[Congressional Record Volume 145, Number 162 (Tuesday, November 16, 1999)]
[Senate]
[Pages S14628-S14635]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Leahy):
  S. 1931. A bill to provide a more just and uniform procedure for 
Federal civil forfeitures, and for other purposes; to the Committee on 
the Judiciary.


                   civil asset forfeiture reform act

  Mr. HATCH. Mr. President, today Senator Leahy and I are introducing a 
civil asset forfeiture reform bill.

  First and foremost, I want to emphasize that civil asset forfeiture 
is an important tool in America's fight against crime and drugs. Last 
year, the federal government seized nearly $500 million in assets. It 
is vitally important that the fruits of crime and the property used to 
commit crimes are forfeited to the government. In recent years, 
however, there have been numerous examples of civil asset forfeiture 
actions that should not have been taken. While the vast majority of 
civil asset forfeiture actions are justified, there have been cases in 
which government officials did not use good judgment. Some would even 
say that civil asset forfeiture has been abused in some instances by 
overzealous law enforcement officials.
  I will mention just a few examples of such imprudent civil forfeiture 
actions. In United States v. $506,231, 125 F.3d 442 (7th Cir. 1997), 
the court dismissed a forfeiture action involving $506,231 and scolded 
the government for its conduct. In this case, state authorities 
obtained a warrant to search a pizzeria for stolen goods. During the 
search of the restaurant, authorities did not find any stolen goods, 
but they did discover a large amount of currency. Criminal charges were 
not filed against the owners of the restaurant. Nevertheless, alleging 
that the currency was related to narcotics, the federal government 
filed a civil complaint for forfeiture of the $506,231.
  Four years after the money was seized, the court dismissed the 
forfeiture complaint and returned the currency to its owner. The court 
found that the evidence ``does not come close to showing any connection 
between the money and narcotics,'' that ``there is no evidence that 
drug trafficking was going on at the pizzeria,'' and that ``nothing 
ties this money to any narcotics activities that the government knew 
about or charged, or to any crime that was occurring when the 
government attempted to seize the property.'' At the conclusion of the 
case, the court stated that ``we believe the government's conduct in 
forfeiture cases leaves much to be desired.''

[[Page S14629]]

  Even more disturbing is United States v. $14,665, 33 F. Supp. 2d 47 
(D. Mass. 1998). In this case, airline officials informed the police 
that a passenger, Manuel Espinola, was carrying a large amount of 
currency in a briefcase. The police questioned Espinola about the 
$14,665 in cash. Espinola, a 23-year-old man who purchased the plane 
ticket in his own name, told the police that he and his brother earned 
the money selling personal care products for a company called Equinox 
International. When the police asked Espinola what the money was going 
to be used for, he stated that he was planning to move to Las Vegas and 
intended to use the cash as a down payment on a home. Espinola told 
police that he did not deposit the currency in a bank because he was 
afraid that it might be attached due to a prior credit problem. 
Espinola also gave the police a pager number of a co-worker who he said 
could verify his employment and his plans in Las Vegas.

  Based on Espinola's explanation, the police officer seized the money 
because the officer believed it was related to purchase narcotics. The 
officer did not arrest Espinola, who had no criminal record.
  After the seizure, in an attempt to get his money back, Espinola 
submitted documents that largely confirmed his explanation of the 
currency, including receipts for personal care products from Equinox 
International and copies of a settlement check from a personal injury 
claim. By contrast, the government offered no additional evidence that 
the currency was related to drugs and was subject to forfeiture.
  The court granted summary judgment to Espinola and, in its order, 
harshly criticized the forfeiture action. The court stated: ``Even in 
the byzantine world of forfeiture law, this case is an example of 
overreaching. The government's showing of probable cause is completely 
inadequate, based on a troubling mix of baseless generalizations, leaps 
of logic or worse, blatant ethnic stereotyping.'' Nearly two years 
after the police seized his money without any evidence it was related 
to narcotics, the court returned the currency to Espinola.
  Other federal courts have also criticized federal civil forfeiture 
actions. For example, in 1992, the Second Circuit Court of Appeals 
stated: ``We continue to be enormously troubled by the government's 
increasing and virtually unchecked use of the civil forfeiture statutes 
and the disregard for due process that is buried in those statutes.''
  While I believe that these and other cases prove the need for some 
reform of civil asset forfeiture law, I want to take this opportunity 
to praise federal law enforcement officials. Federal law enforcement 
does an outstanding job fighting crime under the most difficult 
circumstances. In short, Mr. President, I believe that the problems 
with civil asset forfeiture have much more to do with defects in the 
law than with the character or competency of federal law enforcement 
officials. Senator Leahy and I drafted this bill to improve civil asset 
forfeiture law and ensure the continued use of civil asset forfeiture 
in appropriate cases.
  The Hatch-Leahy bill makes important improvements to existing law. I 
will describe a few of these improvements today. The first major reform 
places the burden of proof in civil asset forfeiture cases on the 
government throughout the proceeding. Under current law, the government 
is only required to make an initial showing of probable cause that the 
property is connected to criminal activity and is thus subject to 
forfeiture. After the government makes this modest showing, the burden 
then shifts to the property owner to prove that the property was not 
involved in criminal activity. Not surprisingly, the fact that the 
property owner bears the burden of proving the property is not subject 
to forfeiture has been extensively criticized by the federal judiciary 
and numerous legal commentators. As one federal court that has been 
particularly critical of civil asset forfeiture noted, placing the 
burden of proof on the property owner is a ``constitutional anomaly.'' 
United States v. $49,576, 116 F.3d 425 (9th. Cir. 1997). The court 
in $49,576 even questioned whether requiring a property owner to bear 
the burden of proof in a civil forfeiture action is constitutional: 
``We would find it surprising were the Constitution to permit such an 
important decision to turn on a meager burden of proof like probable 
cause.''

