Subject: WHEN POLICE TAKE PROPERTY, WHO DO YOU CALL?
   Date:         Fri, 11 Feb 2000 17:32:46 -0500
   From:        JBJ

[The House passed civil assest forfeiture reform legislation overwhelmingly.
Now the Senate Judiciary is considering S. 1931 to keep the ball moving.
Unsurprisingly, the beltway cops are balking.  The McNamara commentary
explains why.  Also, the credit unions have weighed in on the issue.
The Free Congress Foundation's Coalition for Constitutional Liberties
has its updates online: http://www.freecongress.org/centers/technology/ccl
(a lot of good stuff this week, too much to copy here) and finally,
an oldie but goodie from Rep. Ron Paul.  Enjoy the weekend, JBJ]

WHEN POLICE TAKE PROPERTY, WHO DO YOU CALL?
6 Jun 1999  - Source, Copyright: 1999 The Orange County Register (CA)
Contact: letters@link.freedom.com  Website: http://www.ocregister.com/

by  Joseph McNamara

 When someone takes your property without permission for their own use, you call the police. Who do you call when the police take your property for their own use? The implications of that question have thrown bitter opponents of the House impeachment hearings together in a surprising alliance to prevent some of the worst government civil asset-forfeiture practices.

Republican Reps. Henry Hyde and Bob Barr have been joined by Democrats Barney Frank and John Conyers in co-sponsoring HR 1658, a bill that will better protect individuals and businesses from having their property arbitrarily confiscated and given to the law enforcement agencies that seized it.

The union of conservatives and liberals came about because police organizations have become addicted to grabbing property. I don't mean to attack the police. As police chief of San Jose during the 1980s, I was one of the worst addicts.

A stagnant economy had squeezed taxes. San Jose had the lowest per-capita police staffing in the nation. We needed more cops. I was interested in all the seizure money we could get. That is what makes reform so necessary.

A case in point: One day my boss, the city manager, sent me his proposed annual budget for the police department. San Jose was the 11th largest city in America, but no funds were earmarked for police equipment. When I brought this to the city manager's attention, he dismissively said, "You guys seized $4 million last year. I expect you to do better this year." My officers and I understood that if the $4 million didn't come from seizures, the equipment would be purchased from city general funds reducing the amount available for salary increases and overtime.

That is why the reform bill will face strong opposition from many in law enforcement. Even police chiefs who deplore the inherent conflict of interest in police seizures will hesitate to speak in favor of reform.  Doing so will make them a target of their bosses in city hall and police unions interested in seeing ample funds being available for police
overtime.

Some cops will argue that dope traffickers shouldn't get to keep the profits. That sounds good, but in around 80 percent of the seizure cases no one is even charged with a crime. Because it is a civil proceeding, the property owner does not enjoy the presumption of innocence. If the police have probable cause to believe that the property facilitated a crime, they may seize it without a warrant. Then it is up to the owner to prove innocence. This is not only difficult, but also beyond the means of most property owners because the government rarely nails big drug cartel members. Most of the seizures are for small amounts, and many times lack of knowledge of the underlying crime is not accepted as a defense.

In a Michigan case, a woman unsuccessfully tried to recover her car after it was seized with a prostitute. In an earlier case, the court upheld the forfeiture of a yacht by a leasing company after customs agents found a marijuana cigarette.

I heard an innocent woman describe how seizure had destroyed her business.  She received and shipped a number of packages every day. Without her knowledge, her son had ordered marijuana from what turned out to be a police sting operation. Even though she never opened the disguised marijuana package and was never prosecuted, agents took her property, including her computer data bank. Without her records she was out of business.

During my rookie days in New York's Harlem, my sergeant told me he expected me to issue five traffic citations for moving violations. According to law enforcement principles, of course, traffic citations for driving as seizures are only to help win the drug war. But when cops are put under pressure to produce good statistics and revenue, bad things happen.  Any number of motorists fall victim to petty enforcement and their resentment of arbitrary policing undoubtedly leads to diminished cooperation in reporting crime and cooperating with police investigations.

