THE DRUG WAR'S

HIDDEN ECONOMIC AGENDA

By Eric Blumenson and Eva Nilsen
(c) 1998, The Nation, all rights reserved
(republished on this website with permission)
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A number of aggrieved and hapless citizens converged on Washington

during the summer of 1996, invited by House Judiciary Committee
Chairman Henry Hyde to recite their misfortunes at the hands of the
governments drug police. All had their property taken by police, then
were let go and never prosecuted. All were innocent of wrongdoing.
Remarkably, the hearing was not about corrupt cops shaking down
helpless individuals, but about the law authorizing the police to do
what they did -- the civil forfeiture law, which transfers ownership to
the government of any property that "facilitated" a drug crime. This
Fall the Judiciary Committee completed its work, proposing a series of
partial and controversial reforms now pending before Congress.

The stories were sad survivors tales, each recounting a moment of

unexpected financial ruin followed by years of mostly fruitless attempts
to undo it. A pilot told of how the government destroyed his air charter
business: the DEA seized his airplane when a drug dealer chartered it;
$85,000 in legal fees later, the pilot filed for bankruptcy and became a
truck driver. A landscaper testified that while on a purchasing trip, he
had been stripped of $9,000 by an airport drug interdiction unit, then
sent home without a receipt, on grounds that only drug dealers carry
so much cash. Congressmen also heard the tale of Mary Miller (a
pseudonym), a 75-year-old grandmother dispossessed of her home for
the sins of her fugitive, drug-dealing son.

When events like these appear in the newspapers, they seem to be

aberrations -- mishaps by some unskilled police officers, or the
handiwork of a few rogue cops. No one believes that police routinely
await the chance to harass and impoverish elderly ladies like Mrs.
Miller. Yet the 20 police who confronted Mrs. Miller were not keystone
cops; they included not only local police officers, but also agents from
the sheriffs office, the U.S. Marshals Service, the FBI and the IRS. These
officers were probably much less concerned with harassing Mrs. Miller
than with her property. By their presence at the seizure, the local
agencies and the Justice Department each acquired a claim to a share
of the house. Mrs. Miller was on the wrong side of a police funding raid,
and since 1984, many thousands of other Americans have been as
well.
1984 was the year that Congress rewrote the civil forfeiture law to
funnel drug money and "drug related" assets into the law enforcement
agencies that seize them. This amendment offered law enforcement a
new source of income, limited only by the energy police and
prosecutors were willing to put into seizing assets. The number of
forfeitures mushroomed; Between 1885 and 1991 the Justice
Department collected more than $1.5 billion in illegal assets; in the
next five years, it almost double this intake. By 1987 the Drug
Enforcement Administration was effectively earning its keep, with
seizures exceeding its annual budget.

Local law enforcement benefited from a separate "equitable sharing"

provision, which allows local police to federalize a forfeiture. This law
gives police a way to circumvent their own state forfeiture laws, which
often require police to share forfeited assets with school boards,
libraries, drug education programs, or the general fund. Instead, local
police can conspire with the U.S. Justice Department to evade these
requirements through paperwork: if a U.S. attorney "adopts" the
forfeiture, 80% of the assets are returned to the local police agency
and 20% are deposited in the Justice Departments forfeiture fund. As of
1994 the Justice Department had transferred almost $1.4 billion in
forfeited assets to state and local law enforcement agencies. Some
small town police forces have enhanced their annual budget by a
factor of five or more through such drug enforcement activities.

These financial benefits are essentially there for the taking, thanks to
expansive laws from Congress and a green light from the Supreme
Court. The reach of the forfeiture law extends to any property which
"facilitated" a drug crime, a potentially enormous class. Cars, bars,
homes and restaurants have all been forfeited on grounds that they
served as sites for drug deals, marijuana cultivation, or other drug
crimes. Are the bills in your wallet forfeitable? Probably, because an
estimated 80% of American paper currency has been contaminated by
cocaine, and cocaine residue has been held sufficient by some courts
to warrant forfeiture. Meanwhile, according to the Supreme Court few
constitutional safeguards apply to forfeiture cases, where the seized
property is deemed the defendant (as in United States v. One 1974
Cadillac Eldorado Sedan) and the defendant is presumed guilty. Owners
who want to contest seizures must put up a bond, hire a lawyer, and
rebut the presumption of guilt with proof that the property is untainted
by criminal activity. There is no constitutional requirement that the
owner knew of any illegal activities, and forfeiture may occur even if
the owner is charged and acquitted. In other words, if you are either
related to a drug dealer or mistaken for one, you may find yourself
legally dispossessed of your property without effective recourse.
There is, of course, a clever symmetry in the forfeiture law. It makes for
some appealing sound bites, like former Attorney General Richard
Thornburghs boast that "its now possible for a drug dealer to serve
time in a forfeiture-financed prison after being arrested by agents
driving a forfeiture-provided automobile while working in a forfeiture-
funded sting operation." According to a 1993 report on drug task forces
prepared for the Justice Department, we can expect entire police
agencies to be funded in this way. Heralding the prospect of "free" drug
law enforcement, the report noted that "one 'big bust' can provide a
[drug] task force with the resources to become financially independent.
Once financially independent, a task force can choose to operate
without Federal or state assistance."

