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Five years ago, Senator Barack Obama was part of a group of legislators that supported substantial changes to NSA surveillance programs. Here are seven ways he's flip flopped his stance on the NSA since becoming president
When the House of Representatives recently considered an amendment that would have dismantled the NSA’s bulk phone records collection program, the White House swiftly condemned the measure. But only five years ago, Sen. Barack Obama, D-Ill. was part of a group of legislators that supported substantial changes to NSA surveillance programs. Here are some of the proposals the president co-sponsored as a senator.
As a senator, Obama wanted to limit bulk records collection.
Obama co-sponsored a 2007 bill, introduced by Sen. Russ Feingold, D-Wis., that would have required the government to demonstrate, with “specific and articulable facts,” that it wanted records related to “a suspected agent of a foreign power” or the records of people with one degree of separation from a suspect. The bill died in committee. Following pressure from the Bush administration, lawmakers had abandoned a similar 2005 measure, which Obama also supported.
We now know the Obama administration has sought, and obtained, the phone records belonging to all Verizon Business Network Services subscribers (and reportedly, Sprint and AT&T subscribers, as well). Once the NSA has the database, analysts search through the phone records and look at people with two or three degrees of separation from suspected terrorists.
The measure Obama supported in 2007 is actually similar to the House amendment that the White House condemned earlier this month. That measure, introduced by Reps. Justin Amash, R-Mich., and John Conyers, D-Mich., would have ended bulk phone records collection but still allowed the NSA to collect records related to individual suspects without a warrant based on probable cause.
As a senator, Obama wanted to require government analysts to get court approval before accessing incidentally collected American data.
In Feb. 2008, Obama co-sponsored an amendment, also introduced by Feingold, which would have further limited the ability of the government to collect any communications to or from people residing in the U.S.
The measure would have also required government analysts to segregate all incidentally collected American communications. If analysts wanted to access those communications, they would have needed to apply for individualized surveillance court approval.
The amendment failed 35-63. Obama later reversed his position and supported what became the law now known to authorize the PRISM program. That legislation — the FISA Amendments Act of 2008 — also granted immunity to telecoms that had cooperated with the government on surveillance.
The law ensured the government would not need a court order to collect data from foreigners residing outside the United States. According to the Washington Post, analysts are told that they can compel companies to turn over communications if they are 51 percent certain the data belongs to foreigners.
Powerpoint presentation slides published by the Guardian indicate that when analysts use XKeyscore — the software the NSA uses to sift through huge amounts of raw internet data — they must first justify why they have reason to believe communications are foreign. Analysts can select from rationales available in dropdown menus and then read the communications without court or supervisor approval.
Finally, analysts do not need court approval to look at previously-collected bulk metadata either, even domestic metadata. Instead, the NSA limits access to incidentally collected American data according to its own “minimization” procedures. A leaked 2009 document said that analysts only needed permission from their “shift coordinators” to access previously-collected phone records. Rep. Stephen Lynch, D-Mass., has introduced a bill that would require analysts to get special court approval to search through telephone metadata.
As a senator, Obama wanted the executive branch to report to Congress how many American communications had been swept up during surveillance.
Feingold’s 2008 amendment, which Obama supported, would have also required the Defense Department and Justice Department to complete a joint audit of all incidentally collected American communications and provide the report to congressional intelligence committees. The amendment failed 35-63.
The Inspector General of the Intelligence Community told Senators Ron Wyden, D-Ore., and Mark Udall, D-Co. last year that it would be unfeasible to estimate how many American communications have been incidentally collected, and doing so would violate Americans’ privacy rights.
As a senator, Obama wanted to restrict the use of gag orders related to surveillance court orders.
Obama co-sponsored at least two measures that would have made it harder for the government to issue nondisclosure orders to businesses when compelling them to turn over customer data.
One 2007 bill would have required the government to demonstrate that disclosure could cause one of six specific harms: by either endangering someone, causing someone to avoid prosecution, encouraging the destruction of evidence, intimidating potential witnesses, interfering with diplomatic relations, or threatening national security. It would have also required the government to show that the gag order was “narrowly tailored” to address those specific dangers. Obama also supported a similar measure in 2005. Neither measure made it out of committee.
The Obama administration has thus far prevented companies from disclosing information about surveillance requests. Verizon’s surveillance court order included a gag order.
