Law enforcement fails to undermine popular Utah forfeiture reform law

by Judy Osburn

FEAR Foundation Journal, Vol. 1 No. 1

Fall 2003

posted on FEAR website 4/10/2004
(c) 2003 FEAR Foundation.  Reprinting for distribution without charge, and republication permitted if article is printed in its entirety without editing, and attribution is given to FEAR Foundation Journal, Forfeiture Endangers American Rights Foundation, 20 Sunnyside Suite A-419, Mill Valley, CA 94941. 

Congratulations to Arnold Gaunt, FEAR coordinator for Utah and proponent of the popular forfeiture reform initiative, Measure B–the Utah Uniform Forfeiture Procedures Act, which voters overwhelmingly approved in November, 2001.

Arnold sounded the alarm about abuses to the new reform legislation, and attempts by law enforcement addicted to police piracy to thwart the new law. Utah police objected to the reform because it curtailed their profit sharing in several ways, including earmarking the majority of forfeiture proceeds to the state education fund.

Prior to Utah voters passing Initiative B, the Uniform Forfeiture Procedures Act, profits from sales of seized property went back to police agencies for their use. The reform initiative put an end to the perversion of law enforcement priorities that accompanies the lure of forfeiture proceeds for police coffers.

Police chiefs and prosecutors statewide came out en masse against Initiative B during its emotional public debate, saying it would only help drug criminals. Forfeiture squads had previously helped agencies statewide access millions in federal law enforcement funds. Since the passage of Initiative Measure B, many agencies have lost hundreds of thousands of dollars. The Salt Lake County Sheriff’s Office, for example, estimates it has lost as much as $500,000, said deputy Peggy Faulkner.

Proponents argued the seizures were unconstitutional, usually coming before a conviction in a case. Reformers cited horror stories of property taken from innocent third parties and agencies profiting directly from items its officers seized. Voters agreed, passing the initiative by a 69% majority.

Under Initiative B, police are not allowed to keep the proceeds from forfeiture sales. Instead the money is supposed to go into the Uniform School Fund. Since the passage of the initiative, forfeitures have all but stopped, and no money has been deposited in state coffers.

State Senator John Valentine introduced SB31, stating the bill was intended to balance the interests on both sides of the debate. Law enforcement liked the bill because it would have restored the ability of police to keep the property they seized. The proceeds from sales of seized property would have been divided between statewide drug court programs and a new grant program for police agencies to be administered by the Attorney General’s Office.

SB31 would have also freed up some $3.8 million in federal funds that have been earmarked for Utah police agencies but cannot be awarded because current federal law requires that all shared forfeiture assets returned to states go only to law enforcement agencies.

Opponents argued that SB31 would go too far in undermining the reform initiative efforts. Because police and the courts stood to benefit from profits, the bill created a financial incentive for police to make seizing property their top priority. Making the attorney general the gatekeeper of those proceeds set up a political incentive for that elected office. Arnold Gaunt wrote:

The confiscation lobby has redrafted the bill attacking private property protections in Utah law. As with the previous bill [attacking Measure B], it has not been disclosed on the Legislature’s web page.

In addition, the state auditor has released another letter, detailing the 154 forfeiture cases for which there has been no public accounting. I believe you will find the information is damaging to the confiscators, and reemphasizes the importance of opposing their attack.

A report from the Utah State Tax Commission made it pretty clear that the Narcotics Task Force procedures were woefully inadequate to prevent insider abuses.

The "Utah State Tax Commission report on irregularities with State Narcotics Task Force disbursing of forfeited property" detailed the "inadequate procedures and supporting documentation regarding vehicle seizures."

The Tax Commission reviewed all 876 closed cases involving vehicles from December 1994 through December 1999. They found that files related to 36 sold vehicles did not contain sufficient sales documentation:

Of the 36 vehicles…, five had related sales documentation that conflicted with the sales documentation on file at the Tax Commission. All five of these vehicles were sold to one individual (Individual A) for $40 each as part of a group. The Task Force indicated that the vehicles were considered unsellable and were sold for scrap. However, the Tax Commission records showed subsequent owners for all five vehicles (after Individual A purchased the vehicles from the Strike Force), which indicates the possibility that all five vehicles had value and should have been sold at a public auction. Also, the conflicts between reports on file at the Strike Force vs. the Tax Commission seem to indicate that records may have been altered. Based on our review of records from various sources, we noted the following:

Strike Force records indicated that three of the vehicles were sold to Individual A, but Tax Commission records indicate that different persons, Individuals B, C, and D, purchased the vehicles one month before Strike Force records indicate the sale to Individual A. Strike Force records indicate that the other vehicle was sold to Individual A, but Tax Commission records indicate that a different person, Individual E, obtained title to the vehicle one month after the date the Strike Force sold the vehicle to Individual A.

The commission described Bills of Sale with sellers and buyers names left blank, whereas Tax Commission records listed several third party buyers with the previous Strike Force Lieutenant’s name as the seller on all four.

State Auditor Austin G. Johnson went on to say law enforcement agencies have kept nearly $500,000 in drug seizures in defiance of the 2001 voter initiative directing that those funds flow to the state treasury earmarked for education.

The withheld money included forfeitures valued at $200,509 by the Weber-Morgan Narcotics Strike Force, according to an audit by Johnson’s office. "It’s the law, and they are disregarding it," Johnson said, referring to Initiative B.

Johnson said Salt Lake, Weber and Davis counties account for all of the money cited in his audit, and county attorneys there claim revisions to the state’s Uniform Commercial Code supercede Initiative B and allow agencies to return the money to law enforcement.

