Nebraska Law Ends “Policing for Profit” Via Asset Forfeiture

By Mike Maharrey

Today, civil asset forfeiture officially ends in Nebraska as reforms to asset forfeiture laws passed in the spring go into effect. Under the new law, the state can no longer take property without a criminal conviction. The legislation also takes on federal forfeiture programs by banning prosecutors from circumventing state laws by passing cases off to the feds in most situations.

Sen. Tommy Garrett (R-Bellevue) introduced Legislature Bill 1106 (LB1106) in January. The new law reforms Nebraska law by requiring a criminal conviction before prosecutors can proceed with asset forfeiture. Under the old statute, the state could seize assets even if a person was never found guilty of a crime, or even arrested.

The unicameral legislature passed  LB1106 by a 38-8 vote.

“Civil forfeiture is one of the most serious assaults on due process and private property rights in America today. By passing LB 1106, lawmakers will ensure that only convicted criminals—and not innocent Nebraskans—lose their property to forfeiture,” Institute for Justice (IJ) Legislative Counsel Lee McGrath said.

ADDRESSES FEDERAL PROGRAMS

LB1106 also closes a loophole that allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government under its Equitable Sharing forfeiture program. The following language shuts the loophole in most cases:

No law enforcement agency or prosecuting authority of this state or its political subdivisions shall transfer or refer any money or property to a federal law enforcement authority or other federal agency by any means unless

(1) The money or property seized exceeds twenty-five thousand dollars in currency or value;

(2)  The  money  or  property  is  physically  seized  by  a  federal  agent who is employed by the federal government; or

(3)  The  person  from  whom  the  money  or  property  was  seized  is  the subject  of  a  federal  prosecution  or  the  facts  and  circumstances surrounding  the  money  or  property  seized  are  the  subject  of  a  federal prosecution.

The inclusion of provisions barring state and local law enforcement agencies from passing off cases to the feds is particularly important. In several states with strict asset forfeiture laws, prosecutors have done just that.

By starting with a state or local case, then transferring it to federal jurisdiction, law enforcement can bypass the need for a conviction under state law and collect up to 80 percent of the proceeds from forfeited assets via the federal Equitable Sharing Program. Nick Sibilla of IJ discussed this in his report at Forbes:

Although Nebraska’s reform is not as sweeping as New Mexico’s, it will still go far in protecting property from unjust takings. Data analysis by the Institute for Justice found that in 2013, out of all properties seized under equitable sharing in Nebraska, 78 percent were under $25,000. In fact, half of all seized assets were valued at under $6,035.

California prosecutors and law enforcement agencies have regularly utilized this loophole to get around strict state-level restrictions on forfeiture. According to a report by the Institute for Justice, Policing for Profit, between 2000 and 2013, the U.S. DOJ paid local and state agencies in Nebraska more than $48.3 million in equitable-sharing proceeds. “In 2013, out of all properties seized for equitable sharing in Nebraska, 78 percent were valued at under $25,000.”

In other words, under the new law, asset forfeiture without conviction will be ended for more than 78% of cases in the state.

As the Tenth Amendment Center previously reported the federal government has inserted itself into the California’s asset forfeiture debate. The feds clearly want the policy to continue.

Why?

We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its unconstitutional “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.

Asset forfeiture laws incentivize “policing for profit” on one hand, and dubious state-federal partnerships on the other.

NEXT UP

With a strong foundation, further action can be taken in the next legislative session. As Sibilla noted, in 1984 a constitutional amendment was approved by voters that allocates fifty percent of drug forfeiture funds to law enforcement, with the other half directed to schools. Even with the new limits of LB1106, a new constitutional amendment should be passed to repeal the previous one. Doing so would remove the incentive to “police for profit.”

Additionally, fully closing the federal loophole can be taken up in new legislation next year. “Police shouldn’t be allowed to circumvent the law just because the property value is high,” said Michael Boldin of the Tenth Amendment Center. “We applaud these important first steps and recognize that it will have a significant impact going forward. But that loophole must be fully closed as soon as possible.”