Floor Statement By Sen. Patrick Leahy On Senate Passage of the Civil Asset Forfeiture Reform Act of 2000

March 27, 2000

Mr. Leahy: Mr. President, at long last, after years of effort and several weeks of intensive, tedious and seemingly endless negotiations, we have reached agreement on civil asset forfeiture reform legislation. This is a significant improvement over the current system and should go a long way toward stemming the abuses that have so offended Americans across the country and the political spectrum. It is not often that we see the U.S. Chamber of Commerce, ACLU, NRA, National Association of Criminal Defense Lawyers, American Bankers Association, the Institute of Justice, Americans for Tax Reform, and the American Bar Association joining together on the same side of a legislative effort. Working with Chairman Hatch, Chairman Hyde, Mr. Conyers, Senator Sessions and Senator Schumer, we have crafted a good bill, a balanced bill and a reform package that should move forward as consensus legislation and be enacted without further delay this year. I want to thank all who have worked with us in this process. In particular, I want to thank Janet Reno, our Attorney General, for working with us, meeting with us and lending her support to this effort and joining our coalition by agreeing to the consensus civil asset forfeiture reform legislation that the Senate is passing today. Asset forfeiture is a powerful crime-fighting tool. It has been a particularly potent weapon in the war on drugs, allowing the government to take the cars and boats and stash houses amassed by drug dealers and put them to honest use. Last year alone, the government was able to seize nearly half a billion dollars worth of assets, cutting a big chunk out of criminals' profit stream and returning it to the law-abiding community.

Unfortunately, our nation's asset forfeiture is not fail-safe; it can be and has been abused. In hearings on this issue, the Judiciary Committee has heard examples of what happens when prosecutorial zeal skirts the boundaries of due process, leading to the taking of private property regardless of whether the owner is innocent of, or even cognizant of, the property's use in an illegal act, or whether the seizure is entirely out of proportion to the criminal conduct alleged. I am well aware from incidents in Vermont about how aggressive use by Federal and State law enforcement official of civil asset forfeiture laws can appear unfair and excessive, and thereby fuel public distrust of the government in general and law enforcement in particular. For example, in 1989, federal prosecutors seized a Vermont homestead that a family had built and lived in for over a decade. The husband had pleaded guilty in State court to growing six marijuana plants, without his wife's knowledge, and was sentenced to 50 hours of community service, which he fulfilled by building bookshelves for the local public library.

Yet, one year after his arrest, Vermont State police brought his arrest to the attention of the federal authorities and Federal marshals seized the family's home and 49 surrounding acres. Hundreds of Vermonters rallied to the family's defense, including former prosecutors, until the case was settled with no seizure of the property.

In another civil asset forfeiture case, federal prosecutors again seized the home and 10 acres of a Vermont woman in Richmond, Vermont, after two hidden patches of marijuana plants were discovered on her property. Criminal charges against the woman were dismissed when she established she was unaware that her daughter and daughter's boyfriend were cultivating the plants. Three years after the seizure, in 1990, a federal judge ordered the government to return the property to the woman, but by that time it had been destroyed by fire.

By contrast to the obligation under Vermont law that law enforcement agencies must "ensure that the property is properly maintained," 18 V.S.A. § 4246, the federal authorities who made the seizure of this property had no such obligation and did not take good care of the property.

In yet another civil asset forfeiture case, federal prosecutors in 1990, seized the home and 10.7 acres of a family in Craftsbury Common, Vermont, after the homeowners were convicted in State court of cultivating marijuana and given suspended sentences three years earlier in 1987. Given the fact that in each of these cases, the underlying criminal charges were prosecuted by the State but the forfeiture action was taken federally, one might ask why these related proceedings were divided between the State and Federal authorities? The answer is simple: Vermont law does not allow the forfeiture of real property "which is occupied as the primary residence of a person involved in the violation and a member or members of that person's family." 18 V.S.A. § 4241(a)(5).

Moreover, under Vermont law, state law enforcement authorities carry a heavier burden "of proving all material facts by clear and convincing evidence." 18 V.S.A. § 4244(c). By contrast, federal forfeiture procedures provide more latitude on the property subject to seizure and more lenient requirements for federal law enforcement authorities to meet.

While federal authorities in Vermont have in recent years avoided such egregious asset forfeiture abuses, that is not the situation in other jurisdictions, prompting increasing and exceedingly sharp criticism from scholars and commentators of the federal asset forfeiture system, which in general requires far less from the government than any State forfeiture law.

Federal judges have also added their voices to the growing chorus of concern. In 1992, the Second Circuit Court of Appeals stated: "We continue to be enormously troubled by the government's increasing and virtually unchecked use of the civil forfeiture statutes and the disregard for due process that is buried in those statutes." Four years later, the Eighth Circuit rebuked the government for capitalizing on the claimants' confusion to forfeit over $70,000 of their currency, and expressed alarm that:

"[T]he war on drugs has brought us to the point where the government may seize ... a citizen's property without any initial showing of cause, and put the onus on the citizen to perfectly navigate the bureaucratic labyrinth in order to liberate what is presumptively his or hers in the first place. ... Should the citizen prove inept, the government may keep the property, without ever having to justify or explain its actions."

