In September, the Arizona Attorney General's Office made headlines.
Early that month, its lawyers won what it called a major battle in the state's ongoing drug war by securing a judgment against reputed drug kingpin Isidro Ibarra Chaidez. The verdict allowed the state to confiscate $1.8 million in property and cash Ibarra allegedly earned from the sale of cocaine and marijuana.
Federal and state agents claimed that Ibarra controlled an octopuslike network of drug importers and distributors, through which he moved 13,000 pounds of cocaine, valued at $100 million, from Mexico into California and Arizona. Working with the Yuma County attorney, the attorney general used a state forfeiture law that permits confiscation of property bought with drug money--or of property used to contain, transport or sell illegal drugs--to seize mounds of cash, vehicles and a luxury estate belonging to Ibarra and his family. The seizures, announced in a triumphant press release, were among the largest in state history; proof, officials said, that the war on drugs was hitting major drug traffickers where it hurts most--in the pocketbook.
But later that same month, the powerful drug-war machine, utilizing the same forfeiture law it brings to bear on coke lords like Ibarra, focused its might on a much smaller fish--a middle-aged busboy named Juan, who works in a Phoenix cafeteria. This time there were no press releases, no headlines.
Instead of seizing mansions and suitcases full of greenbacks, the state grabbed Juan's 1968 Chevrolet Impala, valued at less than $300, and auctioned it off. The profit from the sale was returned to the Phoenix Police Department, which had busted Juan the previous year for possessing a vial containing "trace amounts" of cocaine (hardly enough to register on the most sensitive of scales) and a pipe--tossed casually in the back seat of his car-- which contained marijuana residue.
Because his employers don't know about the bust, Juan asked that his real name not be used. "They took away my car for drugs that were worth nearly nothing," he says. "And along with it I nearly lost my job because I couldn't get there. I know I broke laws, but were the drugs I had in my car really worth what they took from me?"
It's a question defendants and their attorneys are asking more often, as the practice of seizing the assets of those in possession of even the smallest amount of illegal drugs has become common police procedure--so common that the task of processing the forfeited property has spawned a mushrooming multimillion-dollar business in Arizona. For both Blue Chip Realty, the Phoenix company that holds an exclusive state contract to manage and sell the forfeited assets, and police departments themselves, many of which benefit directly from the confiscated items they seize, forfeiture has truly become a growth industry.
It's a little-known branch of the drug war, miles beyond the spotlight of high-dollar busts of millionaire narcotics dealers. Here, the spoils of the war, rather than yachts and Lear jets, are common cars and trucks driven by casual drug users. While big-money busts like Ibarra's have netted millions for police agencies, so, too, have the hundreds, perhaps thousands, of forfeitures obtained from drivers who often are caught during routine traffic or speeding stops with relatively small amounts of drugs in their vehicles.
"What people don't realize," says defense attorney Greg Clark, who has represented several defendants in forfeiture cases, "is that if the police can prove you've got any illegal drugs in your car, they can take it. Kiss it goodbye. And for most people, there isn't much they can do about it. It happens all the time."
But does the punishment fit the crime? Is it, in legal jargon, "proportional"?
Law-enforcement officials say forfeiture is a powerful deterrent, a vital club with which to beat drug traffickers. Cameron "Kip" Holmes, an assistant state attorney general in charge of the attorney general's Forfeiture Support Project and primary architect of the state's forfeiture statute, defends the practice as "one of the only ways to get the job done."
The Harvard-educated Holmes is one of a new breed of prosecutors and law-enforcement officers that is trained to fight the drug war using calculators and account ledgers as well as handcuffs and guns. He says an emphasis on financial assault is likely to become the trend.
"Drugs traffickers are into big business, maybe the biggest," Holmes says. "We've got to start meeting them on their own terms, and that means understanding the money end. And it means being able to take the fight to them financially."
Defense attorneys reject Holmes' analysis. They view forfeiture as a draconian measure akin to robbery, inflicted more on "average guys" than big-time drug dealers. Moreover, they maintain, forfeiture injects a corrupting profit motive into the criminal-justice process. Consequently, police officers are turned into bounty hunters with a potential financial interest in each and every bust.
Undeterred, law-enforcement officials insist that most forfeiture cases are directed only at those who are arrested for possessing saleable amounts of illegal drugs and that stories like Juan's are merely anomalies. But the county's forfeiture case files are littered with examples of similar tales, where only a trace amount of drugs found in a car results in the vehicle's forfeiture.
In a random sampling of fifty forfeiture cases springing from drug-related vehicular arrests made by the Phoenix Police Department, fourteen involved less than one gram of illegal drugs. Many of the cases involved the equivalent of a single marijuana cigarette, trace amounts or "residue" of cocaine or less than a gram of methamphetamine. In all fourteen cases, the car involved was confiscated and auctioned off.
