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The feds are helping local police make money by taking your stuff again

The Obama administration rolls back one of its best policing reforms.

For decades, the federal government has given local police departments a share of money or property seized from people who haven't committed crimes. When state governments use most, or all, of the money from police-seized assets to fund other things, like education, the federal government gave police a loophole: a convenient way to keep 80 percent of what they'd seized for themselves.

Quietly, just a few days before Christmas, the federal government closed that loophole. The Department of Justice said it was no longer giving a share of asset forfeiture proceeds to local and state police departments for temporary budgetary reasons — but with President Obama trying to use the executive branch to reform the criminal justice system, advocates hoped it would be one of those "temporary" changes that finally becomes permanent.

No dice. Three months after closing the loophole, the Department of Justice is opening it again.

How the federal government helps local police seize people's stuff

After someone is convicted of a crime, the government agencies that arrested and convicted him are allowed to seize property related to that crime (such as a car that was used to commit a robbery, or money earned selling drugs). That's called criminal forfeiture, and that's not something most people have a problem with.

But there's also a principle in the law, going all the way back to English common law, that says when property is involved in a crime, the government can start legal proceedings against the property itself for "participating" in criminal activity. The property doesn't get charged with a crime — instead, it's sued by the government, in a civil lawsuit. (Hence the name "civil asset forfeiture.")

Many states guarantee that any money seized by police, or any profits from auctioning off forfeited goods, goes right back to the law enforcement agency. A few states say police don't get to use any of the property they take — instead, that money goes toward something like state schools. The rest split the difference:

State asset forfeiture laws

In states that take most of the money from asset forfeiture for other purposes, there isn't much benefit to police in seizing assets at all — after all, they won't see much of the proceeds. But there's another option that allows police to get a share of seized assets, regardless of how generous their state policies are — taking it to the federal government, which encourages state and local police to share the wealth under a policy called equitable sharing.

Thanks to equitable sharing, when local police work with federal agents on an investigation, police can turn the property over to the federal government. (Before January 2015, police could do the same thing with investigations the federal government hadn't even been involved with, as long as the suspect had also allegedly broken federal law.) The feds then gave 80 percent of the money right back to the local police (the other 20 percent stayed in the DOJ's coffers). That's a much bigger cut than police in most states would get by turning assets over to their state governments.

The DOJ put some limits on kickbacks in 2015 — but they didn't touch most of the money

In January 2015, Attorney General Eric Holder put limits on when the federal government could use equitable sharing to give seized assets back to local police. He stopped the federal government from "adopting" assets that had been seized by a local or state police department working on its own just because the person whose assets were seized also violated federal law.

But the DOJ still allowed local and state police to seize and keep assets when working with federal authorities on an investigation, and when the property was linked to public safety concerns — such as illegal firearms, ammunition, and explosives.

The exemption for joint investigations with the feds left most of the money captured by local and state police through the federal program untouched. Only about 13 percent of the equitable sharing revenue local and state police got in 2014 came from "adoptions," according to data from the Department of Justice.

As Eapen Thampy of the advocacy group Americans for Forfeiture Reform explained to Vox in January, police would be able to work with federal authorities or deputize officers into federal agents to continue most or all of their asset forfeiture activity.

The federal government suspended state kickbacks for budget reasons — then resumed them after 3 months

In late December, the Department of Justice released a memo suspending all equitable sharing — regardless of whether the assets got seized by local or state police and "adopted" by the feds, or seized by a local-federal task force. It was much broader than the January 2015 changes — and didn't provide easy workarounds, like simply deputizing local police officers into federal agents.

But the DOJ made it clear that this was happening for budgetary reasons. Under the funding bill Congress passed in December 2015, which funded the government through September 2016, the DOJ felt it wasn't getting enough money from Congress to be able to turn forfeited assets back to local police. So it "suspended" the sharing program until it started getting more money again.

By the end of March, the DOJ felt it had saved enough money to start that reimbursement process again — even without an increase in congressional funding.

It's even possible that DOJ will reimburse state and local police for any assets they would have gotten a share of over the last three months. When it paused the program in December, the federal government was essentially planning to keep the receipts for any assets it seized while the equitable-sharing program was suspended.

Will states need new ways of making money off the backs of the criminal justice system?

The biggest losers from the policy bait-and-switch are state governments. When the feds weren't reimbursing state and local police for assets turned over to the federal government, state and local police had less of an incentive to participate in investigations that would end up enriching the feds, and more of an incentive to seize assets at the state level instead.

But if states were counting on 9 months or more of asset-forfeiture money, they ended up getting only 3.

This isn't necessarily good news for people who might be victimized by aggressive policing. Many state and local governments already feel they're strapped for cash — and these dynamics have already led many cities to find ways to fund law enforcement on the backs of offenders themselves.

The Department of Justice's report on Ferguson, Missouri, revealed how much this can exacerbate problems of racial profiling and economic inequality in a community. As Ferguson defense lawyer Thomas Harvey told Vox's Sarah Kliff in 2014:

We had one woman who was pulled over and charged with driving with a suspended license, failure to register and no proof of insurance. She was ticketed and assessed fines of $1,700. She couldn't pay that; she's a mother of three living in Section 8 housing. She didn't go to court, a warrant was issued for her failure to appear and a few months later she got into a car accident that wasn't her fault.

They saw that she had a warrant, and held her for two weeks and then took her in front of a judge. She told them I can't pay this money, so they reduced it to $700. For her, that might as well have been $700,000. What ended up happening was her mom borrowed against her life insurance policy and her sister gave her half her bi-weekly paycheck.

That was two weeks in jail for unpaid traffic tickets. And what the court learned from that, is that, if they send people to jail, they'll probably make money.