Similarly, the Seventh Circuit recently expressed its belief that "the government's conduct in forfeiture cases leaves much to be desired," and ordered the return of over $500,000 in currency that had been improperly seized from a Chicago pizzeria.

Under current law, the property owner -- not the government -- bears the burden of proof. All the government must do is make an initial showing of probable cause that the property is "guilty" and subject to forfeiture. The property owner must then prove a negative -- that the property was not involved in any wrongdoing. It is time to bring this law in line with our modern principles of due process and fair play, and reform forfeiture procedures to ensure that innocent property owners are adequately protected.

The Hyde-Conyers civil asset forfeiture reform bill, H.R. 1658, passed the House by an overwhelming bipartisan majority (375-48) last June. After lengthy negotiations with the Department of Justice, Chairman Hatch and I introduced a Senate civil asset forfeiture reform bill, S.1931. Our bill addressed every major concern that the Department had raised in our hearings and in the Statement of Administration Policy regarding the Hyde-Conyers bill, and struck a fair compromise on those issues. For example, the Hyde-Conyers bill put the burden of proof on the Government by clear and convincing evidence. We put the burden of proof on the Government by a preponderance of the evidence. The preponderance standard is used in virtually all other civil cases, and we believe it is sufficient to protect the interests of property owners. The Hyde-Conyers bill authorized courts to appoint counsel for any indigent person who asserted an interest in seized property. Although I am sympathetic to that proposal -- justice should not be only for the wealthy -- the Administration strongly opposed it. We provided for appointment of counsel only in the rare case where the property subject to forfeiture was the claimant's primary residence. In other cases, a claimant could recoup attorney fees only if she substantially prevailed in challenging the forfeiture. We are grateful for the support of so many members of the Committee and others over the last year. The Hatch-Leahy bill was endorsed by the last six Attorneys General of the United States from both parties, William Barr, Richard Thornburgh, Edwin Meese, Benjamin Civiletti, Griffin Bell, and Nicholas Katzenbach, and a wide range of organizations. Although I knew that we had met the Department more than half way in our bill, we did not stop there. We have met with and worked with Senators Sessions and Schumer, who had introduced a different type of bill, to see whether we might find common ground. After weeks of intensive efforts, we succeeded in coming together. For our part, Chairman Hatch and I accepted more than 30 substantive changes to the provisions in the Hatch-Leahy bill, plus about a dozen new sections to the bill that give law enforcement new, but measured, authority. In essence we combined the Hatch-Leahy Civil Asset Forfeiture Reform Act, S.1931, with suggestions from the Sessions-Schumer bill to form a civil asset forfeiture legislative package that we can all agree to support.

Among the important reforms made by the Hatch-Leahy-Sessions-Schumer substitute amendment to H.R. 1658, which the Senate passes today, are the following:

Burden of proof:  The substitute amendment puts the burden of proof on the government by a preponderance of the evidence.

Cost bond:  Another coe reform of the substitute amendment is the elimination of the so-called "cost bond." Under current law, a property owner who seeks to recover his property after it has been seized by the government must pay for the privilege by posting a bond with the court. No other federal statute requires a cost bond, and no State requires a cost bond in civil forfeiture cases.

The government has defended the cost bond, not as a device for ensuring that its court costs are covered, but as a way of deterring frivolous claims. Of course, we are all in favor of deterring frivolous claims, but there are ways to deter frivolous claims without offending the fundamental principle of equal and open access to the courts, a bedrock of our American system of justice.

The substitute amendment provides that a person who challenges a forfeiture must file his claim on oath, under penalty of perjury. It also provides for imposition of a civil fine, in cases where the claimant's assertion of an interest in the property was frivolous. In addition, claimants will continue to bear the substantial costs of litigating their claims in court, and they and their attorneys will remain subject to the general sanctions for bad faith in instituting or conducting litigation. Frivolous prisoner claimants will be barred from repeated filings on proper court findings. The added burden of the "cost bond" serves no legitimate purpose.

Legal assistance and attorney fees:  The substitute amendment permits courts to authorize counsel to represent an indigent claimant only if the claimant is already represented by a court-appointed attorney in connection with a related federal criminal case. This is both fair and efficient, and eliminates any appearance that the government chose to pursue the forfeiture in a civil proceeding rather than as part of the criminal case in order to deprive the claimant of his right to counsel.

Beyond this, the substitute amendment ensures that when the government seeks to forfeit an indigent person's primary residence, that person will be afforded representation by the Legal Services Corporation. When a forfeiture action can result in a claimant's eviction and homelessness, there is more at stake than just a property interest, and it is fair and just that the claimant be provided with an attorney if he cannot otherwise afford one. The Legal Services Corporation will be paid by the government for providing representation in these cases.

