After a failed attempt last year, so-called asset forfeiture — the controversial nationwide practice used by cops to permanently seize property belonging to individuals who have run afoul of the law but have not been convicted — could soon be reformed in California after all, with a once-dead bill making a sudden return.

Laws and loopholes

Senate Bill 443, a popular piece of legislation that went down to defeat once before, “aims to close a federal loophole that allows state and local law enforcement officials to pocket the proceeds and assets seized from a defendant — even if that person is only suspected of a crime,” BuzzFeed News reported. “If passed, the bill would require that a defendant be convicted first before cash and property can be permanently seized.”

“In 2015, despite a near 80 percent approval rating according to some polls, the bill lost 24-41 when it came up for a vote on the Assembly floor. However, California’s legislative process allowed for it to be placed in the inactive file[.]”

The defeat underscored the paradoxes surrounding the practice of asset forfeiture in the Golden State. “California law prohibits local authorities from permanently seizing most property without a conviction, but there’s a loophole in the law — called ‘equitable sharing.’ Local police can seize your property, hand jurisdiction over the feds, and get rewarded with up to 80 percent of the goodies even if prosecutors fail to convict — or even charge — an offender,” Debra Saunders recalled at the San Francisco Chronicle.

Until very recently, following the SB443 setback, in-state civil liberties activists and advocates have struggled to get the traction they hoped for. “California has been a challenge,” as Reason noted. “Not only do state regulations allow law enforcement agencies to seize and keep money and property without actually convicting people; in addition, restrictions the state has put on police (like restricting how much they can keep for themselves) can be bypassed by participating in the federal asset forfeiture program. As California cities dealt with drops in revenue during the recession over the past decade, that’s exactly what governments did — participation in the federal program skyrocketed.”

Successful negotiation

But in May, state Sen. Holly Mitchell, D-Los Angeles, reactivated SB443, amending it for a vote. Faced with an end-of-summer deadline to put the legislation before her colleagues, Mitchell managed this month to strike a deal with key law enforcement groups, clearing a huge hurdle toward passage.

“Under changes to Mitchell’s bill introduced Thursday, any property seizure in California worth less than $40,000 would now require a criminal conviction before police could take permanent action,” according to the Los Angeles Times. “Seizures higher than that amount would still allow for a lower burden of proof, such as the standard used in civil cases. The $40,000 threshold is an attempt to balance advocates’ desire that those in poverty don’t lose their property unless they’re convicted of wrongdoing and law enforcement’s interest in preserving its ability to go after large criminal enterprises, Mitchell said.”

A stubborn practice

Despite the deal, however, high-profile asset forfeiture cases have cropped up in California throughout the summer. James Slatic, owner of licensed medical cannabis extraction company Med-West Distributors, was raided for the second time this June by a narcotics task force. In January, officers seized “more than 30,000 cartridges of cannabis oil and a couple of pounds of concentrate,” along with “$1.4 million in cash, product and money from various bank accounts” belonging to Slatic, according to Inc. magazine. And in June, “San Diego law enforcement used federal asset forfeiture laws to freeze and seize the company’s cash and the money in Slatic’s personal bank account, the bank account of his wife (who is a federal employee at Veterans Affairs), and his kids’ college savings accounts. The San Diego Sheriff’s Office and San Diego County District Attorney’s Office declined to explain why they seized Med-West’s and the Slatic family’s money, but neither has charged Slatic with a crime.”

In another notable — if less sympathetic — case this month, a judge ruled that the U.S. government “can seize money from life insurance policies taken out by a shooter in the San Bernardino, California, terrorist attack,” the Associated Press reported.

The high-profile coalition of supporters — which spans the partisan divide with powerful advocacy groups and influential members of both parties — is aiming for a vote in the Assembly next week to block law enforcement from circumventing strict state law by partnering with the federal government in a program called “equitable sharing.”

On the right, Republican consultant Mike Madrid and Shawn Steel, a former chairman of the California Republican Party, are urging Republican support while California Democratic Party Chairman John Burton is working with Democrats. 

It’s uncommon for Madrid, who specializes in Latino issues, to weigh in so heavily on policy issues inside the Capitol. But, as he told CalWatchdog, Senate Bill 443 is a “no-brainer” because it upholds the core Republican values of “not preying on the poor” and the right to due process, and, politically, it could make inroads in minority communities that have been disproportionately affected by the current civil asset forfeiture system.

“If you can’t do this, you don’t have a shot at expanding the base,” Madrid said of Republican lawmakers.

Madrid said Republican lawmakers who opposed the measure lacked a “political backbone” because they are “afraid of offending law enforcement,” which is a historically strong ally on the right. 

Madrid added that Assembly Republican Leader Chad Mayes has a “unique opportunity” to help the poor, which has been a central theme of the Yucca Valley Republican’s agenda since becoming leader in January.

A Mayes spokesperson on Monday told CalWatchdog he had not announced how he would proceed. Mayes voted against the measure in September.  

Those affected

A report issued this month by the ACLU of California showed 85 percent of proceeds from equitable sharing in California go to law enforcement agencies in communities with a majority of people of color.