  I, too, believe that placing the burden of proof on the property 
owner contradicts our nation's traditional notions of justice and 
fairness. Under the Hatch-Leahy bill, the government will have the 
burden in civil forfeiture actions to prove by the preponderance of the 
evidence that the property is connected with criminal activity and is 
subject to forfeiture.
  Another major reform in the Hatch-Leahy bill involves what is known 
as the cost bond. Under current civil forfeiture law, a property owner 
must post a cost bond of the lessor of $5,000 or 10 percent of the 
value of the property seized in order to contest a seizure of property. 
It is important to note that the cost bond merely allows the property 
owner to contest the forfeiture. It does not entitle the property owner 
to the return of the property pending trial.
  I believe that it is fundamentally unfair to require a person to post 
a bond in order to be allowed to contest the seizure of property. For 
example, what if the government required persons who were indicted to 
post a bond to contest the indictment? Such a requirement would be 
unconstitutional under the Sixth Amendment. I believe that requiring a 
property owner to post a bond to contest the seizure of property is no 
less objectionable. Such a requirement, Mr. President, seems un-
American. The framers of our Constitution would be appalled to know 
that the federal government, after seizing private property, required 
the property owner to post a bond in order to contest the seizure.
  The Justice Department argues that the cost bond requirement reduces 
frivolous claims. To address this concern, the Hatch-Leahy bill 
requires that a person who challenges a forfeiture must file his claim 
to the property under oath, subject to penalty of perjury. I predict 
that eliminating the cost bond will produce, at most, minor 
inconveniences because persons who file frivolous claims will be 
deterred by the substantial legal fees and costs incurred in contesting 
the forfeiture. After all, who is willing to hire counsel and pay other 
expenses to litigate a frivolous claim, especially when subject to 
penalty of perjury?
  Another reform in the Hatch-Leahy bill addresses the situation in 
which the government's possession of seized property pending trial 
causes hardship to the property owner. Under current law, the 
government maintains possession of seized property pending trial even 
if it causes hardship to the property owner. A common example of such 
hardship is where the government seizes an automobile, and the seizure 
prevents the property owner or members of the property owner's family 
from getting to and from work pending the forfeiture trial. The Hatch-
Leahy bill changes current law to allow, but not require, the court to 
release property pending trial if the court determines that the 
hardship to the property owner of continued possession by the 
government outweighs the risk that the property will be damaged or 
lost. This is a common sense reform that allows the court to release 
property in appropriate cases.
  Another reform in the Hatch-Leahy bill involves reimbursement of 
attorney fees. The Hatch-Leahy bill awards attorney fees and costs to 
property owners who prevail against the government in civil forfeiture 
cases. The costs of contesting a civil forfeiture of property can be 
substantial. The award of attorney fees and costs to property owners 
who prevail against the government in civil forfeiture cases is 
justified because unlike criminal forfeiture actions, the property 
owner is not charged with a crime. Instead, the government proceeds 
``in rem'' against the property. Given that the government does not sue 
or indict the property owner, it is unfair for the property owner to 
have to incur attorney fees and costs when the government does not 
prevail in civil forfeiture actions.

  The award of attorney fees is also justified because the government 
only has to prove its case against the property by a preponderance of 
the evidence. By contrast, the government must prove beyond a 
reasonable doubt that property is subject to forfeiture in

[[Page S14630]]

criminal forfeiture actions. If the government decides to pursue a 
civil forfeiture action instead of the more difficult to prove criminal 
forfeiture action, it should be obligated to pay the attorney fees and 
costs of the property owner when the property owner prevails.
  Mr. President, I would like to emphasize that while the Hatch-Leahy 
Civil Asset Forfeiture Reform Act contains important reforms; it 
retains civil forfeiture as an important tool for law enforcement. In 
fact, the Hatch-Leahy bill is a cautious, responsible reform. Some 
would even argue that this bill is too modest.
  A comparison of the reforms enacted by the State of California in 
1993 is instructive. For example, California changed its civil 
forfeiture law to require the government to prove beyond a reasonable 
doubt and achieve a related criminal conviction in most civil asset 
forfeiture cases. The exception to this rule in California involves 
seizures of currency in excess of $25,000. In these cases, the State 
must prove the currency is subject to forfeiture by clear and 
convincing evidence. Also, California abolished the cost bond in civil 
forfeiture cases.
  In short, California's reforms go far beyond anything in the Hatch-
Leahy bill, but these reforms have not undermined civil asset 
forfeiture as a law enforcement tool. The modest reforms in the Hatch-
Leahy bill will add much needed protections for property owners at no 
significant costs to law enforcement. By making these needed reforms, 
the Hatch-Leahy bill will preserve civil forfeiture as a law 
enforcement tool for the future.
  Lastly, I would like to thank Senator Leahy and his staff for their 
tireless effort on this legislation. Senator Leahy has been an advocate 
for civil asset forfeiture reform for many years. He is one of the 
leading champions of civil liberties in the Senate. This legislation 
would not have occurred without his interest and persistence, and I 
thank him for his efforts.
  I ask unanimous consent that the bill and a section-by-section 
summary of the bill be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1931

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Civil Asset Forfeiture 
     Reform Act''.

     SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL 
                   FORFEITURE PROCEEDINGS.

       (a) In General.--Chapter 46 of title 18, United States 
     Code, is amended by inserting after section 981 the 
     following:

     ``Sec. 981A. General rules for civil forfeiture proceedings

       ``(a) Notice; Claim; Complaint.--(1)(A)(i) Except as 
     provided in clauses (ii) and (iii), in any nonjudicial civil 
     forfeiture proceeding under a civil forfeiture statute, with 
     respect to which the Government must send written notice to 
     interested parties, such notice shall be sent in a manner to 
     achieve proper service as soon as practicable, and in no case 
     more than 60 days after the date of the seizure.
       ``(ii) In a case in which the property is seized by a State 
     or local law enforcement agency and turned over to a Federal 
     law enforcement agency for the purpose of forfeiture under 
     Federal law, notice shall be sent no more than 90 days after 
     the date of seizure by the State or local law enforcement 
     agency.
       ``(iii) If the identity or interest of a party is not 
     determined until after the seizure or turnover but is 
     determined before a declaration of forfeiture is entered, 
     notice shall be sent to such interested party not later than 
     60 days after the determination by the Government of the 
     identity of the party or the party's interest.
       ``(B) A court shall extend the period for sending notice 
     under subparagraph (A) for a period not to exceed 60 days 
     (which period may be further extended), if the court 
     determines, based on a written ex parte certification of a 
     supervisory official of the seizing agency, that there is 
     reason to believe that notice may have an adverse result, 
     including--
       ``(i) endangering the life or physical safety of an 
     individual;
       ``(ii) flight from prosecution;
       ``(iii) destruction of or tampering with evidence;
       ``(iv) intimidation of potential witnesses; or
       ``(v) otherwise seriously jeopardizing an investigation or 
     unduly delaying a trial.
       ``(C) If the Government does not send notice of a seizure 
     of property in accordance with subparagraph (A) to the person 
     from whom the property was seized, and no extension of time 
     is granted, the Government shall return the property to that 
     person without prejudice to the right of the Government to 
     commence a forfeiture proceeding at a later time.
       ``(2)(A) Any person claiming property seized in a 
     nonjudicial forfeiture proceeding may file a claim with the 
     appropriate official after the seizure.
       ``(B) A claim under subparagraph (A) may be filed not later 
     than the deadline set forth in a personal notice letter, 
     except that if that letter is not received, then a claim may 
     be filed not later than 30 days after the date of final 
     publication of notice of seizure.
       ``(C) The claim shall state the claimant's interest in the 
     property and be made under oath, subject to penalty of 
     perjury. The seizing agency shall make claim forms generally 
     available on request.
       ``(D) Any person may make a claim under subparagraph (A) 
     without posting bond with respect to the property which is 
     the subject of the claim.
       ``(3)(A) Not later than 90 days after a claim has been 
     filed, the Government shall file a complaint for forfeiture 
     in the manner set forth in the Supplemental Rules for Certain 
     Admiralty and Maritime Claims or return the property pending 
     the filing of a complaint, except that a court in the 
     district in which the complaint will be filed may extend the 
     period for filing a complaint for good cause shown or upon 
     agreement of the parties.
       ``(B) If the Government does not file a complaint for 
     forfeiture or return the property, in accordance with 
     subparagraph (A), it shall return the property and may not 
     take any further action to effect the civil forfeiture of 
     such property.
       ``(C) In lieu of, or in addition to, filing a civil 
     forfeiture complaint, the Government may include a forfeiture 
     allegation in a criminal indictment. In such case, the 
     Government's right to continued possession of the property 
     shall be governed by the applicable criminal forfeiture 
     statute.
       ``(D) No complaint may be dismissed on the ground that the 
     Government did not have adequate evidence at the time the 
     complaint was filed to establish the forfeitability of the 
     property by a preponderance of the evidence.
       ``(4)(A) In any case in which the Government files in the 
     appropriate United States district court a complaint for 
     forfeiture of property, any person claiming an interest in 
     the seized property may file a claim asserting such person's 
     interest in the property in the manner set forth in the 
     Supplemental Rules for Certain Admiralty and Maritime Claims, 
     except that such claim may be filed not later than 30 days 
     after the date of service of the Government's complaint or, 
     as applicable, not later than 30 days after the date of final 
     publication of notice of the filing of the complaint.
       ``(B) A person asserting an interest in seized property, in 
     accordance with subparagraph (A), shall file an answer to the 
     Government's complaint for forfeiture not later than 20 days 
     after the date of the filing of the claim.
       ``(b) Appointment of Counsel.--(1) If--
       ``(A) a person in a judicial civil forfeiture proceeding 
     under a civil forfeiture statute is financially unable to 
     obtain representation by counsel; and
       ``(B)(i) the property subject to forfeiture is real 
     property that is being used by the person as a primary 
     residence; or
       ``(ii) the person is represented by counsel appointed under 
     section 3006A of this title in connection with a related 
     criminal case;
     the court may appoint or authorize counsel to represent that 
     person with respect to the claim, as appropriate.
       ``(2) In determining whether to appoint or authorize 
     counsel to represent a person asserting a claim under this 
     subsection, the court shall take into account such factors 
     as--
       ``(A) the person's standing to contest the forfeiture; and
       ``(B) whether the claim appears to be made in good faith.
       ``(3) The court shall set the compensation for 
     representation under this subsection, which shall be 
     equivalent to that provided for court-appointed 
     representation under section 3006A of this title.
       ``(c) Burden of Proof.--In all suits or actions brought 
     under any civil forfeiture statute for the civil forfeiture 
     of any property, the burden of proof is on the Government to 
     establish, by a preponderance of the evidence, that the 
     property is subject to forfeiture. The Government may use 
     evidence gathered after the filing of a complaint for 
     forfeiture to establish, by a preponderance of the evidence, 
     that property is subject to forfeiture.
       ``(d) Innocent Owner Defense.--(1) An innocent owner's 
     interest in property shall not be forfeited under any civil 
     forfeiture statute. The claimant shall have the burden of 
     proving that he is an innocent owner by a preponderance of 
     the evidence.
       ``(2)(A) With respect to a property interest in existence 
     at the time the illegal conduct giving rise to forfeiture 
     took place, the term `innocent owner' means an owner who--
       ``(i) did not know of the conduct giving rise to 
     forfeiture; or
       ``(ii) upon learning of the conduct giving rise to the 
     forfeiture, did all that reasonably could be expected under 
     the circumstances to terminate such use of the property.
       ``(B)(i) For the purposes of this paragraph, ways in which 
     a person may show that such person did all that reasonably 
     could be expected may include demonstrating that such person, 
     to the extent permitted by law--

