Intel Intelligencer: Debating Asset Forfeiture as a Funding Source for Intel

Posted on 25 April 2011 by


This week’s Intel Intelligencer points at some documents, works, articles and government guidelines around the topic of asset forfeiture. It is a very long (nearly 3000 word) article, so I’ve broken it into two pieces; this, Part I, is 1500 words long and sets forth the arguments that it may well be a dangerous thing to fund an intel center with seized assets. Part II looks more closely at some of these issues.

When we launched our podcasts and interviews with Patrick Ryder of the Nassau County Police Department’s Asset Forfeiture and Intelligence Unit (listen to Part I and Part II and read our initial report on the facility), we knew it would spark conversations. Dave and I have had a range of excellent discussions with folks in law enforcement about the general setup over at the NCPD, as well as the funding method used.

Essentially, the NCPD uses seized assets to establish and expand its Real Time Intelligence Center:

The project began with HIDTA funding of about $100,000 per year…to which was added about $500,000… Most of the rest of the expansion was funded with about $1 million in asset forfeitures from financial crimes or money laundering. Asset forfeiture continues to support the intelligence operation, which in turn lowers crime – NCPD reckons major crimes were down 11% last year within its jurisdiction, and in the first quarter of 2011 major crime is down 17%. The $1m was spent over the last two years on technology, training, awareness programs. One hundred percent of overtime pay, training and equipment purchases have been paid for by asset forfeiture.

This caught the attention of Roland Dobbins, an information security expert at Arbor Networks – one of the firms we’ve talked about and will continue to discuss as we get more into discussions of specific technologies, and certainly one of the firms I will discuss in my presentation at the IACA Spring Symposium in Vancouver this coming Wednesday.

On the Daily Dave, a mailing list for security researchers, Roland wrote,

Doing anything with seized funds other than handing them over to the general treasury completely subverts the key principle of subsidiarity, violates the due process rights of suspects, and encourages law enforcement to ‘find’
offenses/violations in order to fund whatever they decide they want to do/buy, any given week.

It completely subverts the legislative and judicial processes and is an inducement to corruption. This is a perfect example of iatrogenic ‘security’ – i.e., how some particular action at one level appears to be a win, but at the macro level, actually has negative, extremely undesirable effects on the system as a whole. Only in this case, the ‘system as a whole’ = Nassau County.

That’s a great comment: it’s highly specific and raises an important point using a hundred-dollar word in an inspired context that was a first for me (iatrogenic), it challenges the basis of our praise but in a constructive, if argumentative manner that sets the stage for a good conversation. Later, another reader wrote in that,

The Economist had a good article on this subject last year [in which it was stated that] “Total federal seizures have exploded from $400m in 2001 to $1.3 billion in 2008. State data are patchier, but the trend appears to be sharply upward.” I, too, find it odd that Selby would praise this corruption rather than criticize it.”

Hang on a tick. We’ve moved from potential for abuse to me waving the flag for corruption? That’s not what this reader meant (we had a good telephone conversation about it) but he was seeking some clarity on my position.

So I wrote back:

When I hear that I am in support of corruption I must answer. I’ll set forth my understanding about how asset forfeiture works, give links to scholarly or government publications showing how I got there, then state my opinion. Then I’ll respond to Roland’s comment. Lest this devolve into more of a food fight, I’ll say that we should probably find another channel for this discussion, but if others want to do it here, giddyup.

A reason someone would find it “odd that [I] would praise … corruption” is because I would hope [all of] you know [that] I don’t support corruption or crime of any kind.

I’ll start where the last reader started: there are concerns about a lack of oversight of asset forfeiture in general, the article he referred to worried that seizures were up, and that the standard of proof in civil asset forfeiture proceedings is too low – a preponderance of the evidence, not the “beyond a reasonable doubt” of a criminal proceeding. I’m no expert on this (and I am not a lawyer).

It is my understanding that this standard is true, as the proceedings are civil. My article and podcast were discussing the funding of a crime intelligence center with siezed assets, and I agree that the ends do not justify the means if the means are corrupt or wrong.

For context, there are three types of forfeiture in the US: Administrative, civil and criminal. Civil forfeiture is a growing avenue, but the majority of forfeiture cases are administrative – cases in which the forfeiture is legally uncontested.

For specifics about abuses of the current system, and a read far more substantive and compelling than the Economist article, I encourage everyone to read Eric Moores’ piece, “Reforming the Civil Asset Forfeiture Reform Act” in the Arizona Law Review, which will curl the toes of any Libertarian.

To see the total amounts involved and a description of the program, the Department of Justice’s annual report (2010) is available here.

On abuses of the asset forfeiture system: I am not so naive that I believe that there are not abuses of the system. I am absolutely naive enough to believe that in the United States, there are sufficient due process safeguards in place which ultimately provide protection to citizens for capricious and unfair actions on the part of government.

There are abuses of every system known to man. This does not mean that systems should be dismantled, but that the system should be made to work generally as well as it possibly can through public participation in the process of government.

Also, it is incumbent upon public servants to use the system in every way that it can legally do so to carry out their duty. I believe that law enforcement has the responsibility to do what it can legally do to fight crime and criminals.

For the Nassau County Police to appropriate in a corrupt or otherwise illegal manner the property of innocent people would require that it was itself corrupt, and it would further require conspiracy and collusion amongst several branches of local, county, state and federal government, and agencies in each of those branches. This is of course possible. I firmly believe that this is not the case.

I believe that the assets being targeted in the operations described in my article and podcast with Pat Ryder refer to those of criminals who would do society great harm, and that the motivation of the NCPD seeking “profit” is to better serve the community.

Further, the “profit” he describes is being legally seized with state and federal oversight, and spent (with similar oversight and accountability) on the tools of societal defense against crime and violence: an intelligence center’s equipment, technology, training and overtime; bike patrol equipment (for neighborhood policing, an important national program) and tactical vehicles and equipment to protect first responders.

I trust – truly trust – that the system in the US is sufficient to ultimately protect all of us against abuses by government, and strongly urge everyone to become involved in public service to challenge the un-just when they see it. I live this philosophy personally, and I support financially organizations that seek to remedy injustice.

In its guidelines for asset forfeiture, the Department of Justice sets forth its goals for criminal asset forfeiture:

  • Seize and forfeit the guns, airplanes, and cars with concealed
    compartments, that are used for drug smuggling.
  • Take the computers, printers, and other electronic devices used in child
    pornography, counterfeiting, and identification fraud cases.
  • Shut down the “crack house” where drugs are distributed to children on their way to school.
  • Confiscate the farm used to grow marijuana.
  • Close down the business used to commit insurance fraud, telemarketing
    fraud, or to run a Ponzi scheme

Finally, to Roland’s well-stated comment about asset forfeiture in general, I’ll say that I’m not sure how much better off we are if the federal government’s general fund gets all the illegal proceeds and assets: the argument about what to do with seized assets is, I think, more complex than whether local, county, state or the federal government get the stuff. Federal government spending priorities have been much in the news recently, and I think that moving the money to the general fund simply punts the political football into different arenas. I appreciated your comment very much.

In Part II, Roland and I trade notes in a public forum, beginning with his radiantly valid point about an apparent conflict of interest. We then bring Patrick Ryder into the discussion for his views on this off-list conversation.