The state chapter of a small business advocacy group is among the supporters of a bipartisan bill package introduced this month to reform the way law enforcement seizes property from people suspected of crimes.
Charlie Owens, state director of the National Federation of Independent Business, says Michigan’s civil asset forfeiture laws are broken. By law, police agencies can seize property from people suspected or charged with crimes but who may not ultimately be convicted. The process of recovering that property can be expensive and take years, if victims bother at all.
“Private property is the bedrock of free enterprise,” Owens said. “Civil forfeiture laws seize property without due process.”
Owens added that the system, which was created to target the assets of drug-related criminals, has “wandered off” to affect other citizens by incentivizing police agencies to seize property without a conviction. Police agencies freely admit that forfeitures help fund departments, including personnel and equipment.
“When you allow a police department to financially benefit, you’ve created a perfect environment for corruption,” Owens said. “That is terrible public policy.”
Two bills introduced at the beginning of this year’s legislative session would reform the practice and require convictions before seizing assets up to $50,000. Similar legislation cleared the state House last year but died in the Senate Judiciary Committee.
The bills — H.B. 4001 and 4002 — are sponsored by state Rep. Jason Wentworth, R-Clare, and Rep. David LaGrand, D-Grand Rapids. Earlier this month, Attorney General Dana Nessel, a Democrat, stood alongside Republican Speaker of the House Lee Chatfield in calling for reforms.
LaGrand is a former private-sector attorney and assistant Kent County prosecutor, bringing experience on both sides of the issue.
“Civil asset forfeiture started decades ago and was applied very poorly historically, and often disproportionately,” he said. The bills target small-dollar forfeitures because they often go unclaimed by people not convicted of a crime.
“If the government wants to take money, it has to have proof of criminality,” LaGrand said of the legislation.
Businesses also affected
While most cases of civil forfeiture involve individuals in drug-related crimes, a small portion have affected business owners in the state.
Last year, the owner of an auto parts dealer in Lake Orion in Oakland County testified during a House committee about being unable to regain possession of his parts inventory that was seized by police, even though he reportedly had a court order to do so.
Owens said small businesses tend to “carry a lot of cash” to deal with a variety of circumstances, such as restaurants or bars that may have to react quickly when they unexpectedly run out of supplies. Additionally, he said business owners are unlikely to publicize their encounter and “wave a red flag in front of a police agency.”
“The potential for abuse is always there. This is a concern (among members),” Owens said.
Officials with the Grand Rapids Area Chamber of Commerce and the West Michigan Policy Forum say they are not taking a position on the issue.
In 2015 and 2017, the state Legislature took steps to address the issue by increasing transparency with stronger reporting requirements and eliminating a bond requirement that required payment from citizens to start the process of regaining property.
In addition to uniting Republicans and Democrats, the issue has garnered joint support from the Mackinac Center for Public Policy and the American Civil Liberties Union.
ACLU of Michigan policy counsel Kimberly Budding-Crawford said civil forfeitures usually affect businesses under state nuisance laws rather than drug statutes.
“If someone made a complaint, and (police) think they have some type of evidence of that, they can seize property they believe is connected to that crime,” Budding-Crawford said. “Even before someone is convicted of that particular crime, that property can be forfeited to the government. That is fundamentally wrong and deprives people and companies of property that is legally theirs.”
Additionally, landlords can have property seized in cases involving tenants. While it’s possible for landlords to claim an interest in property to get it back, “the property and forfeiture proceeding is not connected to the criminal proceeding, allowing forfeitures to go through at their own pace. That process could certainly be improved,” Budding-Crawford said.
LaGrand said his parents — who owned a rental property decades ago — received a warning from federal law enforcement that their house could be seized after a tenant’s teenage child was followed home by police for suspected drug activity.
“You can imagine a person in the rental property business is not going to be happy about a letter like that,” LaGrand said.
Budding-Crawford called the proposed legislation a “pretty good first step” that addresses the “core solution” of requiring a criminal conviction before forfeiting property.
‘Tool’ for police
In 2017, the state took $13.1 million in cash or property through civil forfeiture in more than 6,000 cases, according to a Michigan State Police report. Charges were never filed in 736 cases while in 220 others, people who were found not guilty had to forfeit their property. The seized inventory included eight residential properties and two commercial or industrial properties.
But only a small portion of agencies — 278 out of 1,820 agencies, or about 15 percent — receive civil forfeiture revenue, according to the report.
“The majority of the money and property value is out of a small number of those agencies,” Budding-Crawford said.
Blaine Koops, executive director of the Michigan Sheriffs Association, said the group has not yet taken a position on this year’s legislation but “had concerns” about last year’s similar bills.
“All (civil forfeiture) is for us is a tool — a tool for law enforcement and justice for our communities,” said Koops, who was the Allegan County sheriff for 16 years. “If we wait for a conviction, quite frequently the money and the assets are gone.”
Koops added that agencies otherwise might be strained for revenue.
“On the personal side, I don’t like the idea of having to seize property to do business, but that’s what we’ve been forced to do,” he said. “We don’t have the resources to go out and enforce laws the public wants enforced — we’re not given the cash resources to do that.”
LaGrand said he is sensitive to the revenue issue and agrees law enforcement needs more funding. But he says that should come from additional revenue sharing from the state.
“Funding them from criminal asset forfeiture is a bad idea,” LaGrand said. “Being addicted to a bad source is not necessarily a good argument.”
Building a better system
While seizures may help fund police agencies, stories from across the state and country show evidence of misuse.
In 2013, the Internal Revenue Service seized all of the money in the account of the owners of a family-run grocery store in Macomb County for suspected money laundering. Nearly a year later, the IRS ended up returning the money after prosecutors never offered evidence of a crime.
In 2015, the Saginaw County Sheriff’s Office seized a classic car and other items from a couple for a drug-related charge. A year later, the couple filed a federal lawsuit against the office after it logged 56,000 miles on the car before selling it. The couple was never charged with a crime.
Meanwhile, a federal class action lawsuit was filed in Michigan last year against Wayne County prosecutors and the sheriff’s office over the use of civil forfeiture.
Koops said the remedy for regaining property is “through the courts.” He added that legislation passed in recent years created a stronger system of reporting, and “we haven’t given that system enough time to operate to see where the forfeitures are coming from and going.”
“What you have to do is look at each individual jurisdiction and how they do business,” he said. “If they’re out there doing it for the wrong reason and seizing improperly, then approach that jurisdiction. Don’t put rules and regulations on the entire criminal justice system because one or two jurisdictions are not doing it right.”
However, reformers see improper civil forfeiture as a symptom of a bigger problem.
“We’re trying to build a better structure,” LaGrand said. “You can say there are a few bad apples, but it doesn’t deal with the structural problem in the first place.”
Owens of the NFIB added: “When you cast a wide net, you’re going to catch fish that aren’t the problem.”