[[Page S14631]]

       ``(I) gave timely notice to an appropriate law enforcement 
     agency of information that led the person to know the conduct 
     giving rise to a forfeiture would occur or has occurred; and
       ``(II) in a timely fashion revoked or attempted to revoke 
     permission for those engaging in such conduct to use the 
     property or took reasonable actions in consultation with a 
     law enforcement agency to discourage or prevent the illegal 
     use of the property.
       ``(ii) A person is not required by this subparagraph to 
     take steps that the person reasonably believes would be 
     likely to subject any person (other than the person whose 
     conduct gave rise to the forfeiture) to physical danger.
       ``(3)(A) With respect to a property interest acquired after 
     the conduct giving rise to the forfeiture has taken place, 
     the term `innocent owner' means a person who, at the time 
     that person acquired the interest in the property--
       ``(i) was a bona fide purchaser or seller for value 
     (including a purchaser or seller of goods or services for 
     value); and
       ``(ii) did not know and was reasonably without cause to 
     believe that the property was subject to forfeiture.
       ``(B) An otherwise valid claim under subparagraph (A) shall 
     not be denied on the ground that the claimant gave nothing of 
     value in exchange for the property if--
       ``(i) the property is the primary residence of the 
     claimant;
       ``(ii) depriving the claimant of the property would deprive 
     the claimant of the claimant's only means of maintaining 
     adequate shelter in the community for the claimant and all 
     dependents residing with the claimant;
       ``(iii) the property is not, and is not traceable to, the 
     proceeds of any criminal offense; and
       ``(iv) the claimant acquired his or her interest in the 
     property through marriage, divorce, or legal separation, or 
     the claimant was the spouse or legal dependent of a person 
     whose death resulted in the transfer of the property to the 
     claimant through inheritance or probate;
     except that the court shall limit the value of any real 
     property interest for which innocent ownership is recognized 
     under this subparagraph to the value necessary to maintain 
     adequate shelter in the community for such claimant and all 
     dependents residing with the claimant.
       ``(4) Notwithstanding any provision of this subsection, no 
     person may assert an ownership interest under this subsection 
     in contraband or other property that it is illegal to 
     possess.
       ``(e) Motion To Set Aside Forfeiture.--(1) Any person 
     entitled to written notice in any nonjudicial civil 
     forfeiture proceeding under a civil forfeiture statute who 
     does not receive such notice may file a motion to set aside a 
     declaration of forfeiture with respect to that person's 
     interest in the property, which motion shall be granted if--
       ``(A) the Government knew, or reasonably should have known, 
     of the moving party's interest and failed to take reasonable 
     steps to provide such party with notice; and
       ``(B) the moving party did not know or have reason to know 
     of the seizure within sufficient time to file a timely claim.
       ``(2) If the court grants a motion under paragraph (1), the 
     court shall set aside the declaration of forfeiture as to the 
     interest of the moving party without prejudice to the right 
     of the Government to commence a subsequent forfeiture 
     proceeding as to the interest of the moving party, which 
     proceeding shall be instituted within 60 days of the entry of 
     the order granting the motion.
       ``(3) A motion under paragraph (1) may be filed not later 
     than 6 years after the date that the claimant discovered or 
     had reason to discover that the property was forfeited, 
     subject to the doctrine of laches, except that no motion may 
     be filed more than 11 years after the date that the 
     Government's forfeiture cause of action accrued.
       ``(f) Release of Seized Property.--(1) A claimant under 
     subsection (a) is entitled to immediate release of seized 
     property if--
       ``(A) the claimant has a possessory interest in the 
     property;
       ``(B) the claimant has sufficient ties to the community to 
     provide assurance that the property will be available at the 
     time of the trial;
       ``(C) the continued possession by the Government pending 
     the final disposition of forfeiture proceedings will cause 
     substantial hardship to the claimant, such as preventing the 
     functioning of a business, preventing an individual from 
     working, or leaving an individual homeless;
       ``(D) the claimant's likely hardship from the continued 
     possession by the Government of the seized property outweighs 
     the risk that the property will be destroyed, damaged, lost, 
     concealed, or transferred if it is returned to the claimant 
     during the pendency of the proceeding; and
       ``(E) none of the conditions set forth in paragraph (7) 
     applies.