Meanwhile, Microsoft and Google have filed motions with the Foreign Intelligence Surveillance Court seeking permission to release aggregate data about directives they’ve received. Microsoft has said the Justice Department and the FBI had previously denied its requests to release more information. The Justice Department has asked for more time to consider lifting the gag orders.
As a senator, Obama wanted to give the accused a chance to challenge government surveillance.
Obama co-sponsored a 2007 measure that would have required the government to tell defendants before it used any evidence collected under the controversial section of the Patriot Act. (That section, known as 215, has served as the basis for the bulk phone records collection program.) Obama also supported an identical measure in 2005.
Both bills would have ensured that defendants had a chance to challenge the legalityof Patriot Act surveillance. The Supreme Court has since held that plaintiffs who cannot prove they have been monitored cannot challenge NSA surveillance programs.
Those particular bills did not make it out of committee. But another section of the Foreign Intelligence Surveillance Act requires that the government tell defendants before it uses evidence collected under that law.
Until recently, federal prosecutors would not tell defendants what kind of surveillance had been used.
The New York Times reported that in two separate bomb plot prosecutions, the government resisted efforts to reveal whether its surveillance relied on a traditional FISA order, or the 2008 law now known to authorize PRISM. As a result, defense attorneys had been unable to contest the legality of the surveillance. Sen. Dianne Feinstein, D-Calif., later said that in both cases, the government had relied on the 2008 law, though prosecutors now dispute that account.
On July 30, the Justice Department reversed its position in one bomb plot prosecution. The government disclosed that it had not gathered any evidence under the 2008 law now known to authorize sweeping surveillance.
But that’s not the only case in which the government has refused to detail its surveillance. When San Diego cab driver BasaalySaeedMoalin was charged with providing material support to terrorists based on surveillance evidence in Dec. 2010, his attorney, Joshua Dratel, tried to get the government’s wiretap application to the Foreign Intelligence Surveillance Court. The government refused, citing national security.
Dratel only learned that the government had used Moalin’s phone records as the basis for its wiretap application — collected under Section 215 of the Patriot Act — when FBI Deputy Director Sean Joyce cited the Moalin case as a success story for the bulk phone records collection program.
Reuters has also reported that a U.S. Drug Enforcement Administration unit uses evidence from surveillance to investigate Americans for drug-related crimes, and then directs DEA agents to “recreate” the investigations to cover up the original tip, so defendants won’t know they’ve been monitored.
As a senator, Obama wanted the attorney general to submit a public report giving aggregate data about how many people had been targeted for searches.
Under current law, the attorney general gives congressional intelligence committees a semiannual report with aggregate data on how many people have been targeted for surveillance. Obama co-sponsored a 2005 bill that would have made that report public. The bill didn’t make it out of committee.
As a senator, Obama wanted the government to declassify significant surveillance court opinions.
Currently, the attorney general also gives congressional intelligence committees “significant” surveillance court opinions, decisions and orders and summaries of any significant legal interpretations. The 2005 bill that Obama co-sponsored would have released those opinions to the public, allowing redactions for sensitive national security information.
Before Edward Snowden’s disclosures, the Obama Justice Department had fought Freedom of Information Act lawsuits seeking surveillance court opinions. On July 31, the Director of National Intelligence released a heavily redacted version of the FISA court’s “primary order” compelling telecoms to turn over metadata.
In response to a request from Yahoo, the government also says it is going to declassify court documents showing how Yahoo challenged a government directive to turn over user data. The Director of National Intelligence is still reviewing if there are other surveillance court opinions and other significant documents that may be released. Meanwhile, there are severalbills in Congress that would compel the government to release secret surveillance court opinions.
In state after state that has tried to ban payday and similar loans, the industry has found ways to continue to peddle them
A version of this story was co-published with the St. Louis Post-Dispatch.
In 2008, payday lenders suffered a major defeat when the Ohio legislature banned high-cost loans. That same year, they lost again when they dumped more than $20 million into an effort to roll back the law: The public voted against it by nearly two-to-one.
But five years later, hundreds of payday loan stores still operate in Ohio, charging annual rates that can approach 700 percent.
It’s just one example of the industry’s resilience. In state after state where lenders have confronted unwanted regulation, they have found ways to continue to deliver high-cost loans.
Sometimes, as in Ohio, lenders have exploited loopholes in the law. But more often, they have reacted to laws targeted at one type of high-cost loan by churning out other products that feature triple-digit annual rates.
