Ohio House Passes Bill to Close Federal Asset Forfeiture Loophole

COLUMBUS, Ohio (Jun. 2, 2016) – Last week, the Ohio House passed a bill that would reform asset forfeiture laws to prohibit the state from taking property without a criminal conviction in the majority of cases. The legislation also takes on federal forfeiture programs by banning prosecutors from circumventing state laws by passing cases off to the feds.

Rep. Rob McColley (R-Napoleon) and Rep. Tom Brinkman Jr. (R-Cincinnati), along with 17 cosponsors, introduced HB347 last fall. The legislation would require a criminal conviction before proceeding with asset forfeiture in the majority of cases.

The bill also almost completely 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 House passed HB347 72-25. It will now move to the Senate for further consideration.

ADDRESSES FEDERAL PROGRAMS

According to the Institute of Justice, Ohio already has pretty good asset forfeiture laws compared to many states. It requires a higher standard than most and does not funnel forfeiture proceeds back to local law enforcement agencies. But police and prosecutors regularly circumvent these requirements using a loophole to simply transfer assets to the feds. Ohio state and local law enforcement agencies raked in more than $80 million this way between 2000 and 2008.

HB347 closes this loophole allowing 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 specifically prohibit this practice in most cases.

"A law enforcement agency or prosecuting authority 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."

In other words the legislation does not attempt to interfere with federally initiated forfeiture, but bans state and local police from passing off their cases to federal jurisdiction in most cases.

FEDERAL LOOPHOLE

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 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.

Late last December the U.S. Department of Justice suspended the Equitable Sharing Program due to budget cuts, but it was resumed just four months later.

California prosecutors and law enforcement agencies have regularly utilized this loophole. As previously reported by the Tenth Amendment Center, 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 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.

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

UP NEXT

As originally filed, HB347 would have completely eliminated civil asset forfeiture and required a conviction in all cases. The House Judiciary Committee amended the bill. It would now allow civil asset forfeiture “in cases against any person who is alleged to have received, retained, possessed, or disposed of proceeds, in an amount exceeding $25,000, knowing or having reasonable cause to believe that the proceeds were allegedly derived from the commission of a drug abuse offense, a theft offense, or the offense of trafficking in persons.”

All other cases would require a criminal conviction before prosecutors could proceed with forfeiture proceedings.

The bill now moves to the Senate, where it will first need to pass out of committee before the full Senate can consider it.