       ``(2) A claimant seeking release of property under this 
     subsection must request possession of the property from the 
     appropriate official, and the request must set forth the 
     basis on which the requirements of paragraph (1) are met.
       ``(3) If not later than 10 days after the date of a request 
     under paragraph (2) the property has not been released, the 
     claimant may file a motion or complaint in the district court 
     in which the complaint has been filed or, if no complaint has 
     been filed, any district court that would have jurisdiction 
     of forfeiture proceedings relating to the property, setting 
     forth--
       ``(A) the basis on which the requirements of paragraph (1) 
     are met; and
       ``(B) the steps the claimant has taken to secure release of 
     the property from the appropriate official.
       ``(4) The court shall render a decision on a motion or 
     complaint filed under paragraph (3) no later than 30 days 
     after the date of the filing, unless such 30-day limitation 
     is extended by consent of the parties or by the court for 
     good cause shown.
       ``(5) If--
       ``(A) a motion or complaint is filed under paragraph (3); 
     and
       ``(B) the claimant demonstrates that the requirements of 
     paragraph (1) have been met;
     the district court shall order that the property be returned 
     to the claimant, pending completion of proceedings by the 
     Government to obtain forfeiture of the property.
       ``(6) If the court grants a motion or complaint under 
     paragraph (3)--
       ``(A) the court may enter any order necessary to ensure 
     that the value of the property is maintained while the 
     forfeiture action is pending, including--
       ``(i) permitting the inspection, photographing, and 
     inventory of the property;
       ``(ii) fixing a bond in accordance with rule E(5) of the 
     Supplemental Rules for Certain Admiralty and Maritime Claims; 
     and
       ``(iii) requiring the claimant to obtain or maintain 
     insurance on the subject property; and
       ``(B) the Government may place a lien against the property 
     or file a lis pendens to ensure that the property is not 
     transferred to another person.
       ``(7) This subsection shall not apply if the seized 
     property--
       ``(A) is contraband, currency or other monetary instrument, 
     or electronic funds unless such currency or other monetary 
     instrument or electronic funds constitutes the assets of a 
     legitimate business which has been seized;
       ``(B) is to be used as evidence of a violation of the law;
       ``(C) by reason of design or other characteristic, is 
     particularly suited for use in illegal activities; or
       ``(D) is likely to be used to commit additional criminal 
     acts if returned to the claimant.
       ``(g) Proportionality.--The claimant may petition the court 
     to determine whether the forfeiture was constitutionally 
     excessive. In making this determination, the court shall 
     compare the forfeiture to the gravity of the offense giving 
     rise to the forfeiture. If the court finds that the 
     forfeiture is grossly disproportional to the offense it shall 
     reduce or eliminate the forfeiture as necessary. The claimant 
     shall have the burden of establishing that the forfeiture is 
     grossly disproportional by a preponderance of the evidence at 
     a hearing conducted by the court without a jury.
       ``(h) Definitions.--In this section:
       ``(1)(A) Except as provided in subparagraph (B), the term 
     `civil forfeiture statute' means any provision of Federal law 
     providing for the forfeiture of property other than as a 
     sentence imposed upon conviction of a criminal offense.
       ``(B) The term `civil forfeiture statute' does not 
     include--
       ``(i) the Tariff Act of 1930 or any other provision of law 
     codified in title 19;
       ``(ii) the Internal Revenue Code of 1986;
       ``(iii) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     301 et seq.);
       ``(iv) the Trading with the Enemy Act (50 U.S.C. App. 1 et 
     seq.); or
       ``(v) section 1 of title VI of the Act of June 15, 1917 (40 
     Stat. 233; 22 U.S.C. 401).
       ``(2)(A) The term `owner' means a person with an ownership 
     interest in the specific property sought to be forfeited, 
     including a leasehold, lien, mortgage, recorded security 
     interest, or valid assignment of an ownership interest.
       ``(B) The term `owner' does not include--
       ``(i) a person with only a general unsecured interest in, 
     or claim against, the property or estate of another;
       ``(ii) a bailee unless the bailor is identified and the 
     bailee shows a colorable legitimate interest in the property 
     seized; or
       ``(iii) a nominee who exercises no dominion or control over 
     the property.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 46 of title 18, United States Code, is amended by 
     inserting after the item relating to section 981 the 
     following:

``981A. General rules for civil forfeiture proceedings.''.

     SEC. 3. COMPENSATION FOR DAMAGE TO SEIZED PROPERTY.

