United States. Congress. House. Committee on the J.

Civil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 online

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Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 23 of 37)
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the ones we have addressed here are the ones of main concern to
us.

Mr. Gekas. I thank you.

And, Mr. Chairman, I yield back the balance of my nontime.

Mr. Hyde. I thank the gentleman.

Let me just say that my staff has been working with Mr.
Cassella, the Justice Department, and with the Treasury Depart-
ment working with the Justice Department, and we are making
progress. We are making substantial progress. I expect over the
month of August, when we all will be otherwise engaged, the staffs
will be engaged in refining their agreements and disagreements, so
that at the end of August and the beginning of September, we
should have a product that we can expect support from Treasury
and Justice and that will do the things we want it to do, which we
heard egregious examples this morning that need attention in the
law.

And I am pleased and gratified that we are not at odds or at
swords' points. There are some differences that will remain and
may still exist after our meetings, but I am very encouraged by the



247

spirit of cooperation that we are getting. And so we are not adver-
saries at all on this.

Mr. Frank.

Mr. Frank, Thank you, Mr. Chairman. I am glad we are making
progress.

Mr. Cassella, you said "phasing out the bond." Do you mean
chronologically or financially? I mean, how are we phasing it out?

Mr, Cassella. The problem. Congressman, is that we have to
strike a balance.

Mr. Frank. How are you going to do it?

Mr. Cassella. The cost bond serves an important purpose. It dis-
courages the filing of frivolous claims. What we have to do is strike
a balance between discouraging frivolous claims and inadvertently
discouraging bona fide claims. So we would propose to codify the
rule that no cost bond is required for someone who has status as
in forma pauperis position. That is number one.

Mr. Frank. Yes.

Mr. Cassella. Second, we would ask the authority for the Attor-
ney Greneral and the Secretary of the Treasury to waive the bond
in those circumstances where it isn't needed to protect the Grovern-
ment from maintenance costs and storage costs.

For example, seizure of currency or the seizure of a bank ac-
count: There is no need for a cost bond in that situation to protect
us from costs, and if we waived it in those circumstances, we could
see how many claims are filed, frivolous or otherwise.

The problem. Congressman, is the number of seizures that we do
every year. Justice does about 30,000 seizures per year. This is a
page from USA Today. It appears every Wednesday, and it lists the
seizures for the previous 3 weeks just by the DBA,

Mr. Frank. How many of them are overturned?

Mr, Cassella. Sorry?

Mr. Frank. Can you give us the numbers, how many of the for-
feitures are ultimately successfully challenged?

Mr. Cassella. Successfully challenged, very, very few. Eighty
percent of them are never even challenged; 80 percent of our for-
feitures are administrative forfeitures in which there is no claim
filed at all.

Mr, Frank, Those in which there are challenges, I would be in-
terested in the statistics, how many of the challenges are success-
ful,

Mr. Cassella. If we have those statistics, Congressman, we will
try to get them for you,

[The information follows:]



248 ,

\




U.S. Department of Justice



1



t»bshmielon. DC 2000



The Honorable Henry J. Hyde, Chairman,
Committee on the Judiciary
U.S. House of Repreaentatives
Washington, D.C. 20515

Dear Congressman Hyde :

At a Judiciary Committee hearing on July 22, 1996, on
pending asset forfeiture legislation, Congressman Frank asked the
Department of Justice witness to provide statistics on the number
of forfeiture cases that result in judgments against the United
States in a given year. We have reviewed the available
statistical sources and have attempted to answer your question as
best we can as follows:

In a typical fiscal year, the agencies of the Department of
Justice seize property for forfeiture in approximately 35,000
cases. Eighty- five percent of the FBI and DEA cases, and nearly
99 percent of the INS cases are uncontested;' thus approximately
2500 Justice cases are referred to the U.S. Attorneys. We do not
have comparable statistics for the Treasury Department. The
Treasury agencies, however, make ten of thousands of seizures a
year and we believe that a similar number of Treasury cases are
also referred to the U.S. Attorneys.

Of all eases referred to the U.S. Attorneys, some are
declined because they do not meet threshold requirements
regarding minimum property value or other criteria, including
legal merit, established by the U.S. Attorneys. Others become
part of criminal forfeiture cases. ^ In the end, the U.S.



