Comments by Catherine Austin Fitts © 2000.

Kelly O' Meara's  article on Asset Forfeiture, was obtained by
as part of its Solari Action Network.  Click to read the article, "When the Feds Say Seize and Desist."

The pictures and charts are part of the article in Insight magazine, including the Pop Chart on DynCorp's stock market value created by its work in support of the Department of Justice's Asset Forfeiture efforts, which appear to be primarily focused on War on Drugs activities. Briefly, here is what the chart says:

DynCorp's Stock 'Pop' from DOJ Asset Forfeiture Contract (estimates based on 1996 DOJ Asset Forfeiture Financial Statements,  DynCorp's Annual Proxy Statement for May 20, 2000,

DynCorp DOJ Contract) (*)estimate DynCorp Annual Fees as Contractor (1993-2003) $60MM per year X

DynCorp Profit Margin on DOJ Contract 5-10%* DynCorp Annual After-Tax Contract $2-4MM*

DynCorp Current Stock Offering Price Earnings Multiple 30X = $2-4MM = DynCorp's Stock Increase from DOJ Contract $60-120MM

 If anyone has the annual fees associated with Dyncorp's other work for DOD, State, DOJ & HUD on the War on Drugs including the assignment in Columbia it would be possible to estimate the total stock market value generated to DynCorp employees and investors from the War on Drugs. This same methodology can be used to estimate all corporate participation in Columbia or worldwide.  It is even possible to see if the growth in the War on Drugs is increasing in terms of total stock market value to war or whether or not they are both increasing the gross world equity % related to genocide activities. The probable case on 1996 and 2000 campaign fundraising is that stock market and real estate capital gains determined/fueled by reinvestment of drug, organized crime and arms sales and other warfare profits are the primary source of donations. Kelly O'Meara developed the Pop Chart a while back when she estimated the increase in drug company stock value for every child that gets put on Ritlin. Over time, Kelly's Pop Charts will offer interesting tidbits which illuminate opportunities for the socially responsible investment industry.

When the Feds Say Seize and Desist
By Kelly Patricia O’Meara © 2000

State and federal law enforcement say that civil-asset forfeiture is a crucial weapon in the battle against crime, but critics say the laws are a scandal and an outrage.