The negative impact of police seizure efforts is far more severe for both the police and public than questionable traffic tickets. Each year, a number of police officers are shot during dangerous drug raids.  Innocent citizens suffer as well. The police understandably who usually have powerful firearms handy to protect them from robbers. So at 4 or 5 a.m., while people are sleeping, the police smash through doors, yelling and screaming and exploding stun and smoke grenades.

An elderly African-American minister in Boston thought he was being robbed and struggled with the police. He died of a heart attack. Only afterward did the police realize that they had gone to the wrong address.

In California, a law enforcement task force obtained a search warrant after an officer swore under oath that a federal agent had told him that he observed marijuana being grown on a ranch he flew over in a helicopter.  During the subsequent raid, the rancher apparently thought he and his wife were being assaulted by criminals. When he displayed a firearm, he was shot to death. No drugs were found. The DEA agent cited in the warrant later testified that he had not said he saw marijuana growing, rather, that it was the kind of place where marijuana could be grown. The county prosecutor stated that he believed that the various police agencies involved had been motivated by their greed to seize the ranch to enhance their budgets.

The police can usually avoid dangerous raids by arresting the drug trafficker in some other location. Sometimes, however, the desire to seize money or property at the suspected location will be put ahead of safety.

Although billions of dollars have been seized and distributed to police agencies, drugs are more plentiful, more pure and cheaper than ever.  Drug use has not declined among hard-core users and is increasing among youngsters.  Overdose deaths have increased and the number of people mentioning drug use during emergency room treatment has increased.  Police and government drug corruption are as bad or worse, and too many neighborhoods are drug battlegrounds.

Arguments against reform of civil seizure should be defeated.  Seizure reform will help protect Fourth Amendment rights against unreasonable searches and Fifth Amendment rights of due process in the government taking of property.

In a free society, the police should never be compelled to, or allowed to, view their law enforcement duties as a means of raising revenue for government.

__________________________________________________________________________

----------------------------------------------------------------------------

Opening Statement of Rep. Ron Paul
Hearing on Current Trends in Money Laundering
House Committee on Banking and Financial Services
April 15, 1999

        Thank you for holding this important hearing.  In light of the public outcry against the violation of financial privacy in the Know Your Customer rule, it is no small wonder that consumers are now protesting the existing Know Your Customer policies under the Bank Secrecy Act compliance manual and calling for the review or repeal of the Bank Secrecy Act itself.

        In a letter to financial regulators regarding the ill-fated Know Your Customer proposal, the Consumer Federation of America, Consumers Union and U.S. Public Interest Research Group wrote a joint letter urging not only the immediate withdrawal of the proposal but added, "we believe that, additionally, the underlying current regulations of the Bank Secrecy Act need review as well."  Passing HR 518, the Bank Secrecy Sunset Act, would accomplish that goal by forcing a three-year debate of the issue.  The group letter asked, "Why is the burden on the consumer to explain his or her life to the satisfaction of the bank's inspector of the bank's computer, when he or she has done nothing wrong?  No warrant would be required, no court order, no probable cause."  The American Association of Retired People (AARP) wrote to the financial regulators about its concern with the "wholesale breach of the firewall protecting the individual's right to financial privacy."

        The American Bankers Association (Financial Privacy in America: A Review of Consumer Financial Services Issues, June 1998 report) explained that consumers are "increasingly well-informed and aggressive in addressing perceived risks to their personal privacy" such as the current "Know Your Banker" campaign being launched by some citizens groups.  It adds, "For businesses to succeed, they must satisfy consumer needs and demands as efficiently and accurately as possible. This is a 'market' check on privacy."  Congress should review current laws and regulations
accordingly.

        This violation of privacy imposes a great cost with little benefit.  The Independent Bankers Association of America's letter to regulators regarding the Know Your Customer proposal read, "There has been no indication of instances when these reports have been successfully utilized in the prosecution of criminal activities . . . Therefore, given the lack of demonstration of benefits from any prior reporting that has been required under the Bank Secrecy Act, it is clear to the IBAA that the costs of the proposal would outweigh any minuscule benefits many thousand times over . . .   The IBAA and others have encouraged law enforcement officials to share the results of these efforts with banks, but there has been little evidence that would convince banks that their compliance with the Bank Secrecy Act is providing useful information leading to prosecution and conviction of criminals."

