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Posts Tagged ‘Asset Forfeiture’

Yesterday’s column was my annual end-of-year round-up of the best and worst developments of the concluding year.

Today I’ll be forward looking and give you my hopes and fears for the new year, which is a newer tradition that began in 2017 (and continued in 2018 and 2019).

With my glass-half-full outlook, we’ll start with the things I hope will happen.

Supreme Court strikes down civil asset forfeiture – It is nauseating that bureaucrats can steal property from citizens who have never been convicted of a crime. Or even charged with a crime. Fortunately, this disgusting practice already has attracted attention from Clarence Thomas and other sound-thinking Justices on the Supreme Court. Hopefully, this will produce a decision that ends this example of Venezuela-style government thuggery.

Good free-trade agreements for the United Kingdom – This is a two-pronged hope. First, I want a great agreement between the U.S. and the U.K., based on the principle of mutual recognition. Second, I want the best-possible agreement between the U.K. and the E.U., which will be a challenge since the political elite in Brussels has a spiteful desire to “punish” the British people for supporting Brexit.

Maduro’s ouster in Venezuela – I already wished for this development in 2018 and 2019, so this is my “Groundhog Day” addition to the list. But if I keep wishing for it, sooner or later it will happen and I’ll look prescient. But I actually don’t care about whether my predictions are correct, I just want an end to the horrible suffering for the people of Venezuela.

Here are the things I fear will happen in 2020.

A bubble bursts – I hope I’m wrong (and that may be the case since I’ve been fretting about it for a long time), but I fear that financial markets are being goosed by an easy-money policy from the Federal Reserve. Bubbles feel good when they’re expanding, but last decade should have taught us that they can be very painful when they pop.

A loss of economic liberty in Chile and/or Hong Kong – As shown by Economic Freedom of the World, there are not that many success stories in the world. But we can celebrate what’s happened in Hong Kong since WWII and what’s happened in Chile since the late 1970s. Economic liberty has dramatically boosted prosperity. Unfortunately, Hong Kong’s liberty is now being threatened from without and Chile’s liberty is now being threatened from within.

Repeal of the Illinois flat tax – The best approach for a state is to have no income tax, and a state flat tax is the second-best approach. Illinois is in that second category thanks to a long-standing provision of the state’s constitution. Needless to say, this irks the big spenders who control the Illinois government and they are asking voters this upcoming November to vote on whether to bust the flat tax and open the floodgates for an ever-growing fiscal burden. By the way, it’s quite likely that I’ll be including the Massachusetts flat tax on this list next year.

I’ll also add a special category for something that would be both good and bad.

Trump gets reelected – Because Trump is producing better tax policy and better regulatory policy, and because of my hopes for judges who believe in the Constitution’s protections of economic liberty, it would be good if he won a second term.

Trump gets reelected – Because Trump is producing worse spending policy and worse trade policy, and because of my concerns never-ending Keynesian monetary policy from the Federal Reserve, it would be bad if he won a second term.

Happy New Year, everyone.

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In the world of public policy, it’s very easy to make fun of politicians (especially Barack Obama, Donald Trump, Hillary Clinton, Bernie Sanders, and Elizabeth Warren).

And there are plenty of jokes about certain issues in the public arena, particularly the IRS, but also gun control and Brexit. And I have entire pages dedicated to libertarian humor and communism/socialism humor.

But some topics are so grim that’s it’s not easy to laugh about them. There’s nothing funny about the horror of Venezuela, for instance, though there are examples of dark humor from that unfortunate nation.

Another topic that doesn’t lend itself to laughs is the horrid practice of civil asset forfeiture. I’ve shared many nauseating stories about how governments literally steal property from people who have not been convicted of crimes (or, in many cases, have not even been accused of any crime).

Here’s the latest absurd example, this time from Michigan.

Nearly 400 people in Wayne County who were never charged with a crime still lost property to law enforcement agencies last year through a legal procedure called civil asset forfeiture… Altogether, there were 736 asset forfeiture proceedings in Michigan in 2017 during which someone lost property to the government despite never being charged with any crime; this happened 380 times in Wayne County. …Jarrett Skorup of the Mackinac Center for Public Policy, who co-authored a recent report on civil forfeiture, said…it’s likely that these forfeitures disproportionately affected low-income individuals, who are less able to afford an attorney or navigate the legal system to reclaim their property. Revenue obtained from forfeited property typically goes to the agency that seized the property.

Yes, you read correctly. The agency that steals the property gets to keep the money, which is why the disgusting practice of civil asset forfeiture is sometimes known as “policing for profit.”

If this sounds like the kind of behavior you’d find in a third-world banana republic, you’re right.

Anyhow, is there any way we can find mirth and amusement in this reprehensible practice?

Actually, courtesy of libertarian Reddit, there is.

Kudos to the clever person who left this comment. Maybe the bureaucrats finally understand what it feels like to have property arbitrarily seized.

I’m not quite ready to applaud the actual thief, however, since a speed trailer only notifies people how fast they’re traveling.

If that person wants my praise, go after speed-trap cameras like this hero.

P.S. There is an example of money-laundering humor, and it features a former President.

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I don’t think I’ll ever stray from libertarianism. But if I ever get tempted by the siren song of statism, I’ll bolster my resistance by reminding myself of how people have been victimized by venal government.

And if that doesn’t get my libertarian blood boiling, I’ll revisit some of my columns on so-called civil asset forfeiture. This is the policy that allows the government to steal your money.

I’m not joking. Bureaucrats can take your money (or property) simply by concocting a claim that it may have been associated with criminal activity.

They can grab your cash even though you haven’t been convicted. Heck, they don’t even need to arrest you.

Let’s look at some new examples of this odious practice. We’ll start with this video clip from a local news station in Sacramento, California.

And here’s another example from West Virginia, as reported by the Charleston Gazette-Mail.

A West Virginia State Police trooper issued Dimitrios Patlias a warning for failing to drive within his lane, just before seizing more than $10,000 in cash from him and his wife. …The trooper pulled them over, Smith said in an interview, …accusing them of smuggling cigarettes, to having drugs in the car, to gift card fraud. After searching the car, their persons, and Smith’s purse, the trooper let them go with a uniform warning citation. However, he also took the $10,478 in cash, the 78 “gift cards” in the car, and Patlias’ smartphone, according to a property disposition report. …Patlias and Smith wound up returning to their home in Egg Harbor City, New Jersey, stripped of all their cash but $2, without ever having been charged with a crime. …The seizure was part of a practice known as civil asset forfeiture, where law enforcement officers have the right to lay claim to property they argue was used in the commission of certain crimes. …the law seems to incentivize bad behavior from otherwise good police officers.“To me, this law, now that I’ve learned of it, it turns police officers into dishonest crooks,” she said. “I feel like I was in a movie.”

Yes, indeed, the cop was a crook in this instance. That’s because civil asset forfeiture creates a horrible incentive called “policing for profit.”

Efforts to curtail this disgusting tactic have not been successful in West Virginia.

In February, the state House Judiciary Committee considered a bill that would tie civil asset forfeiture to its respective criminal proceeding, i.e., if you’re acquitted criminally, the seized property cannot be forfeited. The bill died in committee.

But this story does have a happy ending. When this example of theft-by-government began to get publicity, the bureaucrats decided to return everything they stole.

After the Gazette-Mail reached out to the state police Monday with inquiries about the seizure, and after weeks of Smith calling police, the Jefferson County prosecuting attorney and local politicians, Smith said an officer returned her and Patlias’ possessions in full Thursday evening.

Speaking of good news, some governments around the country are curtailing this venal practice.

And the Utah Supreme Court also is taking a jaundiced look at civil asset forfeiture, even if only for procedural reasons.

The Utah Supreme Court has sided with a man pulled over in a traffic stop where police seized more than $500,000. In a unanimous ruling published Wednesday, the state’s top court ordered a lower court to reconsider who has jurisdiction over the money seized when Kyle Savely was stopped in a 2016 traffic stop. A drug dog alerted to the presence of narcotics, but none were found. Instead, a Utah Highway Patrol trooper found cash and seized it despite never charging Savely with any drug crime. …The libertarian-leaning think tank Libertas Institute, which jumped into the case, praised the ruling. They argued that state and federal agencies often split seized money. “The public is rightly outraged by laws that allow the government to take property from people not charged with a crime, as was the case here. It’s even worse when state laws designed to protect a property owner’s rights are not followed by state agencies, which is why we’re very pleased to see the state’s highest court unanimously holding them accountable,” Libertas Institute President Connor Boyack said in a statement.

What we really need, though, is for the Supreme Court to decide whether governments have the right to steal.

And that’s exactly what may soon happen, according to Jibran Khan of National Review.

Did you know that, in most states, the police can take your money and property without even charging you with a crime? Mundane actions such as having cash on hand have been cited as grounds for seizure, as a young man moving to Los Angeles to start a business discovered when his life savings were seized. He wasn’t detained, or charged with any crime — but he was left with nothing when the Drug Enforcement Agency took his cash. In any other situation, we would label this theft… Stories abound of abusive seizures justified under civil forfeiture. …A new Supreme Court case, however, might change that. …Justice Thomas has hoped for a civil-forfeiture case to come before the Supreme Court, so that this practice, which he views as incompatible with the due-process clause, can be analyzed on constitutional grounds. When it considers Timbs v. Indiana later this year, the Court will be able to do just that.

Kudos to Clarence Thomas for wanting to protect our rights.

If you need more evidence, Khan goes on the summarize why civil asset forfeiture is so reprehensible.

