VIA CERTIFIED MAIL
Michael
E
Horowitz, Esq. Inspector General
cmr
cAUSE
- 0
£ACTION
Advocates for Government Accountability
A
501 c) 3)
Nonprofit Corporation
January 29, 2015 U.S. Department
of
Justice Office
of
the Inspector General 950 Pennsylvania Avenue, N.W., Suite 4706 Washington, D.C. 20530-0001
Re: Request for Audit
or
Review
Dear Inspector General Horowitz: Cause
of
Action is a nonprofit, nonpartisan government oversight group that protects economic liberty by promoting executive branch transparency. We write to request that the Office oflnspector General ( OIG ) initiate an audit or review
of
the Department
of
Justice's ( DOJ ) forfeiture programs.
Introduction
As you are well aware, on January 16, 2015, Attorney General Eric Holder issued an order titled Prohibition on Certain Federal Adoptions
of
Seizures by State and Local Law Enforcement Agencies, (the Order ) prohibiting federal agencies from taking property seized by state
or
local law enforcement under state law (except for property that directly relates to public safety concerns, including firearms, ammunition, explosives and property associated with child pornography) and then forfeiting it under federal law using a practice known as adoption.
1
State and local authorities can retain up to 80 percent
of
the proceeds stemming from such adoptions.
2
Also, state and local law enforcement agencies that participate in joint investigations with
DOJ s
law enforcement agencies can receive a portion
of
the proceeds
of
1•
Press Release, U.S. Dep't
of
Justice, Office
of
Pub. Affairs,
Attorney General Prohibits Federal Agency Adoptions
of
Assets Seized by State
nd
Local Law Enforcement Agencies Except Where Need to Protect Public Safety
(Jan. 16, 2015),
available at
http://www.justice.gov/opa/pr/attomey-general-prohibits-federal-agency-adoptions-assets
seized-state-and-local-law (the Press Release ). The Order's prohibition on federal agency adoption includes, but
is
not limited to, seizures by state or local law enforcement
of
vehicles, valuables, cash and other monetary instruments.
2
See
U.S.
Dep t
of
Justice, Criminal Div., Asset Forfeiture and Money Laundering Section,
Guide to Equitable Sharing
for
State and Local Law Enforcement Agencies
(2009),
available at
http://www.justice.gov/usao/ri/projects/esguidelines.pdf (the Guides ).
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• :
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Pennsylvania
Ave,
NW
Suite 650 Washington
DC
2 6
Mr. Michael E. Horowitz January 29, 2015 Page 2 forfeited assets resulting from these investigations in the form
of
cash
or
property through
DOJ s
"equitable sharing" program.
3
The Order has been praised as a "major reform"
of
federal asset forfeiture policy.
4
The
Washington Post
described it as "the most sweeping check on police power to confiscate personal property since the seizures began three decades ago as part
of
the war
on
drugs. "
5
Even the Attorney General's critics have hailed the order, with Senator Charles E. Grassley (R-IA) stating, "[w]e're going to have a fairer justice system because
of
it[.]"
6
While the Order purports to safeguard civil liberties by ending federal adoption, it actually does not have a significant impact
on
the government's overall use
of
asset forfeitures.
7
In the analysis that follows, we show that the majority
of
asset forfeitures involve administrative forfeitures, which the Order does not restrict. Therefore,
if
the DOJ in fact believes that inappropriate asset forfeitures pose systemic risks to our civil liberties, then your office should immediately audit or review the entire Asset Forfeiture Program.
Discussion A. The Order fails to address the majority
o
federal seizures which occur administratively and not through civil or criminal forfeiture.
DOJ s
authority to conduct asset forfeitures is generally derived from
18
U.S.C.
§
981
(civil forfeiture),
18
U.S.C. § 982 (criminal forfeiture), and
19
U.S.C. § 1607 (administrative forfeiture).
8
Civil forfeitures result when the government files a court action against property
(in rem).
Criminal forfeitures result from the criminal prosecution
of
a person
(in personam).
The government must "indict" the property used or derived from a crime and
if
the jury finds the property forfeitable, then the court issues an order
of
forfeiture.
9
However, "administrative forfeitures," an
in
rem
action through which the government takes property without judicial involvement,
1
are used most often.
3
21
U.S.C. §881(e)(l)(A) and (e)(3), and
18
U.S.C. §981(e)(2) each authorize the Attorney General to share federally forfeited property with participating state and local law enforcement agencies.