^ Over the past ten years, the rate of contested claims in
DEA cases ranged from 12 percent to 16 percent and averaged 14.2
percent- FBI statistics are similar. INS considers only 1
percent of its cases "contested" because INS generally attempts
to settle cases at the administrative stage before they are
referred to the U.S. Attorney.

^ There is a related arrest or prosecution in 80 percent of
the cases in which there is a seizure for forfeiture. But for a
variety of reasons - most having to do with the ability to
obtain clear title against third parties - prosecutors in the
past generally filed parallel civil forfeiture cases rather than



249



"Attorneys file between 2,000 and 5,000 civil forfeiture cases a
year. The number of filings for the past four years are as
follows:



FY


1992


1993


1994


1995


Cases Filed


5083


4399


2941


2193'



2337


1836


1379


85


63


48


3.64%


3.63%


3.48%



Of these cases, many are settled but somewhat more than half
result in a judgment for or against the United States. The
figures for the past fo\ir years are as follows:

Judgm for U.S. 2569

Judgm against 105

Percent adverse 4.90%

Thus, the government prevails in 96 per cent of the cases
that go to judgment and in 98 per cent of all cases that are
filed, and the number of adverse judgments represents a minute
fraction of all cases initiated by seizure.

We hope these statistics are helpful in answering
Congressman Frank's question.

Sincet-ely,

Andrew Fois

Assistant Attorney General

cc. The Honorable John Conyers, Jr.
The Honorable Barney Frank



make the forfeiture part of the criminal indictment. Therefore,
the number of cases that resulted in criminal forfeiture was
smaller than the number that result in civil forfeiture. The
recent trend is toward parity.

' The drop in the number of civil filings is due both to the
shift to criminal forfeiture and the overall decrease in the
number of seizures in the past two years due primarily to
uncertainly over the double jeopardy effect of civil forfeiture.



250

Mr. Hyde. Would the gentleman yield just for a second?

Mr. Frank. Sure.

Mr. Hyde. Mr. Cassella, we heard some startling testimony from
Mr. Jones this morning about the bond and the failure to waive the
bond.

Mr. Frank. That was cash. I mean, that was cash, wasn t it?

Mr. Hyde. Yes.

Mr. Cassella. That is right. We are

Mr. Hyde. Did you have anything to do with that case?

Mr. Cassella. No, I certainly didf not, Mr. Chairman.

One of the things we are suggesting in our legislation is that we
have the authority to waive the bond other than in in forrna
pauperis situations; that is, to also waive it in cash or currency sit-
uations. We don't have that authority today. The law requires us
to waive it — there is case law that requires us to waive it for pau-
pers.

Mr. Jones, if I understand from what I heard this morning cor-
rectly, filed a financial statement indicating that he was a pauper,
and the Government disagreed. They disagreed that his financial
statement put him in that status.

Reasonable minds can disagree. The important thing is that
there be remedies. And if we can waive the cost bond in some cir-
cumstances and thereby not clog the Federal courts with, you
know, 30,000 more Federal cases every year, we would like to be
able to do it.

Mr. Hyde. Well, due process is costly, I will agree, and time con-
suming, but it is worthwhile. So we need to find a way to do this.

Mr. Cassella. Exactly.

Mr. Hyde. But I thank the gentleman. I didn't mean to inter-
rupt.

Mr. Frank. I would think people who had a — well, we are getting
into the counsel thing.

So your proposal would be to automatically waive it for paupers?

Mr. Cassella. Correct.

Mr. Frank. And the Government would have discretion to waive
it where cash was involved or other elements that didn't have a
storage cost?

Mr. Cassella. That is correct. What we want to find out. Con-
gressman, is, are we correct in our thought that abolishing the cost
bond requirement overnight would flood the Federal courts?

Mr. Frank. Let me ask you: You still — people would still have
to hire a lawyer to bring that suit; right?

Mr. Casselij>i. Well, they could also file it pro se. But you mean
if somebody wanted to be represented by counsel, he would have
to pay for counsel, yes. They have a remedy, of course, Congress-
man, and that is under the Equal Access to Justice Act. If they pre-
vail, it would be

Mr. Frank. If they are small. Under Equal Access to Justice,
they have to be a small business.

Mr. Cassella. They have to have less than $2 million in assets.

Mr. Frank. The next issue then is objecting to appointing coun-
sel where people — I assume that is where they can't afiFord it. You
still object to that? Someone files an in forma pauperis petition, it
is granted, and you still wouldn't give them a lawyer?