But agencies that can finance themselves through asset seizures need
not justify their activities through any regular budgetary process. The
consequence is an extraordinary degree of police secrecy and freedom
from legislative oversight. The prospect of a self-financing law
enforcement branch, largely able to set its own agenda and
accountable to no one, might sound promising to Colonel North or
General Pinochet, but it should not be mistaken for a legitimate organ
in a democracy. It was an anathema to the framers, who in typically
far-sighted fashion warned that "the purse and the sword ought never
to get into the same hands, whether legislative or executive," and
sought to constitutionalize the principle by establishing a government
of separate branches which serve to check and balance each other.

Whether forfeitures financial rewards will prove large enough to spawn

a permanent, fully independent sector of unaccountable law
enforcement agencies is not yet clear. What is clear is that these
rewards already have corrupted the law enforcement agenda of
agencies that have grown dependent on them. At the Department of
Justice, which has deposited 2.7 billion in its Asset Forfeiture Fund over
the last five years, a steady stream of memos exhorts its attorneys to
redirect their efforts towards "forfeiture production" so as to avoid
budget shortfalls. One warns that "funding of initiatives important to
your components will be in jeopardy if we fail to reach the projected
level of forfeiture deposits." Several urge increasing forfeitures
"between now and the end of the fiscal year." The departments task
force study bluntly suggests that multijurisdictional drug task forces
select their targets in part according to the funding they can produce.

What happens when law enforcement agencies rewrite their agendas

to target assets rather than crime? Contemporary police, prosecution
and court records furnish the answer. As expected, they disclose
massive numbers of seizures, a large majority of which are
unaccompanied by criminal prosecution. But they also show a criminal
justice system held hostage to the exigencies of law enforcements self-
financing efforts, endangering the public welfare in at least three ways:

Distorted law enforcement policies. The forfeiture reward scheme has

heightened police interest in drug law enforcement, but with badly
skewed priorities. Economic temptation hovers over all drug
enforcement decisions: methamphetamine distribution may demand
more enforcement, for example, but targeting marijuana deals is
usually far more profitable because methamphetamine transactions
tend to occur on condemned or valueless property. The Justice
Departments study suggests precisely this focus in noting that as asset
seizures become important "it will be useful for task force members to
know the major sources of these assets and whether it is more efficient
to target major dealers or numerous smaller ones."

One example of skewed priorities is the "reverse sting" that targets

drug buyers rather than sellers, a now common tactic that was rarely
used before the law allowed police departments to retains assets they
seized. The reverse sting is an apparently lawful version of police drug
dealing in which police pose as dealers and sell drugs to an unwitting
buyer. Buyers may be less dangerous and less culpable than sellers,
but operations against them are easier, safer, and reliably result in
seizure of the buyers cash. According to one participant in these
operations, in his police force reverse stings "occurred so regularly that
the term reverse became synonymous with the word deal." A similar
motivation may underlie the otherwise baffling policy adopted by both
the New York City and Washington, D. C. police shortly after the
forfeiture retention amendments were passed, directing police to seize
the cash and cars of persons coming into the city to buy drugs. Of
course, arresting buyers before the sale means that the drugs that
would have been purchased will continue to circulate freely. But as
former New York City Police Commissioner Patrick Murphy explained to
Congress, forfeiture laws give police "a financial incentive to impose
[spot-check] roadblocks on the southbound lanes of I-95, which carry
the cash to make drug buys, rather than the northbound lanes, which
carry the drugs. After all, seized cash will end up forfeited to the police
department, while seized drugs can only be destroyed."