The system incentivizes policing for profit, rather than for public safety. The way that seized money is spent is just as disgraceful as the takings themselves. Departments have used forfeiture funds to buy Mercedes-Benzes, BMWs, Corvettes, Hawaiian vacations, and ski trips — just to list a few. They have also used these funds to buy military equipment, which has contributed to the dissolution of Sir Robert Peel’s concept of good policing that held the police should be well-integrated with the public rather than seeing itself as a military force. It’s no surprise that Brad Cates, who headed up asset forfeiture at the Department of Justice in the 1980s, describes it as “a free-floating slush fund.” The taking of property from citizens who are not charged with crimes to fund lavish lifestyles for government officials sounds like something out of the most dysfunctional Third World regimes. It’s heartening to see that the Supreme Court will hear the case. The practice is an affront to both constitutional and cultural norms, and has empowered law enforcement to engage in what would be considered criminality by any other measure.

Amen.

By the way, Brad Cates is one of two former officials who were in charge of asset forfeiture who now reject the procedure.

Sadly, this is an issue where Trump and his team are definitely on the wrong side.

P.S. Defenders of civil asset forfeiture sometimes tell me that I shouldn’t get upset because many of the people who lose their property are criminals.

I’m willing to acknowledge that some of these folks may not be model citizens, but I make two basic points.

  1. Our Constitution has a presumption of innocence, so people shouldn’t be punished unless found guilty by a jury of their peers. In other words, I side with the Founding Fathers rather than Jeff Sessions.
  2. Something shouldn’t be against the law if there isn’t a victim. This is why asset forfeiture laws, just like drug laws and money-laundering laws, are misguided and should be repealed.

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I periodically list people who have suffered horrible abuse because of despicable actions by government. At some point, I’ll have to create a special page to memorialize these victims. Something like the Bureaucrat Hall of Fame or Moocher Hall of Fame, though I haven’t figured out a good name (“Victims of Government Thuggery Hall of Fame” is too wordy).

Anyhow, many of these unfortunate people (the Dehko family, Carole Hinders, Joseph Rivers, and Thomas Williams) have something in common. They are victims of theft. But they can’t call law enforcement because their money and property was stolen by the government.

Such theft is enabled by “civil asset forfeiture” and we can now add Gerardo Serrano to the list of victims. The Washington Post has the disgusting story of what happened.

On Sept. 21, 2015, Gerardo Serrano was driving from his home in Kentucky to Piedras Negras, Mexico, when his truck was searched by U.S. Customs and Border Protection agents at Texas’s Eagle Pass border crossing. After finding a small ammunition clip, the agents took Serrano’s truck from him. Two years later, Customs hasn’t charged Serrano with a crime, and they haven’t given his truck back either.

The bureaucrats could take his truck because Civil asset forfeiture basically gives bureaucrats a license to steal. I’m not joking, though I wish I was.

Customs seized the truck under the laws of civil asset forfeiture, which allow authorities to take cash and property from citizens upon suspicion of criminal wrongdoing. Because it happens under civil law, no criminal conviction — or even criminal charge — is necessary for authorities to take property they believe is connected to a crime.

That’s bad enough. But it gets even worse when you read about what happened to Serrano.

In September 2015, Serrano drove his new Ford F-250 pickup from his home in Kentucky to the Mexico border. He was going to visit a cousin he hadn’t seen in many years. He snapped a few photos with his phone as he drove through the checkpoint, planning to upload them to Facebook, just as he says he had been doing throughout his whole trip, to share the experience with friends and family back home. That’s when the trouble started. One of Serrano’s photos shows two Customs agents looking in his direction, hands held up. According to his lawsuit, the agents objected to his taking photos.

Are these bureaucrats members of some primitive jungle tribe that believes a photograph steals their souls?

That would at least be a semi-rational explanation.

But if you read the rest of the story, they’re apparently petulant jerks (I had other words in mind, but this is a family-friendly site).

Those agents waved him over to the side of the road, on the U.S. side of the border, and demanded he hand over his phone. Serrano said “no.” Customs declined to say whether there’s a prohibition on photography at border crossings. …one of the agents unlocked Serrano’s door, unbuckled his seat belt, and yanked him out of the car. “I know I didn’t do anything wrong,” Serrano told The Post. “So I say ‘listen, you can’t yank me out like that, I’m an American, you can’t do that to me.’”The agent took his phone, and demanded Serrano give him the passcode. Serrano recalls he told the agent to “go get a warrant.”By this time, other agents had started searching his truck. “I said, ‘Hey listen I have rights, you’re violating my rights, you’re not supposed to do that kind of stuff,’” Serrano recounted. …“I’m sick of hearing about your rights,” the agent said, according to Serrano’s lawsuit. “You have no rights here.”Eventually, one of the agents searching the truck found an ammunition clip containing five .380-caliber bullets and yelled “we got him!,” according to the lawsuit. …Serrano had planned to take his pistol on the trip, but he left it home at the strong urging of his cousin, who explained the potential consequences of bringing it to Mexico. But he didn’t realize the extra ammunition clip, containing five .380 caliber rounds, was still in the center console of his truck.

The bureaucrats must have been trained in Venezuela.

At the crossing, the CBP agents put Serrano in handcuffs and continued to ask him to give up the passcode. “You go get that warrant,” Serrano says he told them. “I’ll wait for you in jail.” Serrano didn’t believe that any judge would grant a warrant to search a phone for taking pictures at the border. …The agents eventually placed Serrano in a locked cell without food, water or a toilet, Serrano says. Periodically someone would come in and ask for the passcode to his phone, he says. He refused every time.

The good news is that Mr. Serrano won, sort of.

Serrano says that after three hours, the agents told him he was free to go, returned his phone and said he wasn’t being arrested or charged with any crime. Serrano says he was elated.

The bad news is that the bureaucrats stole his truck.

But then, the agents handed him a document informing him that Customs was taking his truck and the ammunition clip. Those items were “subject of legally becoming the property of the Federal Government (forfeiture),” according to the document, because Serrano had failed to disclose the presence of the clip, making the truck a “conveyance of illegal exportation.” …Several weeks later he received a formal forfeiture notice from Customs, informing him that the government believed his truck was being used to transport “arms or munitions of war.” The notice gave him a number of options to pursue if he wanted his truck back.

Here’s the part that only be described as adding insult to injury.

One of the options was to make an “offer in compromise” — send Customs a check, and if they deemed the amount to be high enough, they would return his truck to him. “That’s like a shakedown,” Serrano said.

Fortunately, the great folks at the Institute for Justice are helping him challenge this horrific example of theft by government.

By the way, you may be thinking Serrano is some sort of thug, maybe a gang member from MS-13? I’ve had some defenders of civil asset forfeiture claim that the program is justifiable because it gives law enforcement leeway to go after bad guys that they can identify with their “sixth sense.” Was Serrano a bad guy who was nailed, albeit using a bad law?

Um…, not exactly.

Serrano is originally from Chicago but he’s lived on a farm in Kentucky for 20 years. A lifelong Republican, he unsuccessfully ran for a seat in Kentucky’s House of Representatives in 2014 on an explicitly pro-Second Amendment platform. He describes himself as a civil libertarian, and has a concealed carry permit for a Sig Sauer .380 pistol he carries for self-defense. “I believe in freedom,” he said in an interview with The Washington Post. “That’s what made this country great, is our freedom, our liberty.”

Serrano sounds like a great American. If he’s an immigrant, I want more just like him.

He understands what’s really doing on.

“It’s like there’s a war going on and they want to make war with my Bill of Rights,” he said. “How do they get away with this? How could this happen?”

For what it’s worth, I hope Senator Rand Paul (who is willing to fight for liberty) place a “hold” on all nominations to the Justice Department and Department of Homeland Security until and unless the government returns Serrano’s truck and compensates him for mistreatment.

Let’s close with some additional excerpts from the column that explain the injustice of civil asset forfeiture.

Many Americans haven’t heard of civil asset forfeiture, the legal provision that grants police the authority to seize cash and property from people not charged with a crime. The practice doesn’t follow the traditional American concept of “innocent until proven guilty.” If police suspect that you acquired something as a result of illegal activity, or even if it is connected to illegal activity, they can take it from you. If you want to get it back, the onus is on you to prove you got it legally. Once property is seized and forfeited, in most states and at the federal level police can either keep it for themselves or sell it at auction to raise money for the department. Critics say this creates a perverse profit motive. …said Robert Johnson, Serrano’s attorney. “That’s an open invitation to abuse.” The practice is widespread. In 2014, for instance, federal law enforcement officers alone took more than $5 billion worth of cash and property from people — more than the total amount of reported burglary losses that year. After public outcry, the Obama administration put in place a number of restrictions on forfeiture that made it harder, in some cases, for authorities to take property without a criminal conviction. But Attorney General Jeff Sessions recently reversed those restrictions.

Every sentence of the above passage is spot on. Including the last two sentences. The Obama Administration actually took a small step in the right direction, but that was reversed in a terrible move by Trump’s Attorney General.

And here are some excerpts from a column published by CapX.

