In a historic class-action lawsuit settlement announced Tuesday, Philadelphia officials agreed to reform parts of the city’s controversial civil asset forfeiture program and establish a $3 million fund to compensate victims who had their property seized through its widespread practice.
Civil asset forfeiture laws have long allowed police to seize property — cash, cars, jewelry, even entire homes — from ordinary citizens, which prosecutors can then force people to hand over with or without a criminal conviction.
In the name of winning the drug war, the mere suspicion of narcotics involvement was enough to lose your property for good. And over the years, the Philadelphia District Attorney’s Office developed a particularly avaricious reputation for turning the assets seized by city narcotics police into private municipal lucre. Once forfeited, the assets were split between the two law enforcement agencies to fund their mysterious forfeiture operations, largely free of public oversight.
The practice gave both sides what critics called an unconstitutional profit incentive to ramp up the practice. In some cases, Philly prosecutors would petition to forfeit as little as $9 from a criminal defendant, said Darpana Sheth, an attorney with the Virginia-based Institute for Justice who served as lead counsel in the class-action suit.
Four years in the making, the settlement still needs needs to be stamped by a federal judge before it has any teeth. But Mayor Jim Kenney and District Attorney Larry Krasner have already committing to a raft of reforms that have hailed been as a major win for civil liberties advocates.
“There are some 23,000 people in Philadelphia harmed by this program,” Sheth told Billy Penn, “and the settlement will hopefully serve as a model for other cities who are pursuing to reform their profit-driven forfeiture programs.”
Still, while the rules of engagement have changed, the practice itself isn’t going to disappear entirely. And there are still many questions unanswered as to how the newly settled reforms will work in practice — and of equal importance, where all that secret forfeiture money will go now that the program has come clean.
Harder to justify seizures, but some could still happen
In the lucrative heyday of asset forfeiture in Philadelphia, law enforcement officials were seizing hundreds of homes and cars each year. Under state forfeiture laws, a simple drug possession charge could mean losing all your cash — or even your car. And no amount of money was too small for authorities to seize. In 100 cases examined between 2011 and 2012, the now-defunct Philadelphia City Paper found the average forfeiture petition sought just $178.
“We saw a lot of cases where there was a marijuana joint, and they would try to take the defendant’s car,” Sheth said.
Those practices slowed after reporters and public interest attorneys ramped up inquiries; the class-action lawsuit effectively shut down most operations last year.
Now, under the new settlement reforms, police officers won’t be able to seize assets for simple drug possession charges. And in cases where narcotics involvement warrants enough suspicion, there will be a new threshold: no seizures of any amount less than $250.
But that figure is too low to be meaningful for the population most often on the receiving end of police seizures, Molly Tack-Hooper, an attorney with the Pennsylvania ACLU, told Billy Penn.
“The threshold for cash cases should be higher than this, or there will continue to be a risk that people lose their property by default simply because they can’t afford to fight the case,” she said.
Krasner said his office would abide by an internal limit of $500. That policy would not be legally obligated under the settlement terms and could change under another top prosecutor.
The city now *wants* a conviction for forfeit, but it’s not required
The settlement does not mandate a guilty verdict in order for the prosecutor’s office to forfeit assets seized in connection to criminal activity, Tack-Hooper noted.
Krasner emphasized that the the days of sidestepping convictions to seize “grandma’s possessions” are over — but stopped short of saying the practice was gone for good.
His office will require a conviction for asset forfeiture 99 percent of the time. The caveat? Krasner cited an anomalous case in California where federal authorities raided more than 100 residences in which foreign-born U.S. residents were allegedly running massive pot-growing operations.
“There is value in asset forfeiture so long as it is targeted closely to criminals and criminal organizations who are owners of the property,” Krasner said.
Still, even Institute for Justice attorney Sheth noted that some of Philadelphia’s most egregious-seeming forfeitures could be classified as “conviction cases.” The plaintiffs in this specific class-action lawsuit, Markela and Chris Sourovelis, had their home seized without warning after their son was busted for selling $40 worth of drugs outside.
With less being taken overall, the forfeiture courts will likely continue to unclog in the coming days. But it remains unclear how exactly the new system will operate. Tack-Hooper hopes there will be clear procedures for the process of returning property — including providing legal counsel to those who can’t afford it.