       (a) Tort Claims Act.--Section 2680(c) of title 28, United 
     States Code, is amended--
       (1) by striking ``any goods or merchandise'' and inserting 
     ``any goods, merchandise, or other property'';
       (2) by striking ``law-enforcement'' and inserting ``law 
     enforcement''; and
       (3) by inserting before the period at the end the 
     following: ``, except that the provisions of this chapter and 
     section 1346(b) of this title apply to any claim based on 
     injury or loss of goods, merchandise, or other property, 
     while in the possession of any officer of customs or excise 
     or any other law enforcement officer, if--
       ``(1) the property was seized for the purpose of forfeiture 
     under any provision of Federal law providing for the 
     forfeiture of property other than as a sentence imposed upon 
     conviction of a criminal offense;

[[Page S14632]]

       ``(2) the interest of the claimant is not forfeited; and
       ``(3) the claimant is not convicted of a crime for which 
     the interest of the claimant in the property would be subject 
     to forfeiture under a Federal criminal forfeiture law.''.
       (b) Department of Justice.--
       (1) In general.--With respect to a claim that cannot be 
     settled under chapter 171 of title 28, United States Code, 
     the Attorney General may settle, for not more than $50,000 in 
     any case, a claim for damage to, or loss of, privately owned 
     property caused by an investigative or law enforcement 
     officer (as defined in section 2680(h) of title 28, United 
     States Code) who is employed by the Department of Justice 
     acting within the scope of his or her employment.
       (2) Limitations.--The Attorney General may not pay a claim 
     under paragraph (1) that--
       (A) is presented to the Attorney General more than 1 year 
     after it occurs; or
       (B) is presented by an officer or employee of the Federal 
     Government and arose within the scope of employment.

     SEC. 4. ATTORNEY FEES, COSTS, AND INTEREST.

       (a) In General.--Section 2465 of title 28, United States 
     Code, is amended to read as follows:

     ``Sec. 2465. Return of property to claimant; liability for 
       wrongful seizure; attorney fees, costs, and interest

       ``(a) Upon the entry of a judgment for the claimant in any 
     proceeding to condemn or forfeit property seized or arrested 
     under any provision of Federal law--
       ``(1) such property shall be returned forthwith to the 
     claimant or his agent; and
       ``(2) if it appears that there was reasonable cause for the 
     seizure or arrest, the court shall cause a proper certificate 
     thereof to be entered and, in such case, neither the person 
     who made the seizure or arrest nor the prosecutor shall be 
     liable to suit or judgment on account of such suit or 
     prosecution, nor shall the claimant be entitled to costs, 
     except as provided in subsection (b).
       ``(b)(1) Except as provided in paragraph (2), in any civil 
     proceeding to forfeit property under any provision of Federal 
     law in which the claimant substantially prevails, the United 
     States shall be liable for--
       ``(A) reasonable attorney fees and other litigation costs 
     reasonably incurred by the claimant;
       ``(B) post-judgment interest, as set forth in section 1961 
     of this title; and
       ``(C) in cases involving currency, other negotiable 
     instruments, or the proceeds of an interlocutory sale--
       ``(i) interest actually paid to the United States from the 
     date of seizure or arrest of the property that resulted from 
     the investment of the property in an interest-bearing account 
     or instrument; and
       ``(ii) an imputed amount of interest that such currency, 
     instruments, or proceeds would have earned at the rate 
     described in section 1961, for any period during which no 
     interest was paid (not including any period when the property 
     reasonably was in use as evidence in an official proceeding 
     or in conducting scientific tests for the purpose of 
     collecting evidence).
       ``(2)(A) The United States shall not be required to 
     disgorge the value of any intangible benefits nor make any 
     other payments to the claimant not specifically authorized by 
     this subsection.
       ``(B) The provisions of paragraph (1) shall not apply if 
     the claimant is convicted of a crime for which the interest 
     of the claimant in the property would be subject to 
     forfeiture under a Federal criminal forfeiture law.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 163 of title 28, United States Code, is amended by 
     striking the item relating to section 2465 and inserting 
     following:

``2465. Return of property to claimant; liability for wrongful seizure; 
              attorney fees, costs, and interest.''.

     SEC. 5. SEIZURE WARRANT REQUIREMENT.

       (a) In General.--Section 981(b) of title 18, United States 
     Code, is amended to read as follows:
       ``(b)(1) Except as provided in section 985, any property 
     subject to forfeiture to the United States under subsection 
     (a) may be seized by the Attorney General and, in the case of 
     property involved in a violation investigated by the 
     Secretary of the Treasury or the United States Postal 
     Service, the property may also be seized by the Secretary of 
     the Treasury or the Postal Service, respectively.
       ``(2) Seizures pursuant to this section shall be made 
     pursuant to a warrant obtained in the same manner as provided 
     for a search warrant under the Federal Rules of Criminal 
     Procedure, except that a seizure may be made without a 
     warrant if--
       ``(A) a complaint for forfeiture based on probable cause 
     has been filed in the United States district court and the 
     court has issued an arrest warrant in rem pursuant to the 
     Supplemental Rules for Certain Admiralty and Maritime Claims;
       ``(B) there is probable cause to believe that the property 
     is subject to forfeiture and--
       ``(i) the seizure is made pursuant to a lawful arrest or 
     search; or
       ``(ii) another exception to the Fourth Amendment warrant 
     requirement would apply; or
       ``(C) the property was lawfully seized by a State or local 
     law enforcement agency and has been transferred to a Federal 
     agency in accordance with State law.
       ``(3) Notwithstanding the provisions of rule 41(a) of the 
     Federal Rules of Criminal Procedure, a seizure warrant may be 
     issued pursuant to this subsection by a judicial officer in 
     any district in which a forfeiture action against the 
     property may be filed under section 1355(b) of title 28, and 
     executed in any district in which the property is found.''.
       (b) Drug Forfeitures.--Section 511(b) of the Controlled 
     Substances Act (21 U.S.C. 881(b)) is amended to read as 
     follows:
       ``(b) Seizure Procedures.--Any property subject to 
     forfeiture to the United States under this section may be 
     seized by the Attorney General in the manner set forth in 
     section 981(b) of title 18, United States Code.''.