…asset forfeiture lets government agents seize Americans’ assets (cash, but also cars and even houses) on the mere suspicion that they were involved in a crime. Asset forfeiture is intended to deprive criminals of their ill-gotten gains, but frequently enables police to take the property of Americans who remain innocent in the eyes of the law. …Asset forfeiture primarily targets the poor. Most forfeitures are for small amounts: in 2012, the Institute for Justice, a libertarian law firm that has focused heavily on asset forfeiture, analyzed forfeiture in 10 states and found that the median value of assets seized ranged from $451 (Minnesota) to $2,048 (Utah). Given that law enforcement routinely takes everything they find in a forfeiture case, these small values suggest the relative poverty of the victims. The procedural hurdles for challenging asset forfeiture also mean that poor people are less able to get their money back. The average forfeiture challenge requires four weekdays in court; missing four days of work can be a prohibitive expense for Americans living paycheck to paycheck. …Asset forfeiture is especially dangerous for the unbanked, because police and federal agents consider high amounts of cash to be suspect. …Asset forfeiture functions as a regressive tax, which reduces low-income Americans’ economic mobility. A family that sees their savings wiped out has to start again from the bottom. A person whose cash rent payment is seized may turn to payday loans or the black market, or simply be evicted—none of which are conducive to upward mobility.

Civil asset forfeiture is reprehensible.

The fact that poor people are disproportionately harmed is awful (and pervasive in parts of the criminal justice system).

P.S. To their credit, the first two administrators of the federal government’s civil asset forfeiture program now recognize that it’s become an abusive monster and want it repealed.

P.P.S. It’s possible that the border bureaucrats were acting because of bias, of perhaps profiling Serrano because of his Latino heritage. But I never hurl that accusation without some real evidence. Unlike some people.

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Some types of theft are legal in America.

But there’s a catch. You can only legally steal if you work for the government. It’s a process called “civil asset forfeiture” and it enables government officials to confiscate your property even if you have not been convicted of a crime. Or even charged with a crime.

I’m not joking. This isn’t a snarky reference to the tax system. Nor am I implying that bureaucrats can figuratively steal your property. We’re talking about literal theft by the state.

And it can happen if some government official decides – without any legal proceeding – that the property somehow may have been involved in criminal activity. Or maybe just because you have the wrong skin color.

A column in the Wall Street Journal explains this grotesque injustice.

…thousands of Americans have had their assets taken without ever being charged with a crime, let alone convicted. Russ Caswell almost lost his Massachusetts motel, which had been run by his family for more than 50 years, because of 15 “drug-related incidents” there from 1994-2008, a period through which he rented out nearly 200,000 rooms. Maryland dairy farmer Randy Sowers had his entire bank account—roughly $60,000—seized by the IRS, which accused him of running afoul of reporting requirements for cash deposits. …A manager of a Christian rock band had $53,000 in cash—profits from concerts and donations intended for an orphanage in Thailand—seized in Oklahoma after being stopped for a broken taillight. All of the property in these outrageous cases was eventually returned, but only after an arduous process.

These abuses happen in large part because cops are given bad incentives.

Any property they steal from citizens can be used to pad the budgets of police bureaucracies.

Today more than 40 states and the federal government permit law-enforcement agencies to retain anywhere from 45% to 100% of forfeiture proceeds. As a result, forfeiture has practically become an industry.

And real money is involved.

…data on asset forfeiture across 14 states, including California, Texas and New York. Between 2002 and 2013, the revenue from forfeiture more than doubled, from $107 million to $250 million. Federal confiscations have risen even faster. In 1986 the Justice Department’s Assets Forfeiture Fund collected $93.7 million. In 2014 the number was $4.5 billion.

In other words, there’s a huge incentive for cops to misbehave. It’s called “policing for profit.”

Fortunately, there is a move for reform at the state level.

Since 2014 nearly 20 states and the District of Columbia have enacted laws limiting asset forfeiture or increasing transparency. Nearly 20 other states are considering similar legislation. …lawmakers in Alaska, Connecticut, North Dakota and Texas have sponsored legislation that would send confiscated proceeds directly to the general fund of the state or county. Similar measures in Arizona and Hawaii would restrict forfeiture proceeds to being used to compensate crime victims and their families. …Last fall California Gov. Jerry Brown signed a bill that, in most cases, requires a criminal conviction before any California agency can receive equitable-sharing proceeds. In January Ohio Gov. John Kasich approved legislation to ban his state’s police and prosecutors from transferring seized property to federal agencies unless its value is more than $100,000. Similar reforms have been introduced in Colorado, New Hampshire and a handful of other states.

Legislative reforms are good, though judicial action would be even better.

And, sooner or later, that may happen.

America’s best (but not quite perfect) Supreme Court Justice is justly outraged by these examples of legalized theft. First, some background.

…the U.S. Supreme Court declined to hear a case filed by a Texas woman who says that her due process rights were violated when the police seized over $200,000 in cash from her family despite the fact that no one has been convicted of any underlying crime associated with the money. Unfortunately, thanks to the state’s sweeping civil asset forfeiture laws, the authorities were permitted to take the money of this innocent woman. The Supreme Court offered no explanation today for its refusal to hear the case.

But Justice Thomas is not happy that government officials are allowed to randomly steal property.

Justice Clarence Thomas made it clear that he believes the current state of civil asset forfeiture law is fundamentally unconstitutional. “This system—where police can seize property with limited judicial oversight and retain it for their own use—has led to egregious and well-chronicled abuses,” Thomas declared. Furthermore, he wrote, the Supreme Court’s previous rulings on the matter are starkly at odds with the Constitution, which “presumably would require the Court to align its distinct doctrine governing civil forfeiture with its doctrines governing other forms of punitive state action and property deprivation.” Those other doctrines, Thomas noted, impose significant checks on the government, such as heightened standards of proof, various procedural protections, and the right to a trial by jury. Civil asset forfeiture proceedings, by contrast, offer no such constitutional safeguards for the rights of person or property.

The article continues to explain that Thomas could be signalling that the Supreme Court will address these issues in the future, even though it didn’t choose to address the case filed by the Texas woman.

Let’s hope so. It’s heartening that there’s been a bit of good news at the state level (I even wrote that reform of asset forfeiture was one of the best developments of 2015), but it would be nice if the Supreme Court ultimately decided to prohibit civil asset forfeiture altogether.

But that might be years in the future, so let’s close with a very fresh example of a good state-based reform.

The Wall Street Journal favorably opined yesterday about reforms that have been enacted in Mississippi.

…it’s worth highlighting a civil forfeiture reform backed by the ACLU that Mississippi GOP Governor Phil Bryant signed last week with bipartisan legislative support.

The editorial reminds us why asset forfeiture is wrong.

…civil forfeiture laws…allow law enforcement agencies to seize property they suspect to be related to a crime without actually having to obtain a conviction or even submit charges. Police and prosecutors can auction off the property and keep the proceeds to pad their budgets. …Perverse incentives…create a huge potential for abuse.

Here’s what Mississippi did.

Mississippi’s reforms, which were pushed by the Institute for Justice and had nearly unanimous support in the legislature, would curb the most egregious abuses. Law enforcers would have to obtain a seizure warrant within 72 hours and prosecute within 30 days, so they couldn’t take property while trying to formulate a case. Agencies would also be required to publish a description of the seized property along with its value and petitions contesting the forfeiture to an online public database. …the public will finally be able to police misconduct by law enforcement in criminal raids. That’s something even liberals can cheer.

It’s nice that there’s been reform at the state level, and the Mississippi example is quite encouraging. That’s the good news.

But the bad news is that there may not be much reason to expect progress from the White House since both President Trump and his Attorney General support these arbitrary and unfair confiscations of property.

Which is a shame since they both took oaths to protect Americans from the kind of horrible abuse that the Dehko family experienced. Or the mistreatment of Carole Hinders. Or the ransacking of Joseph Rivers. Or the brutalization of Thomas Williams.

However, if the first two directors of the Justice Department’s asset forfeiture office can change their minds and urge repeal of these unfair laws, maybe there’s hope for Trump and Sessions.

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What were the most noteworthy events from 2015?

Regarding bad news, there’s unfortunately a lot of competition. But if I’m forced to pick the very worst developments, here’s my list.

Resuscitation of the Export-Import Bank – I did a premature victory dance last year when I celebrated the expiration of the Export-Import Bank’s authority.  I should have known that corrupt cronyism was hard to extinguish. Sure enough, Republicans and Democrats conspired to re-authorize the Ex-Im Bank and transfer wealth from ordinary Americans to politically connected corporations.

Expansion of IMF authority – I also did a premature victory dance in 2014 when I lauded the fact that Congress did not approve increased bailout authority for the International Monetary Fund. Sadly, as part of the year-end spending agreement, Congress agreed to expand the IMF’s authority so it could continue to push for higher taxes around the world.

Busting the spending caps (again) – When I wrote last August that maintaining the spending caps was a key test of GOP integrity, I should have known that they would get a failing grade. Sure enough, Republicans deliberately fumbled the ball at the goal line and agreed to higher spending. Again.

Supreme Court ignores law to bail out Obamacare (again) – Back in 2012, the Supreme Court had a chance to rule whether Obamacare was an impermissible expansion of the power of the federal government. In a truly odious decision, Chief Justice John Roberts ignored the Constitution’s limits on federal powers and decided we could be coerced to buy health insurance. Last year, he did it again, this time by bailing out a key part of Obamacare by deciding to arbitrarily ignore the wording of the law.

Business-as-usual transportation bill – The desire of Congress to fund pork-barrel transportation projects is at least somewhat constrained by the amount of revenue generated by the gas tax. There was an opportunity for reform in 2015 because proposed spending was much higher than the trajectory of gas tax revenue, but rather than even engage in a discussion of good policy options, politicians merely bickered over what combination of tax hikes and budget gimmicks they could put together to keep the pork projects flowing.

Creeping support on the right for the value-added tax – When I wrote early last year that the 2016 election might create an opportunity for tax reform, I was being hopeful that we might get something close to a simple and fair flat tax. Yet probably the biggest news so far in this election cycle is that a couple of candidates who presumably favor small government – Rand Paul and Ted Cruz – have proposed to impose a value-added tax without fully repealing the income tax.