        American Bankers Association surveyed their members ("Money Laundering Deterrence and Bank Secrecy Act Research Report," 1990) and found that after nearly two decades of reporting requirements and with 86% of responding banks already having a Know Your Customer policy in place (and with a ninefold increase in Currency Transaction Report filings in the previous four years), only 7% of responding banks were "aware of any prosecution cases that resulted from their filing of CTRs, or from their reporting of a suspicious currency transaction."

        The Law Enforcement Alliance of America reports that between 1987-1996 banks filed more than 77 million Currency Transaction Reports with the U.S. Treasury. From this, 7,300 defendants were charged in 3,000 money laundering cases, but only 580 were convicted. This is less then one/1,000 of 1%!  More than 99.999%of those that had their privacy invaded were law-abiding citizens going about their own personal financial business, referring to a Journal of Commerce article, 10 December 1996, which cites Department of Justice figures.

        Referring to the same 1987-1996 data, Larry Lindsey, former Federal Reserve Board member now at the American Enterprise Institute, compared in a recent Financial Times article ("Invading financial privacy") the usefulness of these reports to the "proverbial needle in a haystack" with a ratio of 25,000 reports to one case brought and 0.2 convictions.  After quoting from the fourth amendment to the constitution, he added, "It would seem clear that the current money-laundering practices are the kind of blanket search that the writers of the constitution sought to prohibit.  Somehow 'probable cause' does not seem to mesh with the one-in-25,000 odds that the currency transactions reports provide."

        Responding to justifications of such a gross violation of the Founding Fathers' intent, Mr. Lindsey explained, "freedom has been buried under the kind of convoluted reading of plain English that George Orwell warned about...Logic that amounts to 'criminals use money, therefore the use of money should be suspect' sounds somewhat Orwellian."  He ending by saying he had no answer when a woman asked him, "You people in Washington think we're all criminals, don't you?"

        Of course, "suspicious" activity is inherently subjective and prone to abuse.  Georgetown University law professor David Cole compiled a list of characteristics included in the "drug-courier profiles" used by U.S. law enforcement officers.  These included: Arrived late at night. Arrived early in the morning. Arrived in afternoon ... One of first to deplane.  One of last to deplane.  Deplaned in the middle ... Bought coach ticket.  Bought first class ticket ... Used one-way ticket.  Used round-trip ticket...
Traveled alone.  Traveled with a companion ... Wore expensive clothing.  Dressed casually.  In short, everyone anywhere at any time could fit a "suspicious profile" according to U.S. customs officials.

        Even use of currency laced with cocaine should not be suspect when one considers Federal Bureau of Investigation Laboratories showing 90% of money samples in selected cities contaminated with cocaine (Discover magazine, October 1998).  The Journal of Forensic Sciences, May 1998, found that close to 93% of its sample--and 100% of $20 bills--tested positive for cocaine, "In fact, most Americans handle small amounts of cocaine every day, not as packets sold by drug dealers but on dollar bills that line their pockets."  Yet such specious implications of guilt of money laundering are used by law enforcement in the pursuit of civil asset forfeiture.

        Consider the increasing abuse of asset forfeiture.  Explains Judge John Yoder (in The End of Money and the Struggle for Financial Privacy by Richard W. Rahn), "When I set up the Asset Forfeiture Office, I thought I could use my position to help protect citizens' rights, and tried to ensure that the US Department of Justice went after big drug dealers and big time criminals, rather then minor offenders and innocent property owners.  Today, overzealous government agents and prosecutors will not think twice about seizing a yacht or car if they find two marijuana cigarettes in it, regardless of where they came from.  I am now ashamed of, and scared of, the monster I helped to create...  Today, asset forfeiture laws are also more likely to be used to intimidate someone who is innocent, than to go after someone who is a big time criminal or drug dealer."

        It is argued that one need not worry if one "isn't doing anything wrong."  Hosep Krikor Bajakajian and his wife know better.  While attempting to board an international flight, Mr. Bajakajian was arrested.  His only "crime" was failing to report carrying more than $10,000 in legally-obtained money.  Despite the fact that the maximum fine for not reporting such behavior to the proper authorities was only $5,000, the U.S. Customs officials sought to confiscate the entire $357,144 he was carrying!