4
Charlotte Alter,
Feds Limit
aw
that Lets Cops Seize Your Stuff,
TIME
(Jan. 16, 2015),
available at
http://time.com/3 672140/civil-forfeiture-assets-ho Ider/.
5
Robert
O
Harrow Jr., Sari Horwitz, Steven Rich,
Holder Limits Seized-Asset Sharing Process That Split Billions with Local, State Police,
WASH. POST
(Jan. 16, 2015),
available at
http://www.washingtonpost.com/investigations/ho der-ends-seized-asset-sharing-process-that-sp lit-bi lions-withlocal-state-police/2015/01/16/0e7ca058-99d4-11 e4-bcfb-059ec7a93ddc _story.html
6
Id
7
See, e.g.
Radley Balko,
How much civil asset fo1feiture will Holder s new policy actually prevent?
WASH. POST
(Jan. 20, 2015),
available
athttp://www.washingtonpost.com/news/the-watch/wp/2015/01/20/how-much-civil-assetforfeiture-will-holders-new-policy-actually-prevent/.
8
U.S.
Dep t
of
Justice, Types
of
Federal Forfeiture, (December 2014),
available at
http://www.justice.gov/jmd/afp/07federalforfeiture/
9
Id
1
Id
11
See infra note
21.
Mr. Michael
E.
Horowitz January 29, 2015 Page 3 Through administrative forfeiture, and without judicial involvement,
12
the government may seize monetary instruments; conveyances used to import, transport or store a controlled substance; and other property with a value
of
up to $500,000.
13
Maximum
Administrative Forfeiture
Thresholds
Monetary Instruments
(e.g., cash, checks, stocks,
bonds) Unlimited
Value
Hauling
Conveyances
(e.g., vehicles, vessels,
and
aircraft
Unlimited
Value
used
to transport
illegal
drugs)
Other
Property
(e.g.,
bank
accounts, jewelry, etc.) $500,000
or
less
As noted, the law concerning administrative forfeitures is in stark contrast to the law governing civil or criminal forfeitures, which, respectively, require either a civil complaint or criminal indictment, both
of
which must be filed in court.
14
The adoption and equitable sharing programs apply to civil, criminal and administrative forfeitures.
15
By its own terms, the Order is limited to adoptions. Public records, however, reflect that adoptions are the least-used method
of
asset forfeiture in
DOJ s
Asset Forfeiture Program.
16
According to a 2012 report from the Government Accountability Office ( GAO ), [i]n 2003, adoptions made up about
23
percent
of
all equitable sharing payments, while in 2010, adoptions made up about 17 percent
of
all equitable sharing payments.
17
Therefore,
GAO s
study suggests the Order's focus on adoptions may ignore the areas where the most significant civil liberties violations occur. According to DOJ as more states have established their own forfeiture laws, they may rely less on DOJ to adopt forfeiture cases and may instead pursue
12
19
U.S.C.
§
1607.
13
Guides,
supra
note 2 at
8.
14
18
u s c
§§
981, 982.
15
Guides,
supra
note 2 at
1.
16
The
DOJ
Administrative Forfeiture Program includes the Asset Forfeiture
and
Money Laundering Section; Bureau
of
Alcohol Tobacco and Firearms; Drug Enforcement Agency; Federal Bureau oflnvestigation;
U.S.
Marshals Service; U.S. Attorney's Office; Asset Forfeiture Management Staff;
U.S.
Postal Inspection Service; Food and Drug Administration; U.S. Department
of
Agriculture,
U.S.
Department
of
Agriculture Office oflnspector General; Department
of
State, Bureau
of
Diplomatic Security;
and
Defense Criminal
and
Investigative Services.
See
WEBSITE,
UNITED STATES DEPARTMENT
OF
JUSTICE, ASSET FORFEITURE PROGRAM, PARTICIPANTS
AND
ROLES,
available at
http://www.justice.gov/jmd/afp/05participants/index.htm.
17
U.S.
GOV T
ACCOUNT ABILITY
OFFICE,
Justice Assets Fo1feiture Fund: Transparency
of
Balances
nd
Controls over Equitable Sharing Should be Improved
REPORT
GA0-12-736 (July 2012)
at
43,
available at
http://www.gao.gov/assets/600/592349.pdf.