To be sure, there are states that have successfully banned high-cost lenders. Today Arkansas is an island, surrounded by six other states where ads scream “Cash!” and high-cost lenders dot the strip malls. Arkansas’ constitution caps non-bank rates at 17 percent.
But even there, the industry managed to operate for nearly a decade until the state Supreme Court finally declared those loans usurious in 2008.
The state-by-state skirmishes are crucial, because high-cost lenders operate primarily under state law. On the federal level, the recently formed Consumer Financial Protection Bureau can address “unfair, deceptive or abusive practices,” said a spokeswoman. But the agency is prohibited from capping interest rates.
In Ohio, the lenders continue to offer payday loans via loopholes in laws written to regulate far different companies — mortgage lenders and credit repair organizations. The latter peddle their services to people struggling with debt, but they can charge unrestricted fees for helping consumers obtain new loans into which borrowers can consolidate their debt.
Today, Ohio lenders often charge even higher annual rates (for example, nearly 700 percent for a two-week loan) than they did before the reforms, according to a report by the nonprofit Policy Matters Ohio. In addition, other breeds of high-cost lending, such as auto-title loans, have recently moved into the state for the first time.
Earlier this year, the Ohio Supreme Court agreed to hear a case challenging the use of the mortgage law by a payday lender named Cashland. But even if the court rules the tactic illegal, the companies might simply find a new loophole. In its recent annual report, Cash America, the parent company of Cashland, addressed the consequences of losing the case: “if the Company is unable to continue making short-term loans under this law, it will have to alter its short-term loan product in Ohio.”
Amy Cantu, a spokeswoman for the Community Financial Services Association, the trade group representing the major payday lenders, said members are “regulated and licensed in every state where they conduct business and have worked with state regulators for more than two decades.”
“Second generation” products
When unrestrained by regulation, the typical two-week payday loan can be immensely profitable for lenders. The key to that profitability is for borrowers to take out loans over and over. When the CFPB studied a sample of payday loans earlier this year, it found that three-quarters of loan fees came from borrowers who had more than 10 payday loans in a 12-month period.
But because that type of loan has come under intense scrutiny, many lenders have developed what payday lender EZCorp chief executive Paul Rothamel calls “second generation” products. In early 2011, the traditional two-week payday loan accounted for about 90 percent of the company’s loan balance, he said in a recent call with analysts. By 2013, it had dropped below 50 percent. Eventually, he said, it would likely drop to 25 percent.
But like payday loans, which have annual rates typically ranging from 300 to 700 percent, the new products come at an extremely high cost. Cash America, for example, offers a “line of credit” in at least four states that works like a credit card — but with a 299 percent annual percentage rate. A number of payday lenders have embraced auto-title loans, which are secured by the borrower’s car and typically carry annual rates around 300 percent.
The most popular alternative to payday loans, however, are “longer term, but still very high-cost, installment loans,” said Tom Feltner, director of financial services at the Consumer Federation of America.
Last year, Delaware passed a major payday lending reform bill. For consumer advocates, it was the culmination of over a decade of effort and a badly needed measure to protect vulnerable borrowers. The bill limited the number of payday loans borrowers can take out each year to five.
“It was probably the best we could get here,” said Rashmi Rangan, executive director of the nonprofit Delaware Community Reinvestment Action Council.
But Cash America declared in its annual statement this year that the bill “only affects the Company’s short-term loan product in Delaware (and does not affect its installment loan product in that state).” The company currently offers a seven-month installment loan there at an annual rate of 398 percent.
Lenders can adapt their products with surprising alacrity. In Texas, where regulation is lax, lenders make more than eight times as many payday loans as installment loans, according to the most recent state data. Contrast that with Illinois, where the legislature passed a bill in 2005 that imposed a number of restraints on payday loans. By 2012, triple-digit-rate installment loans in the state outnumbered payday loans almost three to one.
In New Mexico, a 2007 law triggered the same rapid shift. QC Holdings’ payday loan stores dot that state, but just a year after the law, the president of the company told analysts that installment loans had “taken the place of payday loans” in that state.
New Mexico’s attorney general cracked down, filing suits against two lenders, charging in court documents that their long-term products were “unconscionable.” One loan from Cash Loans Now in early 2008 carried an annual percentage rate of 1,147 percent; after borrowing $50, the customer owed nearly $600 in total payments to be paid over the course of a year. FastBucks charged a 650 percent annual rate over two years for a $500 loan.