        While the U.S. Supreme Court ruled last summer in U.S. v. Bajakajian (No. 96-1487) that the forfeiture of the entire amount of money "would be grossly disproportional to the gravity of his offense," it illustrates one of the perils of our money laundering statutes for law-abiding citizens.  "When the government confiscates a person's home or business, the person is often harmed far more than if they had been given a brief jail sentence," explains Tom Gordon of Forfeiture Endangers American Rights (FEAR).  "The safeguards against government overreaching should be just as strict for protecting property as they are for protecting liberty."

        An increasing number of Americans are becoming wrapped up in this Kafkaesque policy and point out the abuse of asset forfeiture, intimidation and disproportionate penalties.  At a minimum, we should reduce the regulatory burden (especially on small, rural community banks), eliminate the felony possibility where one acts without criminal intent, and restore public confidence in our financial system.  The best approach is to repeal the Bank Secrecy Act which would free banks to tailor policies against fraud and embezzlement best suited to its community rather than conform to the one-size-fits-all approach from Washington beltway financial assaults on our privacy.

On behalf of 78 million credit union members nationwide:

February 10, 2000

The Honorable Orrin Hatch
131 Senate Russell Office Building
Washington, DC  20510

Dear Chairman Hatch:

It is my understanding that the Senate Judiciary Committee intends to mark-up H.R. 1658, the Civil Asset Forfeiture Reform Act, in the near future.  CUNA endorsed H.R. 1658 in May, 1999,  as passed by the House.

On behalf of 78 million credit union members nationwide, I strongly urge you to support S. 1931, the Hatch-Leahy Civil Asset Forfeiture Reform Act, without amendments.  The right to own private property is an indispensable right in the United States.  Unfortunately, current civil forfeiture law provides inadequate protections for private property.

S. 1931 is an outstanding bill which increases protection for property, while preserving civil forfeiture as a law enforcement tool.  It places the burden of proof on the government, establishes reasonable time limits in pursuing forfeiture actions, and provides a uniform innocent owner defense.  In addition, S. 1931 eliminates the unfair cost bond that property owners must post for the mere privilege of contesting the seizure.  The cost bond does not entitle the property owner  the return of the property pending trial.

S. 1931 is a carefully considered bill that reflects the interests of property owners and law enforcement officials alike.  It has been endorsed by former U.S. Attorneys General William Barr, Edwin Meese, Griffin Bell, Benjamin Civiletti, and Nicholas Katzenbach, as well as former Solicitor General, Robert Bork.

Thank you for your consideration of our views.

Sincerely,
Daniel A. Mica
 

[When US Treasury officials talk about "strengthening of international cooperation to disrupt the global flow of illicit money," it is important to understand that this is a euphemism for what the Financial Times refers to as "persuading" and applying "pressure" through multinational fora because sovereign nations pursue policies of respecting consumer financial privacy, um, "excessive secrecy."  What IS needed is a Know Your Customer
program for IMF and US Treasury officials to combat misuse of funds and corruption!

Also, articles from several newspapers on $ laundering/IMF abuse; Echelon admission; LSC update--JBJ]

Ukraine denies IMF funds misuse
Financial Times, 15 Feb 2000 12:41GMT

By Charles Clover in London, Thomas Catan in New York and Stephen Fidler in Washington

Viktor Yushchenko, Ukraine's newly appointed prime minister, on Monday denied using any funds from the International Monetary Fund in "secret operations" to invest the country's foreign exchange reserves...[snip]

Mr Yushchenko, who was governor of the Ukrainian central bank until he was appointed prime minister in December, rejected reports that the former government used IMF money for speculative investments as "pure disinformation".  In an interview with the Financial Times he insisted that all the investment operations of the bank were "in line with international regulations and procedures".

According to documents presented to the Ukrainian parliament, central bank funds deposited in a Cyprus bank were reinvested in high-yielding Ukrainian government debt.  New charges that Ukraine's central bank may have misused loans from the IMF will be investigated by the US House of Representatives banking committee at its upcoming hearings in Washington.

The first set of hearings, scheduled for mid-March, were called after allegations surfaced last year that IMF money may have been part of some $7bn that may have been laundered through the Bank of New York.  The hearings will now be broadened to look at the new Ukrainian charges.

