] The deputies knew little of military tactics, but the GIs knew them well. By taking up the second floor of a bank across the street from the jail, the GIs were able to reciprocate any shots from the jail with a barrage from above.^[21]

By 9:00 PM, Paul Cantrell, Pat Mansfield, George Woods (Speaker of the State House of Representatives and Secretary of the McMinn County Election Commission), and about 50 deputies were in the jail, allegedly rummaging through the ballot boxes. Wood and Mansfield constituted a majority of the election commission and could therefore certify and validate the count from within the jail.^[21]

The Battle Begins

Estimates of the number of veterans besieging the jail vary from several hundred^[20] to as high as 2,000.^[15] Bill White had at least 60 under his command. White split his group with Buck Landers taking up position at the bank overlooking the jail while White took the rest by the Post Office.^[19]

Just as the estimates of people involved vary widely, accounts of how the Battle of Athens began and its actual course disagree.

Edgerton and Williams recall that when the men reached the jail, it was barricaded and manned by 55 deputies. The veterans demanded the ballot boxes but were refused. They then opened fire on the jail, initiating a battle that lasted several hours by some accounts,^[15][20] considerably less by others.^[22]

As Lones Selber, author of the 1985 American Heritage magazine article wrote: "Opinion differs on exactly how the challenge was issued." White says he was the one to call it out: "Would you damn bastards bring those damn ballot boxes out here or we are going to set siege against the jail and blow it down!" Moments later the night exploded in automatic weapons fire punctuated by shotgun blasts. "I fired the first shot," White claimed, "then everybody started shooting from our side." A deputy ran for the jail. "I shot him; he wheeled and fell inside of the jail."^[5]

Read the whole thing, including the aftermath.

Police priorities

In today's Dominion Post we learn that Wellington area police have an ongoing investigation against a euthanasia group.

They've arrested an elderly woman who'd imported drugs that could be useful in euthanasia, and confiscated another elderly woman's helium balloon kit.

It is understood a second elderly woman was also involved in the October 7 raid, part of what police are calling Operation Painter, and that one of the women spent the night in a police cell. 

I wonder if they took any lessons from Arlo Guthrie's Officer Obie in making sure that the cell was safe.

Meanwhile, some of the War on Meth has become self-financing courtesy of New Zealand's asset forfeiture legislation.

A $15 million boost for anti-drug initiatives is not an admission that the Government is losing the war on P, Prime Minister John Key says.

However, Key acknowledges methamphetamine has become "the drug of choice" for some Kiwis, while police must do more to stop P coming into the country through remote areas like Northland.

The Government has announced the funding for 15 anti-drug initiatives, coming from money and assets seized from criminals, as part of its Tackling Methamphetamine Action Plan.

The war may be lost, though.

Earlier this month, Radio NZ had the Police Association telling us that meth is now purer and cheaper than ever before. Remember that half-billion dollars' worth of meth seized on 90 Mile Beach? No apparent effect on the price of meth. There is so much meth out there that the biggest seizure ever in New Zealand has had zero effect on prices.

And I still need to stock up on working pseudoephedrine-based cold medicines whenever I go back home to Canada - all in the futile fight against meth.

The police actions on meth will be futile, but help build a pool of seized assets. I don't know what the police think they're achieving in raids on elderly people who want to be able to end their lives painlessly should need to.

Priorities

If it puzzles you that the New Zealand Police can find resources to run raids on marijuana growers, which sometimes turn into armed standoffs, but cannot find resources to solve burglaries, remember this:

The Criminal Proceeds (Recovery) Act enables police to seize assets believed to be the proceeds of crime, with or without a conviction.
Since it came into effect, $382 million worth of assets has been restrained (which means the police hold on to it during an investigation), while $85 million has been forfeited altogether. The funds recovered are used to fund law enforcement initiatives.
Police Minister Judith Collins says police have been “extremely successful” in investigating and seizing the “dirty money” of criminals and gangs since the legislation was introduced.
About 96% of forfeitures and 86% of restraints are linked to drugs and organised crime.

What profit is there in solving a home break-in? Anything you seize has to go back to the property's owners. But if you go after the folks who only commit victimless crimes, well, there's nobody who has to be compensated out of the seizures.

I hate saying I told you so, but I did tell you so.