251

Mr. Cassella. That is right. Taken together with the idea of
abolishing the cost bond, the appointment of counsel could become
a horrendously expensive proposition. Again, we want to strike a
balance. We want to make sure there is a remedy under the Equal
Access to Justice Act.

Mr. Frank. What is the remedy if I can't afford a lawyer?

Mr. Cassella. The Equal Access to Justice Act.

The point I was trying to make, Congressman, is that unlike a
criminal case where we file an action, the United States v. John
Doe, John Doe is clearly the defendant.

Mr. Frank. I understand that. You can take that as understood.

Mr. Cassella. Right. But in a civil action, which is an in rem
action, anyone could file a claim. If you try to forfeit an airplane,
the pilot might file a claim, the owner, his wife, a lienholder.

Mr. Frank. Well, you can deal with that by allowing the appoint-
ment of counsel only for people who had a very colorable claim. I
think that is — if you really want to do that, that would not be a
problem. I think, frankly, that is a "make wait" argument. That is
not really why you want to do it.

What about a narrow right to counsel? I mean, it does seem to
me pretty outrageous — you admit we do make some mistakes. And,
again, I guess I should go back to one central point. I don't accept
the distinction, as you make it, between a civil and criminal situa-
tion.

Let me ask: In every case of forfeiture, do we not assume that
some crime has been committed? Isn't there a crime that has been
committed as a predicate for every forfeiture?

Mr. Cassella. There is. There has to be a crime committed be-
fore there is a forfeiture. The question is, is it proved?

Mr. Frank. So the very notion of forfeiture presupposes that
there has been= a crime committed?

Mr. Cassella. Correct.

Mr. Frank. I think that is important, because I think that helps
make it, to me, harder for you to argue that this is purely civil and
here is criminal and here is civil. What you are talking about is
something which you believe should happen as the consequence of
a crime, and obviously it is not the same as being incarcerated, but
you have an untenable distinction to treat this as wholly civil. It
is civil, triggered, we all agree, by a crime.

And where someone may have falsely been accused of a crime
and, as a consequence, had his property seized, like the gentleman
on the first panel, and has no money, and you agree he has no
money, not to appoint a lawyer and to then put him to the Equal
Access to Justice, I think, is a very — I don't understand it, and that
is not the balance, that is the Grovernment's convenience, and I
think it is inconsistent with what I thought, frankly, to be the
views of this administration on social justice and fairness. So that
is one I hope we will not accede to.

The next issue I have is — and this one actually kind of bothers
me — you said from the public finance standpoint — now, frankly, I
don't think it matters whether you have quotas or not; you have
something better than quotas, an incentive. I mean, if the agency
I work for is going to be substantially enhanced in its budget by



252

all these successful forfeitures, that is a good incentive. It doesn't
mean people are bad people, but that is an obvious incentive.

Mr. Cassella, you said in some cases the forfeiture — the proceeds
of the forfeiture are given to other agencies, private agencies? Did
you say that?

Mr. Cassella. Well, the first priority, Mr. Congressman, is to
look to see if there are any victims.

Mr. Frank. I agree that we should do that. That is true.

Mr. Cassella. That is what happens first. If there are — once the
victims have been compensated, or if there are no victims, then the
property is deposited into the Federal Assets Forfeiture Fund.
About half of that money is shared with State or local agencies in
accordance with what part of the investigation they participated in.
If they did half the work, they would get half the money.

Mr. Gekas. Would the gentleman yield just for a moment?

Mr. Frank. Yes.

Mr. Gekas. That is because the law states it is to be divided.

Mr. Cassella. That is right.

Mr. Gekas. We here several years ago passed the legislation and
debated that verv thoroughly. It isn't that you are feeling kindly
towards the local authorities. The law says you have to share it.

Mr. Frank. No. It is just that we were feeling kindly to the local
authorities. Let's give credit where credit is due.

Mr. Gekas. Right.

Mr. Frank. Now that we have established ourselves as a foun-
tain of all charity, let's get back to my question. At what point does
this get distributed to other organizations?

Mr. Cassella. The State or local law enforcement agency is au-
thorized to distribute 15 percent. It can pass through 15 percent of
the money that comes from the Federal Government on to commu-
nity-based organizations.

Mr. Frank. Does the Federal Grovernment do that? What do we
do with our share?

Mr. Cassella. Our share gets appropriated out of the fund, and
it goes to administer the Federal Forfeiture Program.