Often, the amount of illegal drugs found on the driver or in the car is too small to warrant criminal prosecution--first-time offenders in such cases can get off with enrollment in drug education and rehabilitation programs--but the forfeiture case proceeds nonetheless, as a civil suit between the city prosecutor and the driver.
Michael Kimerer, another defense attorney who handles forfeiture cases, emphasizes that for many poor defendants caught with drugs, the forfeiture laws amount to an automatic loss of property. "When low-income people are busted, they may often be using a court-appointed public defender to help them with the criminal charge," he says. "But the police and prosecutors go after the car in a separate civil action--which means their lawyer can't help them. If they can't afford to hire one privately, which is usually the case, then they are out of luck."
Even with a lawyer representing them, defendants find that the forfeiture process is almost always a fait accompli. The city attorney--at the request of the local police--merely must notify all parties that have a financial interest in the seized property and file a brief in the county Superior Court, detailing the arrest and requesting forfeiture. If the drugs were found on a driver, or in his vehicle, the city attorney notes in the brief that since the vehicle was "engaged in the transport of illegal drugs, it is subject to forfeiture." In most cases, that--and a three- to four-month waiting period for processing and final judgment--is all it takes.
"This is happening all the time," Kimerer says. "The cars and other property they confiscate and sell may not constitute much individually, but if you sell enough of them, it adds up to something."
In Arizona, it adds up to an awful lot.
The Arizona Criminal Justice Commission, a drug-fighting task force chaired by Maricopa County Attorney Richard Romley, claims it confiscated more than $31 million in assets as the result of drug arrests during the past two years. That number doesn't include the millions seized by most local police departments and the attorney general. No one knows what the total dollar amount for seizures is, because such statistics aren't kept on a statewide basis. Although Holmes points out that police departments uniformly overestimate the value of their seizures, some speculate it could be as high as $60 million during the last eighteen months--a figure expected to rise dramatically during the next year.
One thing is known--the state's seizure and forfeiture record is so impressive that it has attracted the attention of federal officials, who now recognize Arizona as the national flagship in drug-related confiscations. During an April visit to the state as he toured a Phoenix warehouse loaded with forfeited cars, drug czar William Bennett exclaimed, "This is the best forfeiture law that we've seen; it's state of the art.
"It's easier to get the goods here than anywhere."
LIEUTENANT LAWRENCE ROBERTS, the head of the Chandler Police Department's criminal investigation section, says Arizona's forfeiture law is "great." It's little wonder--Roberts heads what is widely considered to be one of the most successful local asset-grabbing programs in the state, and himself drives a confiscated late-model Lincoln Continental. But according to forfeiture opponents, the department illustrates how the business ethic of profit--not justice--fuels the forfeiture machine.
In a frenzy of seizure activity last summer, Chandler police confiscated more than $1 million in cash, jewelry, cars and cellular telephones in a two-month period. In previous months, the department has seized video equipment, expensive jewelry and night-vision goggles, as well as millions more in property and cash. Some of the items, like the jewelry--which is now worn by undercover officers--and the goggles, are kept by the department as crime-fighting tools. So are many of the cars. The taxpayers, Roberts says, haven't had to buy an unmarked car for the criminal-investigation unit in two years. The seized assets that aren't used by the department are auctioned by Blue Chip Realty to pay for computers and other high-tech tools of the trade.
Roberts is proud of the seizure record. "We seize a higher percentage of property in cases we handle than most anyone," he says. "I would be surprised if anyone is higher." He makes no apologies for using the "weapon of forfeiture to get some of these really bad guys."
"I absolutely feel good about it," Roberts says. "Drugs is a pretty rotten business. And we feel we can really hurt them this way. It is a way to gauge our progress. We don't have to just say, `How much cocaine did you get?' Now we also say, `Did we get his car?'"
Cases like Juan's don't bother Roberts. "I'm not familiar with specifics of cases like that, but you have to remember that is the way the statute is written. It allows us to do that. If you do dope, of any amount, you take your chances."
But defense attorney Larry Debus challenges that rationale. Although confiscating property of average drug users may be allowable under the state's forfeiture law, Debus believes such conduct violates the intent of the statutes. The problem, he says, is that the law doesn't provide safeguards that force police to discriminate between high-dollar, multinational drug brokers and small-time users. "The massive drug-war machine catches people in its jaws and chews them up along with the major dealers," he says.
