The Freeman 1996_2.pdf - Ludwig von Mises Institute

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THEFREEMAN
IDEASON LIBERTY
FEATURES
4 WhyMassMediaMergersAreMeaninglessbyAdamD. Thierer
Competition,notlegislation,willbestserveconsumers.
6 SeizureFever:TheWaronPropertyRightsbyJamesBovard
Assetforfeiture-thenewestformoflegalplunder.
14 BuildingCodeBluesbyJamesD. Saltzman
HowbuildingcoderegulationisruiningAmerica'scities.
21 PredatoryUnionismbyThomasJ. DiLorenzo
Howunionssabotagecompetition.
29 TheProperScopeofDemocracybyTiborR. Machan
Democracyisnoexcuseforviolatingindividualrights.
33 TheBusiness-EthicsQuagmirebyKarolBoudreaux
Businessethicsornaivesocialism?
37 FreedomandHappinessbyBryan Caplan
Freemarketsarethekeytohappinessaswellasprosperity.
42 Liberty,Government,andtheRuleofLawbyJeffry WDuffy
Whytheruleoflawisessentialforliberty.
43 OntheNeedfor SocialCoercionbyMichaelHuemer
Voluntarismcansolvethe"tragedyofthecommons."
48 ThomasPaine-PassionatePamphleteerforLibertybyJamesPowell
Theideasandinfluenceofaradicalvisionary.
COLUMNS
Center NOTESfrom FEE-RuinousLitigationbyHansF:Sennholz
19 IDEASandCONSEQUENCES--ALittleErosionofLibertybyLawrenceWReed
31 POTOMACPRINCIPLES--customerService,Government-StylebyDougBandow
46 AMATTERofPRINCIPLE-FromLiberalismtoTribalismbyRobertJamesBidinotto
54 ECONOMICSonTRIAL-{}ood News:TextbookMacroModelRejected! byMarkSkousen
DEPARTMENTS
2 Perspective-ThomasSowell,MurrayRothbard,LordActon
57 BookReviews
•TheLustreofGold, introductionbyHansF. Sennholz,reviewedbyRonPaul;LovingYour
Neighbor:A PrincipledGuidetoPersonalCharityeditedbyMarvinOlasky,reviewedby.
MontgomeryB.Brown; TheTrueStateofthePlaneteditedbyRonaldBailey,reviewedbyMatthew
Carolan;SavingthePlanetwithPesticidesandPlastic:TheEnvironmentalTriumph ofHighYield
FarmingbyDennisT.Avery,reviewedbyE. C. Pasour,Jr.; TheVision oftheAnointed:Self
Congratulation asaBasisforSocialPolicybyThomasSowell,reviewedbyThomasJ. DiLorenzo;
TheTaxRacket:GovernmentExtortionfromA toZ byMartinL. Gross,reviewedbyRaymond1.
Keating;DarkRiversoftheHeartbyDeanKoontz,reviewedbyRussellMadden.
THEFREEMAN
PERSPECTIVE
IDEASONLIBERTY
Publishedby Income "Distribution"
The Foundationfor Economic Education
Irvington-on-Hudson, NY 10533 Despite a voluminous and often fervent
Phone[phone] FAX[phone]
literature on "income distribution," the
E-mail: [email protected]
cold fact is that most income is notdistrib
President: Hans F. Sennholz
ManagingEditor: BethA. Hoffman uted: Itis earned. Peoplepayingeachother
GuestEditor: ThomasJ. DiLorenzo for goods and services generate income.
EditorEmeritus While many people's entire income comes
PaulL.Poirot
Lewisburg,Pennsylvania from a salary paid to them by a given
BookReviewEditor
employer, many others collect individual
RobertBatemarco
MarymountCollege, Tarrytown,NewYork fees for everything from shoe shines to
AssociateEditor
GregoryP.Pavlik surgery, and it is the sum total of these
AssistantEditor innumerable fees which constitutes their
WilliamJ.Watkins,Jr.
EditorialAssistant income....
MaryAnnMurphy
Toquestionthe''fairness" orotherindex
Columnists
DougBandow ofvalidity ofthe existing statistics growing
CatoInstitute, Washington,D.C.
