Government, the Thief

by Douglas French
Dec. 10, 2012

How secure are property rights if the police can take your stuff and keep it, citing no particular reason at all? Not very secure. This is the way police work in the developing world. Of course, this practice is increasingly common in the U.S. too.

Municipalities around the nation are battling to stay afloat, and local police departments are increasingly focused on profits instead of “protecting and serving.” Retired LAPD deputy chief of police Stephen Downing told FoxNews Latino, “The federal government has turned policing into policing for profit.”

For example, the police seized $30 million in cash on the southwest United States border in 2011. Where does the money go? Well, if the local cops make the seizure, they keep the money. If the feds snatch the property, they keep it. If it’s a joint operation, they split the dough. Can you imagine the fights that must take place over the booty these police pirates are confiscating?

As of Sept. 30, 2011, the departments of Justice and Treasury held $1 billion in seized cash. So now cops are tracking down cash, rather than crime. Downing told Fox that departments now direct police assets to generate cash, instead of investigating murders and rapes.

Reporting from the border, Patrick Manning told Fox viewers that the average taxpayer loves these forfeiture laws because they keep their taxes lower. If cops can steal with impunity from not just crooks, but anyone, then taxpayers can get their policing at bargain tax rates. But this isn’t policing at all.

What if you’re a New Jersey insurance adjuster driving through Tennessee as part of your job? You’re stopped for speeding and asked if you happen to be carrying a large amount of cash. It so happened George Reby had $22,000 cash in a bag in his back seat. He’d been negotiating for a car on eBay and wanted to be ready if he could make a deal.

Officer Larry Bates of the Monterey, Tenn., police department seized the $22,000, figuring anyone carrying that much cash must be up to no good. “The safest place to put your money, if it’s legitimate, is in a bank account,” the officer explained. “He stated he had two. I would put it in a bank account. It draws interest and it’s safer.”

Reby was stunned that the cop could legally take his property for no apparent reason. “I never had any clue that they thought they could take my money legally,” Reby said. “I didn’t do anything wrong.”

Indeed, other than going too fast, Reby hadn’t done anything wrong, so Officer Bates didn’t arrest him. It was Reby’s cash that was suspicious, and it was the cash that the department wanted for its coffers. “No, it’s not illegal to carry cash,” Bates said. “Again, it’s what the cash is being used for to facilitate or what it is being utilized for.”

The local news channel pointed out to Officer Bates that he had no proof the cash was being used for no good. But Bates countered with, “And he couldn’t prove it was legitimate.”

It turns out that property can be confiscated if it’s thought that the money was involved in illegal activity. In Tennessee, if the out-of-staters do not hire attorneys and return for a hearing about their matter, they forfeit their property. Many aren’t given notice of the hearings.

Officer Bates conveniently left out of his report that Mr. Reby told him he was shopping for a new car. Also, Reby was arrested 20 years ago for cocaine possession. While not convicted, that moldy item was prominent in Bates’ report.

“Am I going to use it? Yes, I’m going to use it because he’s been charged with it in the past — regardless of whether it’s 10 or 15 years ago,” Bates said.

Because the local TV station reported on the story, Mr. Reby was able to get his $22,000 back from the Monterey Police Department in the form of a check, and with no apology in four months. That is much sooner than is typical. But of course, to get his money back, he had to show up in person, waive his constitutional rights, and sign an agreement not to sue the department.

Tennessee lawmakers debated a bill this year that would have created a special committee to look into the “policing for profit” issue, but the bill died. Property rights just aren’t on the front burner this year.

Anyone stopped driving through Tennessee on Highway 40 will be asked if they are carrying large amounts of cash by arresting officers who, by the way, may be working outside their jurisdiction but have agreements with the local county law enforcement agencies to share any loot they seize.

The economics are easy to figure out. Seizures pay for the programs and, thus, the jobs, so officers working for the 23rd Judicial District Drug Task Force and Dickson Interdiction Criminal Enforcement (DICE) must seize cash or drugs in order to stay employed.

This puts the state in a whole new light. As LFC Gold member seminar host and economist Robert Murphy explains, this looting though civil forfeitures “is a perfect vindication of the Rothbardian point that, in a very real sense, government is a gang of thieves writ large. Such a radical viewpoint sounds crazy to most Americans in the abstract, but when they watch the video, it’s hard to deny.”

Civil forfeiture turns the bedrock principle that Americans are innocent until proven guilty on its head. As the Institute for Justice (IFJ) points out in its report Policing for Profit, “With civil forfeiture, your property is guilty until you prove it innocent.”

In its report, the institute graded each state for their civil forfeiture laws. Only three states — Maine, North Dakota, and Vermont — received grades of B or higher. The other 47 states were graded C or D, with Tennessee earning a D-minus grade, the same grade given to the federal government.

The Department of Justice Assets Forfeiture Fund took in $93.7 million in 1986, its second year in existence. By 2008, the fund held $1 billion in net assets. This growth proves that humans respond to incentives. As the IFJ report explains:

“All people work to better their position. Just as private citizens are motivated by self-interest, so too does it motivate government officials. While many individuals within a government organization may share a principled commitment to carrying out the mission of the agency, government officials, operating in what they perceive as their own self-interest, will also attempt to maximize the size and budget of their agency. Larger budgets will benefit everyone within an agency through higher salaries, greater job security, better equipment, and increased power and prestige. Such incentives can affect even the most well-intentioned law enforcement officers.”

So while law enforcement personnel are climbing the ladder to bureaucratic success by taking people’s property, the IFJ found that 80% of persons whose property was seized were never charged with a crime. There are only eight states that bar the use of forfeiture proceeds by law enforcement, while in 26 states, 100% of forfeiture proceeds are distributed to law enforcement.

There is no hue and cry over these confiscations, just as no one complains about the 2.5 million Americans behind bars. Nixon’s war on drugs, used to jail one in a hundred citizens, is now being used by law enforcement to steal money from law-abiding citizens whose only mistake is carrying too much cash.

The state’s organized thievery has lead TV producers and writers to portray “bad” guys with sympathy, while the state is cast as villainous bully. Walter White is forced to do what’s needed to survive on the series Breaking Bad. On The Wire, cops are portrayed as incompetent drunks at best and corrupt at worst. New Orleans cops are corrupt thugs on Treme. Nobody watching The Sopranos wanted Tony to be indicted. The Volstead Act is portrayed as a joke on Boardwalk Empire, while Nucky Thompson and other rival gangsters are portrayed as sharp businessmen. And in John Grisham’s latest thriller, The Racketeer, convicted lawyer Malcolm Bannister runs circles around the feds, to the delight of readers.

The police aren’t protecting and serving the public anymore. They are protecting their jobs and serving themselves, and they are willing to steal from you to do it. What that means is you must protect yourself. The highway robber you encounter may well be wearing a uniform.
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Douglas E. French is senior editor of the Laissez Faire Club. He received his master's degree under the direction of Murray N. Rothbard at the University of Nevada, Las Vegas, after many years in the business of banking. He is the author of two books, Early Speculative Bubbles and Increases in the Supply of Money, the first major empirical study of the relationship between early bubbles and the money supply, and Walk Away, a monograph assessing the philosophy and morality of strategic default. He is founder and editor of LibertyWatch magazine. Write him.