There’s very little good news to celebrate. Here’s my tragically sparse list, and you’ll notice that my list of victories is heavy on style and light on substance. But let’s take what we can get.

Semi-decent Republican budgets – The budget resolution produced by Congress technically doesn’t embrace specific policies, but the it’s nonetheless noteworthy that the House and Senate approved numbers that – at least conceptually – are based on genuine Medicaid and Medicare reform.

Support for spending caps – Notwithstanding the fact that GOP politicians won’t even abide by the limited spending caps that already exist, I’m somewhat encouraged by the growing consensus for comprehensive spending caps akin to the ones in place in Switzerland and Hong Kong. Heck, even international bureaucracies now agree spending caps are the only effective fiscal rule.

Good election results from the Wolverine State – It was great to see Michigan voters reject a gas tax increase that was supported by the political elite.

More companies escaping the IRS – I heartily applaud when companies figure out how to re-domicile in jurisdictions with better tax law to escape America’s high corporate tax rate and self-destructive worldwide tax system. And I’m glad these “inversions” continue to take place even though the Obama Administration is trying to stop them.

A glimmer of reality at the New York Times – I realize I’m scraping the bottom of the barrel in my search for good news, but the fact that the New York Times published a column acknowledging that feminist economic policies backfire against women hopefully is a sign that sensible thinking is possible in the establishment media.

Gun control flopping – It’s great to see that the left has totally failed in its effort to undermine 2nd Amendment rights.

Limits on asset forfeiture – The final bit of good news from 2015 was the just-before-Christmas announcement by the Obama Administration that the odious practice of asset forfeiture would be modestly curtailed.

I would offer predictions for 2016, but since my big prediction from last year that we would have gridlock was sadly inaccurate, I think I’ll avoid making a fool of myself this year.

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Since we enjoyed yesterday a libertarian version of the night-before-Christmas story, let’s continue today with the holiday spirit.

During previous Christmas seasons, I’ve shared Keynesian Christmas carols, a great Jay Leno joke, a video of Santa as a small business owner dealing with red tape, and a look at the all-important question of whether Santa is a leftist or conservative.

Today, though, let’s be momentarily serious and enjoy a Christmas present to the nation from an unexpected source. The Obama Administration has announced that the odious practice of asset forfeiture is going to be curtailed.

Here are some excerpts from a Washington Post report.

The Department of Justice announced this week that it’s suspending a controversial program that allows local police departments to keep a large portion of assets seized from citizens under federal law and funnel it into their own coffers. The “equitable-sharing” program gives police the option of prosecuting asset forfeiture cases under federal instead of state law. Federal forfeiture policies are more permissive than many state policies, allowing police to keep up to 80 percent of assets they seize — even if the people they took from are never charged with a crime. …Criminal justice reformers are cheering the change. “This is a significant deal,” said Lee McGrath, legislative counsel at the Institute for Justice.

But don’t get too excited. This almost certainly is not a sign of genuine libertarian thinking inside the Obama Administration.

Indeed, the story suggests that the Justice Department made this change at least in part because it didn’t want to share money with state and local governments.

The DOJ is suspending payments under this program due to budget cuts included in the recent spending bill. “While we had hoped to minimize any adverse impact on state, local, and tribal law enforcement partners, the Department is deferring for the time being any equitable sharing payments from the Program,” M. Kendall Day, chief of the asset forfeiture and money laundering section, wrote in a letter to state and local law enforcement agencies. In addition to budget cuts last year, the program has lost $1.2 billion, according to Day’s letter. “The Department does not take this step lightly,” he wrote. “We explored every conceivable option that would have enabled us to preserve some form of meaningful equitable sharing. … Unfortunately, the combined effect of the two reductions totaling $1.2 billion made that impossible.”

Good, I’m glad they didn’t find a “conceivable option” that would have enabled the government to continue stealing property from people who haven’t been convicted of wrongdoing.

Now that we’ve been serious, let’s get back into the Christmas spirit.

An article in The Atlantic looks at Christmas cards, as designed by economists. Mostly they showed why we’re not at the top of people’s invite lists for holiday parties. Here are my two favorites.

Yup, only economists could describe things like love and family in this fashion!

I don’t even know how to characterize this card, but this sometimes is how economists think.

Last but not least, here are a couple of great Christmas-themed cartoons from two years ago, both by Michael Ramirez.

We’ll start with a Christmas wish that Santa hopefully granted.

Amen.

After all, a GOP with spine wouldn’t cower, as illustrated amusingly by A.F. Branco, when Obama threatens a so-called government shutdown.

Our next cartoon looks at an implication of all Obama’s spending plans.

And if you wonder about the size of Santa Obama’s sack, just check out these very depressing numbers.

After perusing that data, some of us may not be feeling like our statist friends deserve any holiday cheer. But this is Christmas, so let’s try to feel love and joy. So if you see some of your government worshipping friends and family today, we even have a Christmas greeting that’s appropriate for leftists.

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Remember Sleepless in Seattle, the 1993 romantic comedy starring Tom Hanks and Meg Ryan?

Well, there should be a remake of that film entitled Clueless in Washington. But it wouldn’t be romantic and it wouldn’t be a comedy.

Though there would be a laughable aspect to this film, because it would be about an editorial writer at the Washington Post trying to convince people to feel sorry for the IRS. Here’s some of what Stephen Stromberg wrote on Wednesday.

Congress has done some dumb things. One of the dumbest is the GOP’s penny-wise-pound-foolish campaign to defund the Internal Revenue Service. …its mindless tantrum against the IRS has produced for taxpayers: a tax season that was “by far the worst in memory,” according to the Taxpayer Advocate Service, an agency watchdog.

Before I share any more of the article, I should point out that the “Taxpayer Advocate Service” isn’t a watchdog. It should be renamed the “Government Advocate Service” since its main goal is to increase the IRS’s budget.

But I’m digressing. Let’s continue with Mr. Stromberg’s love letter to tax collectors.

The underlying problem is that Congress has asked the IRS to do a lot more, such as administering a critical piece of Obamacare, but the GOP Congress won’t give the agency the funding it needs to do its work. …But good luck convincing Republicans to fix the IRS’s entirely predictable and avoidable problems. Not when that would mean restraining the impulse to act on anti-tax orthodoxy, blind populist anger and scandal-mongering about the IRS mistreating conservatives. In fact, Republicans want to double down on their nonsense budgeting, proposing deep cuts to the IRS last month.

Oops, time for another correction.

Stromberg is cherry picking data to imply that the IRS budget has been savaged.

If you look at the long-run data, however, you’ll see that the IRS now has almost twice as much money to run its operations as it did a few decades ago.

And that’s based on inflation-adjusted dollars, so we have a very fair apples-to-apples comparison.

Stromberg also wants us to sympathize with the bureaucrats because the tax code has been made more complex.

The underlying irrationality is the same: The IRS doesn’t write the tax code or health-care law, but the agency must apply these policies and engage with people affected by them, so it is an easy scapegoat.

Part of this passage is correct, and I’ve specifically pointed out that the tax code is mind-numbingly complex and that politicians deserve an overwhelming share of the blame for this sorry state of affairs.

That being said, the IRS goes beyond the law to make the system worse, as we saw when it imposed a regulation that put foreign tax law above American tax law. And when it arbitrarily rewrote the Obamacare legislation to enable additional subsidies.

In other words, it deserves to be scapegoated.

But there’s a bigger issue, one that Stromberg never even addresses. Why should we give more money to a bureaucracy that manages to find plenty of resources to do bad things?

Never forget, after all, that this is the bureaucracy that – in an odious display of bias – interfered with the electoral process by targeting the President’s opponents.

And then awarded bonuses to itself for this corrupt behavior!

Even more outrageous, the Washington Examiner reports today that the IRS still hasn’t cleaned up its act.

A series of new revelations Wednesday and Thursday put the Internal Revenue Service back under fire for its alleged efforts to curtail…conservative nonprofits. …the Government Accountability Office uncovered evidence that holes in the tax agency’s procedure for selecting nonprofit groups to be audited could allow bias to seep into the process. …lawmakers exposed the lack of safeguards that could prevent IRS officials from going after groups with which they disagreed. Meanwhile, the conservative watchdog Judicial Watch released documents Wednesday that suggested the IRS targeted the donors of certain tax-exempt organizations.

Does this sound like a bureaucracy that deserves more of our money?

If you’re still not sure how to answer, consider the fact that the IRS also somehow has enough money in its budget to engage in the disgusting “asset forfeiture” racket.

The Wall Street Journal recently opined on this scandal.

…a pair of new horror stories show why Americans dread any interaction with the vindictive tax man. Khalid Quran owns a small business in Greenville, North Carolina. He emigrated to the U.S. in 1997, opened a convenience store near a local airport, and worked long hours to give his four children more opportunity. After nearly two decades, Mr. Quran had saved $150,000 for retirement. Then in 2014 the IRS seized his bank account because he had made withdrawals that raised red flags under “structuring” laws that require banks to report transactions of more than $10,000. Mr. Quran had made transactions below that limit.

So even though Mr. Quran did nothing illegal and even though it’s legal to make deposits of less than $10,000, the IRS stole his money.

Just like money was stolen from the Dehko family.

Here’s the other example from the WSJ.

Maryland dairy farmer Randy Sowers…had $62,936.04 seized from his bank account because of the pattern of his deposits, though the money was all legally earned. …Mr. Sowers told his story to a local newspaper…a lawyer for Mr. Sowers asked…“why he is being treated differently.” Mr. Cassella replied that the other forfeiture target “did not give an interview to the press.” So much for equal treatment under the law.