RobertJamesBidinotto out of voluntary economic transactions is
LawrenceW.Reed
MackinacCenterforPublicPolicy to question whether those who spent their
Midland,Michigan own money to buy what they wanted from
MarkSkousen
RollinsCollege, WinterPark,Florida other people have a right to do so. To say
ContributingEditors
CharlesW.Baird that a shoe shine boy earns "too little" or
CaliforniaStateUniversity,Hayward
DougBandow a surgeon "too much" is to say that third
CatoInstitute, Washington,D.C. parties shouldhavetherighttopreemptthe
PeterJ.Boettke
New YorkUniversity decisionsofthosewhoelectedtospendtheir
ClarenceB.Carson
AmericanTextbookCommittee money on shoe shines or surgery. To say
Wadley,Alabama
ThomasJ.DiLorenzo that "society" should decide how much it
LoyolaCollege,Baltimore,Maryland
values various goods and services is to say
JosephS.Fulda
New York,New York that individual decisions on these matters
BettinaBienGreaves
ResidentScholar,FEE should be superseded by collective deci
RobertHiggs
TheIndependentInstitute,Oakland,California sions made by political surrogates. But to
JohnHospers
UniversityofSouthernCalifornia saythis openly wouldrequire some persua
TiborR.Machan sive reasons why collective decisions are
AuburnUniversity
EdmundA.Opitz better than individual decisions and why
Chatham,Massachusetts
JamesL.Payne third parties are better judges than those
Sandpoint,Idaho
WilliamH.Peterson whoaremakingtheirowntrade-offsattheir
A4iunctScholar,HeritageFoundation,Washington,D.C.
own expense.
JaneS.Shaw
PERC,Bozeman,Montana
RichardH.Timberlake -THOMAS SOWELL
UniversityofGeorgia The Vision ofthe Anointed
LawrenceH.White
UniversityofGeorgia
The Freeman is the monthly publication ofThe Foundation for Harassing Business
EconomicEducation,Inc.,Irvington-on-Hudson,NY10533.FEE,
establishedin1946byLeonardE.Read,isanon-political,educa
tionalchampionofprivateproperty,thefree market,andlimited Theonly viabledefinition ofmonopoly is
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Copyright© 1996byTheFoundationforEconomicEducation.
Permissionisgrantedtoreprintanyarticleinthisissue,except''Thomas therefore becomes quite clear that it is
Paine," provided appropriate credit is given and two copies of
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The costs ofFoundation projects and servicesare metthrough monopoly by passing punitive laws. The
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notintheleast" diminishmonopoly." What
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2
PERSPECTIVE
theydoaccomplishistoimposeacontinual, 1995-96 Olive W. Garvey
capricious harassment ofefficient business
Fellowships
enterprise. The law in the United States is
couched in vague, indefinable terms, .per Since 1972, the Garvey Fellowship pro
mittingtheAdministrationandthecourtsto gram has awarded financial fellowships to
omitdefininginadvancewhatisa "monop advancethehighereducationofoutstanding
olistic" crime and what is not. Whereas youngacademics around the worldthrough
Anglo-Saxon law has rested on a structure acompetitiveessaycontestonthemeaning
ofclear definitions ofcrime, known in ad and significance ofeconomic and personal
vance and discoverable by ajury after due liberty.OliveW.GarveyFellowshavesince
legal process, the antitrust laws thrive on become some of the finest of scholars,
deliberate vagueness and expostfacto rul ,business leaders, and journalists, applying
ings. No businessman knows when he has andadvancingpublicknowledgeandappre
committedacrimeandwhenhehasnot,and ciation internationally for the ideas ofindi
he will never know until the government, vidual liberty and personal responsibility.
perhapsafteranothershiftinitsowncriteria TheIndependentInstitute,thesponsorof
ofcrime, swoops down upon himand pros the program, has announced the following
ecutes. The effects ofthese arbitrary rules recipients of the 1995-96 Olive W. Garvey
and ex post facto findings of "crime" are Fellowships: First Prize, $2,500
manifold: business initiative is hampered, Bryan Caplan (Department of Economics,
businessmen are fearful and subservient to PrincetonUniversity); SecondPrize, $1,500
thearbitraryrulingsofgovernmentofficials, Jeffry W. Duffy (London School of Eco
and businessis notpermittedto beefficient nomics); and Third Prize, $l,OOO-Michael
in serving the consumer. Huemer (Department of Philosophy, Rut
-MURRAY ROTHBARD, gers University).