"You can look at the original RICO [Racketeer Influenced, Corrupt Organizations Act] hearings in the U.S. Congress, where the modern-day concept of forfeiture was really formulated, and you can see that it was meant to be used to fight organized crime, not to nab a kid with a joint," he says. "At the local level, where the decisions are made to confiscate by the police, it has opened up a can of incredible abuses."
He charges that police are making outright decisions on which cases to pursue based on the bottom line. "A cop sees a car with little or no amount owed on it to the bank, so it is worth something to the department and they go after it," he says. "It's mercenary to the extreme. Every department wants its bag of goodies, and when they seize stuff they know it's going to go right back to their department."
Cameron Holmes doesn't deny that a property's value is an important consideration to drug-enforcement officials. "Why shouldn't the money taken from people who break the law go back into the fight?" he says.
Passed in 1986, the Arizona forfeiture law is a sister statute to the 1978 federal RICO laws that were designed to combat organized crime. As the intellectual force behind the state law, Holmes admits forfeiture can be considered an "extraordinary" measure--perhaps even a dangerous one--but says it is needed to counter an extraordinary crisis. He paints an apocalyptic picture of billions of dollars in drugs--along with violence and other associated crime--pouring through our borders every year. Stopping drugs, or at least slowing them down, is an end that justifies using the means of forfeiture.
"On a philosophical level," Holmes says, "I concede that forfeiture only makes sense in terms of the underlying goal of preserving the democratic ideals that drugs and drug culture attack. Preserving those ideals is what matters."
His pragmatic approach to combating the drug scourge can be summed up this way: Hit them with whatever works. In Holmes' view, what works is forfeiture, and the Attorney General's Office has gone all out to ensure that local police departments have what they need to squeeze the last dollar out of forfeiture cases.
Holmes' Forfeiture Support Project provides legal advice and financial analysis to prosecutors, county attorneys and law-enforcement agencies statewide. The attorney general employs three financial analysts who are available to help departments decide which cases are economically viable to pursue and which aren't. That includes determining whether the costs of confiscating and selling a vehicle outweigh the loans outstanding on it--which must be paid off before the department reaps a profit.
The attorney general is also responsible for setting up a state contract with Blue Chip Realty, the company assigned to manage and liquidate the forfeited property seized by state law-enforcement agencies.
"Narcotics officers are men of action, not paper shufflers," Holmes chuckles. "That's where Blue Chip comes in. They have the expertise needed to get the job done."
"Taken as a whole, the forfeiture system we have devised works. It is having an impact. And it is working better all the time."
RICHARD OLSEN RUNS one of the biggest used-car dealerships in the state. But you'll never see him on TV seated on a bull or wearing a white suit and Lone Ranger mask like other dealers.
A former Wall Street stockbroker, Olsen built Blue Chip Realty, Incorporated, on Sedona's real estate boom during the early 1980s. Since early 1989, he has operated as the private wing of Arizona's quasi-public forfeiture industry. The company is responsible for the upkeep, management and sale of all kinds of merchandise, ranging from hundreds of cars, trucks and motorcycles to paintings, jewelry, handguns, Oriental rugs and boats, all seized from drug offenders. Real-estate seizures are also in the inventory, including the $425,000 Tempe home of Brian "Waterhead Bo" Bennett, a Californian indicted for running a $10 million-per-week crack organization.
"We handle it all," Olsen says. "You would be surprised what comes through here."
It works like this: Blue Chip is the sole contractor for the attorney general's Forfeiture Support Project. Law-enforcement agencies statewide can turn confiscated property over to the company, which stores and maintains the items at its own cost. The company holds periodic auctions to unload the seized cars and dispenses with other property through real-estate sales and other sealed-bid auctions. The proceeds are sent to the attorney general's antiracketeering fund and eventually to the individual law-enforcement agency that seized the property. But first, Blue Chip is reimbursed for all up-front expenses and takes a cut of the sale price (7 percent on real estate and 10 percent on all other property, plus 1 percent for every 10 percent the property sells for over its appraised value). Overhead is low--mostly warehouses to store the property--and that, combined with a steady flow of seized assets provided by law enforcement, spells profit. Olsen says the company handled about $1 million in property last year, but expects to do "many times that" this year.
He is surprised himself by the sudden growth, which he calls "astounding."
"When we first got into this business, we didn't think it would get very big," Olsen says. "Now we're wondering when it is going to stop." As an indicator of the sudden, explosive growth in seizures and forfeitures, one need look no farther than Blue Chip's rapidly expanding need for space.
In about eighteen months, Blue Chip has moved its forfeiture operation from a 3,000-square-foot warehouse . . . to an 8,000-square-foot warehouse . . . to a 20,000-square-foot warehouse . . . and now to a 45,000-square-foot facility with three adjoining acres of space. Starting with only seventeen cars passed on to it by the attorney general in March 1989, it now has an inventory of about 500. That amounts to a business even the Loan Arranger would envy.