Worse, by linking police budgets to drug law enforcement, forfeiture

laws induce police and prosecutors to neglect other, often more
pressing crime problems. They make business judgments which can
only compete with, if not wholly supplant, their broader law
enforcement goals. The Department of Justice has periodically made
this practice official policy, as in 1989 when all U.S. Attorneys were
directed to "divert personnel from other activities" if necessary to meet
their commitment "to increase forfeiture production."
Unjust treatment: For law enforcement agencies dependent on
forfeiture income, fairness too may be a luxury they can ill afford. This
is most obvious at the sentencing of drug offenders, where forfeiture
laws provide an avenue for affluent defendants to buy their freedom.
Plea bargains are struck that commonly favor "kingpins" willing to
forfeit their assets and penalize "mules" with nothing to trade. In
eastern Massachusetts, Boston Globe reporters found that agreements
to forfeit $10,000 or more bought elimination or reduction of trafficking
charges in almost three-quarters of such cases. The prosecutors
involved had a compelling financial reason to recalibrate the scales of
justice in this way because 12% their budgets were financed through
forfeiture income. At the federal level, Federal Circuit Judge Juan
Torruella has noted that in his experience, penalties for drug trafficking
are imposed on the less culpable, while "the 'big fish are able to work
out deals with the government which may leave them with light
sentences or even without any prosecution." It is not a good omen that
Attorney General Reno recently requested all U.S. Attorneys to consult
forfeiture specialists before settling a criminal case.

Police lawlessness: Finally, growing numbers of law enforcement

agencies have been morally and sometimes criminally deformed by
their dependence on drug war financing. In Paducah, Kentucky, the
lawless operations of one agency -- the Western Area Narcotics Task
Force, or WANT -- came to light when the discovery of almost $66,000
secreted in its headquarters provoked a major scandal. Among other
things, reporters discovered that WANT had promised federal funders
that it would produce a 20 percent rise in asset seizures. According to
the police chiefs estimate, 60% of the money found in WANT
headquarters had been improperly seized. Often the seizures had no
nexus to any drug transaction. Some seizures were as small as 93
cents, showing, according to the Paducah Sun, that "once again that
the officers were taking whatever the suspects were carrying, even
though by no stretch could pocket change . . . be construed to be drug
money."

Unfortunately, there are numerous other examples of police agencies

targeting assets with no regard for the rights, safety, or even lives of
the suspects. In one federal civil rights judgment against an Oakland,
California drug task force, we read an officers admission that his unit
operated "more or less like a wolfpack", driving up in police vehicles
and taking "anything and everything we saw on the street corner." In
Louisiana, investigators found police engaged in massive pretextual
stops, with the seized money diverted to police department ski trips
and other unauthorized uses. In Los Angeles, a Sheriffs Department
employee reported that deputies routinely planted drugs and falsified
police reports to establish probable cause for cash seizures.(1) Recent
investigations in Florida, New Jersey, Philadelphia, Boston and
Washington State have exposed similar lawlessness by police in search
of forfeitable cash.

Then there is the appalling case of Donald Scott, a 61 year old wealthy
California recluse. Scott lived on a five million dollar, 200 acre ranch in
Malibu adjacent to a large recreational area maintained by the National
Park Service. Tragically for him, in 1992 the Los Angeles County
Sheriff's Department received a false report that Scott was growing
several thousand marijuana plants on his land. It assembled a team --
including agents from the Los Angeles Police Department, the Park
Service, the DEA, the U.S. Forest Service, the California National Guard,
and the California Bureau of Narcotic Enforcement -- to investigate the
tip, largely through the use of air and ground surveillance missions.
Despite several unsuccessful efforts to corroborate the informant's
claim, and despite advice that Scott posed little threat of violence, the
LA Sheriffs Department dispatched a multi-jurisdictional team to
conduct a military-style raid. On October 2, 1992 at 8:30 a.m., thirty
officers descended upon the Scott ranch with high powered weapons,
flak jackets, dogs, a battering ram and what purported to be a lawful
search warrant. After knocking and announcing their presence, they
kicked in the door and rushed through the house. There they saw
Scott, armed with a gun in response to his wife's screams. With Scott's
wife watching in horror, agents fired two bullets into Scotts chest and
killed him. They found no marijuana plants, other drugs or
paraphernalia anywhere.

Following Scott's death, the Ventura County District Attorney's Office

conducted a five month investigation of the raid. The 70 page report
found that there was no credible evidence of present or past marijuana
cultivation on Donald Scott's property. It found that the Los Angeles
County Sheriff's Department knowingly sought the search warrant on
legally insufficient information, and that much of the information
supporting the warrant was false while exculpatory evidence was
withheld from the judge. The search warrant "[b]ecame Donald Scott's
death warrant," the report concluded, and Scott was unjustifiably
killed.