The Fifth Amendment to the U.S. Constitution states that no person shall “be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
       Under current civil-asset forfeiture, these guarantees have been undermined. Now, largely due to a public outcry about abuses in enforcing the forfeiture laws by state and federal law enforcement, Congress has passed the Civil Asset Forfeiture Reform Act of 2000. This bipartisan effort has been seen by some critics as a welcome relief, but others say it does not go far enough.
       David Smith, deputy chief of the Asset Forfeiture Office under the Reagan administration and a defense lawyer in Alexandria, Va., has been a major player in civil-asset forfeiture for nearly two decades and a key negotiator in the Civil Asset Forfeiture Reform Act of 2000. Smith says that the “1984 asset-forfeiture laws were enacted with good intentions to combat the newly declared war on drugs, but the process is out of control.” There are “far too many horror stories and lives that have been ruined.”
       Take, for instance, the case of Kathy Schrama, who was accused of stealing $500 worth of United Parcel Service packages from her neighbor’s door-step in New Jersey. Local police took her home, two cars and furniture — they even took her 10-year-old son’s Christmas gifts. Schrama pleaded guilty to theft and paid a $5,000 fine and eventually her home was returned to her.
       Then there is the case of Delmar Puryear. Police found 500 marijuana plants growing on the disabled retiree’s 37-acre farm in Kentucky. Puryear insisted he had no knowledge of the plants and a jury found him innocent of any criminal wrongdoing, but the federal government refused to drop its efforts to seize the farm until Puryear agreed to pay $12,000.
       While acknowledging abuses have occurred, state and federal law enforcement insist that civil-asset forfeiture is a crucial weapon in the battle against narcotraffickers. A Justice Department official who only would speak on the condition of anonymity tells Insight that “civil-asset forfeiture helps us keep a lid on the problem. More than half of all the cases are drug related and that money is traceable back to the cartels — it means, say, that $600 million is taken out of the hands of the criminals. Allowing state and local law-enforcement agencies to keep a portion of the seized profits is a good incentive to have them cooperate with federal officials. It’s not the complete solution to the problem, but it has been the most effective means we’ve found. And other nations, such as South Africa, the United Kingdom and Ireland, are adopting our system of asset forfeiture because they see that we’ve made some real headway.”
       Former Drug Enforcement Administration, or DEA, Agent Wayne Roques has no doubts about the importance of keeping tough asset-forfeiture laws on the books. “For most of the kingpins and big dealers the loss of their profits is something they really fear,” he says. “I have had guys say to me that they didn’t mind doing the time — they always expected to get caught — but the one thing they didn’t want to see happen was their money to be seized.”
       And successes there have been —virtually every law-enforcement source with whom Insight spoke about this issue agreed that the civil-asset forfeiture laws have dealt significant blows to drug kingpins and cartels. But with the successes has come a heavy price for a growing number of innocent people — mostly at the local level, where the gains from seizures represent a huge windfall for city and state law-enforcement agencies.
       “Ed Meese,” says Smith “is a big forfeiture reformer and he was the attorney general who succeeded William French Smith under whom many of the forfeiture laws were enacted. He and others who initially pushed for expansion of asset forfeiture now think it was a big mistake — or at least that they never dreamed of the excesses that would occur.”
       According to Smith, “This isn’t a political issue, it’s an economic issue among law-enforcement agencies. It’s driven by law enforcement’s self-interest in getting the booty — the bounty-hunter mentality. They aren’t a disinterested party so it’s difficult to think they can be objective.”
       Rep. Henry Hyde, the Illinois Republican who chairs the House Judiciary Committee and who’s a tough law-and-order legislator, long has been troubled by the way asset-forfeiture laws have been enforced. He tells Insight that he became aware of the problems associated with civil-asset forfeiture in the early 1990s when he read an op-ed article in the Chicago
       Tribune reporting abuses. Since then, he has been negotiating with the Department of Justice and with state and local law-enforcement agencies that appear to have become “addicted” to the revenue that asset forfeiture provides. Hyde’s intervention, combined with a bipartisan effort in the House and the Senate, has resulted in the Civil Asset Forfeiture Reform Act of 2000. It was signed into law on April 25 by President Clinton.
       Many of the law’s supporters, including Hyde, say it isn’t perfect but it does hit at some of the most egregious aspects of the current civil-asset forfeiture laws and it should help to wean law-enforcement agencies from their current dependence.
       In his 1995 book, Forfeiting Our Property Rights, Hyde warned that “a drug ‘war’ has been perverted too often into a series of frontal attacks on basic American Constitutional guarantees — including due process, the presumption of innocence, and the right to own and enjoy private property. Foremost among the invasions we now witness are unrelenting government assaults on property rights, fueled by a dangerous and emotional vigilante mentality that sanctions shredding the U.S. Constitution.”
       Strong stuff. And there are numerous examples to justify Chairman Hyde’s fighting words. The cases of abuse usually result from excesses by overeager law agencies — generally at the local level — many of which have huge financial incentives from such seizures. Here’s why:
       When state and local authorities turn a seizure case over to federal authorities, they are entitled to receive up to 80 percent of the profit after the property has been sold. State and local law enforcement prefer to make asset-forfeiture cases federal because many states have their own forfeiture laws that mandate that profits from sale of seized properties be deposited into the state’s general treasury, which more often than not earmarks the funds for specific programs such as education or health care.