Blue Chip's volume is growing in part because it is so easy for law enforcement to take advantage of its services. Some say it's too easy. With such an accessible way to liquidate assets, and with so many millions of dollars available to use within departments, some feel that law enforcement has built a new bureaucracy around the business of forfeiture--one which will be difficult to dismantle even after the drug war sees its armistice day.
"A whole structure, including new officers and prosecutors, has been built up around the drug war," defense attorney Kimerer says. "It is so lucrative, it may be difficult to break it down. The question is whether people will continue to lose their property for small quantities of drugs, just to finance that massive antidrug apparatus--and to protect the jobs within it--even if it really isn't needed."
Holmes admits that the increase in manpower and equipment to fight the drug war could lead to an entrenched, self-sustaining bureaucracy fed by the forfeiture machine, but downplays the possibility. "Forfeiture could warp the discretionary process, but we have to remember that most law-enforcement officers are very committed and very careful about that process," Holmes says.
Debus laughs at that. "You know, what is basically going on here dates back to the Magna Carta, when the king agreed not to confiscate property. [Law enforcement] hasn't quite caught up with the thirteenth century yet.
"Forfeiture is really an unfair tax on drugs that the state is collecting, and as as everyone knows, once taxes go up, they seldom come down."
AT A BLUE CHIP CAR AUCTION held September 30 at a field just west of Sky Harbor International Airport, hundreds of potential buyers mill among an odd mix of barely roadworthy hulks, ordinary family vehicles and sleek, polished sports cars. Clutching bidding forms, many spend hours poking and prodding the cars as a doctor would a patient, checking for signs of life inside the long-dormant metal hulls. Many of the vehicles have been sitting for months, awaiting a final forfeiture judgment.
Talking quietly, a father and his teenage son stand near a used pickup truck. The father points toward a dent in the truck's right fender, and the boy moves closer to inspect it. Another man approaches and raises the hood, evaluating the rust that pockmarks the faded paint. He draws a nervous glance from the boy, who returns to his father. They whisper for a moment, and then both head toward a table in the far corner of the field, where they drop their bid form into a locked red box. The boy leaves smiling.
Olsen himself smiles, remembering similar scenes. He enjoys his role as Arizona's repo man, viewing Blue Chip as the Robin Hood of the drug war. "Police take away some of the toys from the bad guys, and we sell them off to raise money to finance the effort--saving the taxpayers money. Plus, people who might not otherwise be able to buy can do so at reasonable prices. Everybody wins."
Compared to some other states where forfeiture programs have been plagued with red tape and corruption, he may be right. In Texas, the federal government is investigating charges that a company contracted to liquidate seized assets overcharged the U.S. Customs Service for the management of millions of dollars of cars, jewelry, clothes, houses and boats.
The company, a subsidiary of Northrop Corporation, charged the Customs Service $8,000 to store $91,000 worth of clothing--which was later auctioned off for only $6,000. To ensure similar abuses don't occur here, Blue Chip is required to submit detailed monthly reports to the attorney general. "There will be none of those proverbial stories where you hear about boats selling for $10 and things like that," Olsen says. "Nobody will get a sweetheart deal out of this, and the state will get a fair dollar."
It is a system that does seem to be working--at least for some. Law enforcement has a simple, profitable way to dispose of seized assets, and Blue Chip has a steady, profitable business. "It's fair deal all the way around," Olsen says.
But a substantial number of people who get caught in the forfeiture web have more difficulty seeing the "fairness"--people like Juan, whose car was auctioned off with more than 100 others on that field September 30.
"I still can't believe it," he says. "They took my car for so little, just so they could sell it. How many people know they can do that?"
" . . . if the police can prove you've got any illegal drugs in your car, they can take it. Kiss it goodbye," says defense attorney Greg Clark.
In a frenzy of seizure activity last summer, Chandler police confiscated more than $1 million in cash, jewelry, cars and cellular telephones.
"The massive drug-war machine catches people in its jaws and chews them up along with the major dealers," attorney Larry Debus says.
"Why shouldn't the money taken from people who break the law go back into the fight?"
Olsen says Blue Chip Realty handled about $1 million in confiscated property last year, but expects to do "many times that" this year.
CJ: Must use this quote. Bodney
Law enforcement has built a new bureaucracy around the business of forfeiture--one which will be difficult to dismantle after the drug war sees its armistice day.
"Forfeiture is really an unfair tax on drugs that the state is collecting, and as as everyone knows, once taxes go up, they seldom come down.