Yes, you read correctly. If you have the temerity to expose the IRS’s reprehensible actions, the government will try to punish you more severely.

Even though the only wrongdoing that ever happened was the IRS’s confiscation of money in the first place!

So let’s celebrate the fact that the IRS is being subjected to some modest but long-overdue belt-tightening.

Notwithstanding Mr. Stromberg’s column, the IRS is not a praiseworthy organization. And many of the bureaucrats at the agency deserve our disdain.

The bottom line is that IRS budget cuts show that Republicans sometimes do the right thing.

And maybe if there are continued cuts and the current tax system actually does become unenforceable at some point, maybe politicians could be convinced to replace the corrupt internal revenue code with a simple and fair flat tax.

P.S. Clueless in Washington won’t be the only remake out of DC if President Obama decides to go Hollywood after 2016. Indeed, I suspect his acting career would be more successful than mine.

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Politicians and bureaucrats are very creative in their pursuit of bad policy.

In some case, I’m not even sure how to classify their actions.

When the government squandered $224,000-plus for research on condom sizes, for instance, I thought that story easily could be classified as wasteful spending. But then I discovered the research was related to the fact that the government limits the types of condoms that manufacturers can offer, so maybe this was an example of mindless over-regulation.

Now I’m facing another quandary about how to classify a story. I’m not sure to add the following nightmare to my ever-growing list of theft-by-government stories, or whether it belongs in my collection of stupid-drug-war stories.

Here’s some background from a report in Reason by Jacob Sullum. It’s about a robbery at an airport.

When he visited relatives in Cincinnati the winter before last, Charles Clarke, a 24-year-old college student, took with him $11,000 that he had saved from wages, financial aid, and family gifts because he did not want to lose it. He did not count on the armed robbers at the airport, who took every last cent as he was about to board a flight back to Orlando in February 2014.

So did Mr. Clarke call the cops to report the theft?

Well, not exactly.

…the thieves were cops, who justified confiscating Clarke’s life savings by claiming his luggage and cash smelled like pot.

But the cops didn’t arrest Mr. Clarke for possession of marijuana (they didn’t find any). Nor did they charge him with having smoked marijuana (I guess even cops realize that would be a pointless waste of resources).

However, they did take his money on the very tenuous (and completely unproven) proposition that it may have been connected with a drug deal.

Even more amazing, the burden of proof is now on Mr. Clarke to prove his money is innocent, so the presumption of innocence granted by the Constitution doesn’t apply!

More than a year later, Clarke is still trying to get his money back… But the federal prosecutors who are pursuing forfeiture of Clarke’s money do not have to prove he was a drug dealer. …the government keeps the cash based on “probable cause that it was proceeds of drug trafficking or was intended to be used in an illegal drug transaction,” and the burden is on Clarke to recover it.

Why is this happening?

Well, I’ve written many times that incentives matter. That’s true for taxpayers and it’s true for bureaucrats.

And true for cops as well.

…the number of seizures by police at the Cincinnati/Northern Kentucky International Airport exploded from a couple dozen a year in the late 1990s to nearly 100, totaling $2 million, in 2013. By pursuing forfeiture under federal law through the Justice Department’s Equitable Sharing Program, the airport cops can keep up to 80 percent of the loot while letting the feds do most of the work.

Yup, this is what’s called “policing for profit.”

This is so outrageous that even some folks who like big government are on Mr. Clarke’s side. Here are some excerpts from a report published by Vox.

Under federal and state laws that allow what’s called “civil forfeiture,” law enforcement officers can seize someone’s property without proving the person was guilty of a crime; they just need probable cause to believe the assets are being used as part of criminal activity, typically drug trafficking. Police can then absorb the value of this property — be it cash, cars, guns, or something else — as profit: either through state programs, or under a federal program known as Equitable Sharing that lets local and state police get up to 80 percent of the value of what they seize as money for their departments. So police can not only seize people’s property without proving involvement in a crime, but they have a financial incentive to do so.

Not only is there no presumption of innocence, the government actually puts the money on trial rather than the person.

In typical criminal cases, the government has to prove beyond a reasonable doubt that someone is guilty of a crime. But in civil forfeiture cases, the government only has to show that it’s more likely than not that the property was intended to buy drugs or obtained from selling drugs. The bar is so low in part because it’s the property itself on trial, not the person whose property was taken — and due process rights cover people, not property. So in Clarke’s situation, the case is literally called United States of America v. $11,000.00 in United States Currency. (No, this is not a joke.)

The Vox report also looks at the perverse incentives created by this system.

…under the federal program, 13 different law enforcement agencies from Ohio and Kentucky are seeking a cut of Clarke’s $11,000 — even though 11 of those agencies weren’t involved in the seizure. The competition should show how lucrative these kind of seizures are in the eyes of law enforcement: they’re an opportunity to turn a costly counter-narcotics operation into a profitable venture for the law enforcement agencies involved (or even not, in Clarke’s case).

And here’s a look at how different states approach the issue.

The darker the state, the bigger the incentive for law enforcement agencies to steal money.

There’s also good evidence that these venal laws target minorities.

A bulk of forfeiture cases also appear to disproportionately afflict minorities. Clarke, who’s black, said he felt like he was racially profiled. Of the 400 federal court cases reviewed by the Post in which people challenged a seizure and got some money back, most of the victims were black, Hispanic, or another racial minority.

This is a good opportunity to say something about race relations.

I don’t have any tolerance for racial grievance mongers like Jesse Jackson or Al Sharpton, and I don’t automatically assume racism when a black man like Eric Garner dies because of an interaction with cops.

But I do have great sympathy for law-abiding African-Americans who have to deal getting hassled for “driving while black.”

Not to mention “riding trains while black.”

And as we see from Mr. Clarke’s plight, we also have to include “flying while black.”

By the way, I’m not arguing that profiling is always illegitimate. As Walter Williams has explained, it’s sometimes just common sense.

But if profiling – or even the perception of profiling – causes resentment, then doesn’t it make sense to make sure it isn’t being used promiscuously? Shouldn’t it be reserved for situations where law enforcement is seeking to protect life, liberty, or property? Needless to say, civil asset forfeiture and the drug war are definitely not good reasons to utilize a tool with societal downsides.

P.S. Let’s shift to a different topic. I realize it might be a bit unseemly to do a victory dance in the end zone, but every so often it’s worth noting that folks on the left are spectacularly wrong in their analysis.

I wrote, for instance, about Paul Krugman’s argument that the American economy would benefit from a housing bubble. Gee, that didn’t turn out so well.

Here’s another example that’s been circulating on Twitter. It’s a snapshot on the famous economics textbook authored by Paul Samuelson. Like Krugman, Samuelson won a Nobel Prize, so he presumably had a very high IQ.

Yet just as the Soviet Union was about to collapse, he actually believed that the communist economy was thriving.

Just goes to show you that Thomas Sowell was very insightful when he wrote that intelligence and wisdom are not the same thing.

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If I had to pick a government policy that would be most upsetting to our Founding Fathers, I’d be tempted to pick the income tax. Or maybe some useless agency, such as the Department of Housing and Urban Development.

After all, surely the Founders didn’t envision – or want – today’s Leviathan government in Washington.

But I also know I’m biased since I work on fiscal policy issues.

So upon further reflection, I think the policy that would be most horrifying to the Founding Fathers is so-called civil asset forfeiture, a.k.a., theft by government.

You may think I’m joking or exaggerating, but theft is the right word when you look at how citizens (such as the Dehko family and Lyndon McClellan) have had their bank accounts seized even though they were never even charged with a crime, much less ever committed a crime.

And now we have a new example that would have the Founders rolling in their graves, but also should get every decent person angry.

Reason has a report with the odious details.

…the Drug Enforcement Administration (DEA), is snatching the life savings of a young black male for the crime of being alone on a train. The man, Joseph Rivers, 22, was traveling from Michigan to Los Angeles by train with $18,000 in cash to pay for a music video. In Albuquerque, DEA agents boarded the train and started asking people questions. They got to Rivers, who told him he was going to shoot a music video and agreed to let them search his stuff.

Now put yourself in the mind of Mr. Rivers. You’re not committing a crime. You’re not in possession of any drugs or other illicit substances.

Agents ask to search your stuff as part of their snooping on the train and you figure being cooperative is the best way of allaying suspicion (regardless of whether the DEA used profiling).

And what’s your reward for being cooperative?

The Reason report then shares some very ugly passages from a story in the Albuquerque Journal.

Rivers was the only passenger singled out for a search by DEA agents – and the only black person on his portion of the train… In one of the bags, the agent found the cash, still in the Michigan bank envelope.

Mr. Rivers explained why he had the money, but it didn’t do any good.

“I even allowed him to call my mother, a military veteran and (hospital) coordinator, to corroborate my story,” Rivers said. “Even with all of this, the officers decided to take my money because he stated that he believed that the money was involved in some type of narcotic activity.” Rivers was left penniless.

Here’s perhaps the most disturbing part of the story is the way government bureaucrats openly admit that they can take money without any criminal charges, much less a conviction for any crime.

“We don’t have to prove that the person is guilty,” Waite said. “It’s that the money is presumed to be guilty.”

Just imagine how the Founding Fathers, if they were still around, would react to the statements of this bureaucrat?

Imagine what they would think of a policy that gave bureaucrats arbitrary powers to take money from citizens?

By the way, I’m not asking these rhetorical questions because I have some inside knowledge that Mr. Rivers is a stand-up guy. Maybe his story was fake and he actually was going to buy illegal drugs.