The US Treasury has also expressed concern about the disclosure, both to the government in Kiev and to the IMF. "These are obviously serious revelations," a Treasury official said. "They underscore the need for both Ukraine and the IMF to investigate the reserve management practices thoroughly, make the facts public and make sure that it doesn't happen again."

Mr Yushchenko was central bank chairman at the time some $600m in fiduciary agreements were signed with Credit Suisse First Boston, which for the most part re-directed the money into Ukrainian debt...[snip]

Fight on money laundering to be stepped up
Financial Times; 15-Feb-2000 12:00:00 am

Law enforcement experts plan to step up their fight against money laundering by drawing up a list of countries and territories that do not co-operate with international efforts to combat financial crime.

The 26-nation Financial Action Task Force [FATF] has set up four committees to assess whether financial centres around the world meet newly published criteria for judging rules and practices that impede the prevention of money laundering...[snip]

Excessive financial secrecy provisions are among the 25 criteria set out by FATF. Other deficiencies condemned by the body include lax supervision, weak legal requirements for registering businesses, inadequate resources for combating money laundering and failure to criminalise it.  FATF said that if territories and countries were found not to be co-operating in the fight against terrorism, efforts would initially be made to persuade them to amend their laws and practices.

Pressure could also be applied through other multilateral forums, such as the Group of Seven leading industrial nations, the OECD, the Basle Committee, the World Bank and the International Monetary Fund...[snip]

US-led spy web used to swing business deals
From the Times of India

              WASHINGTON: In what may turn out to be the biggest spy scandal since World War II, the Pentagon has admitted the existence of a spy network, jointly operated by the US, the UK, Canada, Australia and New Zealand, capable of tapping every telephone, fax and e-mail communication in the world [see also the European Parliament Echelon Hearings Report at http://www.iptvreports.mcmail.com/stoa_cover.htm].

              Britain's Sunday Telegraph reported that the communication was passed on to US firms to secure contracts against competition from French, Japanese and other firms of the non-English speaking world.  The information was allegedly used even against Airbus to favour Boeing though the UK has a share in Airbus.

              The project, called ``Echelon'', has been in operation since 1947 and operates from the highly secretive US National Security Agency's (NSA) Meredith Hill listening station in north Yorkshire. The US and the UK were the only two original members of the group which was later expanded.

              The UK's role has come under fire, said the paper whose despatch has made the front page of the Washington Times, as it is the only European participant in the US-led global electronic espionage. European countries say that US espionage chiefs abuse `Echelon' to spy on individuals and pass on commercial secrets to US businesses, the Washington Times said.  The paper said Thomson CSF of France is among the other reported losers as a result of exploitation of the information for commercial purposes.  The US admitted the existence of NSA only recently.  Congress votes billions of dollars for it every year but the amounts are hidden under different heads.

              In Asia, it said, the US used information gathered from its bases in Australia to win a half of Indonesia's trade contracts for AT&T that intercepts showed were initially going to NRC of Japan, Wayne Madsen, a former NSA agent, told Australian TV.  NSA's activities are one reason why delegations from developing countries are at a disadvantage at international conferences, observers here said. Even before they open their mouths, the Americans will have intercepted their instructions so that they know in advance how far they can push them.(PTI)

French to sue US and Britain over network of spies
The Times, 10 Feb 2000  http://www.the-times.co.uk/news/pages/tim/2000/02/10/timfgneur01007.html?999

FROM ADAM SAGE IN PARIS,

THE British and US Governments are to be sued in France after claims that they have spied on French companies, diplomats and Cabinet ministers.  Lawyers are planning a class action after confirmation last week that a global anglophone spy network exists.

Codenamed P-415 Echelon, the world's most powerful electronic spy system was revealed in declassified US National Security Agency documents published on the Internet, and is capable of intercepting telephone conversations, faxes and e-mails [see also the European Parliament Echelon Hearings Report at http://www.iptvreports.mcmail.com/stoa_cover.htm].

The system was established in the 1980s by the UK USA alliance, which unites the British, American, Australian, New Zealand and Canadian secret services. In Europe, its listening devices are at Menwith Hill defence base in Yorkshire. French MPs claim to have evidence that the European Airbus consortium lost a Fr35 billion (?3.5 billion) contract in 1995 after its offer was overheard and passed to Boeing. Georges Sarre, a left-wing MP, said: "The participation of the United Kingdom in spying on its European partners for and with the US raises serious and legitimate concerns in that it creates a particularly acute conflict of interest within the European Union."