The products reflect a basic fact: Many low-income borrowers are desperate enough to accept any terms. In a recent Pew Charitable Trusts survey, 37 percent of payday loan borrowers responded that they’d pay any price for a loan.
The loans were unconscionable for a reason beyond the extremely high rates, the suits alleged. Employees did everything they could to keep borrowers on the hook. As one FastBucks employee testified, “We just basically don’t let anybody pay off.”
“Inherent in the model is repeated lending to folks who do not have the financial means to repay the loan,” said Karen Meyers, director of the New Mexico attorney general’s consumer protection division. “Borrowers often end up paying off one loan by taking out another loan. The goal is keeping people in debt indefinitely.”
In both cases, the judges agreed that the lenders had illegally preyed on unsophisticated borrowers. Cash Loans Now’s parent company has appealed the decision. FastBucks filed for bankruptcy protection after the judge ruled that it owed restitution to its customers for illegally circumventing the state’s payday loan law. The attorney general’s office estimates that the company owes over $20 million. Both companies declined to comment.
Despite the attorney general’s victories, similar types of loans are still widely available in New Mexico. The Cash Store, which has over 280 locations in seven states, offers an installment loan there with annual rates ranging from 520 percent to 780 percent. A 2012 QC loan in New Mexico reviewed by ProPublica carried a 425 percent annual rate.
“Playing Cat and Mouse”
When states — such as Washington, New York and New Hampshire — have laws prohibiting high-cost installment loans, the industry has tried to change them.
A bill introduced in Washington’s state senate early this year proposed allowing “small consumer installment loans” that could carry an annual rate of more than 200 percent. Though touted as a lower-cost alternative to payday loans, the bill’s primary backer was Moneytree, a Seattle-based payday lender. The bill passed the state senate, but stalled in the house.
In New Hampshire, which banned high-cost payday loans in 2008, the governor vetoed a bill last year that would have allowed installment loans with annual rates above 400 percent. But that wasn’t the only bill that high-cost lenders had pushed: One to allow auto-title loans, also vetoed by the governor, passed with a supermajority in the legislature. As a result, in 2012, New Hampshire joined states like Georgia and Arizona that have banned triple-digit-rate payday loans but allow similarly structured triple-digit-rate auto-title loans.
Texas has a law strictly limiting payday loans. But since it limits lenders to a fraction of what they prefer to charge, for more than a decade they have ignored it. To shirk the law, first they partnered with banks, since banks, which are regulated by the federal government, can legally offer loans exceeding state interest caps. But when federal regulators cracked down on the practice in 2005, the lenders had to find a new loophole.
Just as in Ohio, Texas lenders started defining themselves as credit repair organizations, which, under Texas law, can charge steep fees. Texas now has nearly 3,500 of such businesses, almost all of which are, effectively, high-cost lenders. And the industry has successfully fought off all efforts to cap their rates.
Seeing the lenders’ statehouse clout, a number of cities, including Dallas, San Antonio and Austin, have passed local ordinances that aim to break the cycle of payday debt by limiting the number of times a borrower can take out a loan. Speaking to analysts early this year, EZCorp’sRothamel said the ordinances had cut his company’s profit in Austin and Dallas by 90 percent.
But the company had a three-pronged counterattack plan, he said. The company had tweaked the product it offered in its brick-and-mortar outlets, and it had also begun to aggressively market online loans to customers in those cities. And the industry was pushing a statewide law to pre-empt the local rules, he said, so payday companies could stop “playing cat and mouse with the cities.”
Jerry Allen, the Dallas councilman who sponsored the city’s payday lending ordinance in 2011, said he wasn’t surprised by the industry’s response. “I’m just a lil’ ol’ local guy in Dallas, Texas,” he said. “I can only punch them the way I can punch them.”
But Allen, a political independent, said he hoped to persuade still more cities to join the effort. Eventually, he hopes the cities will force the state legislature’s hand, but he expects a fight: “Texas is a prime state for these folks. It’s a battleground. There’s a lot of money on the table.”
Law enforcement authorities are moving to seize homes, cash and other property of people tangentially related to crimes under "civil forfeiture" laws that require minimal proof
When Rochelle Bing bought her modest row home on a tattered block in North Philadelphia 10 years ago, she saw it as an investment in the future for her extended family — especially for her 18 grandchildren.
Bing, 42, works full-time as a home health assistant for the elderly and disabled. In summer when school is out, her house is awash with grandkids whom Bing tends to while their parents work. And the home has been a haven in troubled times when her children needed help or a father went to jail. One of Bing’s grandchildren lives there now.
