New Iowa Law Reforms Asset Forfeiture, but Leaves Federal Loophole Wide Open

DES MOINES, Iowa (May 23, 2017) – Recently, Iowa Gov. Terry Branstad signed a bill into law that takes a step toward reforming the state’s asset forfeiture laws, but fails to close a loophole that allows police to circumvent state laws by passing cases off to the feds.

As introduced by the Senate Judiciary committee Senate Bill 446 (SF446) would have reformed Iowa law by requiring a criminal conviction before prosecutors could proceed with asset forfeiture in cases less involving property or cash valued at less than the “minimum civil forfeiture amount” of $15,000. An amendment in the Senate lowered the threshold to $5,000.

Under current law, the state can seize assets even if a person is never found guilty of a crime, or even charged.

SF446 also raises the burden of proof the state must prove for forfeiture from a “preponderance of the evidence” to “clear and convincing evidence.”

The new law takes a step forward in reforming Iowa asset forfeiture law, but activists say it doesn’t go far enough.

“There is definitely more work to be done to improve this law,” ACLU of Iowa Executive Director Mark Stringer told the Cedar Rapids Gazette. “We believe that a conviction should always be required before seizing assets.”

More significantly, the Senate stripped out provisions in the bill that would have closed a loophole that allows police to avoid more restrictive state forfeiture laws by passing off cases to the feds. Removing this provision rendered even the modest reforms in the bill almost meaningless.

FEDERAL PROGRAMS

As introduced, SF446 closed 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 proposed law would have explicitly prohibited this practice in most cases.

"A law enforcement agency or prosecuting authority in this state shall not directly or indirectly transfer or refer any property seized by the agency or authority to any federal law enforcement authority or other federal agency for purposes of forfeiture under federal law unless the value of the seized property exceeds one hundred thousand dollars, excluding the potential value of the sale of contraband, or the property is being transferred or referred for federal criminal forfeiture proceedings."

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 placing the case under 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.

For example, California previously had some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass the state restrictions by partnering with a federal asset forfeiture program known as “equitable sharing.” Under these arrangements, state officials would simply hand over forfeiture prosecutions to the federal government and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice. According to a report by the Institute for Justice, Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender. During the 2016 legislative session, the state closed the loophole.

As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. 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 deplorable “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.

WHAT’S NEXT

The new law will go into effect July 1, 2017.