DES MOINES — Amid concerns that local law enforcement was, in some cases, taking advantage of a program that allows them to seize the money and property of individuals suspected of a crime, Iowa lawmakers earlier this year approved legislation that put restrictions on the program.
But a recent order from the federal government threatens to undermine Iowa’s new law.
The program is called civil asset forfeiture, and it was used more than 800 times and led to the collection of $2.6 million in fiscal year 2016 in Iowa, according to figures from the state’s nonpartisan fiscal estimating agency.
Previously, Iowa law enforcement could seize an individual’s money or property merely on suspicion that the goods were related to the commission of a crime.
Earlier this year, however, Iowa lawmakers passed legislation that requires a criminal court conviction before law enforcement can use the civil court system to seize any individual’s property valued at less than $5,000. Former Gov. Terry Branstad signed the provision into law in May.
Iowa is far from alone in adding restrictions to civil asset forfeiture. Nearly half the country — 24 states — has passed some type of civil asset forfeiture reform since 2014, according to the Institute for Justice, a national law firm and research company that advocates for individual liberties.
But on July 19, U.S. Attorney General Jeff Sessions announced the Justice Department will resume using equitable sharing, a civil asset forfeiture program that allows local law enforcement to process forfeiture cases under federal law.
The Justice Department under Democratic President Barack Obama halted the use of equitable sharing; Republican President Donald Trump’s Justice Department has put the program back in play.
“President Trump has directed this Department of Justice to reduce crime in this country, and we will use every lawful tool that we have to do that. We will continue to encourage civil asset forfeiture whenever appropriate in order to hit organized crime in the wallet,” Sessions said in announcing his plan to law enforcement officials, according to a department transcript. “At the same time, we must protect the rights of the people we serve. Law-abiding people whose property is used without their knowledge or without their consent should not be punished because of crimes that others have committed.”
Circumventing state law
Equitable sharing, in essence, gives local law enforcement officials a way to circumvent state civil asset forfeiture laws that may be stronger than federal law.
Iowa’s new law is one such example. Neither Iowa’s new $5,000 threshold nor requirement of a criminal conviction are required under federal law.
“Essentially, what the policy will allow local police departments to do is circumvent their state laws — often more restrictive state laws — to have property forfeited at the federal level,” said Kanya Bennett of the American Civil Liberties Union. “I think it’s no coincidence that you see this (policy) reversal at a time when state legislatures are responding to the calls from constituents that civil forfeiture is to end.”
Wesley Hottot, an attorney who litigated a civil forfeiture case in Iowa for the Institute for Justice, said he has similar concerns.
“This is about state law enforcement using federal forfeiture laws to circumvent protections put into place by state legislators,” Hottot said.
In 2014, Hottot represented Carole Hinder, whose Spirit Lake restaurant was raided by authorities. The IRS seized more than $32,000 from Hinder’s business bank account. Hinder had made numerous deposits over the years that were thousands of dollars but came under a $10,000 threshold that triggers a federal reporting requirement, a practice called structuring that is sometimes employed by criminals to avoid detection.
Hinder, however, was never charged with a crime, even as her money was seized.
Eventually, federal prosecutors dropped the case, and Hinder’s money was returned.
“Carole’s case, I think, powerfully illustrates the core problem with civil forfeiture,” Hottot said. “The civil forfeiture process, because it doesn’t require proof of an underlying crime, lets prosecutors get away with highway robbery. They just assert that property’s connected to a crime, and that turns the presumption of innocence on its head and changes the incentive so that the property owner is under a lot of pressure just to give up and walk away.”
Hottot said forfeiture programs without at least some protections — such as those in the new Iowa law — put undue burden on individuals because of the cost to protest a seizure in court. He said the cost of pursuing a grievance in forfeiture cases often is more expensive than the money or value of the property the person is trying to retrieve.
Hinder’s case, which Hottot gave as an example, accumulated more than $70,000 in attorney time to retrieve her $32,000.
Upholding state law
In Iowa, county attorneys make the final decision as to whether to permit the use of civil asset forfeiture. Scott County Attorney Michael Walton said Sessions’ order does not change the way his office will operate; he will continue to pursue civil asset forfeiture only within the confines of state law.
Walton also is president-elect of the Iowa County Attorneys Association, but he made clear he was speaking only for himself and not other county attorneys.
“We would not use Attorney General Sessions’ order to circumvent state law,” Walton said. "We only pursue state forfeiture."
That is what Gov. Kim Reynolds expects will happen, according to her spokeswoman.
“County attorneys decide if seized assets suspected of being involved in criminal activity qualify as forfeitable civil assets,” Reynolds spokeswoman Brenna Smith said. "We expect all county attorneys and local law enforcement will abide by the Iowa code in making these decisions."
Hottot and called for federal civil asset forfeiture reform similar to what has been passed in the states. He said the return of the equitable sharing program shows why legislative reform is needed.
“It was only a policy before during the (Obama) Justice Department. And although it was a step in the right direction, we pointed out then it was only worth the paper it was written on and could be changed with the stroke of a pen. It’s now been changed with the stroke of Attorney General Sessions’ pen,” Hottot said. “That just illustrates the need for Congress to pass meaningful forfeiture reform now. ... This issue needs to be a priority.”
Sen. Chuck Grassley, Iowa’s senior senator and chairman of the Judiciary Committee, has had the issue of civil asset forfeiture on his radar for a few years. In 2016, he introduced legislation with Democratic Sen. Patrick Leahy, D-Vt., that would have added modest safeguards to federal civil asset forfeiture.
After Sessions reinstated equitable sharing, Grassley cautioned the program must be used “properly and in a way that only targets criminal activity.”
“Adoption and equitable sharing of seized assets between federal law enforcement and state or local agencies have created perverse incentives in the past that jeopardized the rights of law abiding citizens,” Grassley said in a statement issued after Sessions’ announcement. “Efforts to improve safeguards for the rights and property of law abiding Americans and increase scrutiny of civil asset forfeiture are important steps to curb any abuses or mistakes, but the program will also require stringent oversight to ensure it is accomplishing the intended outcome of helping victims, not creating new ones.”