“That’s the only reason I bought my home — I needed stability for my children,” Bing said. “And if anything was to happen to me, they would have a home to live in.”
But four years ago, something happened that imperiled Bing’s plans. In October 2009, police raided the house and charged her son, Andrew, then 24, with selling 8 packets of crack cocaine to an undercover informant. (Upon entering the house, police reported finding unused packets, though not drugs, in a rear bedroom.) Rochelle Bing was not present and was not accused of a crime. Yet she soon received a frightening letter from the Philadelphia district attorney’s office. Because Andrew had sold the drugs from inside his mother’s house, a task force of law enforcement officials moved to seize Bing’s house. They filed a court claim, quickly approved, that gave Bing just 30 days to dissuade a judge from granting “a decree of forfeiture” that would give the DA’s office title to the property. Bing was devastated.
“For me to lose my home,” she recalled recently, “for them to take that from me, knowing I had grandchildren - that would have hurt me more than anything.” And so Bing resolved to do what whatever was necessary to keep the house.
She had no idea how long and how difficult that fight would be.
On its face, Bing’s predicament might seem implausible if not unjust. How could someone who’s neither accused nor convicted of a crime be forced to give up her property because of another’s misdeeds? But stories like Bing’s are increasingly more common as Philadelphia and other jurisdictions have embraced the expansive power of forfeiture as a crime-fighting tool.
The idea behind forfeiture is simple enough: drug kingpins, embezzlers, racketeers and other offenders should not be able to keep the financial fruits of illegal acts. Prosecutors often ask a judge to seize the money, vehicles or real estate of a person convicted of a crime.
But authorities can also use civil law to seize assets before the criminal case is adjudicated or, as with Rochelle Bing, even when no charges are brought against the owner.
Doing so offers prosecutors considerable advantages. Unlike the “proof beyond a reasonable doubt” required in criminal law, prosecutors seeking civil forfeitures face a much lower standard. Usually, they need only prove that a “preponderance of evidence” connects the property — not its owner — to a crime. Technically, the property — not the owner — is named as the defendant.
Bing’s name, in fact, appears nowhere in the case involving her own home, listed in court filings as “Commonwealth of Pennsylvania v. The Real Property and Improvements Known as 2544 N. Colorado St.”
Over the last two decades, forfeitures have evolved into a booming business for police agencies across the country, from the federal Drug Enforcement Administration to small-town sheriff’s offices. Although there is no single tally of all this activity – the information is buried in the budgets, court records and annual reports of thousands of individual agencies — the available data makes clear that billions of dollars in cash, cars, real estate and other assets are being confiscated nationwide every year via civil forfeitures.
One measure is the growth of a program in which federal law enforcement officials seize property on behalf of local authorities in exchange for a share of the proceeds. In 2000, officials racked up $500 million in forfeitures. By 2012, that amount rose to $4.2 billion, an eightfold increase.
Bing is among a significant number of property owners not charged with any crime who lost their home or have battled for years against forfeiture actions. Other similar cases reviewed by ProPublica include an elderly widow, two sisters who shared a house, a waitress and hospital worker caring for two children, and a mother of three whose family wound up homeless. All stemmed from drug charges brought against a family member.
Critics argue that the power to pursue civil forfeiture has been abused by prosecutors and is creating a new class of collateral victims. Often they are minorities like Bing without the financial resources or legal know-how to protect their assets.
And prosecutors typically prevail. Of nearly 2,000 cases filed against Philadelphia houses from 2008 through 2012, records reviewed by ProPublica show that only 30 ended with a judge rejecting the attempt to seize the property.
“On the federal level, you tend to see bigger cases get attention — kingpins and that sort of thing — which is what Congress intended with forfeiture,” says Louis Rulli, a law professor at the University of Pennsylvania and director of its civil legal clinic, which does some pro bono work for homeowners facing forfeiture.
“But coming after the parents and the grandparents, who have nothing to do with it?” he says. “The logic does not hold up to me. The folks we’re talking about have usually owned their homes a long time. They’re paid up on their homes; they’re good residents of Philadelphia.”
Rulli worries, too, about the effect on poor and minority residents. “If one sits in court and watches,” he says, “you will see a disproportionate impact on African Americans and Latinos.”
The Philadelphia DA’s office defends forfeiture as a tool for the public good. In the case of forfeited houses, that means protecting neighborhoods from “nuisance properties” which serve as a base for illegal activities.