The cops will tell us that the standoff's lesson is that police should be better armed. But when was the last time that the police needed to do raids, armed or otherwise, on a brewery or a distillery? Or on the Petone cigarette plant? The better lesson is that legalised markets are less violent and have less need for armed cops.

Update: Commenter Ben rightly notes that the funds don't go directly to the police. Here's the NZ Drug Foundation on that:

The lion’s share (70 percent) has gone to Police, Customs, Justice and Corrections. Health gets the rest.

Costly gangs

The linking up of back-end government administrative data turns up interesting results.

The Ministry of Social Development report is depressing stuff. There's a core of just under 4000 known gang members. They're heavily welfare dependent. 92% spent some time on benefit from 1993 through 2014, spending an average of just under 9 of those 21* years on benefit. Over 7000 kids have spent time on benefits linked to a gang member's benefit. Over a quarter of the gang members were linked to child abuse or neglect, though the mother was more often recorded as the alleged perpetrator.

Also depressing are some of the proposed policy responses.

The Government was working on a range of other gang-related initiatives to address the costs of crime, she [Collins] said.

A Start at Home programme was being developed to provide support services for gang members and families by creating new programmes and modifying existing ones.

Multi-agency taskforces were targeting drug trafficking and gang networks, and helped recover over 334 kilograms of methamphetamine with a street value of $334 million in 2015, while seizing almost $14 million of property and profits gained from crime.

New, gang-related laws were being developed, including legislation to place 24-hour GPS monitoring on high-risk offenders like gang members to ensure restrictions on going to gang headquarters could be enforced.

Changes to money-laundering laws, making it easier for police to seize cash found in suspicious circumstances, were also being worked on, along with a firearm prohibition regime to stop certain people from accessing guns.

Figuring out what kinds of support service interventions work is a fantastic idea. GPS monitoring can be better than prison too.

But making it easier to seize cash has led to horrible abuses in the U.S.

The earlier parts of the story, where they roll up together costs incurred over 21 years into one big number, also ain't so hot. Present annual figures for this stuff to allow for reasonable comparisons please?

* The first time I read that, I thought it had been 11 years, not 21. 1993 is becoming unreasonably long ago.

Asset Forfeiture and Harm Maximisation

Another day, another bit of evidence that kicking back to the police assets seized under asset forfeiture legislation completely screws things up. Here's the Sun-Sentinel on a wonderful moneymaking scheme that the cops in Sunrise, Florida have developed. Here's how it works.

Sunrise cops encourage drug dealers to come to Sunrise to buy drugs from them. They meet the drug dealers in shopping malls and fast food restaurants. They make the purchase agreement. They later meet at some other public location, make the exchange, then the swarm of armed officers comes down to seize the cash, cars, or anything else the buyer has that could plausibly be considered a proceed of crime. The seizures are the point: arrests and convictions are pretty secondary. The Sun-Sentinel reports that, in 100 cases they examined, $3 million in cash plus cars and other items were seized, but there were only two convictions for cocaine trafficking.

The first meet-and-greet sessions don’t happen on dark street corners or in seedy motels, court records show. They take place inside popular family restaurants: McDonald’s, Steak ‘n Shake, Chili’s.

Once a buyer is on the hook, a meeting is scheduled to conclude the transaction. Police come with at least one real kilo of cocaine and additional fake kilos, all shaped like bricks.

Undercover officers with assault rifles wait in unmarked cars, watching for the signal for the takedown. While the busts are tightly controlled, some can get messy. Some buyers bring guns along with their cash.

A few have run away; police have released dogs and fired Tasers. One man nabbed at TGI Fridays threw a gym bag containing the cocaine on the ground, and his partner fell and dropped a gun he had in his waistband.

In a 2010 deposition, one defense attorney asked a Sunrise cop: “Would you take your wife shopping in that plaza if you knew a deal was going down that afternoon?”

The reply: “Probably not.”

TGI Fridays managers at the restaurant in Sunrise, 13350 W. Sunrise Blvd., and corporate relations representatives declined to comment about the numerous stings staged on their property.

Lessons:

• Never ever ever go to Sunrise, Florida, for a family vacation. Or for any other reason.
• Asset forfeiture's incentives are sufficient to induce Sunrise's police officers to put the public at risk by deliberately bringing armed drug dealers into family restaurants. 
• New Zealand has made a very serious mistake in moving to civil asset forfeiture with proceeds kicked back to the drug enforcement budget. At least we have, as yet, no evidence that local departments can profit by increased seizures.