Power andMarket Thisyear'sOliveW. GarveyFellowships
havebeenawardedtotheauthorsofthetop
three essays on the topic, "The road to
What Was Lost
prosperityandhumanwelfare:free markets
I saw in State Rights the only availing or government controls?" Mr. Caplan's
check upon the absolution ofthe sovereign first-prize essay, "Freedom and Happi
will, and secessionfilled me with hope, not ness," appearsonpages37-41ofthisissue.
as the destruction but as the redemption of Excerpts from the second- and third-prize
Democracy. . . . Therefore I deemed that winning essays start on page 42.
you were fighting the battles ofourliberty, All entries were reviewed by a panel of
our progress, and our civilization; and I three distinguished scholars: Gerald Gun
mourn for the stake that was lost derson (Professor of Economics, Trinity
atRichmondmoredeeplythanIrejoiceover College), Daniel Klein (Professor of Eco
that which was saved at Waterloo. nomics, University of California, Irvine),
-Letterfrom Lord Acton to andJohnMorehouse(ProfessorofEconom
Robert E. Lee, November 4, 1866 ics, Wake Forest University).
For further information on the Olive W.
Garvey Fellowships program, please con
tactMs. TheresaNavarro, DirectorofPro
gram Services, The Independent Institute,
134 Ninety-Eighth Avenue, Oakland, CA
94603; Phone: [phone]; fax: (510)
568-6040; E-mail: independ@dnaLcom.
3
THEFREEMAN
IDEASONLIBERTY
Why Mass Media
Mergers Are Meaningless
by Adam D. Thierer
Time WarnerInc.'s$8billionacquisition tages whileforcing them tofurther improve
of Turner Broadcasting System Inc., the quality oftheir own offerings.
along with other recently announced alli Today'scommunications,entertainment,
ances of media giants-Walt Disney and and computer markets are becoming in
Capital Cities/ABC Inc., Westinghouse creasinglydemand-driven.Thatis,consum
Electric Co. and CBS Inc.-has observers ersarenow, morethanever,beingprovided
of all political stripes wondering whether with the tools to tailor-make programming
an already mediocre television program to meettheirown tastes. Acriticaljuncture
ming menu is about to become even less isabouttobereachedinthehistoryofthese
appetizing. threedistinctsectorsastheymergeintoone
Whileonecanargue the meritsordemer newlargerindustry: the informationsector.
itsofthe mergers onprogramquality, more Thedigitalizationofinformation-itscoding
disturbing arguments are beingputforward and distribution in a more efficient and
that such mergers and alliances should not cost-effective fashion-has facilitated this
be allowed to go forward in the first place. process. As it continues, the costs ofinfor
The DepartmentofJustice has already said mationprocessing, storage,anddistribution
it may challenge elements of the Time will continue to fall rapidly. Consequently,
Warner-Turnerdealandisnowlookinginto countless new sources of information and
the Disney-ABC merger. entertainment will make their way into
Thiswouldbeamistake. Prohibitingsuch American homes and workplaces, espe
alliances from occurring would be anti cially via the computer.
competitive and an utter waste of regula It's already happening. Internet survey
tors' time. There simply is no credible ists Matrix Information and Directory Ser
evidence that these mergers will hurt con vices (MIDS) estimate that roughly 13.5
sumers. The old days of mass-media mo million people currently use the Internet,
nopolies and shovel-fed couch-potato fare andthatthe numberisdoublingevery year.
are over. These corporations will compete IfInternetaccess continued to grow at that
in a radically modernized media market rate (as it has for the past six years),
placethatiserodingtheirtraditionaladvan- everyone in the world would be wired by
2003! Of course, that won't happen, but
Mr. Thierer is the Walker Fellow in Economic suchremarkable growthbodes unfavorably
Policy with The Heritage Foundation in Wash
for the older media moguls, whose idea of
ington,D.C.,andauthoroftheseries, "APolicy
viewer empowerment is a remote control
Maker'sGuidetoDeregulatingTelecommunica
tions." with more buttons.