In a statement, the DA’s office said that its goal in forfeiture actions was “to establish responsible property ownership,” not to seize houses. “In those cases in which the legal owner was not the party arrested for drug dealing and he or she can establish that they had no knowledge of the illegal behavior,” the statement said, “the Commonwealth works with them to settle those cases and the property is not forfeited.”
But that’s not how the law looked to Bing and others who’ve spent years battling the city in court.
Records show that Philadelphia uses forfeiture on a scale and in a way unlike any other county in Pennsylvania. Since 2008, the next three largest counties in Pennsylvania – Allegheny, Montgomery and Berks – have taken fewer than a dozen houses combined, even though they operate under the same state drug laws enabling forfeiture.
By contrast, the Philadelphia DA’s office files forfeiture motions on 300 to 500 private residences annually. It seizes and sells as many as 100 or more properties each year, bringing in more than $1 million annually in real estate sales alone. In 2010, the year the DA went after Bing's house, it acquired 90 houses via forfeiture and auctioned 119 properties for $1.2 million.
The money went directly to the DA’s office and to the Philadelphia police department, including the narcotics units involved in raids that resulted in the forfeitures.
Forfeiture reports obtained from Pennsylvania’s Attorney General give only a general breakdown of how these funds are spent. The records show that the bulk of Philadelphia’s forfeiture money goes to “salaries” (the report does not say whose), and “municipal task force support.” The reports include a line-item for money spent on “Community Based Drug & Crime Fighting Programs” and “Witness Relocation and/or Protection Expenses.” In recent years, both of those items read “$0.00.”
Money from housing sales in 2010 represented about a fifth of all the DA’s $5.9 million in forfeiture income that year. The rest was generated by seizure of cash, cars and other property. Last fall, a story by this reporter in The Philadelphia City Paper disclosed that the DA’s office moves to seize virtually every dollar in cash found by police in stops — even amounts of $100 or less. Under the law, prosecutors need not secure a conviction in the underlying criminal case to keep the cash.
The money raised through forfeiture is handled outside the city’s budgeting and appropriations processes. The law requires only that it be used to enforce Pennsylvania’s drug laws. Critics and experts who study the issue say that gives prosecutors a powerful motive to step up the pace of forfeitures.
“The idea that law enforcement can raise money on its own, through this self-help practice of forfeiture — it’s subversive to the idea of democratic accountability and rule of law,” said Eric Blumenson, a research professor of law at Suffolk University.
Blumenson has criticized the reliance on forfeiture, saying it prompts law enforcement officials to over-emphasize drug prosecutions at the expense of other crime-fighting.
“Prosecutors and police are only too happy to use forfeiture, because it fills their coffers. And why would they stop? They’ve become dependent — you can look at it as an addiction by itself,” Blumenson said.
Prosecutors and police view the issue differently. In an interview last year, officials from the Philadelphia DA’s office last defended the practice as a means of improving civic life.
“Everything is approached from a public safety perspective,” said Beth Grossman, who heads the forfeiture unit. “You have people suffering on their blocks, where their homes are, because of drug-dealing properties. And it’s not fair.”
A Lack of Lawyers
Every weekday, Courtroom 478 in Philadelphia’s City Hall fills with people — most are poor, black and Latino — trying to get back seized property. An administrative judge presides, interacting entirely with assistant district attorneys, who effectively run the show. Some property owners are represented by a lawyer; most are not. Many have been there before, often a dozen or more times, only to have their cases rescheduled over and over. Some have spent years in legal limbo until the case is decided, even longer on appeal.
According to multiple accounts, Tracy Clements was sitting on the sofa on the first floor of her North Philadelphia row house on April 21, 2010, when her brother, William Clements burst in followed by police in hot pursuit. William Clements was arrested and convicted seven months later on drug-related charges.
Neither Tracy, 49, who worked on an assembly line and cared for a son in the house, nor her sister, Sheila, 56, who worked for the IRS and was out of town visiting a daughter at Penn State, were charged with a crime. The two had inherited the house from their mother when she died in 2008. They had played there as children. When their brother William was released from prison, according to their attorney, Jonathan Freedman, they refused to let him live there again.
In the meantime, they were served a notice of forfeiture from the DA’s office. “We had to appear 17 times in court,” their attorney, Jonathan Freedman, said in an email. “Had I charged the clients a merely reasonable fee it would have cost them more than the house is worth!”
