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in a Supreme Court case I think called the United States v. James Daniel Good Property. That was back in 1990. There has been since then no memoranda, no quota system, no effort whatsoever to try to turn this forfeiture program into a money-making operation. It is not that.

Mr. GEKAS. You say that the court commented on that memorandum?

Mr. CASSELLA. Yes. It was a footnote in a Supreme Court case. Mr. GEKAS. In what way? Adversely, or critically, or how?

Mr. CASSELLA. They were making the point that it is appropriate for the Court to review the forfeiture laws closely because the Government enjoys some benefit from enforcing the law, some financial benefit, and cited the memoranda in a footnote to make that point. Mr. GEKAS. Was any subsequent memo circulated to the effect that we should not have quotas?

Mr. CASSELLA. I don't know if it was ever done in a written memorandum, but I speak regularly at forfeiture training conferences for all of our prosecutors and law enforcement agents, and we regularly make the point that this is not to be driven by money, we do not seize property for the purpose of bringing in revenue, and we are not going to have any quota system.

Mr. GEKAS. Thank you.

Ms. Blanton, in your testimony you include a statement that you worry about the implementation of this bill because it would serve to encourage litigation of the most plainly forfeitable property interests. We, too, have always been concerned about a multiplicity of actions flooding the courts in this and other arenas.

Listening to testimony having to do with Mr. Jones, we found that because he was unable to use the process in place to fight that seizure, his lawyer used another forum or another predicate upon which to base the claim, so they were in court anyway. Even if it would be a desired end of all of law enforcement to keep down the number of actions, the failure to include in our law something to give potential relief to an innocent party would breed actions anyway. Am I correct in that assumption?

Ms. BLANTON. Sir, in my testimony, we basically agree; we have no argument. We know that there are reforms needed in civil forfeiture today. What we would like to see, is that those changes are not made to title 19 but to title 18, so that uniform innocent owner provisions apply uniformly across the board and to all civil forfeitures under the Federal Criminal Code, not at title 19.

Mr. GEKAS. I have in front of me the administration's proposal, and in large part at least the summaries indicate that most of the bill at hand that the chairman has produced here-most of those proposals are, in one way or another, endorsed by the administration bill.

I am going to read off a bullet for the Hyde bill, and maybe one of you can answer yes or no, is it included in the administration's proposal?

For instance, it puts the burden of proof on the Government. We agree that that should be a

Mr. HYDE. With a change in the standard to "preponderance" as against "clear and convincing."

Mr. GEKAS. Yes. Provides fair notice to challenge of forfeiture.

Mr. CASSELLA. That is correct.

If I may, Mr. Gekas, the proposal in the administration's bill would give property owners 30 days from the last publication of notice of the forfeiture, which is actually a little bit longer than the period in H.R. 1916.

Mr. GEKAS. And eliminates the cost of a-cost bond requirement? Mr. CASSELLA. No, Mr. Gekas. We don't favor the absolute abolition of the cost bond, but we favor a phasing out of the cost bond. I can tell you why, if you want to, later.

Mr. GEKAS. So there is one bullet that has gone astray. Allows for the release of property pending final disposition of a case in certain cases?

Mr. CASSELLA. We have that concept in, in a different form, Mr. Gekas. We propose to allow the property to be released pending trial, if substitute property is submitted or if there is some showing, as Mr. McMahon pointed out, of a likelihood of success on the merits.

Mr. GEKAS. Provides for the appointment of counsel for indigents?

Mr. CASSELLA. No, we don't do that.

Mr. GEKAS. Well, there is another one, Mr. Chairman, that we will look at closely.

Provides a remedy for property damage caused by Government negligence.

Mr. CASSELLA. Yes, we have the Tort Reforms Act proposal in the legislation.

Mr. GEKAS. All right. I say to Mr. McMahon that it would be valuable to us if you would do a side-by-side-well, maybe you already have between the administration's proposal and the Hyde bill, and whatever stark differences there are that you wish us to address we would be happy to accommodate. Your testimony does cover some of that.

Mr. MCMAHON. Sir, we have been working with Justice and the IACP on their bill, and I think they have already done that, and the ones we have addressed here are the ones of main concern to

us.

Mr. GEKAS. I thank you.

And, Mr. Chairman, I yield back the balance of my nontime.
Mr. HYDE. I thank the gentleman.

Let me just say that my staff has been working with Mr. Cassella, the Justice Department, and with the Treasury Department working with the Justice Department, and we are making progress. We are making substantial progress. I expect over the month of August, when we all will be otherwise engaged, the staffs will be engaged in refining their agreements and disagreements, so that at the end of August and the beginning of September, we should have a product that we can expect support from Treasury and Justice and that will do the things we want it to do, which we heard egregious examples this morning that need attention in the law.