4
5
No Uncompetitive Advantage their actions are a signal to the world that
the old media empires are modern-day di
The mergingmediagiants maygain some nosaurs headed for extinction. Scholars
programming advantages in the short run like Harvard Business School professor
via their combined pool ofinvestment cap Michael Porter have noted that alliances
ital. But,theycertainlywillhavenouncom "proliferate in industries undergoing struc
petitive advantages since they will be just tural change or escalating competition,
one of many providers consumers can re where managers fear they cannot cope.
quest service from in the nearfuture. With They are a response to uncertainty, and
consumers calling the shots, the idea that provide comfort that the firm is taking ac
programmerslikeABC, CBS,Turner,Time tion." Inotherwords,themergeroralliance
Warner, and Disney will have a serious is often the last refuge of a desperate cor
advantage overall otherinformation-enter poration, a lifeboat to grab hold of while
tainment providers is unrealistic. the bigger ship is sinking. For America's
Indeed, onemustwonderifthetelevision mass-media firms looking to buy competi
itselfwillsurvivethedigitalstorm. Techno tive advantages both upstream and down
logical visionaries like George Gilder and stream, they have to hope this strategy
NicholasNegropontewarnoftheimpending works. Meanwhile, pesky information-age
death of TV and its eventual overthrow entrepreneurs willcontinueto chipaway at
by the more intelligent, programmable per the broadcastempire by continuingto offer
sonalcomputeralongwithitsmanyon-line, more innovative services.
consumer-driven services. If the Internet But regardless of whether these media
revolution continues apace, they may be mergerexperimentssucceedinthelongrun,
right. No wonder the broadcast industry there is no need for policy-makers to inter
is currently begging Congress to give them vene and micromanage their transitional
additionalbroadcastlicensesfree ofcharge efforts. As Negroponte notes: "The com
to make their transition into the digital bined forces oftechnology and human na
world. ture will ultimately take a stronger hand in
This is the real meaning behind the new plurality than any laws Congress can in
mergers. Olderfirmsarelookingtomergeas vent." Being that this is undoubtedly al
the world around them becomes less cer ready the case, legislators and regulators
tain.Inreality,Americansshouldfeelsome can rest easier knowing Disney's Mickey
whatsorryforthesefirmsthatfeeltheymust Mouseandhisnewbroadcastbuddieswon't
"merge or die," so to speak. In essence, be monopolists any time soon. D
Op-Ed Watch
TheFoundationforEconomicEducationcontinuestoexpandinitseffortstospread
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THEFREEMAN
IDEASONUBER1Y
Seizure Fever: The War on
Property Rights
by James Bovard
M ass confiscation has become politi governments have also seized hundreds of
cally fashionable. Politicians and the millions of dollars of property in recent
courts have created an overwhelming pre years.4AccordingtoStevenKessler,aNew
sumptioninfavorofthegovernment'sright York lawyer who authored a three-volume
to seize control over private land, private 1993 study on federal and state forfeiture,
homes, boats, and cars, and even the cash "The use of forfeiture has probably in
in people's wallets. While the dispute over creased a hundred-fold in the last
propertyrights isoftenportrayedasmerely ten years.,,5 Thousands ofAmericans have
an economic contest, the powerofgovern hadtheirpropertyconfiscatedthankstothe
ment officials to seize private propertydi forfeiture laws.