     SEC. 6. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME 
                   VICTIMS.

       Section 981(e) of title 18, United States Code, is amended 
     by striking paragraph (6) and inserting the following:
       ``(6) as restoration to any victim of the offense giving 
     rise to the forfeiture, including, in the case of a money 
     laundering offense, any offense constituting the underlying 
     specified unlawful activity; or''.

     SEC. 7. CIVIL FORFEITURE OF REAL PROPERTY.

       (a) In General.--Chapter 46 of title 18, United States 
     Code, is amended by inserting after section 984 the 
     following:

     ``Sec. 985. Civil forfeiture of real property

       ``(a) Notwithstanding any other provision of law, all civil 
     forfeitures of real property and interests in real property 
     shall proceed as judicial forfeitures.
       ``(b)(1) Except as provided in this section--
       ``(A) real property that is the subject of a civil 
     forfeiture action shall not be seized before entry of an 
     order of forfeiture; and
       ``(B) the owners or occupants of the real property shall 
     not be evicted from, or otherwise deprived of the use and 
     enjoyment of, real property that is the subject of a pending 
     forfeiture action.
       ``(2) The filing of a lis pendens and the execution of a 
     writ of entry for the purpose of conducting an inspection and 
     inventory of the property shall not be considered a seizure 
     under this subsection.
       ``(c)(1) The Government shall initiate a civil forfeiture 
     action against real property by--
       ``(A) filing a complaint for forfeiture;
       ``(B) posting a notice of the complaint on the property; 
     and
       ``(C) serving notice on the property owner, along with a 
     copy of the complaint.
       ``(2) If the property owner cannot be served with the 
     notice under paragraph (1) because the owner--
       ``(A) is a fugitive;
       ``(B) resides outside the United States and efforts at 
     service pursuant to Rule 4 of the Federal Rules of Civil 
     Procedure are unavailing; or
       ``(C) cannot be located despite the exercise of due 
     diligence,
     constructive service may be made in accordance with the laws 
     of the State in which the property is located.
       ``(3) If real property has been posted in accordance with 
     this subsection, it shall not be necessary for the court to 
     issue an arrest warrant in rem, or to take any other action 
     to establish in rem jurisdiction over the property.
       ``(d) Real property may be seized prior to the entry of an 
     order of forfeiture if--
       ``(1) the Government notifies the court that it intends to 
     seize the property before trial; and
       ``(2) the court--
       ``(A) issues a notice of application for warrant, causes 
     the notice to be served on the property owner and posted on 
     the property, and conducts a hearing to determine if there is 
     probable cause for the forfeiture; or
       ``(B) makes an ex parte determination that there is 
     probable cause for the forfeiture and that there are exigent 
     circumstances that permit the government to seize the 
     property without prior notice and an opportunity for the 
     property owner to be heard.
     For purposes of paragraph (2)(B), to establish exigent 
     circumstances, the Government shall show that less 
     restrictive measures such as a lis pendens, restraining 
     order, or bond would not suffice to protect the Government's 
     interests in preventing the sale, destruction, or continued 
     unlawful use of the real property.
       ``(e) If the court authorizes a seizure of real property 
     under subsection (d)(2), it shall conduct a prompt post-
     seizure hearing during which the property owner shall have an 
     opportunity to contest the basis for the seizure.
       ``(f) This section--
       ``(1) applies only to civil forfeitures of real property 
     and interests in real property;
       ``(2) does not apply to forfeitures of the proceeds of the 
     sale of such property or interests, or of money or other 
     assets intended to be used to acquire such property or 
     interests; and
       ``(3) shall not affect the authority of the court to enter 
     a restraining order relating to real property.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 46 of title 18, United States Code, is amended by 
     inserting after the item relating to section 984 the 
     following:

``985. Civil forfeiture of real property.''.

     SEC. 8. APPLICABILITY.

       This Act and the amendments made by this Act shall apply to 
     any forfeiture proceeding commenced on or after the date of 
     enactment of this Act.

[[Page S14633]]

     
                                  ____
   Hatch/Leahy Civil Asset Forfeiture Reform Act--Section-by-Section 
                                Summary


                                overview

       The Hatch/Leahy Civil Asset Forfeiture Reform Act would 
     provide a more uniform procedure for federal civil asset 
     forfeitures while increasing the due process safeguards for 
     property owners. Among other things, the bill (1) places the 
     burden of proof in civil forfeiture proceedings upon the 
     government, by a preponderance of the evidence; (2) allows 
     for the provision of counsel to indigent claimants where the 
     property at issue is the claimant's primary residence, and 
     where the claimant is represented by court-appointed counsel 
     in connection with a related criminal case; (3) requires the 
     government to pay attorney fees, costs and interest in any 
     civil forfeiture proceeding in which the claimant 
     substantially prevails; (4) eliminates the cost bond 
     requirement; (5) creates a uniform innocent owner defense; 
     (6) allows property owners more time to challenge a seizure; 
     (7) codifies existing practice with respect to Eighth 
     Amendment proportionality review and seizures of real 
     property; (8) permits the pre-adjudication return of property 
     to owners upon a showing of hardship; and (9) allows property 
     owners to sue the government for any damage to their 
     property.


                       section-by-section summary

     SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL 
                   FORFEITURE PROCEEDINGS.