The study also reported that the counties with higher per capita seizure rates have below average median household incomes and that the number of California law enforcement agencies participating in the equitable sharing program increased from 200 to 232 over the last two years.

Who cares? Isn’t it just drug dealers?

The program was designed to seize the assets of large criminal enterprises, toppling them in the process — which the law would still allow if SB443 were to pass. But as budgets were cut, law enforcement saw it as a viable revenue stream, and the claims of abuse started piling up.

One notable example was the attempted seizure of a $1.5 million building in Anaheim because the landlord rented space to a medical marijuana dispensary (which was legal in CA).

Another case involved Bob Alexander, who had $10,788 in cash that he was about to use to purchase a car for his daughter before the money was seized in Mendocino County because he had medical marijuana on him (along with the doctor’s recommendation for the marijuana, which was shown to police).

Alexander did get his money back eight months later. No charges were ever filed.

Current law

Current California law already bars the practice of seizing property without a conviction for assets valued at under $25,000, and requires “clear and convincing evidence” of a connection to a crime for assets exceeding $25,000 in value.

Law enforcement can get around that if the seizure is done in coordination with federal law enforcement and 20 percent of the proceeds are kicked up to the federal government. Yet there’s often not even an arrest because federal law doesn’t require it. Instead, there only needs to be suspicion that the property, not necessarily the person, is attached to some criminal activity.

People often get their property back after considerable time and frustration — but sometimes they don’t. So the bill, sponsored by Sen. Holly Mitchell, D-Los Angeles, and Asm. David Hadley, R-Torrance, would close that loophole and require a conviction for seizure of assets of any amount. Proponents like Mitchell and others say the practice often violates the Fourth and Fifth Amendments.

Support builds

It’s not just Republicans whose support is being whipped. A large share of Assembly Democrats either voted against the measure or just didn’t vote, after nearly unanimous support in the Senate.

Burton — who as a member of the Legislature decades ago and authored the bill that established much of the state’s relatively strict civil asset forfeiture laws—- has been reaching out to Democrats.

“I am especially disheartened and disappointed to learn that the state reforms that I and your predecessors worked so hard to put in place have been cast aside by California law enforcement agencies in favor of less protective federal laws,” Burton wrote last week in a letter to Speaker Anthony Rendon, D-Paramount. Rendon voted in favor of the bill in September.

However, Republicans are in a tighter squeeze than Democrats, wedged between law enforcement and limited government intrusion. But the right-leaning Howard Jarvis Taxpayers Association gave lawmakers political cover on Monday when it issued a letter of support, pointing to the sharp increase in seizures from the federally-supported equitable sharing program.

“(T)here is also no denying the fact that law enforcement is largely to blame for the situation that SB443 aims to fix,” wrote David Wolfe, legislative director for HJTA. “Rather than use the federal law selectively, they have overplayed their hand.”

Law enforcement’s position

Opponents of the bill argue that law enforcement doesn’t police for profit, and asset seizure is a vital tool used to cripple criminal organizations, partially by funding costly investigations. The California District Attorneys Association claimed the bill would “deny every law enforcement agency in California direct receipt of any forfeited assets.”

“California’s asset forfeiture law will be changed for the worse, and it will cripple the ability of law enforcement to forfeit assets from drug dealers when arrest and incarceration is an incomplete strategy for combating drug trafficking,” Sean Hoffman, CDAA’s director of legislation argued in a letter against SB443.

“Narcotics investigations are costly, and the California asset forfeiture law’s dedication of forfeiture proceeds to the seizing law enforcement agencies speaks to the serious resource needs involved when drug traffickers and their ill-gotten gains are pursued,” Hoffman added.

A CDAA spokesperson on Tuesday said the group was still opposed to the measure, but did not lobby against “inactive” bills, which SB443 is at the moment. 

Golden State cops teamed with prosecutors to sink the legislation once it became clear that the Senate vote had made it a viable threat to current forfeiture law, which permits law enforcement to keep confiscated property worth under $25,000 even if the former owner is not convicted of a crime. Through these so-called forfeitures, police departments across the country have been able to swell or cushion their budgets — sometimes substantially.

A tide turned

But in spite of protections that have made California’s asset forfeiture rules more stringent than others, lawmakers in both parties zeroed in on the practice as excessive and sometimes unjustifiable. State Sen. Holly Mitchell, D-Los Angeles, and Assemblyman David Hadley, R-Torrance, advanced legislation that would have returned property valued at any amount without a conviction. But after the state Senate version, SB443, won in a 38-1 vote, bipartisan support for the bill began to dry up, despite efforts to scale it back in committee and dispel budgeting worries. “The bill was opposed by Republicans and some Democrats, and failed on a 24-41 vote in the Assembly. It could be revived on the floor in the future,” the Los Angeles Times noted, although this year, the deadline for passing new legislation itself has passed.