rectly subjugates citizens to the capricious Unfortunately, the more forfeiture laws
will ofthose officials. legislatures enacted, the less attention po
Once upon a time, possession was nine lice seemto pay to majorcriminals. Repre
tenths of the law. Nowadays, gossip is sentative Henry Hyde of Illinois noted in
sometimesnine-tenthsofpossession.Thou June 1993 that 80 percent of the people
sands of American citizens are being whose property is seized by the federal
stripped of their property on the basis of government under drug laws are neverfor
rumors and unsubstantiated assertions mally charged with any crime.6 Represen
made by the government's confidential in tative John Conyers of Michigan declared
formants. at a June 1993 congressional hearing: "A
Beginningin 1970, Congress enactedleg law designed to give cops the right to con
islationtopermitgovernmentto seizeprop fiscate and keep the luxury possessions of
erty of Mafia organizations and big-time major drug dealers mostly ensnares the
drug smugglers.1 In succeeding decades, modesthomes,carsandhard-earnedcashof
other forfeiture laws were enacted, and ordinary, law-ab~dingpeople.,,7
federal agents can now seize private prop
ertyundermorethan200differentstatutes.2 Legalized Theft
From 1985 to 1991, the number offederal
seizures of property under asset forfeiture Willie Jones of Nashville was flying to
laws increased by 1500 percent-reaching HoustononFebruary27, 1991, topurchase
a total of $644 million.3 State and local plantsforhislandscapingbusiness.Because
Joneswasblackandpaidcashfor his plane
Mr. BovardistheauthorofShakedown(Viking,
ticket, the ticket clerk reported him to
1995)andLostRights:TheDestructionofAmer
ican Liberty (St. Martin's, 1994). nearby Drug Enforcement Agency officers,
6
7
who presumed Jones was a drug courier. andinparks-evenwhennodrugsarefound
DEA officers at the Nashville airport ap orchargesfiled.,,12BenDavis, aresidentof
proachedJones, checked his identification, Washington, complained, "I've got money
and asked permission to search him. Al in both pockets, but I don't know how
though Jones refused to grant permission, much. The assumption is, ifI can'ttell you
theofficerssearchedhimanywayandfound exactly how much I have, it must be from
$9,000 in cash. The DEA agents then an criminal enterprise." 13
nounced that they were "detaining" the Increasingly, the mere suspicion of a
.money. Jones observed: "They said I was government official is sufficient proof to
going to buy drugs with it, that their dog nullify all claims that a citizen legitimately
sniffeditandsaidithaddrugsonit." (A1989 owns his property. The Volusia County,
study found that 70 percent ofall the cur Florida, sheriff's department set up a "for
rency in the United States had cocaine feiture trap" to stop motorists traveling
residueonit.)8Jonesneversawthedog.The Interstate 95 and seized an average ofover
officersdidn'tarrestJones,buttheykeptthe $5,000 a day from motorists between 1989
money. WhenJones askedtheofficersfora and 1992-over $8 million dollars total. In
receipt for his money, they handed him a three-quarters of the seizures, no criminal
receipt for an "undetermined amount of charges were filed. An investigation by the
U.S. currency." Jones objected and asked Orlando Sentinel revealed 90 percent of
the officers to countthe moneyout, butthe those seizurevictimswereblackorHispan
officersrefused,claimingthatsuchanaction ic.14 When confronted with this statistic,
would violate DEA policy. Volusia County Sheriff Bob Vogel said,
Federal judge Thomas Wiseman, in an "Whatthisdatatellsmeisthatthemajority
April 1993 decision, concluded that "the ofmoneybeingtransportedfordrugactivity
officers' behavior at this point was casual involves blacks and Hispanics."
and sarcastic . . . they believed that the People whose cash was seized by the
seizure of the currency was all but a fait deputiesreceived scantdue process oflaw;
accompli . . . they cared little for Mr. as the Sentinel noted, one deputy told two
Jones's feelings of insecurity.',9 Judge blacks from whom he had just confiscated
Wisemanconcludedthat the DEAofficials' $19,000: "You have the right to follow us
testimonyontheseizurewas''misleading," backtothe stationandgetareceipt." Even
"unconvincing," and "inconsistent" and citizens who provided proof that their
ordered the money returned-after a two money was honestly acquired (including a
yearlegal battle. Jones observed: "I didn't lotterywinner'sproofofhislotteryreceipts)
knowitwasagainstthelawfora42-year-old were treated like drug dealers. Volusia
black man to have money in his pocket.,,10 County officials routinely offered "settle
AmarriedcoupleinOttsville, Pennsylva ments" to drivers whose cash they seized,
nia, had their $250,000 home confiscated offeringto returnapercentageofthe seized
after police found marijuana plants inside cash ifthe drivers would sign a form prom
the house; the couple and their three chil ising not to sue.