So what?

I’m tempted to point out at this point the foolishness of the Drug War, but that’s the point I want to make today. Heck, we can assume he had $18,000 because he intended to commit a real crime. Perhaps he was going to pay a hit man to kill someone.

At the risk of being repetitive, so what?

Our Constitution was set up to constrain the powers of government and protect citizens from abuse by government. We have a 4th Amendment to protect us from unreasonable search and seizure and we have the presumption of innocence so that we can’t be punished unless that’s the outcome of a proper legal proceeding.

Needless to say, allowing agents to steal money from train passengers is not what the Founding Fathers had in mind.

In a just society, there shouldn’t be shortcuts which trample people’s rights. Real police work should be used to amass evidence of real crimes, which then should be used in real courts where a jury can decide on guilt.

Let’s close with a few more passages from the Albuquerque story.

Rivers, 22, wasn’t detained and has not been charged with any crime since his money was taken last month. That doesn’t matter. Under a federal law enforcement tool called civil asset forfeiture, he need never be arrested or convicted of a crime for the government to take away his cash, cars or property – and keep it. Agencies like the DEA can confiscate money or property if they have a hunch, a suspicion, a notion that maybe, possibly, perhaps the items are connected with narcotics. Or something else illegal.Or maybe the fact that the person holding a bunch of cash is a young black man is good enough. …Meanwhile, Rivers is back in Michigan, dreaming, praying. “He’s handed this over to God,” his attorney said. Which seems infinitely safer than handing over anything further to government agents.

Amen.

I’ll make one final point.

In the absence of some evidence to the contrary, I’m not going to accuse the DEA agents of racial profiling. After all, government agents have stolen money from plenty of white people.

But I strongly suspect there was economic profiling. If Mr. Rivers was a 50-year old white guy in a business suit, the DEA probably wouldn’t have confiscated the money.

That doesn’t mean, by the way, that 50-year old white guys should rest easy. When government bureaucrats get away with stealing money from young people without power and connections, it’s probably just a matter of time before others get victimized as well.

Just keep in mind that slippery slopes are very slippery when government is involved.

P.S. Also keep in mind that asset forfeiture has become such an abusive nightmare that the first two heads of that division of the Justice Department now say the policy should be abolished.

P.P.S. I don’t know what’s riskier, riding trains while black or banking while Russian?

P.P.P.S. On a separate matter, the good people at the Competitive Enterprise Institute periodically measure the overall cost of regulation and red tape on the American economy. Their latest version of Ten Thousand Commandments was just released and it is very depressing reading.

Here are two charts (out of many) from the study. The first looks at the annual cost of federal rules.

The second chart looks at how the regulatory burden has grown over time.

As I said, very depressing. No wonder Santa Claus wasn’t happy with the end-of-year gifts he received last year from the Obama Administration.

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Notwithstanding the title of this post, I’m not going to make an ultra-libertarian argument that all taxation is theft (see the P.P.P.S. below if you want my thoughts on that issue).

Instead, today’s topic is about a more specialized version of theft by government, which technically is called civil asset forfeiture but more accurately should be referred to as policing for profit.

It occurs when the government seizes cash or other property even though the victimized citizen has never been convicted – or in many cases even charged – with a crime.

I wish I was joking. But as you can see from these excerpts from a recent report, this is horrifyingly real.

Simply carrying a large amount of cash in a grocery sack in your car is now sufficient grounds for a police officer to seize your money, a US circuit court has ruled. A panel of the Eighth US Circuit Court of Appeals found that all a deputy has to do to seize cash from a person is say it is drug money. The court refused to return the $63,530 that Deputy Dave Wintle seized from a disabled veteran named Mark A. Brewer during a traffic stop in 2011. Brewer was never charged with a crime or even given a traffic ticket. Yet the decorated Air Force veteran lost his savings when a drug-sniffing dog smelled marijuana on it, even though no cannabis was found in Brewer’s car or his home. …Brewer saved the money from disability payments and his Air Force pay — as documents deputies found in the car indicated.

Since much of our currency contains traces of marijuana and cocaine, there was no way to determine if Mr. Brewer had “drug money” simply on the basis of what the dog smelled.

What’s especially disturbing is that a court agreed that there was no evidence of a crime, but the Judge decided to “assume” the money was criminal.

“The record here does not make clear whether the seized currency constitutes property used to facilitate a drug offense or proceeds from a drug offense,” Judge Bobby E. Shepherd wrote in a March 23 opinion upholding the seizure. “For the purposes of analysis, however, we will assume that the currency facilitated a drug offense and is thus subject to [to be seized].” It was taken through a legal mechanism called civil forfeiture.

And to add injury to injury, the court case will apply to several states.

Even more tragic: The ruling will have a wide impact. “This court case will be the ‘law of the circuit’ for Arkansas, Iowa, Minnesota, Missouri and North and South Dakota as well, creating even more barriers for Americans to fight back against unjust seizures in court,” Sibilla wrote.

But we do have a sliver of good news.

Meanwhile, New Mexico has become the second state to effectively eliminate the use of civil forfeiture and seizure by law enforcement. …It still will allow the criminal forfeiture of property, although that legal barrier is much higher for the government. …“This is the first time in decades that a state legislature has taken the bold but necessary step to put an end to the perverse financial incentive in civil forfeiture laws,” Scott Bullock, the attorney in charge of the Institute for Justice’s battle against the practice, stated in a press release. “Thankfully, Governor Martinez and the New Mexico legislature recognized that no one should lose their property without being first convicted of a crime.”

Kudos to Governor Martinez and New Mexico lawmakers.

Now we need action in Washington.

P.S. Here are some other cases of “policing for profit” that should distress all decent people.

*Such as when the government wanted to steal someone’s truck because a different person was arrested for drunk driving.

*Such as when the government tried to steal the bond money a family has collected to bail out a relative.

*Such as when the government seized nearly $400,000 of a business owner’s money because it was in the possession of an armored car company suspected of wrongdoing.

*Such as when the government sought to confiscate an office building from the owner because a tenant was legally selling medical marijuana.

*Such as when the government killed a man as part of an anti-gambling investigation undertaken in hopes of using asset forfeiture to steal other people’s cash.

*And you can read several other outrageous examples by clicking here.

All I can say is that our Founding Fathers must be rolling over in their graves. They gave us a marvelous Constitution precisely to protect citizens from government abuse.

Yet now courts routinely allow governments at all levels to run roughshod over our civil liberties.

P.P.S. It surely must say something that the first two directors of the Justice Department’s asset forfeiture office now say the law is riddled with abuse and should be repealed.

P.P.P.S. For what it’s worth, here’s my two cents on the issue of taxation and theft. Supreme Court Justice Potter Stewart famously opined, when seeking to define pornography, that “I know it when I see it.” That’s not exactly a firm legal definition, but I’ve always liked his reasoning. When I look at a jurisdiction such as Hong Kong, with a relatively small and honest government, I think of taxes as an unfortunate but acceptable price to pay. But when I think of nations with bloated public sectors and maliciously destructive tax regimes, then there’s little doubt in my mind that taxation is theft. And that’s true if the government is sinisterly malign, such as Venezuela, or a failing welfare state, such as France.

Especially when tax rates exceed 100 percent!

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Earlier today, I gave a speech to some folks at London’s Institute of Economic Affairs about the failure of global financial regulation.

I touched on some predictable themes:

The absence of cost/benefit analysis for regulatory initiatives.

The failure of anti-money laundering laws and their harmful impact on the poor.

How one-size-fits-all Basel rules led to imprudent risk and misallocation of capital.

How anti-tax competition schemes impose high costs on the financial system (which get passed on to financial consumers).

One thing I noticed, though, is that I didn’t get overly passionate when discussing these topics. I didn’t even get that worked up when talking about the OECD’s dangerous plan to create something akin to a World Tax Organization.

But I did get rather agitated when talking about how money-laundering rules and regulations have led to disgusting and reprehensible examples of so-called civil asset forfeiture.

This happens when a government decides to steal the property of citizens simply because they think it may have been involved in illegal activity.

Politicians and bureaucrats often use the failed Drug War as their rationale, but the activity doesn’t actually have to be illegal. I specifically cited the horrific example of the government stealing $35,000 from some folks in Michigan for no other reason than money from the family grocery business was generally deposited in amounts under $10,000.

I’m sure such government actions have a negative economic impact, but this is a case where the moral argument should take precedence.

Simply stated, all decent and humane people should stand united against thuggery by government.

And in an example of serendipity, after finishing my speech, I turned on my computer and came across more evidence against civil asset forfeiture.

Here are some truly disturbing passages from a report in the Detroit Free Press that showed up in my Twitter feed.

Thomas Williams was alone that November morning in 2013 when police raided his rural St. Joseph County home, wearing black masks, camouflage and holding guns at their sides. They broke down his front door with a battering ram. “We think you’re dealing marijuana,” they told Williams, a 72-year-old, retired carpenter and cancer patient who is disabled and carries a medical marijuana card. When he protested, they handcuffed him and left him on the living room floor as they ransacked his home, emptying drawers, rummaging through closets and surveying his grow room, where he was nourishing his 12 personal marijuana plants as allowed by law.

All this sounds horrible – and it is, but it gets worse.

They did not charge Williams with a crime… Instead, they took his Dodge Journey, $11,000 in cash from his home, his television, his cell phone, his shotgun and are attempting to take his Colon Township home. And they plan to keep the proceeds, auctioning off the property and putting the cash in police coffers. More than a year later, he is still fighting to get his belongings back and to hang on to his house. “I want to ask them, ‘Why? Why me?’ I gave them no reason to do this to me,” said Williams, who says he also suffers from glaucoma, a damaged disc in his back, and COPD, a lung disorder. “I’m out here minding my own business, and just wanted to be left alone.”