And I am pleased and gratified that we are not at odds or at swords' points. There are some differences that will remain and may still exist after our meetings, but I am very encouraged by the

spirit of cooperation that we are getting. And so we are not adversaries at all on this.

Mr. Frank.

Mr. FRANK. Thank you, Mr. Chairman. I am glad we are making progress.

Mr. Cassella, you said "phasing out the bond." Do you mean chronologically or financially? I mean, how are we phasing it out? Mr. CASSELLA. The problem, Congressman, is that we have to strike a balance.

Mr. FRANK. How are you going to do it?

Mr. CASSELLA. The cost bond serves an important purpose. It discourages the filing of frivolous claims. What we have to do is strike a balance between discouraging frivolous claims and inadvertently discouraging bona fide claims. So we would propose to codify the rule that no cost bond is required for someone who has status as in forma pauperis position. That is number one.

Mr. FRANK. Yes.

Mr. CASSELLA. Second, we would ask the authority for the Attorney General and the Secretary of the Treasury to waive the bond in those circumstances where it isn't needed to protect the Government from maintenance costs and storage costs.

For example, seizure of currency or the seizure of a bank account: There is no need for a cost bond in that situation to protect us from costs, and if we waived it in those circumstances, we could see how many claims are filed, frivolous or otherwise.

The problem, Congressman, is the number of seizures that we do every year. Justice does about 30,000 seizures per year. This is a page from USA Today. It appears every Wednesday, and it lists the seizures for the previous 3 weeks just by the DEA.

Mr. FRANK. How many of them are overturned?

Mr. CASSELLA. Sorry?

Mr. FRANK. Can you give us the numbers, how many of the forfeitures are ultimately successfully challenged?

Mr. CASSELLA. Successfully challenged, very, very few. Eighty percent of them are never even challenged; 80 percent of our forfeitures are administrative forfeitures in which there is no claim filed at all.

Mr. FRANK. Those in which there are challenges, I would be interested in the statistics, how many of the challenges are successful.

Mr. CASSELLA. If we have those statistics, Congressman, we will try to get them for you.

[The information follows:]

U.S. Department of Justice

Washington, DC 20530

The Honorable Henry J. Hyde, Chairman,

Committee on the Judiciary

U.S. House of Representatives
Washington, D.C. 20515

Dear Congressman Hyde:

At a Judiciary Committee hearing on July 22, 1996, on pending asset forfeiture legislation, Congressman Frank asked the Department of Justice witness to provide statistics on the number of forfeiture cases that result in judgments against the United States in a given year. We have reviewed the available

statistical sources and have attempted to answer your question as best we can as follows:

1

In a typical fiscal year, the agencies of the Department of Justice seize property for forfeiture in approximately 35,000 cases. Eighty-five percent of the FBI and DEA cases, and nearly 99 percent of the INS cases are uncontested; thus approximately 2500 Justice cases are referred to the U.S. Attorneys. We do not have comparable statistics for the Treasury Department. The Treasury agencies, however, make ten of thousands of seizures a year and we believe that a similar number of Treasury cases are also referred to the U.S. Attorneys.

Of all cases referred to the U.S. Attorneys, some are declined because they do not meet threshold requirements regarding minimum property value or other criteria, including legal merit, established by the U.S. Attorneys. Others become part of criminal forfeiture cases. In the end, the U.S.

1

2

Over the past ten years, the rate of contested claims in DEA cases ranged from 12 percent to 16 percent and averaged 14.2 percent. FBI statistics are similar. INS considers only 1 percent of its cases "contested" because INS generally attempts to settle cases at the administrative stage before they are referred to the U.S. Attorney.

2 There is a related arrest or prosecution in 80 percent of the cases in which there is a seizure for forfeiture. But for a variety of reasons -- most having to do with the ability to obtain clear title against third parties -- prosecutors in the past generally filed parallel civil forfeiture cases rather than

Attorneys file between 2,000 and 5,000 civil forfeiture cases a year. The number of filings for the past four years are as follows:

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2569

Of these cases, many are settled but somewhat more than half result in a judgment for or against the United States. The figures for the past four years are as follows: Judgm for U.S.

2337

1836

1379

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Thus, the government prevails in 96 per cent of the cases that go to judgment and in 98 per cent of all cases that are filed, and the number of adverse judgments represents a minute fraction of all cases initiated by seizure.

We hope these statistics are helpful in answering Congressman Frank's question.

Sincerely,

Andrew Fois

Assistant Attorney General

CC.

The Honorable John Conyers, Jr.
The Honorable Barney Frank

make the forfeiture part of the criminal indictment. Therefore, the number of cases that resulted in criminal forfeiture was smaller than the number that result in civil forfeiture. The recent trend is toward parity.

3 The drop in the number of civil filings is due both to the shift to criminal forfeiture and the overall decrease in the number of seizures in the past two years due primarily to uncertainly over the double jeopardy effect of civil forfeiture.

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