See also the asset forfeiture tag here at Offsetting...

Bad incentives

Radio NZ this morning reported that Justice Minister Judith Collins is allocating $8.3m seized under the Proceeds of Crime legislation to drug enforcement activities and to addiction treatment.

It could be worse. In the US, individual police departments seizing assets get to keep a cut. Where police are rational and maximising, this encourages departments to shift to activities that can be profit centres rather than focus on crime-reduction activities that would yield only social benefits to the community.*

Here's Radley Balko with John Stossel on asset forfeiture. How bad can it get? Balko's been documenting cases where police departments have been demanding that bail money be paid in cash, then seize the cash from the family of an arrested person. Here's more and more. And more.

The NZ police seem to be good and honest people, but they're human too. Why make it be in their interest to do bad things?

Civil asset forfeiture is a thoroughly inside-the-asylum policy. We should know better. If Collins is determined to run civil asset forfeiture, it has to be set up such that there's zero link between the amount seized and police budgets.


* And don't get cute arguing that if the subsidy winds up being large enough, the police can wind up doing more of both. Hit the Balko links. American police are committing crimes so that they can seize assets. Here's the Institute for Justice:

Asset forfeiture

Radley Balko points to asset forfeiture as cause of much of the rise in police corruption in the US.

Not only was the seizure of Simpson's property perfectly legal under Michigan's asset forfeiture laws; this sort of confiscation is encouraged. In 2009 The Detroit News reported that forfeitures in some Michigan jurisdictions had jumped 100 percent or more in recent years, as police departments used the procedure to supplement budgets strained by the bad economy and government debt. Police need not charge someone with a crime to take his property, and it can cost thousands of dollars to get it back. One former prosecutor told The Detroit News: "Forfeiture laws are being abused by police and prosecutors who see only dollar signs. It's a money grab, pure and simple—a sneaky way of getting a penalty on something prosecutors can't prove. It's like shooting fish in a barrel." It is not terribly surprising, then, to read that the same Lt. Luke Davis who oversaw the raid on Rudy Simpson's home was later arrested because, as the local news station WXYZ reported, "he and...others sold off drugs and confiscated goods for their own profit."

Read the whole post for some of the recent outrages.

Radley's soon off to blog for Huffington; excellent that he'll be reaching a broader audience.

Meanwhile, Christchurch demolition contractors seem to have been doing a bit of their own asset forfeiture from the properties they're demolishing at Civil Defence's behest. Demolition guys salvaging from properties they're wrecking is great where it's by contract with the property owner. But where the owner hasn't even been informed that the property is going under the wrecking ball, it's an awful lot more like looting. And preventing looting is one of the reasons Civil Defense has given for banning property owners from entering the cordon - too hard to maintain security if they let property owners in.

Stephen Franks worries that insurers might well be off the hook for businesses destroyed by Civil Defense where the buildings were otherwise salvageable.

It begins...

And it turns out that the NZ Police are getting to keep the money they seize under the recently implemented civil asset forfeiture regime. Says Minister of Police Judith Collins in Question Period:

SANDRA GOUDIE (National—Coromandel) to the Minister of Police: What reports has she received on the Government’s efforts to confiscate the proceeds of crime?

Hon JUDITH COLLINS (Minister of Police) : I am very pleased to report that since the Criminal Proceeds (Recovery) Act came into force last December, the police asset recovery unit has investigated 201 cases. That has resulted in an estimated $34.6 million worth of assets being made subject to restraining orders under the Act. Those assets are now in the hands of the official assignee, awaiting further legal orders, with the objective of confiscation. The assets involved in those cases include $6 million in cash and bank accounts; 36 residential and commercial properties worth an estimated $15.8 million; eight farms, orchards, and lifestyle blocks worth an estimated $10.5 million; 44 cars, vans, and four-wheel drives worth an estimated $852,000; and 24 motorcycles worth an estimated $423,000.

Sandra Goudie: How are the funds gained from confiscated assets likely to be used?

Hon JUDITH COLLINS: The Government is planning to put the money to good use. Police are working with other agencies on plans to expand alcohol and drug treatment and extra law enforcement initiatives to fight organised crime groups.