The sisters ultimately had their day before a judge. The Hon. Rayford Means, Jr., denied the DA’s motion, saying, “They’re innocent owners. They knew nothing about the drugs, had nothing to do with the transaction.”
The DA disagrees, and has appealed, arguing that at least one of the sisters, Tracy, was home during the drug transactions on the porch, and must have known they were occurring. Prosecutors argue that she turned a blind eye to the crimes. The DA cited policy testimony indicating that a mirror with cocaine residue was found in her bedroom, though Tracy Clements testified in court that she knew nothing about the mirror and that it hadn’t been in her room when she left for work that day.
The Clements sisters, at least, had professional legal representation; many facing forfeiture do not.
Unable to afford an attorney, Takeela Burney chose to fight the forfeiture of her house alone after her son was arrested on May 6, 2010, for a single sale of $20 worth of cocaine from the house.
Over the course of the next two years, Burney would appear several times in court in an effort to save her house.
Because many real estate forfeiture cases are resolved through deals with prosecutors, most of the homeowners contesting their forfeiture cases never appear before a judge.
Burney, however, eventually appeared as her own lawyer before Judge Paula Patrick, on May 13, 2012. When a prosecutor called a Philadelphia police officer as a witness, Burney didn’t seem to know what to do. Rather than cross-examine the officer, she attempted to explain her side of the story to Judge Patrick, court records show.
Patrick said “that it was not her turn to tell her story,” according to an appellate court’s summary of the case. When asked if she had any questions for the officer, she answered, “Not at this time,” as if she’d have another chance to challenge the testimony. Judge Patrick granted the DA’s motion for forfeiture.
At the very last moment, Burney contacted the Philadelphia Volunteers for the Indigent Program, a legal aid group which agreed to take on her case. Burney’s attorney, Matthew Lee, filed a brief arguing that his client had never been informed of her right to a jury trial and that a lawyer should have been appointed for her.
An appeals court blocked the forfeiture, ruling that Burney deserved to know of her right to a jury trial. The judges did not address the question of whether Burney was entitled to a court-appointed lawyer.
Writing for the majority, Judge Renee Cohn Jubelirer said: “We understand the importance of denying criminals the proceeds of their crimes and the need to make our communities safer.”
“However, it is also our obligation to assure that these laudable goals are achieved within constitutional boundaries. These boundaries become more apparent where there is no alleged criminal conduct of the homeowner.”
Practice of Forfeiture is Widespread
Philadelphia is hardly alone in its aggressive pursuit of forfeiture.
In Washington, D.C., the City Council recently held hearings on a bill that would impose new limits on cases arising from cars linked to crimes. For years, the Metropolitan Police Department has seized cars by the hundreds and required owners to post “bonds” if they wanted to contest that action.
Last May the D.C. Public Defenders Service filed a class-action lawsuit against the city, asserting that the practice violates the U.S. Constitution's Fifth Amendment’s guarantees of due process. They argued that car owners who can’t afford to put up money are deprived of their property without any judicial review.
The D.C. City Council is considering change in the law, including putting the money from forfeitures into the city’s general fund rather than law enforcement budgets. (The Attorney General for the District of Columbia opposes this bill, as does the city administration).
Darpana Sheth, an attorney for the libertarian-leaning nonprofit Institute for Justice who testified at a recent hearing alongside the D.C. Public Defender Service, endorses that idea. “Having the people charged with enforcing the law seizing property and benefiting from that property is unconstitutional – specifically, the concept of ‘neutrality’ in due process,” she said. “They can’t be neutral if they have a financial stake.”
Last year, police officials in Tenaha, Texas, agreed to various monitoring and reporting conditions after being sued by the American Civil Liberties Union for stopping drivers, mostly minorities, and seizing their cash and other property. Tenaha police often did not charge the motorists with any crime but threatened them with arrest if they didn’t agree to forfeit their possessions, according to the lawsuit. In settling the case, Tenaha officials denied that the traffic stops were unconstitutional.
The Teneha case drew national attention – briefly, at least – to the larger issue of forfeiture. But the revelations underscored how little is known about forfeiture practices nationwide.
“The problem is when police departments are able to seize assets in hundreds of thousands of dollars – they’re going to,” said Vanita Gupta, an attorney with the ACLU. “I worry with the Tenaha case that people will think, ‘Oh that’s just Tenaha.’”
“Every police department in Texas is pocketing money from forfeiture,” she said.