The European Parliament's Civil Liberties Committee will study a report on the Echelon network on February 23. The debate is certain to fuel criticism of Britain's role.

Until this month, the network was an official secret recognised by none of the members of the UK USA alliance. But the documents published by the George Washington University prove its existence and its capacity to intercept civilian satellite communications.

Jean-Pierre Millet, a Parisian lawyer, said that Echelon tracked every mobile and satellite call, but only decoded those involving a key figure.  "You can bet that every time a French government minister makes a mobile phone call, it is recorded," he said.

M Millet said that Echelon's system leaves it open to legal challenge under French privacy laws. "The simple fact that an attempt has been made to intercept a communication is against the law in France, however the information is exploited." Yesterday he said that he would bring an action on behalf of French civil liberty groups.

------------------------------------

Dear friend of liberty,

Do the bureaucrats at H.H.S. really want your comments about
their proposed regulations that will affect your medical privacy?
The A.C.L.U. doesn't think they do.

"A week from today, the period for public comment on medical
privacy regulations drafted by the Department of Health and
Human Services will end.  But according to the American Civil
Liberties Union, the public will not have been able to comment
much.  ACLU officials contend that HHS disregarded thousands of
faxes sent through the ACLU web site from citizens...." as
reported in The Washington Post yesterday.

http://washingtonpost.com/wp-dyn/politics/fedpage/A34346-2000Feb10.html

"This is a classic case of David vs. Goliath," said Laura W.Murphy, Director of the ACLU's Washington office.  "The HHS system is set up so that it is far easier for special interest groups like the insurance industry to weigh in than it is for the average person to make their views known."
[ACLU news release, 2/3/00]
http://www.aclu.org/news/2000/n020300a.html
 

By the way, we don't provide a form letter because we understand HHS will count form letters as coming from one person even though thousands might have signed it.

Kent Snyder
Executive Director
Liberty Study Committee
http://www.libertystudy.org
 
 

[Forwarded from a friend; I thought this would interest my list--JBJ]

Clinton Taking Up Web Security

By SONYA ROSS

Managers of a recently formed warning network for banks said computer experts at some of the nation's largest financial institutions received detailed warnings of impending threats days before last week's attacks began on major sites such as Yahoo!, Buy.com, eBay and ETrade.

But banking officials never passed those warnings to the FBI or other law enforcement agencies, because they weren't allowed to do so under rules of the unusual security arrangement, formed with the government's encouragement.

To encourage open participation by banks and other financial firms, the Treasury Department decided that information disclosed within such a network  would not be turned over to federal regulators or law enforcement agencies.  It worked well for the banks that were forewarned about the attacks last week but the system also ensured the same warnings were not widely distributed.

The banking network issued the first alert in the latest attacks on Feb. 4,  ``when we started seeing certain machines being compromised,'' said William Marlow of Global Integrity Corp., which runs the network.  Yahoo! was attacked  four days later.

 Today, Clinton said the banks should not be blamed. ``They were just better organized to engage in information sharing,'' he said.  ``What we want is for every sector of the economy to be in the same shape.''

 --------------
Global Integrity Corp. is a wholly-owned subsidiary of Science Applications International Corp (SAIC). SAIC is a major CIA, NSA, and Pentagon contractor. The company also has an interest in Network Solutions (the Internet domain registrar). It is now apparently involved with tracking the US and international banking network. This means that SAIC, made up of a large number of ex-intelligence and FBI personnel, has the opportunity to peek at your ATM transactions, home banking transactions via the  Internet, your checking and savings account balances, and aything else it deems to be a network security problem. While Clinton has been promising us to look after our medical privacy, he has let this dubious firm to have open access to our banking information. Wake Up Call Everyone!
 

*************************************************************************
Sanho Tree
 Director, Drug Policy Project            202/234-9382 ext. 266 (voice)
 Institute for Policy Studies             202/387-7915 (fax)
 733 15th St., NW, #1020                  202/422-7952 (mobile)
 Washington, DC 20005                     E-mail: stree@igc.org