Subject: FEAR: Abuse of the Federal Equitable Sharing ("federal adoption") program
From: Brenda Grantland
Date: Wed, 07 Jul 2004 12:29:09 -0700
To: fear-list@mapinc.org

Journalists:  this would make fodder for some good follow-up stories.

The article "SHERIFF'S RACE HEATS UP OVER DRUG MONEY" -- which was distributed over FEAR-List earlier today -- reported that Camden County, GA, sheriff Bill Smith was making questionable disbursements from the money his agency received from federally adopted forfeitures.  The article reports that Sheriff Smith doled out some of the money to civic organizations,  and "has given substantial donations to other causes, including his alma mater, The Citadel."  

Rich Gamble, Smith's opponent in the sheriff's race, was too quick to concede that Smith's actions have not violated any laws.

Equitable Sharing (also known as "federal adoption") authorizes the federal law enforcement agencies such as DEA, FBI or Treasury to "adopt" property seizures by state and local police, and process the forfeiture under federal forfeiture statutes.  The state and local agency is rewarded by getting a kickback of up to 80% of the proceeds of the forfeiture.  This is permitted even if the state or local agency had no legal basis for forfeiting the property under state law. 

Before state/local agencies are given proceeds from property seizures that the federal government "adopts," the state/local agency has to sign a Federal Equitable Sharing Agreement.  Here is a link to the form used:  http://www.usdoj.gov:80/criminal/afmls/forms/ES_Agreement.pdf.  In paragraph 3 of this agreement, the local law enforcement agency promises the proceeds "shall be used for law enforcement purposes  in accordance with the statutes and guidelines that govern equitable sharing"  and also that they will be used as the local agency specified in the application it submitted requesting equitable sharing in that case.  Paragraph 5 says "the misuse or misapplication of shared resources is prohibited" and will subject the local agency to sanctions.

The Attorney General's Guidelines on Seized and Forfeited Property (http://www.usdoj.gov/criminal/publicdocs/11-1prior/crm05.pdf) states at page 7 paragraph 3 that all property transferred to state or local agencies under the Equitable Sharing program "shall be used for the law enforcement purposes specified in the request."

A 1994 DOJ memorandum entitled EQUITABLE TRANSFERS OF FORFEITED MONIES OR PROPERTY, from Assistant Attorney General Walter Dellinger, states that:
When the federal government makes an equitable transfer of forfeited monies or property to a state or local law enforcement agency, that transfer is more appropriately characterized as a conditional gift to the agency rather than as a formal contract between the federal government and the agency.

      If the state or local agency fails to use the transferred property for law enforcement purposes, the federal government may be able to pursue restitution of the property.

The DOJ's regulations on how local agencies proceeds from equitable sharing may be spent is set out in a publication called "A Guide to Equitable Sharing of Federally Forfeited Property for State and Local Law Enforcement Agencies" (http://www.usdoj.gov/criminal/publicdocs/11-1prior/crm06.pdf)  published in 1994.  Permissible uses of equitable sharing proceeds are discussed beginning on page 10 of the Guide (page 18 of the PDF file).  "Permissible uses" (Section X-A-1) are law enforcement purposes such as the enhancement of future investigations, training, equipment and operations, detention facilities, law enforcement facilities and furniture, drug education (e.g. DARE program), and asset accounting and tracking.  Recipient agencies are instructed to give priority in their expenditures to "operations calculated to result in further seizures and forfeitures."  Impermissible uses (p. 20 of the PDF file) include: paying salaries for existing positions, use of forfeited property by non-law enforcement personnel, payment of non-law enforcement expenses, and "any use that creates the appearance that shared funds are being used for political or personal purposes."  (section X-A-2-f.)  Section XI (pdf file p. 26) requires any recipient agency to maintain accounting records of the expenditures, and requires independent audits of any agency that receives $100,000 in equitable sharing per year.  (Sounds like someone needs to send Sheriff Smith a Freedom of Information Act request!)  Penalties for violators are set out in Section XIII (pdf file p. 27).  They include barring the agency from future participation in the program, offsets against future equitable sharing revenues, and civil and criminal penalties.

Stefan Cassella, one of the honchos in DOJ's Asset Forfeiture Office, has for a long time subscribed to FEAR-List.  Stefan are you still here?  If so, you ought to add Sheriff Smith's department to your audit list.

Brenda Grantland
President of the Board,
Forfeiture Endangers American Rights

Further resources:

The U.S. Attorney's Manual chapter on Equitable Sharing: http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/116mcrm.htm.

This page lists links to DOJ audits of Equitable Sharing expenditures by recipient agencies, arranged by state:  http://www.usdoj.gov/oig/copsumma/esstat1.htm. 

This audit report deals with the portion of proceeds from federally adopted state/local seizures which the DOJ keeps for itself:  "Federal Cost Recovery and Program Monitoring  In the Equitable Sharing Program" (http://www.usdoj.gov/oig/audit/plus/0112/final.pdf).

Equitable sharing with foreign countries exceeded $3 million in Fiscal Year 2003 -- see  http://www.usdoj.gov/jmd/afp/02fundreport/2003affr/foreign_sharing.htm.

"The Department of Justice's Consolidated Asset Tracking System" (http://www.usdoj.gov/oig/audit/plus/0108.htm), a DOJ Office of Inspector General report (Report No. 01-08) issued in 2001,  has some interesting statistics about the DOJ's expensive computerized system for tracking seized assets:
The Asset Forfeiture Management Staff (AFMS) in the Justice Management Division is responsible for the development and operation of CATS. AFMS relies on the participating agencies to enter seized and forfeited asset information into the system.  According to AFMS officials, CATS was fully implemented in 1998 at a cost of about $150 million, has annual maintenance and operating costs of about $25 million, and stores over 300,000 seized and forfeited property records with an estimated value of over $7 billion. CATS is currently a DOS-based system, but AFMS is considering an upgrade of the system to a more "Windows-like" application.