drenwereeffectivelyevictedfromtheirown Asset forfeiture laws are turning some
home. DistrictAttorneyGaryGambardella, federal agents into the modern-day equiva
whofiledthemotiontoconfiscatethehome, lent of horse thieves. Ranchers are being
observed: "People say that selling drugs is victimizedby seizures based on allegations
a victimless crime, but the children are the of violations of environmental laws. On
real losers here." 11 March 10, 1992, U.S. Fish and Wildlife
Asset forfeiture increases the power of Serviceandstateagentstrespassed 15miles
local policemen over people they do not ontoRichardSmith'sTexasranch, accused
like. In Washington, D.C., police routinely him of poisoning eagles, and seized his
stop black citizens and "confiscate small pickuptruck. Theagentslatertrackeddown
amounts ofcash andjewelry on the streets Smith's75-year-oldfather,W.B.Smith,and
8 THE FREEMAN • JANUARY 1996
seized his pickup truck-threatening to nals, some police target wealthy citizens.
leave an old man who had had five heart Early in the morning ofOctober 2, 1992, a
bypassoperationstenmilesoutoftownwith small army of 31 people from eight law
notransportation.15Theagentsproducedno enforcement agellcies smashed their way
evidence to support their accusation and into61-year-oldDonaldScott'shomeonhis
returned the trucks nine months laterwith 200-acre Trail's End Ranch in Malibu, Cal
out filing charges.16 W.B. Smith com ifornia. The raiders were equipped with
plained: "The Fish and Wildlife Service is automatic weapons, flakjackets, and abat
outofcontrol, andthe Endangered Species tering ram.20 Scott's wife screamed when
Act has giventhemthe tools to destroy the shesawtheintruders, Scottcameoutofthe
ranching industry.',17 bedroom with a pistol in his hands, and
LawyerNancy Hollandertoldthe House policegunnedhimdown. AfterkillingScott,
GovernmentOperationsCommitteeinJune the agents thoroughly searched his house
1993: "Alltoooften, inmy practicebackin andranchbutfailed tofind anyillicitdrugs.
Albuquerque, I see cases where someone VenturaCountydistrictattorneyMichael
loses thefamily pick-uptruckatthetime of Bradburyinvestigatedtheraid and issued a
arrest for a non-money related, non-drug report in 1993 that concluded that a "pri
federal crime. These persons frequently marypurposeoftheraidwasalandgrabby
give up the criminal case, even when the the [Los Angeles County] Sheriff's Depart
prosecutionhaslittlemerit, tonegotiatethe ment.,,21 Bradbury revealed that at a brief
release of a vehicle which provides their ing before the raid took place, government
livelihood.,,18 agents were informed that the ranch had
Confiscation based on mere suspicion is been appraised at $1.1 million and that "80
the essence of contemporary asset forfei acres sold for $800,000 in 1991 in the same
ture.InAdairCounty,Missouri,localpolice area.',22Thelawofficersatthebriefingwere
seized Sheri and Matthew Farrell's 60-acre told that if they discovered as few as "14
farm based on an unsubstantiated tip from marijuana plants" on the ranch, the entire
a paid drug informant who claimed that property could be seized.23 Bradbury also
Farrellhadavastfieldofmarijuanaandused concludedthat a Los Angeles sheriff's dep
tractors outfitted with special lights to har uty had lied to obtain a search warrant and
vest it at night. Police made no effort to declared: "This search warrant became
investigate the allegations before seizing Donald Scott's death warrant. This guy
Farrell's farm. The caseagainst Farrelland shouldnotbedead.,,24LosAngelesofficials
34 other local defendants collapsed when claimed that a confidential informant told
the informant refused to testify in court them that marijuana was being grown on
first because he claimed he had laryngitis, Scott'sranch,buttheinformantdeniedever
and then because he claimed a total loss of making such a statement.25
memory.19Despitethecollapseofthepros In Pittsburgh, federal prosecutors last
ecution's case, the police refused to return year devastated Jane Ward after she had
Farrell's farm. They had a change ofheart fully cooperated with them in testifying
afterthePittsburghPressexposedthecase, to help solve the murder of her husband,
althoughtheyrequiredthattheFarrellssign John Ward. Prosecutors decided that John
an agreement promising not to sue before Ward had been a drug dealer and that all
giving back the farm. The case cost the of his previous income was drug-related.