The targeting of Donald Scott, and the massive multijurisdictional

police presence, cannot be explained as any kind of crime control
strategy. Rather, as the District Attorney's report concluded, one
purpose of this operation was to garner the proceeds expected from
forfeiture of the $5 million ranch. The investigation found that as they
invaded the property, the officers -- with two asset forfeiture specialists
in tow -- were armed with a property appraisal of Scott's ranch, a
parcel map of the ranch marked with the sales price of a near-by
property, and instructions to seize the ranch if at least 14 marijuana
plants were found.

Such dire results should prompt reform, and indeed major reforms are
called for by a broad-based coalition including the American Civil
Liberties Union and the Cato Institute. But thus far the forfeiture
industry has enjoyed an astonishing immunity to scrutiny by
lawmakers. Even the Hyde forfeiture reform bill, which would institute
some significant procedural reforms, would not redirect the stream of
assets flowing into the police agencies that seize them. Rep. Hyde did
not seek to curtail forfeitures financial rewards, he says, largely
because of the continued, vigorous opposition of law enforcement. But
unless Congress wants to abandon any hope of regaining control over
the drug war bureaucracy it has created, it had better try to do so
sooner rather than later.

The solution is not hard to envision: A law mandating that forfeited

assets be deposited in the Treasury's general fund, rather than
retained by the seizing agency, would cure the forfeiture law of its
most corrupting effects. This single measure would restore budgetary
oversight to law enforcement, and remove the incentive that leads
police agencies to distort their agendas for budgetary reasons. A less
sweeping reform, but important nonetheless, would repeal the law that
permits local police forces to evade their state laws by "federalizing"
their forfeitures.

Reformers might also challenge forfeiture rewards on constitutional

grounds in the courts. Although the Supreme Court has not placed
many meaningful limits on the states forfeiture powers, the logic of
some past decisions unrelated to forfeiture supports a strong argument
that self-financing law enforcement agencies are constitutionally
objectionable on both conflict-of-interest and separation-of-powers
grounds. A more fundamental fact is that the constitution was born in
part to eliminate such institutions. Financial incentives promoting
police lawlessness and selective enforcement, in the form of the writs
of assistance, were high on the list of grievances that triggered the
American revolution. Writs of assistance authorized customs officers to
seize suspected contraband, and retain a share of the proceeds, often
a third, for themselves and their informants. From the viewpoint of the
Crown, this incentive could help insure that goods landing in American
ports were taxed or, if prohibited, confiscated. But for the colonists, it
was an outrage that brought with it corrupt officials, lawless seizures,
selective enforcement, and fabricated evidence. From these
complaints, John Adams later said, "the child Independence was born."
The same fundamental grievances are now lodged against our present
forfeiture law. When they reach the Supreme Court, the justices will be
forced to choose between redressing them or reading the framers
concerns out of the Constitution.

The distribution of drug war dividends to law enforcement is but one

part of an anti-drug mobilization that has continued, at ever escalating
levels, for almost 30 years. Despite a succession of failures to "win" the
war on drugs, the governments response has always been simply more
of the same -- more money thrown into this war (now $50 billion per
year in federal and state budgets), more arrests (now about 500,000
per year for marijuana possession alone), and more prisoners (60% of
federal prisoners are incarcerated for drug offenses). This heavy law
enforcement emphasis has never flagged, and cases like Mary Millers
and Donald Scotts help explain why: Police and prosecutorial agencies
that make drug law enforcement their highest priority are
extravagantly rewarded for doing so by the forfeiture laws. For law
enforcement officials, however irrational the drug war may be as public
policy, it remains superbly rational as a bureaucratic strategy.

Eric Blumenson is a professor at Suffolk University Law School. Eva

Nilsen is an associate clinical professor at Boston University School of
Law. The authors' research was supported by a grant from the Open
Society Institutes Individual Project Fellowships Program, and is
reported in full in "Policing for Profit: The Drug Wars Hidden Economic
Agenda," in the University of Chicago Law Review (Vol. 65, Winter
1998). Further assistance was provided by the Abe and Flora Shafer
Fund of The Nation Institute.

1. 1 "$60 Million Theft by Sheriffs Deputies Alleged, Los Angeles Times,

April 1, 1993 at B1 (quoting L. A. Sheriffs sergeant Robert Sobel, "My
team seized about $10 to $15 million, and none of it was
straight...[they were] legal street robberies."]