Why him? Well, one local attorney has a good idea of what’s really happening.

“It’s straight up theft,” said Williams’ Kalamazoo attorney, Dan Grow. “The forfeiture penalty does not match the crime. It’s absurd. …A lot of my practice is made up of these kinds of cases — middle-aged, middle-income people who have never been in trouble before. It’s all about the money.”

Just to be clear, Mr. Grow is emphasizing the utterly perverse incentive structure that exists when cops are allowed to steal money from citizens and use it to pad their own budget.

This system needs to be reformed.

And the second bit of serendipity is that a new report from the Institute for Justice showed up in my inbox. It explains why civil asset forfeiture should be abolished. And while the report focuses on the venal actions of the IRS, this reform should apply to all government agencies at all levels of government.

Civil forfeiture is the government’s power to take property suspected of involvement in a crime. Unlike criminal forfeiture, no one needs to be convicted of—or even a charged with—a crime for the government to take the property. Lax civil forfeiture standards enable the IRS to “seize first and ask questions later,” taking money without serious investigation and forcing owners into a long and difficult legal battle to try to stop the forfeiture. Any money forfeited is then used to fund further law enforcement efforts, giving agencies like the IRS an incentive to seize.

Here’s how IJ suggests that this type of abuse can be halted.

The surest way to prevent innocent people from losing money unjustly would be to end civil forfeiture and replace it with criminal forfeiture. Short of that, removing the financial incentive to seize, raising the standard of proof to forfeit and enacting other procedural reforms would help protect people from losing their bank accounts when the government has little or no proof of criminal wrongdoing.

While the Institute for Justice does great work, I don’t think they should have opened the door to halfway reforms.

Heck, even the two people who helped start up the Justice Department’s asset forfeiture program now say it should be abolished.

P.S. The Princess of the Levant is also in London, so I’m being forced to engage in tourist activities.

We took a ride on the London Eye, which wasn’t cheap but offers very good views of Big Ben, the House of Commons, Westminster Abbey, and other historic sites.

As far as I’m concerned, though, London is too cold and dreary. The only good tourism involves a warm beach in the Caribbean.

P.P.S. To close on a humorous note, here’s some anti-gun control humor with a rather pointed message.

Definitely worth adding to my collection.

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I don’t particularly care how people vote, but I do care whether they believe in freedom.

That’s why I periodically share stories that should convince everyone to believe in the libertarian philosophy of small government, individual liberty, and personal responsibility.

The stories that get me most agitated are the ones that involve innocent people being robbed by bureaucrats.

And when I say robbed, I use that word deliberately.

Such as the case of an elderly couple who had their hotel stolen by government.

Such as the case of the family grocer who had his bank account stolen by government.

Such as when the government wanted to steal someone’s truck because a different person was arrested for drunk driving.

Such as when the government tried to steal the bond money a family collected to bail out a relative.

Such as when the government seized nearly $400,000 of a business owner’s money because it was in the possession of an armored car company suspected of wrongdoing.

Such as when the government sought to confiscate an office building from the owner because a tenant was legally selling medical marijuana.

Such as when the government killed a man as part of an anti-gambling investigation undertaken in hopes of using asset forfeiture to steal other people’s cash.

With all this background, you can probably guess I’m going to add to that list.

And you’re right. We have a report from the New York Times that has me frothing at the mouth. I can’t imagine any decent person not being outraged by this example of big government run amok.

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000. The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

In other words, this is an example of two evil policies – asset forfeiture laws and money laundering laws – coming together in a vortex of we’ll-screw-you-over-even-if-you’re-law-abiding statism.

And you can forget about the Constitution’s presumption of innocence.

Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?” The federal government does. Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.

Of course, much of tax code enforcement is based on the upside-down premise that taxpayers are guilty and have to prove themselves innocent.

But that still doesn’t make it right. And the IRS is just the tip of the iceberg. Stealing is now a common practice by all sorts of bureaucracies at all levels of government.

The practice has swept up dairy farmers in Maryland, an Army sergeant in Virginia saving for his children’s college education and Ms. Hinders, 67, who has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going. Their money was seized under an increasingly controversial area of law known as civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited. Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize.

Here’s just one horrifying example of how this process works.

 In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years. …the government seized $447,000, and the brothers have been unable to retrieve it. …Mr. Potashnik said he had spent that time trying, to no avail, to show that the brothers were innocent. They even paid a forensic accounting firm $25,000 to check the books. “I don’t think they’re really interested in anything,” Mr. Potashnik said of the prosecutors. “They just want the money.” …“We’re just hanging on as a family here,” Mr. Hirsch said. “We weren’t going to take a settlement, because I was not guilty.”

Still not convinced about the venality of big government? Here’s another nauseating example.

Army Sgt. Jeff Cortazzo of Arlington, Va., began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do. “She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’” The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year. “Why didn’t the teller tell me that was illegal?” he said. “I would have just plopped the whole thing in the account and been done with it.”

By the way, some of you may be thinking that these terrible examples are somehow justifiable because the government is stopping crime in other instances.

But that’s not true. Experts who have looking at money laundering laws have found that there’s no impact on genuine criminal activity. But lots of costs imposed on innocent people.

Which probably explains why the first two directors of the Justice Department’s Asset Forfeiture Office now say the laws should be repealed.

If you want more information, here’s my video on the government’s costly and failed war on money laundering.

Sigh.

By the way, the government also abuses people in ways that have nothing to do with money laundering or asset forfeiture.

And there are more examples where those came from.

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Since I’m a public finance economist, I realize I’m supposed to focus on big-picture issues such as tax reform and entitlement reform. And I do beat those issues to death, so I obviously care about controlling the size and power of government.

But I like to think I’m also a decent human being. And this is why I get even more agitated when politicians and bureaucrats engage in thuggish behavior against comparatively powerless citizens.

Some of the worst examples of government thuggery are the result of “asset forfeiture,” which happens when governments confiscate the property of people who haven’t been convicted of any crime. Heck, sometimes they’re not even charged with any crime.

*Such as when the government wanted to steal someone’s truck because a different person was arrested for drunk driving.

*Such as when the government tried to steal the bond money a family has collected to bail out a relative.

*Such as when the government seized nearly $400,000 of a business owner’s money because it was in the possession of an armored car company suspected of wrongdoing.

*Such as when the government sought to confiscate an office building from the owner because a tenant was legally selling medical marijuana.

*Such as when the government killed a man as part of an anti-gambling investigation undertaken in hopes of using asset forfeiture to steal other people’s cash.

But we do have a bit of good news. All these horror stories seem to be causing a backlash.

Fox News has a very revealing article on how this system is under assault. The story begins by explaining how asset forfeiture is an open invitation for abuse and grossly inconsistent with the Constitution.

Civil forfeiture is when police and prosecutors seize property, cars or cash from someone they suspect of wrongdoing. …authorities don’t have to prove guilt, file charges or obtain a conviction before seizing private property. Critics say it is a process ripe for abuse, and one which leaves citizens little means of fighting back. “You breed a culture of ‘take first, ask questions later,’” Larry Salzman, an attorney with the Institute for Justice, told FoxNews.com. “It’s thuggish behavior.” …civil forfeitures represent a dangerous area of the U.S. justice system where, by law, a person is supposed to be presumed innocent until proven guilty and not the other way around.

The report from Fox cites a couple of reasons why asset forfeiture is misguided. One major problem is that it gives cops a budgetary incentive to steal.

In Tennessee, local law enforcement agencies get to keep 100 percent of all property seized through civil forfeiture – an incentive some say can tempt police to go after property for the wrong reasons.

Fortunately, people are now fighting this horrible procedure. The story explains that a former law enforcement official who is now a state lawmaker, Barrett Rich, is trying to reform Tennessee’s awful bill.

And Minnesota actually has eliminated this odious tactic. Here are some excerpts from a Forbes column.

In a big win for property rights and due process, Minnesota Gov. Mark Dayton signed a bill yesterday to curb an abusive—and little known—police practice called civil forfeiture. Unlike criminal forfeiture, under civil forfeiture someone does not have to be convicted of a crime, or even charged with one, to permanently lose his or her cash, car or home. …Now the government can only take property if it obtains a criminal conviction or its equivalent, like if a property owner pleads guilty to a crime or becomes an informant. The bill also shifts the burden of proof onto the government, where it rightfully belongs.

Wyoming’s state legislature also is considering reform, so there are positive developments in many different states.

For more information, click here for a very good introductory video about civil asset forfeiture.

If you like videos, click here for a horrifying video about the government stealing $17,000 from an innocent man.

And here’s another video, this one about the government stealing money from a family grocery store.

Last but not least, if you want to get more upset, here are some additional examples of non-forfeiture related government thuggery.

Gee, it’s almost enough to make a person a libertarian!

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I’ve already written about the despicable practice of “civil forfeiture,” which allows governments to confiscate the property of innocent people who have not been convicted of any crime.

And I’ve cited great columns on the issue from George Will and John Stossel., as well a sobering report on the topic from the Wall Street Journal.

Now the Institute for Justice has a video that should outrage any decent person.

It’s examples of government thuggery like this that make me a libertarian. You should be one as well.

If you need more convincing, check out these horror stories of statist abuse.

But let’s end on a happy note, with a few jokes about cops, one sympathetic, one mocking, and one political.

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I hope you’re a libertarian already. But if you’re not, I hope you’ll be one after you finish reading this post.