Farrells over $5,600 in legal fees. They proceeded to confiscate almost all of
the assets ofthe widow (who had her own
Distorted Law Enforcement legitimatebusiness);federalofficialsarrived
Priorities withatruckatthe Ward's home and carted
off all the family's furniture. Prosecutors
Assetforfeiture distortslawenforcement even sought to confiscate all the proceeds
priorities; instead ofchasing violent crimi- from Ward's life insurance; Jane Ward and
SEIZURE FEVER: THE WAR ON PROPERTY RIGHTS 9
her three children were forced to go on ceedings.) Police routinely refuse to reveal
welfare, according to Terrance Reed, Ms. theirsource ofa rumorabout the forfeiture
Ward's lawyer and one of the nation's target;somepolicemenhavelikelyinvented
leading authorities on forfeiture law. anonymous informants to give them a pre
Assetforfeiture propertygrabsarespark text to take private property they covet. In
ing fights across the nation-even in states Fort Lauderdale, Florida, police seizedthe
known for giving government a long leash, $250,000homeofadeadmanfrom hisheirs
suchas Maryland. In Frederick, Maryland, whohadcaredforhimwhilehewasdyingof
police seized a 1988 Toyota pickup truck cancer. Thejustificationfor the seizure? A
from a local resident after he bought $40 "confidentialinformanttoldpolicethat[two
worthofadrugplacebofromanundercover years earlier] the owner ... took a $10,000
cop at an open-air drug market. Under paymentfromdrugdealerswhousedadock
Marylandlaw, localpolice and prosecutors atthehousealongacanaltounloadcocaine.
have effectively unlimited power to confis The informant can't recall the exact date,
cateanyvehicletheysuspectwasinvolved, the boat's name orthe dealers' names, and
or that the owner intended to be involved, the government candidly says in its court
intransportingdrugs. Marylandpolicehave briefit'doesnotpossessthefacts necessary
confiscated thousands of autos and trucks tobeanymorespecific,'" asthePittsburgh
30
in recent years, often based on mere accu Press reported. Although the police had
sations. no evidence that the deceased homeowner
After Maryland Delegate John Arnick wasinvolvedindrugdealing,aninformant's
proposed a law to reform the forfeiture vague, uncorroborated assertion was suffi
procedure to shore up defendants' rights, cient to evict the owners and seize the
stateofficialswentberserk. HarfordCounty property. Whilegovernmentagents canuse
State'sattorneyJosephCassillydenounced hearsay evidence tojustify a seizure, prop
Amick'sproposal: "It'sacrazylaw. Abso erty owners are usually prohibited from
lutely crazy.... It's just going to incon offering hearsay evidence to support their
venience the hell out of everybody" by claims.
requiringpoliceofficialstotestifyincourtto Lawenforcementofficialsarealsoseizing
26
explainwhy cars were confiscated. Frank apartmentbuildings to punishthe landlords
CharlesMeyer,anassistantstate'sattorney fornoteradicatingdrugdealingintheapart
in Baltimore County, justified the existing ments. (Ifthe same standard were applied
law: "It hurts the bad guy, it benefits the toinner-citypublichousingprojects,almost
good guy and it doesn't really cost.,,27 every public housing projectinthe country
Police sometimes "settle" the forfeiture could be seized from the government; in
cases by allowing the auto owners to buy 1993 Baltimore Mayor Kurt Schmoke
back their car for halfthe car's value. blamedmaintenanceproblemsatonepublic
housingprojectondrugdealerswhorefused
Government by Gossip to let city workers enter the buildings.)31
InFlorida, theDadeCountyCommission
The Justice Department's 1992 annual revisedcountylawsin 1989toallowcounty
report on asset seizures declared, "No officials "to demolish a nuisance building
property may be seized unless the govern within 30 days after the police report drug
menthasprobablecausetobelievethatitis activity at the property. Proof of drug ac
subject to forfeiture.',28 In reality, govern tivity is defined in the ordinance as one
ment officials are seizing people's property arrest.,,32Theownerofa36-unitapartment
basedsolelyon"hearsay" -rumorand gos buildinginMilwaukee soughttoplacatethe
29
sip-fromanonymousinformants. (Hear police by evicting ten tenants suspected of
say evidence is held in such low esteem in drug use, giving a master key to local beat
the Americanjudicial system that itcannot cops, forwarding tips to the police, and
be introduced into court in criminal pro- hiringtwo securityfirms topatrolthebuild-
10 THE FREEMAN • JANUARY 1996
ing. The city still seized the building be guilty of violating the Trading with the
cause, as Milwaukee city attorney David Enemy Act.)
