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SB3274: Limit property forfeiture to people convicted of crime

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Judiciary on Feb. 6, 2024.
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Feb. 6,  2024, 9:45 a.m.
Hawaii State Capitol
Conference Room 016 and Videoconference

To: Senate Committee on Judiciary
      Sen. Karl Rhoads, Chair
      Sen. Mike Gabbard, Vice-Chair

  From: Grassroot Institute of Hawaii
             Ted Kefalas, Director of Strategic Campaigns

RE: COMMENTS IN SUPPORT OF SB3274 — RELATING TO PROPERTY FORFEITURE

Aloha Chair Rhoads, Vice-Chair Gabbard and Committee Members,

The Grassroot Institute of Hawaii would like to offer its comments in support of SB3274, which would substantially reform the practice of civil asset forfeiture in Hawaii by restricting the practice to only those cases where the property owner has been convicted of an underlying criminal offense.

In addition, the bill would remove the incentive for the agencies involved to benefit from forfeitures by directing forfeiture revenues to the general fund.

Finally, SB3274 would greatly strengthen oversight and reporting of the practice of asset forfeiture in the state.

We commend the Legislature for focusing on this issue, which has been the subject of growing national concern and criticism.

In 2020, a report card of civil asset forfeiture practices nationwide by the Institute of Justice gave Hawaii a D- and the dubious distinction of having some of the worst forfeiture laws in the country.[1] 

Singled out for criticism was the state’s low standard of proof for showing how the property is tied to a crime.

In addition, Hawaii places the burden on innocent owners to prove they weren’t tied to the crime resulting in the forfeiture.

The result is a state forfeiture program open to abuse and able to prey on innocent property owners.

As the Hawaii state auditor wrote in a June 2018 report, Hawaii’s asset-forfeiture program lacks clear rules and procedures, inadequately manages funds and is badly in need of greater transparency.[2]

That 2018 report found that:

>> In 26% of asset forfeiture cases closed during fiscal 2015, property was forfeited without a corresponding criminal charge.

>> In 4% of cases, the property was forfeited even though the charge was dismissed. Of those whose property was forfeited, very few petitioned for remission or mitigation. The state auditor speculated that most people might not know that being able to petition is an option because of the lack of transparency surrounding the forfeiture program.

A follow-up report in 2021 by the state Office of the Auditor found that the state Department of the Attorney General had implemented only two of its 2018 recommendations, with two partially implemented and two not implemented at all.

Among the recommendations that were ignored was that the AG department develop policies and procedures “to ensure that petitions for administrative forfeiture are processed timely and consistently; that forfeited property and program funds are appropriately managed; and that proceeds from the sale of forfeited property are used for purposes intended by the Legislature.”

The other unimplemented recommendation concerned the lack of a strict accounting and valuation system for forfeited property.[3]

In fiscal 2022, the Department of the Attorney General reported that there were 58 cases of forfeiture, 56 of which were uncontested. There were no claims for judicial review, and only two petitions for remission or mitigation.[4]

Rather than attest to the efficacy of the program, the lack of petitions and other claims suggests that the state auditor’s conclusions still hold — that there is too little transparency around the program and most people are unaware of their rights regarding forfeiture.

It is shocking that Hawaii residents can lose their property without being convicted of a crime. Given that many of those subject to forfeiture lack the knowledge, assets or ability to challenge the seizures, this makes the forfeiture program especially threatening to vulnerable populations.

By limiting forfeiture to those situations where the property owner has been convicted of a felony, this bill would address the auditor’s concerns while strengthening protections for innocent third-parties who can get swept up in a forfeiture case.

This bill also deserves praise for seeking to eliminate the monetary incentives that can arise from the practice of asset forfeiture. By directing the proceeds from the forfeiture program to the general fund and limiting the allowable expenses for monies in the criminal forfeiture fund, this bill would prevent any agency or group from having a financial interest in asset forfeiture.

Similarly, SB3274  should also be praised for limiting the transfer of forfeiture property to federal agencies, a technique that has been used elsewhere to circumvent state restrictions on forfeiture.

Finally, the recording and reporting requirements included in the bill would help improve transparency and accountability within the program. This, in turn, would help improve public trust in government.

To sum up, Hawaii continues to be among the worst states for property forfeiture. It is clear that reform is overdue.

By introducing a higher standard for forfeiture, this bill would represent a giant leap forward in improving Hawaii’s forfeiture laws.

Thank you for the opportunity to testify.

Ted Kefalas

Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Lisa Knepper, Jennifer McDonald, Kathy Sanchez, Elyse Smith Pohl, “Policing for Profit: The Abuse of Civil Asset Forfeiture, 3rd Edition,” Institute for Justice, December 2020.
[2] “Audit of the Department of the Attorney General’s Asset Forfeiture Program,” Hawaii Office of the Auditor, June 2018.
[3]Follow-Up on Recommendations from Report No. 18-09, Audit of the Department of the Attorney General’s Asset Forfeiture Program,” Hawaii Office of the Auditor, July 2021.
[4] “Report on Proceedings under the Hawaii Omnibus Criminal Forfeiture Act,” Hawaii Department of the Attorney General, Nov. 23, 2022.

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