The initiative took effect on March 29, 2002, while the changes to the commercial code took effect on July 1, 2002, therefore negating the initiative according to the prosecutors’ arguments. "We’re just not buying their argument," State Auditor Johnson said.

The forfeiture lobby claimed that Initiative B was effectively repealed by S.B. 168, which enacted major changes to the Uniform Commercial Code, and made three insignificant (to S.B. 168) changes to a section pertaining to forfeiture. Therefore, alleged the forfeiture lobby, the original forfeiture code section was reenacted as if Initiative B had never been made law! Two of these changes were technical clarifications immaterial to the subject of S.B. 168, while the other change updated a Commercial Code reference.

Initiative B also modified this same forfeiture section. In actuality, says Arnold Gaunt, there is no technical conflict between S.B. 168 and Initiative B. If there were a conflict, such that the intent of S.B. 168 was to modify forfeiture procedure as well as the Uniform Commercial Code, then S.B. 168 would be illegal. The Utah Constitution, Article VI, Section 22 states that bills passed shall not contain more than one subject.

The forfeiture lobby cannot have it both ways. Either S.B. 168 does modify and did intend to modify forfeiture procedure (invalidating it under Utah Constitution Article VI, Section 22), or it does not modify forfeiture procedure.

Arnold Gaunt focused on this issue and galvanized popular action against the law enforcement attempt to destroy Initiative B. Gaunt’s call to action worked and Senator John Valentine withdrew his bill. Heeding the pleas of constituents, he decided to halt his efforts to retool the state’s asset-forfeiture laws this legislative session. "Senate Bill 31 is dead for this year," he said while at the American Fork Library, where some 100 forfeiture opponents–most from Valentine’s District 14–gathered to ask questions about the bill. "They have raised legitimate issues with the bill, so I’ve decided that I will no longer pursue it."

Opponents of SB31 said they will be watching closely to see if the bill is resurrected by others. "There are other mechanisms by which the Legislature can revive things," said Arnold Gaunt. "I’ve seen it happen in the past."

Sure enough, a May 5 headline in the Salt Lake Tribune announced "AG’s Office Targets Forfeiture Law." Utah Attorney General Shurtleff "is beside himself" says attorney Janet Jenson, a co-author of Measure B who successfully defended a law enforcement challenge of the constitutionality of the reform initiative in federal court last year. "They have the motive to keep fighting–at taxpayer expense," she said of the Attorney General's Office. "It grinds everyone down."

Utah Assistant Attorney General Kirk Torgensen "is busy working on a new revision of the law, hoping to find a sponsor for the 2004 legislative session. Not even the growing body of national law favoring forfeiture reform seems to deter him" says the Tribune, noting the "constitutional challenge in New Jersey stopped police and prosecutors from holding assets they seized, and put some $32 million on hold pending a state Supreme Court review."

On June 24 Utah citizens, represented by the Washington, D.C.-based Institute for Justice, took matters into their own hands and filed papers with the state’s attorney general, demanding that law enforcement officials follow the initiative and the U.S. Constitution.

"A bedrock principle of our system of government is that police and prosecutors follow constitutional laws passed by the legislature or the people–even if they might personally disagree with them," stated Scott Bullock, the lead attorney in an Institute for Justice case that recently struck down New Jersey’s civil forfeiture law (see page 1). "We filed our action today to hold public officials accountable to the people they serve. Police and prosecutors must make decisions on the basis of justice, not on the potential for profit," said Bullock.

Despite the clear mandate of Initiative B, prosecutors from Weber, Salt Lake and Davis counties, using a completely illegitimate justification, have thus far diverted nearly a quarter of a million dollars of forfeited proceeds into their own accounts rather than to the education fund, as required under the initiative.

Represented by the Institute for Justice, Utahns for Property Protection along with a group of Utah citizens filed a "notice of claim" with Utah Attorney General Mark Shurtleff, demanding that he take immediate action against the district attorneys to end their unlawful behavior and to secure the return of the funds that should have gone to public education and to the victims of crime. If the attorney general does not act, Utah citizens will go to court to hold public officials accountable for their illegal actions.

"We intend to expose the legal chicanery of these district attorneys and law enforcement officials, to hold them fully accountable for blatantly ignoring the will of Utah citizens and to slam shut any remaining incentive to forfeit property for profit," said Andy Stavros, one of the primary drafters of Initiative B and co-counsel of Utahns for Property Protection.

"General Shurtleff’s response to the district attorneys’ unlawful behavior has been timid and toothless, which is not surprising considering that he is the leading opponent of Initiative B," said Bullock.

In the wake of Utah State Auditor Johnson’s report and the district attorneys’ flagrant disregard of the law, General Shurtleff wrote a letter stating that he, too, believed the prosecutors were wrong in their interpretation of the law. He had little choice to do otherwise as the prosecutors’ argument border on the frivolous. Shurtleff also filed papers in three current forfeiture cases stating it was the position of his office that Initiative B should be followed in those particular cases. However, he has taken no steps to demand that the previously diverted forfeiture proceeds be turned over to the education fund or to enjoin the district attorneys from any further diversions of forfeiture funds to their own accounts beyond those three cases. This gives rise to the need for citizen action.

"Initiative B was sponsored by citizens, and now citizens must come to its defense against public officials who refuse to abide by it," said Bullock. "This litigation by Utah citizens will ensure that all law enforcement officials in the state follow the initiative overwhelmingly passed by the voters," Bullock concluded.