(Gupta has a point. Data compiled by the Institute for Justice, which has been a vocal critic of forfeiture, shows that 759 law enforcement agencies in Texas alone reported proceeds from forfeiture in 2008, the most recent year that data was available.)
The Search for a Fairer System
Spurred by similar reports of the abuse in the late 1990s, former Rep. Henry Hyde, R-Ill., held a series of hearings on forfeiture, prompting the passage of the Civil Asset Forfeiture Reform Act of 2000.
The law addressed several key shortcomings in federal forfeitures, providing “innocent owners” with a defense against being punished for the crimes of a relative or friend. It also provided for the appointment of an attorney when a homeowner faced the loss of his or her primary residence and was too poor to afford legal help.
Those reforms did not extend to the local level, where forfeiture is often governed by state laws.
In 2010, the Institute for Justice released a report entitled “Policing for Profit,” which represented one of the first attempts to catalogue each state’s laws regarding forfeiture. It found that most offered minimal protections to property owners.
North Dakota, for example, is among the few states that impose limited restrictions on the practice, prohibiting forfeiture of a home co-owned by someone not accused of a crime.
Critics have been pushing local legislators to enact additional rules.
Forfeitures in cities like Philadelphia and Washington, D.C., are conducted through civil laws. One way to eliminate the inequities of that system would be to conduct property seizures only through parallel laws in the criminal code.
Such laws come into play only after an accused criminal has had his or her day in court. The ACLU’s Gupta said this would rule out one of the more unfair results of the civil cases, which is that people are arrested, lose their property and are then ultimately acquitted on the criminal charges.
“There are a few jurisdictions where they use criminal, not civil forfeiture – meaning they’ll still seize assets, but once someone is convicted,” Gupta pointed out. “It begs the question, why do we use civil forfeiture at all?”
The courts of Allegheny County, Pa., have answered that question, requiring local judges to pursue property seizures in most cases through the state’s criminal statute and then only after the person involved in the case is convicted. That practice began under the late Judge Robert Dauer, president judge in the county’s trial courts, and continues to this day. In 2009-2010, the county did not seize a single house.
“Our policy was we had to have a conviction and it had to make some reasonable sense why we were going after forfeiture,” recalls Pennsylvania Superior Court Robert Coville, who headed up the Allegheny County District Attorney’s office for 21 years.
Coville says that as DA he supported using criminal, not civil, forfeiture as a matter of principle.
“It’s based on fairness,” he says. “I would be very restrained as a prosecutor or a solicitor for the city, going in on the theory of an allegation or the presumption of something we don’t have – namely, a criminal conviction against the owner for some kind of illegal conduct.”
Coville declined to comment on the specifics of this story, as legal issues around forfeiture very well may come before him in his role as an appellate judge. But speaking from his experience as a former county prosecutor, he said he is troubled by the idea of supplementing police and prosecutor budgets with money from forfeitures.
“I can understand why someone would want to do that in this day and age,” he said. But “is there an incentive for police and prosecutors to go after property only for the value? That gets into a whole other bag of issues.”
Other legal experts see the right to representation – especially in cases involving something as important as a home -- as the single best way to curb injustices.
“The main defenses to civil forfeiture are called ‘affirmative defenses’ – you must raise them or you waive them,” says University of Pennsylvania professor Rulli. “I think lack of counsel is a big deal. Do these people know their rights? Are they learning it from the DA? What is the DA saying to people? Is DA saying you have a right to assert innocent owner?”
Matthew Lee, the lawyer for Takeela Burney, said the recent ruling that his client was entitled to be informed of her right to a jury trial was a step in the right direction. “I was hoping that they would say you have a right to a lawyer,” Lee said, “but what they did ultimately hold is that these cases are really more like criminal cases than civil cases and that a lot of the constitutional protections in criminal cases should apply.”
Rochelle Bing’s case illustrates the value of legal counsel. Like Burney, Bing couldn't afford a lawyer herself. She eventually was referred to the University of Pennsylvania Legal Clinic where law students took on her case without charge.
Bing’s fight to save her home dragged on for two years and required her or her attorney to appear in court no fewer than 23 times. Finally, prosecutors settled the case, allowing Bing to retain ownership if she agreed not to let her son visit when she wasn’t home. (Her son, who negotiated a guilty plea to one count of possession with intent to distribute, had already finished serving his sentence he received.)
Bing said she would have agreed to that condition at the outset.