Stanosz declared, "Once a property devel A New Jersey mother's Oldsmobile was
opsareputationasaplacetobuydrugs,the confiscatedbypoliceafterthey allegedthat
only way to fix that is to leave it totally hersonhadusedittodrivetoastorewhere
vacant for a number ofmonths. This land he shoplifted a pair of pants.38 One New
lord doesn't want to do that." York businessman was forced to forfeit
The owner had encouraged the police to allofhis·gas stations because ofafailure to
send undercover agents into the building pay New York sales tax.39 A New Jersey
but the police claimed they were too short constructioncompanyhadallitsequipment
of officers.33 In July 1992, several Cleve seized after state officials decided that the
land landlords informed the police ofdrug companywastechnicallyineligibletobidon
dealingintheirbuildings;thecityresponded three municipal projects that it had already
by quickly seizing the buildings and evict completed.40 Suffolk County, New York,
ing all tenants, even in a building where legislatorsconsideredalawin 1993toallow
drug-dealing occurred in a single apart local officials to confiscate the "cars, boats
ment.34 Apparently, the worse the police and planes used in connection with any
fail to controlcrime, themorepowerpolice misdemeanor.',41
acquire to seize law-biding citizens' prop Asset confiscation programs are creating
erty. thousands of new police informants. The
Justice Department routinely gives mone
The Long Arm of tary rewards to individuals who report in
Legal Plunder formation or make accusations that lead to
aseizure. Theforfeitureprogramthusturns
Assetforfeiture is spreading like wildfire many airline ticket agents into conspirators
through the statute books. Some Islamic with the government, since anyone who
countries impose draconian penalties on pays cash for an airline ticket stands a
men who approach and talk to women in chanceofbeingreportedasasuspecteddrug
public. In Washington, D.C., Portland, Or dealer or an accomplice to drug dealing.
egon, and Hartford, Connecticut, police
confiscatethecarsofmenwhodriveupand Perverse Incentives
suggesta"capitalistactbetweenconsenting
adults" to streetwalkers. Customs Service Forfeiture is the biggest growth area in
officials inTexas seized a $138,000Learjet lawenforcementpartlybecausefederal and
afterdiscoveringthattheownerhadmadea local police agencies usually keep a large
typographical error on paperwork he sub amount of the booty they seize. Federal
mitted to the Federal Aviation Administra Judge Richard Arnold noted in 1992 that
tion.35(TheFAA'susualresponsetosucha someobserverswerequestioning''whether
mistakeistorequiretheownertocorrectthe weareseeingfairandeffectivelaw,enforce
form.) ment or an insatiable appetite for it source
The Immigration and Naturalization Ser forincreased.agencyrevenue.',42InNueces
vice has seized over 30,000cars and trucks County, Texas, SheriffJames Hickey used
since 1990fromeitherpeoplehelpingillegal assetsfrom afederal drugforfeiturefund to
immigrants enter the United States or con grant himself a retroactive $48,000 salary
structioncompaniestransportingillegalim increase just before retirement ($400 a
migrants to job sites.36 Customs agents month for the previous ten years). The
confiscated the $113,000 that a Vietnamese sheriffwas indicted for embezzlement by a
mother had collected from 20 families in federal grand jury in August 1993.43 Even
theSeattleareatotakebacktoVietnamfor internal government documents concede
humanitarian relief for their relatives.37 that federal agents have gone overboard: a
(Customs officials pronounced the woman September 1992 Justice Department news-