Adding to the uphill climb, the federal government did its own part to pressure the state to abandon reform. “Documents obtained by the Institute for Justice show that the California District Attorneys Association has been circulating emails from the Justice and Treasury Departments confirming that the current reforms proposed to California’s civil asset forfeiture laws would make the state ineligible to receive millions of dollars through the federal government’s Equitable Sharing Program,” according to the Daily Signal, a news site run by The Heritage Foundation.

Through that program, which gives a cut of seizures to agencies at the state and local level, California law enforcement netted nearly $90 million last year, the Daily Signal noted.

Other states advancing asset forfeiture reforms have also faced similar pressure to that inflicted on California. But they have met with mixed results. “The Departments of Justice and Treasury threatened New Mexico with ending it equitable sharing program if reforms were passed. In response, New Mexico not only passed asset forfeiture reform, but abolished it entirely,” observed Americans for Tax Reform. “In May of this year, Montana passed asset forfeiture reform that requires a criminal conviction prior to permanent forfeiture, as well as several other requirements that beef up protections for property owners. Other states making strides in asset forfeiture reform are Minnesota, North Carolina and Michigan.”

Looking ahead

So far, advocates for California forfeiture reform have not talked up the prospect of reintroducing a bill for next year’s legislative session. According to Reason, however, another option remained — a ballot initiative building on past successes with reducing some criminal penalties, paring down the so-called “three strikes” law, and encouraging treatment instead of jail time for lesser drug offenses. “But that’s a plan that would have some timing issues,” Reason noted, with organizers unlikely to get a measure before voters until the off-year election in 2018. Nevertheless, “if the polling is accurate, it’s certainly an option if they aren’t able to push legislation through by then.” According to Americans for Tax Reform, California respondents expressed hostility to asset forfeitures “by a massive 76 percent to 14 percent.” Despite the reform bill’s setback in Sacramento, little seemed likely to shift that imbalance in the months and years to come.

Amid growing national concern over the practice of so-called civil asset forfeiture, bipartisan support has swelled in California to reform the practice, with a new bill poised to add Assembly to Senate approval.

An emerging consensus

Asset forfeiture, wherein law enforcement retains property or cash seized in the course of an arrest, has come under broad criticism from the political Left and Right.

Predictably, libertarians have trained their political and legal fire on the practice. In an interview with the Wall Street Journal, Institute for Justice attorney Robert Everett Johnson warned that asset forfeiture had short-circuited due process. “People around the country are having their money taken, based on the barest suspicion that they might be involved in some sort of drug offense without ever bringing the case before a jury or convicting them of a crime,” he said. The California ACLU has recently thrown its weight behind legislation reforming asset forfeiture.

But liberals have also attacked its role in civil rights abuses, while conservatives have bridled at its dismissive approach toward property rights — and its increasing use as a source of government funding. At the national level, conservative justice reform groups, such as Right on Crime, have singled out asset forfeiture as a rule of law problem. “Our Constitution is meant to be a shield against this sort of arbitrary and capricious over-extension of government power, but to this point, most states — and the federal government — have very lackluster protections in place,” two Right on Crime supporters editorialized in the Washington Examiner. West Coast conservatives raised the alarm when, in recent months, several California cities were accused of cashing on through asset forfeiture — “at a time of dwindling police budgets, potentially creating pressure on cops to make more seizures,” as the Los Angeles Times reported this spring.

Rolling back excesses

The shift in the political winds has given a boost to SB443, introduced this year by state Sen. Holly Mitchell, D-Los Angeles. In addition to prohibiting transfers of seized property to the federal government, the bill would wipe out any prior agreements that would necessitate such transfers, as the Tenth Amendment Center observed. 

What’s more, court protections for state residents would be beefed up. “Californians would need to be convicted of a crime before they could lose their property,” the Orange County Register noted; “the bill would institute new notice requirements, establish court-appointed counsel for indigent owners and allow those who ‘substantially prevail’ in a civil forfeiture case to recover attorney’s fees.”

In an effort to minimize abuses, state law already reduced the amount, relative to federal rules, that law enforcement could keep from any seizures — 65 percent, rather than the 80 percent allowed at the federal level. Further protections were also put in place. “California requires a conviction to justify keeping seized assets of up to $25,000,” noted the Times. “For larger amounts of money, police must show by ‘clear and convincing evidence’ that the property was connected to drug sales or manufacturing – a higher standard than the ‘probable cause’ required under federal law.”

But the curbs on asset forfeiture imposed by SB443 could make a powerful impact on the cut of forfeitures available to law enforcement, also known as equitable sharing. “Since 2008, law enforcement agencies in California have generated and spent over $380 million in equitable sharing funds – the highest in the nation,” according to the Register. “Almost $60 million went to salaries and overtime.”

Catching a wave

While California has often been seen as a bellwether for state-level legislation, passage of SB443 would follow a strengthening trend toward reassessing the validity of asset forfeiture rules. Federal officials have already begun chipping away at the more controversial elements of the practice. “In January,” as the Journal reported, “the Justice Department said it was curtailing a program that had allowed state law-enforcement agencies to pursue civil forfeitures under federal law and then share in a large portion of the proceeds. The department has also launched a review of the federal asset-forfeiture program.”