Mr. Frank. Appropriated out by the regular appropriations proc-
ess?

Mr. Cassella. That is my understanding, but I don't

Mr. Frank. Ms. Blanton.

Mr. Cassella. Sorry.

Mr. Frank. I was asking Ms. Blanton. She was hitting her
switch there.

Ms. Blanton. Those moneys are used to pay for the cost of stor-
ing and maintaining the property.

Mr. Frank. How do you decide — what if there is any surplus over
and above? I mean, storing somebody's money in a bank generally
doesn't cost you a lot of money if you have deposited it; might even
make you a little money.

Ms. Blanton. That is true. We pay off third party interests and
lien holders, if there are lien holders, such as banks, against sei-
zures of vehicles or other properties. We use the money to

Mr. Frank. Is there a surplus?

Ms. Blanton. There has been at Treasury for the last 2 years,
and that money is used for law enforcement purposes at the Treas-



253

ury Department. I can't speak to Justice as to whether they have
had a surplus the last 2 years.

Mr. Cassella. We had a surplus in the past, Congressman, and
there was a provision in the law — it may still be in effect — that the
surplus would go to the Drug Control Policy Director's Office. For
the last year

Mr. Frank. If I might just — ^you have answered enough of that.
That is, one of the things I think we should do — what the State
and local people do, that is a matter for State decisions, but from
the standpoint of public finance, it does seem to me that this
money should not be dispensed any differently than any other pub-
lic money. That is, it ought to be subject to the appropriations proc-
ess.

And you don't want to have an accident because of — for instance,
I was a little disturbed to hear that security of the Olympics, Mr.
Cassella — maybe it was Ms. Blanton — said security of the Olympics
was enhanced because of seizures. See, that seems to me to be
nuts.

If we are going to provide security at the Olympics, it ought to
be based on an assumption of what kind of security we need, and
then we pay for it. The notion we would have less security if we
had had fewer seizures makes you want to have a seizure. I mean,
that is no way to run a government.

Ms. Blanton. That statement came from me. About 2 months
ago or maybe less. There were more Federal law enforcement offi-
cers needed to assist with security at the Olympics. There was no
other source of funding in Treasury's appropriation. We did not
have any additional funds to provide those monies, and so we used
some of the money

Mr. Frank. How much?

Ms. Blanton. I believe it is less than $2 million.

Mr. Frank. OK I think the forfeiture thing is a good thing, but
I have got to be honest with you, Ms. Blanton. I think if the people
who are in charge of security came to the Speaker and said, "Gee,
we are a little short of money here in the greater Atlanta area for
the security we need," you probably would have got it. You prob-
ably didn't need the seizure thing.

I don't think we ought to be justifying the seizures by arguing
that, oh, we need it for this important Government program or that
important Government program. We are talking about money
taken from private citizens. If they have committed crimes and the
money is gotten illegally and it could be used for departments, that
is OK, that is not a basis for an appropriation, and I would dis-
agree very much with that kind of argument because that could
lead to incentives to do more than should be done, and it is also
no way to run a Government.

We don't say, "Gee, this is really an important program, and if
we catch enough crooks, we will be able to deal with it." I don't
think that is, in fact, how it works. I mean, I think invoking Olym-
pic security probably gives this program more credit than it needs.
I believe this Congress would have voted you the money for the
Olympic security without that.

Mr. Cassella. Congressman, just to m.ake the record clear, the
Attorney General does receive an appropriation of the money com-



35-668 96-9



254

ing out of the forfeiture fund through the regular appropriations
process.

Mr. Frank. I think that is the way it should be done. At the
State and local level, I think it is reasonable to give them the
money, and that is a decision to be made at the State level. I would
argue for the same thing, but that is for them to decide.

My last point is just, I just want to be clear, on the damage and
interest, are we in agreement that where you win back your prop-
erty, because the Government can't meet the preponderance of the
evidence, burden of proof, you are made as whole as it is possible
to be made through a combination of interest on cash or damages
restored?

Mr. Cassella. That is correct. Congressman. We have proposed
that the Government be liable for interest, and we have also pro-
posed that the Tort Claims Act be amended so that a person who
feels that his property was damaged while in the custody of the
Government could have

Mr. Frank. What about if my house is taken and I had to go live
somewhere else for 2 years and pay rent? The principle ought to
be, we are not making it easy for you to get the money back. If you
can win in court against the Government, if they took your prop-
erty inappropriately, that vou were, in effect, inappropriately ac-
cused, inaccurately accused of a crime, shouldn't we make you as
whole as possible?