Which brings us to the money.
No revenue for police, DA’s share to nonprofits
In many municipalities, the money trail remains one of the biggest mysteries of the asset forfeiture juggernaut. District attorneys and police chiefs freely admit to using the proceeds, but rarely provide details on how exactly the funds get spent.
Last year, an investigative report (co-written by this reporter) traced $7 million spent by the Philadelphia police department and DA’s Office over a five-year period. Bank records depicted a rainy day fund for police and prosecutors to spend on whatever they pleased, from $30,000 in submachine guns to a fancy $16,000 website to $76 in unpaid parking tickets. But the clandestine revenue stream largely funded the forfeiture apparatus itself, padding salaries and expensing costly stings. That’s what critics have called a “perverse incentive” to feed the beast and keep the forfeiture going.
In recent years, forfeiture has been one of the rare law enforcement practices to receive bipartisan condemnation — even as U.S. Attorney General Jeff Sessions seeks to expand the practice on a federal level. Republican and Democrat lawmakers, both in Washington and in local municipalities across the nation, have pushed to curtail a system that they say represents a grave levy on individual property rights. The U.S. Supreme Court will soon review the constitutionality of the practice for the first time in more than two decades.
“You remove the profit incentive, and it becomes more of a law enforcement tool than a profitable tool,” said Sheth. “Under the settlement, forfeiture proceeds have to go right back into the community for drug rehab and community-based drug prevention programs.”
That’s right. Under the settlement, Kenney confirmed Philly police won’t receive a cent of the forfeiture revenue. Police Commissioner Richard Ross added that those funds, which accounted for a fraction of the department’s nearly $700 million annual budget, have already been phased out. And as for the DA, forfeiture proceeds may only account for less than one percent of the office’s $38 million dollars for the coming fiscal year.
As of now, Krasner said there is about $2.5 million still sitting the DA’s forfeiture coffers. That money will be diverted to the one-time settlement with plaintiffs in the class-action case. All residents whose property was forfeited without a conviction will be fully reimbursed, according to the consent decree.
As for future revenue churned out by the forfeiture cogs? That’s another story.
It’s not clear who’s going to control the money, or if there will be transparency
The main commitment at this point is that seized assets will be funneled into community organizations and nonprofits doing drug rehabilitation and prevention work. As phrased, that could include a lot of disparate programs. Krasner said he would personally like to direct revenue back into the zip codes it came from (read: lower income sections of the city).
But right now, there’s no official plan. And details were scarce Tuesday as to who will hold the pursestrings and how those authorities would remain accountable for the historically opaque revenue stream.
“Any distribution we would do has to be in compliance with the law, and the law does place some limits on what we can do,” Krasner said. “However, I am willing to commit that we would be transparent as to where all those funds go.”
Coincidentally, state laws have shielded law enforcement agencies from disclosing “any meaningful transparency,” the ACLU’s Tack-Hooper noted. “And as far as I can tell, this settlement doesn’t increase transparency,”
To increase sunshine, Tack-Hooper suggested, the DA’s office could maintain a database of non-privileged information about who is losing property to forfeiture, including details about related criminal proceedings. Such a database would also allow the city (and public) to look at the impact of Philly’s forfeiture practices along racial, gender, and geographic lines.
As for where the revenue ends up, Tack-Hooper added that some should be reserved for paying for appointed counsel to forfeiture defendants trying to retrieve their property.
“The DA’s office can ask the court to appoint counsel for indigent property owners facing forfeiture who are unrepresented,” she said. “The court has inherent authority to grant such a request, but does not have any funds available to pay for appointed counsel.”
Using the money this way may not be possible under the settlement, as it’s still a mystery who control the newly reformed fund. Officials said any financial arrangement will also have to be approved by a higher court.
The Institute for Justice has until early October to finalize its agreement with the city. The details will be ironed out in the coming weeks, but reform advocates already agree these are undoubtedly big strides.
“The settlement is going to make civil forfeiture a lot harder to pursue. They have a higher standard of proof. They have to show the property owner knew about or consented to the illegal activity,” Sheth said. “Hopefully, it’s no longer going to be the same robo-file seizure system.”