       As a result of being able to grab substantial assets, local and state authorities can be blinded by the glint of gold at the expense of civil liberties, say critics. Consider what happened to Donald Scott, whose case was instrumental in persuading federal lawmakers of the need for reform. Scott’s 200-acre Malibu, Calif., ranch was surrounded by national-park land. He was approached by the National Park Service about selling but declined the offer. In the early-morning hours of Oct. 2, 1992, in the process of serving a search warrant — issued for evidence of marijuana on the property — state and federal agents broke down his door. Facing men with guns drawn, Scott’s wife, Frances Plante, begged the officers not to shoot. Scott obeyed their orders and lowered the weapon he had seized in fear of an armed robbery. As he did so, he was shot to death.
       A subsequent investigation found no evidence that marijuana ever had been on the property and Ventura County, Calif., District Attorney Michael Bradbury concluded that officers made false statements to obtain the search warrant. The raid was illegal and motivated by forfeiture, he decided. Meanwhile, the Scott home was burned to the ground.
       Another classic case of civil-asset forfeiture abuse was uncovered by Jeff Brazil and Steve Berry of the Orlando Sentinel. Just off Interstate 95 in Volusia County, Fla., Sheriff Bob Vogel created a special drug squad operating under the 1980 Florida Contraband Forfeiture Act, allowing police to seize cash and property based on probable cause. Any person stopped by the squad carrying more than $100 in cash was presumed a drug trafficker. In 1989, cash was confiscated from 83 percent of the drivers stopped but only 19 percent were arrested for alleged crimes. During a three-year period, the Volusia County Sheriff’s Department took in a cool $8 million in cash from motorists. Brazil and Berry won a Pulitzer Prize for their series exposing the abuses.
       “It literally was highway robbery,” says Smith. “Some of these people were deprived of their life savings because they happened to be in the wrong place at the wrong time.”
       When most people first hear of these abuses they say it can’t happen in America. People have rights under the Constitution, right? Well, yes and no. Under current civil-asset forfeiture laws the Constitution might as well be “confetti,” says Hyde. Property simply can be confiscated by alleging that it was purchased with proceeds of crime or used to facilitate crime. In legal jargon the procedure is referred to as “in rem” — against the thing. In other words, the property is charged and presumed to be guilty rather than the person. In fact, according to a 10-month study culminating in a 1991 exposé by the Pittsburgh Press Gazette, in 80 percent of the cases where property was seized, victims never were charged with a crime.
       So it’s confiscate first and ask questions later. For example, if you own a rental property and your tenant grows pot without your knowledge, you could lose your property under the civil-asset forfeiture laws because it’s not you who is being prosecuted, it is your property that has committed a crime. And, therefore, your property is subject to seizure and forfeiture.
       Getting property returned can be a nightmare. First, owners must decide if the assets seized are worth more than what it will cost to hire an attorney and fight a protracted legal battle to prove a negative — namely, that the property is not guilty. If victims decide to fight, they are allowed only 20 days from the date of seizure to post a nonrefundable bond worth 10 percent of the value of the property seized. If they can’t afford to post the bond, the property is lost by default. Should the case go to trial, the government need only prove probable cause and can base its case on hearsay. In many cases informants are used and they may receive 25 percent of the proceeds of successful forfeitures.
       When the federal rules change in August, some of these topsy-turvy legal contortions will be eliminated. But many in Congress, as well as some civil libertarians, worry that the continued underlying financial incentives will not slow the rate of seizures.
       Former DEA agent John Marcello, a 27-year veteran of the drug wars, argues the Hyde law will have little effect as long as the proceeds find their ways to law-enforcement agencies: “Being able to seize the assets of the traffickers is important, but it needs to be part of a bigger strategy — the kingpins and the drugs are ultimately what we want — asset forfeiture perverts our strategies, we end up just thinking about the money and, as long as law-enforcement agencies profit from seizures, they will find a way around the stricter rules.” Marcello argues that proceeds should not go to law enforcement but to treatment centers and antidrug education.
       Nearly two dozen federal agencies have forfeiture power — including the Department of Justice, or DOJ, the FBI, the DEA and Treasury — as well as thousands of state and local police departments. There have been forfeiture laws on the books since the nation’s inception but, due to the Fifth Amendment, they rarely were utilized until the United States declared its war on drugs in 1984.
       Prior to enactment of the 1984 Comprehensive Crime and Control Act, all revenue generated by a federal civil- or criminal-asset forfeiture was deposited into the U.S. Treasury general fund. With the enactment of the 1984 law, however, federal law en-forcement was allowed to keep all proceeds from confiscated property and target the profits to support asset-seizure programs. This system will continue under the 2000 reform act.
       According to DOJ figures, 28,421 properties were seized or forfeited in 1996 with a combined value of $1.264 billion. Justice noted that the lion’s share came from civil-forfeiture actions.