For claimants who are not provided with counsel, the substitute allows for the recovery of reasonable attorney fees and costs if they substantially prevail on their claim. The bill also makes the government liable for post-judgment interest on any money judgment, and imputed interest in certain cases involving currency or negotiable instruments.

Filing deadlines:  Under current law, a property owner has only 20 days from the date of first publication of the notice of seizure to file a claim challenging an administrative forfeiture, and only 10 days to file a claim challenging a judicial forfeiture. It is therefore unlikely that anyone who misses the first of three published notices will be able to file a timely claim. The substitute extends the property owner's time to file a claim following the commencement of an administrative or judicial forfeiture action to 30 days. The bill also codifies current Department of Justice policy with respect to the time period for sending notice of seizure, and establishes a 90-day period for filing a complaint.

Release of property for hardship:  The substitute will allow a property owner to hold on to his property pending the final disposition of the case, if he can show that continued possession by the government will cause the owner substantial hardship, such as preventing him from working, and that this hardship outweighs the risk that the property will be destroyed or concealed if returned to the owner during the pendency of the case. Unlike H.R. 1658, the substitute adopts the primary safeguards that the Justice Department wanted added to the provision -- that property owners must have sufficient ties to the community to provide assurance that the property will not disappear, and that certain property, such as currency and property particularly outfitted for use in illegal activities, shall not be returned. government cannot obtain a grand jury subpoena to obtain such documents.

Criminal proceeds:  The substitute also brings clarity and fairness to the confused body of case law concerning the definition of criminal proceeds. Specifically, in cases involving lawful goods or lawful services that are sold or provided in an illegal manner, the term "proceeds" is defined to mean the amount of money acquired through the illegal transactions resulting in the forfeiture, less the direct costs incurred in providing the goods or services. An exception is made for cases involving certain health care fraud schemes, since it would make no sense to allow those who provide unnecessary services to deduct the cost of those unnecessary services. Having resolved this important matter, the substitute amendment broadly extends the government's authority to forfeit criminal proceeds under the civil asset forfeiture laws.

Fugitive disentitlement:  The Supreme Court in 1996 disallowed the judge-made doctrine that a fugitive avoiding the jurisdiction of the U.S. courts in a criminal case may not contest a civil forfeiture; however, the Court left open the possibility that Congress could establish such doctrine by statute. The Court was responding, in part, to the government's record of seeking forfeiture of property even though the property is not subject to forfeiture (e.g., because the statute of limitations has expired), when the government believes that the fugitive owner will not be permitted to contest the forfeiture. Opponents of the fugitive disentitlement doctrine say that the prosecutors have gone so far as to indict people whom they know will never return to this country, so that they can invoke the doctrine in civil forfeiture proceedings against such persons' U.S. assets. The substitute provides a statutory basis for a judge to disallow a civil asset forfeiture claim by a fugitive, while leaving judges discretion to allow such a claim in the interests of justice. Senator Hatch and I share a longstanding and deeply-held appreciation for law enforcement and the officers who work on the front lines to protect our families and communities, and we have worked together on a number of crime-related issues in the past. Recently, for example, we have led the Senate in passing a number of legislative initiatives of importance to State and local law enforcement, including the Bulletproof Vests Partnership Act of 1998, Crime Identification Technology Act of 1998, Care for Police Survivors Act of 1998, the Railroad Police Officers Training Act of 1999, and the Methamphetamine Anti-Proliferation Act of 1999. I want to commend him for his commitment, not just to law enforcement, but to the rights of all Americans. It has been my pleasure to work with him on this issue, to bring balance back in the relationship between our police forces and the citizens of this country.

It has been a privilege to work with Representatives Hyde and Conyers on this important legislation. And we greatly appreciate the contributions made by Senators Sessions and Schumer, both knowledgeable and experienced legislators in this area. I would also like to thank the Senate and House staff who worked so hard to bring this matter to closure: On my staff, Julie Katzman and Beryl Howell; in addition, George Fishman, who has been dedicated to this project for so many years, Manus Cooney, Rhett DeHart, Ed Haden, Ben Lawsky, Tom Mooney, John Dudas, Julian Epstein, Perry Apelbaum, and Cori Flam -- their efforts made this day possible. Thanks are also due to Bill Jensen and the other hardworking members of the Senate's Office of Legislative Counsel.

Finally, I would like to express my gratitude to David Smith, a leading expert on civil asset forfeiture, who gave tirelessly of his time over the past few months. His expertise and good counsel were invaluable in producing the legislation that the Senate passes today.

It is time for Congress to catch up with the American people and the courts and do the right thing on this important issue of fairness. I am glad that the Senate is acting without delay to pass this long overdue reform legislation.