HT: NoRightTurn

Previously, they'd said that money went to a mix of victim support and fighting organised crime. In April, MED was anticipating allocating seized funds to drug enforcement efforts.

I'd hoped when National passed the New Zealand regime that seized monies would go into the consolidated fund and wouldn't be earmarked for law enforcement. The incentive properties of police getting to finance their operations through asset seizures are not good. First, police will have, at the margin, incentive to redirect their time towards profit-making activities and away from things like murder investigations. Second, the bar for seizures may be set rather lower than we might like. As Radley Balko noted in the States:

The Chicago Tribune reported that in just the three years between 2006 and 2008, Tenaha police stopped 140 drivers and asked them to sign waivers agreeing to hand over their cash, cars, jewelry, and other property to avoid arrest and prosecution on drug charges. If the drivers agreed, police took their property and waved them down the highway. If they refused, even innocent motorists faced months of legal hassles and thousands of dollars in attorney fees, usually amounting to far more than the value of the amount seized. One local attorney found court records of 200 cases in which Tenaha police had seized assets from drivers; only 50 were ever criminally charged.

National Public Radio reported in 2008 that in Kingsville, Texas, a town of 25,000, “Police officers drive high-performance Dodge Chargers and use $40,000 digital ticket writers. They’ll soon carry military-style assault rifles, and the SWAT team recently acquired sniper rifles.” All this equipment was funded with proceeds from highway forfeitures.

I hope somebody's keeping an eye on things here....

Asset forfeiture

Switched On Gardener has been accused of facilitating illegal marijuana grow ops, with some of its staff allegedly telling customers how best to grow marijuana. The owner's bank account has been seized under New Zealand's recently enacted civil asset forfeiture legislation which lets the cops take your stuff if it is, on balance of probabilities, derived from criminal activity.

He also said his Gulf Harbour home - worth more than $1 million according to property records - had been restrained by police. This means Quinlan cannot sell the home or borrow money against it.

The company director said he understood why the Government had introduced the civil forfeiture law, and had no problem with his house being frozen.

"You can't have people accused of major crimes selling their assets off. But I'm not guilty of any crimes and I don't intend to sell my home."

However, he said, he had instructed his lawyers to apply to get the $189,000 back.

"We are going to fight that. The bank had instructed me to use that money to prop up the business.

"If I can't get that money and we go bust, then we win the court case, we'll be going after the Crown for our lost earnings."

Meanwhile, in the States:

Child pornography is against the law. You can go to jail if you make it, distribute it, or possess it. There is also a law that says the government can seize property that is “used” to distribute child pornography. So prosecutors can seize computer equipment from someone who engages in such criminal conduct. Pretty straightforward.

But in a recent case, the federal agents not only seized the computer, but the house and the 19 acres of land on which the house was located. The prosecution argued — and an appellate court agreed [pdf] — that there was a “substantial connection” between the acreage and the offense. That is just absurd.

Yes, kiddie porn is bad. But it's not like he was producing the stuff on the property. Instead, the Court was going to seize the house (because the computer was in there), but because the entire property was on a single title, they took the whole lot. And, again, the only connection between the property and the crime was that the guy used the computer in his house on the property.

Lynch, quoted above, points to a nice Institute for Justice primer on civil asset forfeiture in the States:

Civil forfeiture laws represent one of the most serious assaults on private property rights in the nation today. Under civil forfeiture, police and prosecutors can seize your car or other property, sell it and use the proceeds to fund agency budgets—all without so much as charging you with a crime. Unlike criminal forfeiture, where property is taken after its owner has been found guilty in a court of law, with civil forfeiture, owners need not be charged with or convicted of a crime to lose homes, cars, cash or other property.

Americans are supposed to be innocent until proven guilty, but civil forfeiture turns that principle on its head. With civil forfeiture, your property is guilty until you prove it innocent.

Policing for Profit: The Abuse of Civil Asset Forfeiture chronicles how state and federal laws leave innocent property owners vulnerable to forfeiture abuse and encourage law enforcement to take property to boost their budgets. The report finds that by giving law enforcement a direct financial stake in forfeiture efforts, most state and federal laws encourage policing for profit, not justice.

Of course, the New Zealand police would be entirely immune to pecuniary motivations, so there's nothing to worry about here.

Recall that only the Greens and Maori Party opposed bringing civil asset forfeiture to New Zealand.