And if you’re not a libertarian after reading this post, I suggest you emigrate to Zimbabwe, or some other place where government has unchecked and arbitrary power to steal. You’ll feel right at home.

This post is about the disgusting practice of “asset forfeiture,” which is basically a scheme that allows government to steal people’s property and money.

I’ve already posted a great video from the Institute for Justice about this topic, and I also suggest you read this horror story and this nauseating episode to see how asset forfeiture works in the real world.

Now let’s look at two new examples of theft by government.

Let’s start with some excerpts from a George Will column.

Russ Caswell, 68, is bewildered: “What country are we in?” He and his wife, Pat, are ensnared in a Kafkaesque nightmare unfolding in Orwellian language. This town’s police department is conniving with the federal government to circumvent Massachusetts law — which is less permissive than federal law — to seize his livelihood and retirement asset. In the lawsuit titled United States of America v. 434 Main Street, Tewksbury, Massachusetts, the government is suing an inanimate object, the motel Caswell’s father built in 1955. The U.S. Department of Justice intends to seize it, sell it for perhaps $1.5 million and give up to 80 percent of that to the Tewksbury Police Department, whose budget is just $5.5 million. The Caswells have not been charged with, let alone convicted of, a crime.

Is Will’s language over the top? Hardly, as you can see from this excerpt. The government is trying to steal the hotel because a tiny percentage of guests engaged in victimless crimes.

Since 1994, about 30 motel customers have been arrested on drug-dealing charges. Even if those police figures are accurate — the police have a substantial monetary incentive to exaggerate — these 30 episodes involved less than 5/100ths of 1 percent of the 125,000 rooms Caswell has rented over those more than 6,700 days. Yet this is the government’s excuse for impoverishing the Caswells by seizing this property, which is their only significant source of income and all of their retirement security. The government says the rooms were used to “facilitate” a crime. It does not say the Caswells knew or even that they were supposed to know what was going on in all their rooms all the time. Civil forfeiture law treats citizens worse than criminals, requiring them to prove their innocence — to prove they did everything possible to prevent those rare crimes from occurring in a few of those rooms. What counts as possible remains vague.

Amazing. You’re guilty until you prove yourself innocent, even though you’ve done nothing wrong.

The government officials should be the ones arrested and thrown in jail.

Now let’s look at a Huff Post column by Radley Balko.

When the Brown County, Wis., Drug Task Force arrested her son Joel last February, Beverly Greer started piecing together his bail. She used part of her disability payment and her tax return. Joel Greer’s wife also chipped in, as did his brother and two sisters. On Feb. 29, a judge set Greer’s bail at $7,500, and his mother called the Brown County jail to see where and how she could get him out. “The police specifically told us to bring cash,” Greer says. “Not a cashier’s check or a credit card. They said cash.” So Greer and her family visited a series of ATMs, and on March 1, she brought the money to the jail, thinking she’d be taking Joel Greer home. But she left without her money, or her son. Instead jail officials called in the same Drug Task Force that arrested Greer. A drug-sniffing dog inspected the Greers’ cash, and about a half-hour later, Beverly Greer said, a police officer told her the dog had alerted to the presence of narcotics on the bills — and that the police department would be confiscating the bail money.

You probably can figure out the rest of the story. Radley’s column has a lot of additional details, but here are a couple of passages to whet your appetite.

The Greers had been subjected to civil asset forfeiture, a policy that lets police confiscate money and property even if they can only loosely connect them to drug activity. The cash, or revenue from the property seized, often goes back to the coffers of the police department that confiscated it. It’s a policy critics say is often abused, but experts told The HuffPost that the way the law is applied to bail money in Brown County is exceptionally unfair. It took four months for Beverly Greer to get her family’s money back, and then only after attorney Andy Williams agreed to take their case. “The family produced the ATM receipts proving that had recently withdrawn the money,” Williams says. “Beverly Greer had documentation for her disability check and her tax return. Even then, the police tried to keep their money.” …Civil asset forfeiture is based on the premise that a piece of property — a car, a pile of cash, a house — can be guilty of a crime. Laws vary from state to state, but generally, law enforcement officials can seize property if they can show any connection between the property and illegal activity. It is then up to the owner of the property to prove in court that he owns it or earned it legitimately. It doesn’t require a property owner to actually be convicted of a crime. In fact, most people who lose property to civil asset forfeiture are never charged.

It’s probably worth noting that this is another example of government stealing when the underlying offense was a victimless crime. I reckon this must be a turbo-charged version of Mitchell’s Law.

P.S. Just in case you’re pro-Drug War, here are some examples of government thuggery that don’t involve persecution of victimless crimes. This post shows how the IRS can run amok, engaging in brutal persecution. And here’s a story of the government targeting a low-level person for inexplicable reasons.

Both these stories should turn you into a raving libertarian. In which case, welcome to the club!

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As a grumpy libertarian, I routinely get agitated about taxes, spending, and regulation. As far as I’m concerned, much of government is a racket that uses coercion to reward interest groups with unearned wealth.

But there are degrees of evil. So if you asked me to pick the most reprehensible thing that government does,  “asset forfeiture” might be in second place (hurting poor people to benefit rich people is at the top of my list).

Asset forfeiture occurs when government seizes property that is associated with a crime. That sounds reasonable – and it is reasonable if someone is convicted of, say, bank robbery and the government confiscates the stolen cash and any loot purchased with that money.

But it is not reasonable (or moral, or just, or appropriate) when government seizes assets without a conviction. And it is downright disgusting when the government steals (and I use that word deliberately) the assets of innocent parties.

I’ve already written about this issue (including an example from my county) and highlighted how asset forfeiture gives government bureaucracies a perverse incentive to steal.

Now we have a story from the Wall Street Journal that confirms our worst fears.

New York businessman James Lieto was an innocent bystander in a fraud investigation last year. Federal agents seized $392,000 of his cash anyway. An armored-car firm hired by Mr. Lieto to carry money for his check-cashing company got ensnared in the FBI probe. Agents seized about $19 million—including Mr. Lieto’s money—from vaults belonging to the armored-car firm’s parent company. He is one among thousands of Americans in recent decades who have had a jarring introduction to the federal system of asset seizure. Some 400 federal statutes—a near-doubling, by one count, since the 1990s—empower the government to take assets from convicted criminals as well as people never charged with a crime. …The forfeiture system has opponents across the political spectrum, including representatives of groups such as the American Civil Liberties Union on the left and the Heritage Foundation on the right. They argue it represents a widening threat to innocent people. “We are paying assistant U.S. attorneys to carry out the theft of property from often the most defenseless citizens,” given that people sometimes have limited resources to fight a seizure after their assets are taken, says David Smith, a former Justice Department forfeiture official and now a forfeiture lawyer in Alexandria, Va.

What’s really amazing is that government officials want to expand this reprehensible practice. The use of “civil forfeiture” is particularly worrisome, as illustrated by this passage.

Top federal officials are also pushing for greater use of civil-forfeiture proceedings, in which assets can be taken without criminal charges being filed against the owner. In a civil forfeiture, the asset itself—not the owner of the asset—is technically the defendant. In such a case, the government must show by a preponderance of evidence that the property was connected to illegal activity. In a criminal forfeiture, the government must first win a conviction against an individual, where the burden of proof is higher.

Here’s a really disgusting example.

Raul Stio, a New Jersey businessman, is caught up in the civil-forfeiture world. Last October, the Internal Revenue Service, suspicious of Mr. Stio’s bank deposits, seized more than $157,000 from his account. Mr. Stio hasn’t been charged with a crime. In a court filing in his pending civil case, the Justice Department alleges that Mr. Stio’s deposits were structured to illegally avoid an anti-money-laundering rule that requires a cash transaction of more than $10,000 to be reported to federal authorities. Mr. Stio made 21 deposits over a four-month period, each $10,000 or less, the filing said. Steven L. Kessler, Mr. Stio’s attorney, says there was no attempt to evade the law and that the deposits merely reflected the amount of cash his client’s businesses, a security firm and bar, had produced. Mr. Stio was saving to buy a house, he says.

I have no idea whether Mr. Stio is a good guy or a crook. But I know that the government shouldn’t be allowed to grab his money without convicting him of a crime. Especially for a supposed offense against absurdly foolish and ill-conceived anti-money laundering laws.

Our Founding Fathers gave us a presumption of innocence and no bureaucrat or politician should be allowed to cancel our constitutional rights.

Asset forfeiture should apply to people like Bernie Madoff. He’s been convicted of operating a Ponzi scheme, so by all means grab every penny he accumulated. But government should follow a simple rule: Convict first, seize second.

And here’s one final section from the story, highlighting how bureaucracies “earn” a profit by abusing forfeiture laws.

Part of the debate over seizures involves a potential conflict of interest: Under a 1984 federal law, state and local law-enforcement agencies that work with Uncle Sam on seizures get to keep up to 80% of the proceeds. Last year, under this “equitable-sharing” program, the federal government paid out more than $500 million, up about 75% from a decade ago. The payments give authorities an “improper profit incentive” to seize assets, says Scott Bullock of the Institute for Justice, a libertarian public-interest law firm in Arlington, Va. It’s a particular concern amid current state and local government budget problems, he contends. …Seeming abuses occasionally emerge. In 2008, federal Judge Joseph Bataillon ordered the return of $20,000 taken from a man during a traffic stop in Douglas County, Neb. Judge Battaillon quoted from a recording of the seizure, in which a sheriff’s deputy complained about the man’s attitude and suggested “we take his money and, um, count it as a drug seizure.” The judge’s order said the case produced “overwhelming evidence” that the funds were clean.

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