Mr. Cassella. Certainly. The reason I was pausing is because,
in general, we don't seize real property, but I don't want to

Mr. Frank. That wouldn't be a problem then if we added that?

Mr. Cassella. Right. I don't want to argue a hypothetical, but
some other example

Mr. Frank. It is not hypothetical. You never seize real property?
Maybe that was a State case we had.

Mr. Cassella. We used to, but since the Supreme Court decided
a real property case in about 1993 we have a "post and walk" pol-
icy. We post the property, indicate that it is subject to forfeiture,
inventory, the contents — we don't seize it.

Mr. Frank. The people can still live there?

Mr. Cassella. The people live there, yes.

Mr. Frank. OK. Thank you, Mr. Chairman.

Mr. Hyde. Well, I thank the gentleman.

I have a problem with recovery for negligence on the part of the
Government to damaging the property while it is in their custody.
What about a situation where they deliberately damage the prop-
erty, as they did this man's sailboat? You can't say it was neg-
ligence when they took the axes to it and drilled the holes in it
looking for drugs. Do we cover that situation where there is delib-
erate damage to the property?

Mr. Cassella. I don't know whether the language in either of
our proposals does, but it should, and we can work to make sure
it does.

Mr. Hyde. Would you give us your thinking on that? because you
wouldn't — I wouldn't want the Grovemment to escape saying, "Well,
we weren't negligent."

Mr. Cassella. We did it on purpose.

Mr. Hyde. "We intended to destroy your property."



255

Ms. Blanton. Mr. Chairman, since that occurred, Customs Serv-
ice now has authority to pay in those situations and I think the
issue back when that situation was occurring, was no statutory au-
thority to pay.

Mr. Frank. If I might say, Mr. Chairman, that grew out of a pri-
vate bill which we had a few years ago, and I think we ultimately
passed a statute, Mr. Gekas and I. Ultimately, we had to give them
statutory authority over their objection to be able to do that.

Mr. Hyde. My recollection is in this yacht or boat case, the gen-
tleman could not prove negligence because it wasn't negligent; they
intended to do what they did.

Ms. Blanton. They had a warrant, is my understanding, of that
case. And when law agents are lawfully executing a warrant to
search, so it was not considered negligence.

Mr. Hyde. True. But the problem is, warrants are issued on
probable cause and rumors, and the man's boat was ready to sink
when they got through it with, and nobody is to blame.

OK Well, anyway, thank you for your contribution and your con-
tinued contribution, because we intend to work with all of you. We
want you all to support the eventual product. We may have a little
different approach to this, but I am sure you understand — you
heard this morning's testimony. No one can be comforted by that,
and we want to redress that and prevent that from happening
again, without impacting negatively on criminal asset forfeiture.

We all agree — I do, I know Mr. Frank does, I assume he does,
and Mr. Gekas — that it is a useful weapon, resource, in the strug-
gle against serious crime. But these abuses have to be eliminated,
the possibility of them, so that the integrity of the programs and
the Government's integrity is protected. So we all are serious about
that, as you are, too.

I thank you very much.

Mr. Cassella. Thank you, Mr. Chairman.

Ms. Blanton. Thank you.

Mr. McMahon. Thank you.

Mr. Hyde. We have a final panel. Before they approach the table,
we have Terrance G. Reed, who is chairperson of the RICO Forfeit-
ure and Civil Remedies Committee, the Section on Criminal Justice
of the ABA; and Mark Kappelhofif, legislative counsel for the
ACLU, and E.E. (Bo) Edwards of the National Association of Crimi-
nal Defense Lawyers. But we have a bill on the floor. It is sched-
uled at — we go in at 12, and we are not sure at this moment how
soon after 12 the bill will be called. I have to manage the bill. We
are going to break.

Mr. Frank. I have the other half, Mr. Chairman.

Mr. Hyde. You have the other.

Mr. Frank will also be there.

I hate to do this to you, but is 2 p.m. too late to resume? Will
that work a hardship on any of you? We will give you time to —
is that all right?

Mr. Kappelhoff.

Mr. Kappelhoff. Fine.

Mr. Frank. Mr. Chairman, when you come to Congress the day



Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 23 of 37)