Statement of Kristian Stout, On NJ S1963/A3442 - Asset Forfeiture and Reporting Requirements - International Center for Law & Economics

Statement of Kristian Stout, On NJ S1963/A3442 – Asset Forfeiture and Reporting Requirements


Chairwoman Greenstein, Vice Chairman Lagana, and members of the Law and Public Safety Committee, thank you for giving me the opportunity to testify before you.

The general thrust of my comments today is that bad incentives exist in the law enforcement practice known as Civil Asset Forfeiture (“CAF”) that lead to violations of our citizens’ civil rights. Without the support of the New Jersey legislature, it will be next to impossible to identify where and how those incentives are working to undermine our justice system. Thus, S1963, and its counterpart in the General Assembly, A3442, provide a crucial first step in the process of coming to understand how CAF is practiced in New Jersey, and where our legislature will need to look next to root out any systematic injustices being perpetrated through CAF programs.

I believe there is a problem with how civil asset forfeiture is practiced on the whole, but even for those relatively more supportive of the practice, there is a way to conceptually divide the potentially problematic aspects of CAF in order to find areas for reform.

The problems of CAF are separable into two conceptual groups: in the first group there are bad systemic incentives that are distinct from the second group of more specific problems of procedural justice in individual cases. Indeed, if bad incentives exist within a legal system, that surely constitutes a breach of procedural justice as well, but the problems associated with systemic incentives operate on a global scale and are addressable as such, whereas the procedural justice issues such as presumptions, proof standards, and civil rights guarantees are typically more cognizable within a particular case.

When we talk about the incentives that drive CAF as a general law enforcement program, we think about things like whether law enforcement can retain the proceeds of the program and what utility those programs have generally on proceedings against criminal networks. On the other hand, when we think about procedural justice concerns, like the right to representation or the standard of proof, we are focused more on how the operation of a program affects individual citizens that are brought into the system as defendants (or, more precisely, parties with claims to property that is subject to a forfeiture proceeding).

The procedural justice problems that exist in CAF programs are troubling, and deserve the careful consideration of this body. Today, however, I intend to focus my remarks on the incentive problems with CAF programs because they are more directly implicated, and would stand most to be rectified, by the pending legislation before the Senate and Assembly.

As detailed further below, there are due process protections, guaranteed by the U.S. and New Jersey Constitutions, that are owed to individuals subjected to CAF proceedings. Yet, as CAF programs operate, these protections are systematically undermined. Based on the relevant case law from the Supreme Court, the due process protections are clear: individuals entrusted with protecting the public good, like prosecutors and other law enforcement officers, have an obligation to act on behalf of the community, free from incentives to bend the power of their offices to self-serving ends.

CAF has a place in law enforcement, and can be a useful tool for disrupting criminal networks. There must be, however, systemic protections that disrupt the possibility for bad incentives to work on our public servants. First, these protections should include a requirement that seized property be sent to some neutral fund — the general fund, a fund for drug treatment or prisoner reentry, or something of similar general applicability. By allowing law enforcement personnel to retain seized property for use by their department, we allow a distorting pressure to be placed on our public servants that is flatly unconstitutional.

Second, and the subject of today’s hearing, there should be general, standardized reporting requirements applied through uniform legislation on all agencies that seize property. These reports should be publicly available, and presented in a format that helps citizens to understand what property is being taken, what sorts of people it is being taken from, how much is being taken, and what exact uses it is being put to. Without this sort of transparency, we introduce yet more distortion into the administration of justice.

There is much more to do. We need, I believe, strong civil rights protections for persons who are subject to CAF proceedings. But I also believe that starting with greater transparency requirements like those contained in the bills under consideration would go a long way toward rectifying some of the major flaws in CAF proceedings.

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