       The same 1996 DOJ report also said that nearly $160 million was paid out to state and local law-enforcement agencies under the Equitable Sharing Program. “Allowing law-enforcement officials to keep the proceeds of forfeiture began the war on the private property of innocent Americans, not just the proceeds of the crime or the assets of convicted criminals,” says Brenda Grantland, the president of Forfeiture Endangers Americans’ Rights, or FEAR. “Armed with statu-tory authorization and no legislative oversight over how they spent it, the popularity of asset forfeiture immediately skyrocketed. It not only gave the police the power to terrorize innocent citizens, it also allowed the police to finance their own new police state out of the property seized,” she claims.
       And excesses do come with little oversight. Opponents cite the case of a local district attorney in Suffolk County, N.Y., who drives a BMW 735i seized from an alleged drug dealer. That district attorney also appropriated $3,412 from forfeiture funds to work on the car, including $75 for pinstriping. Another case cited is the assistant chief prosecutor in Warren County, N.J., who drives a confiscated yellow Corvette.
       But it’s not only law enforcement that appears to benefit directly from the cash cow of asset forfeiture. Private companies hired by federal and local agencies also gain. For example, EG&G is the primary contractor hired by the U.S. Customs Service to help manage its asset-forfeiture program. The company has enjoyed a $133 million contract for five years; it ends in November. Then there’s the DynCorp Co., a multimillion-dollar conglomerate that was awarded its second five-year, $300 million contract to handle the administrative services and support for the Justice Department’s asset-forfeiture program.
       Though no one is accusing these companies of wrongdoing, critics of the system point out that huge profits are generated from the programs, sometimes at the expense of innocent victims for whom there are no available government services to help return their property.
       But Hyde reminds Insight that his bipartisan legislation at least has fixed some of the problems with civil-asset forfeiture. “It’s a good start,” he says. The government now will have to prove “by a preponderance of the evidence that the property is subject to forfeiture” — a much higher standard than the current “probable cause.” His new law also eliminates the cost-bond requirement and requires federal prosecutors to show that there is “a substantial connection between the property and the crime.” Furthermore, the Hyde law will, in certain cases, allow the property to be released by a federal court pending final disposition of a case when the continued possession by the government causes the owner substantial hardship. And the reform also allows property owners to sue the federal government for any damage to the property when the victim of seizure wins in civil-asset forfeiture actions.
       Getting these few changes was no small feat. Hyde says: “We struggled for seven years trying to get over the hump of law-enforcement agencies objecting to provisions — complaining that I was trying to help drug dealers and law breakers. The money law enforcement receives from asset forfeiture is addictive and it was an enormous mountain to climb. It took all of these years to reach a point where we could put a bill on the table and say let’s go with it.”
       Was it worth the fight? Hyde tells Insight: “I was convinced that this [civil-asset forfeiture] was a ‘Soviet’ practice — to put the burden of proof on the property owner. The government power is too overwhelming and intimidating. I think if people are convicted drug dealers they should pay —but the average forfeiture isn’t about drug dealers. This legislation is a huge step in the right direction.… But the negotiations on this legislation were interminable and we had to make concessions with Justice to get a bill to sign and we finally got down to a minimum. I told them what I had to have and without it I’d walk away from the bill. The administration never liked the bill so it wouldn’t do any good to pass it in Congress if the president was going to veto it. In the end, it’s less than perfect, but it’s progress.”
       Smith agrees with Hyde and recalls the long battles with negotiators at the Department of Justice. “I was involved in the previous negotiations with the reformers and the DOJ didn’t want to compromise. The negotiators at the DOJ were these zealots from the Asset Forfeiture and Money Laundering Section, whose religion is asset forfeiture. They think the world will come to an end if they can’t continue to expand asset-forfeiture powers. The same thing would have happened on this bill if the higher-ups at DOJ hadn’t taken the reins and made the key decisions.”
       While Smith believes that the changes in the laws “make it a whole new ball game,” he doesn’t envision the reduction that is predicted by the DOJ. “According to a report done by the Congressional Budget Office,” says Smith, “the government is predicting a dramatic drop of up to 40 percent in civil-asset forfeiture cases. I don’t think it will be that dramatic, but there will be a significant reduction because of the changes in the law. A lot of small cases may not be worth it anymore because the government can no longer use hearsay — they actually have to bring in witnesses to prove their cases. That gets expensive, and if there’s only $10,000 at stake, it will cost more than it’s worth for them to litigate.”
       The bad news, Smith says, is that law enforcement may pick up the slack of any financial losses by pushing on criminal-asset forfeiture because the rules there have been changed in their favor. He says, “These changes substantially reduce a victim’s right to a jury trial and create other huge possibilities for unfairness. They are turning it into a sentencing-type proceeding where the government can use hearsay evidence — exactly what we’re abolishing in the area of civil forfeiture. This was done in the Advisory Committee on Criminal Rules of the Judicial Conference, because Congress laughed at this proposal and they knew they never would have gotten congressional support. So instead, the government went to the committee of judges and got it done.”
       Hyde says he is unaware of the changes in criminal-asset forfeiture raised by Smith but tells Insight, “It may have to be looked into.”