       Creates a new section in federal criminal code (18 U.S.C. 
     Sec. 981A) that establishes general rules for virtually all 
     proceedings under a federal civil forfeiture statute.
       Notice; claim; complaint. Subsection (a) establishes 
     general procedures and deadlines for initiating civil 
     forfeiture proceedings.
       Paragraph (1) provides that, in general, a Federal law 
     enforcement agency has 60 days to send notice of a seizure of 
     property. A court shall extend the period for sending notice 
     for 60 days upon written ex parte certification by the 
     seizing agency that notice may have an adverse result. If the 
     government fails to send notice, it must return the property, 
     without prejudice to the right of the Government to commence 
     a forfeiture proceeding at a later time.
       Paragraph (2) allows property owners more time to challenge 
     a seizure. Any person claiming an interest in seized property 
     may file a claim not later than the deadline set forth in a 
     personal notice letter, except that if such letter is not 
     received, then a claim may be filed not later than 30 days 
     after the date of final publication of notice of seizure. 
     Claims shall be made under oath, subject to penalty of 
     perjury. No cost bond need be posted.
       Paragraph (3) allows the government 90 days after a claim 
     has been filed to file a complaint for forfeiture or return 
     the property, except that a court may extend the time for 
     filing a complaint for good cause shown or upon agreement of 
     the parties. If the government does not comply with this 
     rule, it may not take further action to effect forfeiture of 
     the property.
       Paragraph (4) provides that any person claiming an interest 
     in seized property must file a claim in court not later than 
     30 days after service of the government's complaint or, where 
     applicable, not later than 30 days after final publication of 
     notice of seizure. A claimant must file an answer to the 
     government's complaint within 20 days of the filing of such 
     claim.
       Appointment of counsel. Subsection (b) permits a court to 
     appoint counsel to represent an indigent claimant in a 
     judicial civil forfeiture proceeding if the property subject 
     to forfeiture is real property used by the claimant as a 
     primary residence, or the claimant is already represented by 
     a court-appointed attorney in connection with a related 
     Federal criminal case.
       Burden of proof. Subsection (c) shifts the burden of proof 
     in civil asset forfeiture cases to the government, by a 
     preponderance of the evidence. It also makes clear that the 
     government may use evidence gathered after the filing of a 
     complaint to meet that burden of proof.
       Innocent owner. Subsection (d) codifies a uniform innocent 
     owner defense. With respect to a property interest in 
     existence at the time the illegal conduct giving rise to 
     forfeiture took place, ``innocent owner'' means an owner who 
     did not know of the conduct giving rise to forfeiture or who, 
     upon learning of such conduct, did all that reasonably could 
     be expected under the circumstances to terminate such use of 
     the property. With respect to a property interest acquired 
     after the conduct giving rise to the forfeiture has taken 
     place, ``innocent owner'' means a person who, at the time 
     that person acquired the interest in property, was a bona 
     fide purchaser or seller for value and reasonably without 
     cause to believe that the property was subject to forfeiture 
     or, in limited circumstances involving a principal residence, 
     a spouse or legal dependent.
       Motion to set aside declaration of forfeiture. Subsection 
     (e) provides that a person who was entitled to notice of a 
     nonjudicial civil forfeiture who did not receive such notice 
     may file a motion to set aside a declaration of forfeiture 
     with respect to his or her interest in the property. This 
     subsection codifies current case law holding that such motion 
     must be filed not later than 6 years after the date that the 
     claimant discovered or had reason to discover that the 
     property was forfeited, but in no event more than 11 years 
     after the government's cause of action in forfeiture 
     accrued. The common law doctrine of laches applies to any 
     motion made under this subsection. If such motion is 
     granted, the government has 60 days to reinstitute 
     proceedings against the property.
       Release of property to avoid hardship. Subsection (f) 
     entitles a claimant to immediate release of seized property 
     in certain cases of hardship. Among other things, the 
     claimant must have sufficient ties to the community to 
     provide assurance that the property will be available at the 
     time of the trial, the claimant's likely hardship from such 
     continued possession outweighs the risk that the property 
     will be destroyed, damaged, lost, concealed, or transferred 
     if it is returned to the claimant during the pendency of the 
     preceding. Hardship return of property does not apply to 
     contraband, currency, electronic funds, property that is 
     evidence of a crime, property that is specially designed to 
     use in a crime, or any other item likely to be used to commit 
     additional crimes if returned.
       Proportionality review. Subsection (g) implements United 
     States v. Bajakajian, 524 U.S. 321 (1998), which held that a 
     punitive forfeiture violates the Excessive Fines Clause of 
     the Eighth Amendment if it is grossly disproportionate to the 
     gravity of the offense.

     SEC. 3. COMPENSATION FOR DAMAGE TO SEIZED PROPERTY.

       Amends the federal Tort Claims Act to apply to claims based 
     on injury or loss of property while in the possession of the 
     government, if the property was seized for the purpose of 
     forfeiture but the interest of the claimant was not 
     forfeited.

     SEC. 4. ATTORNEY FEES, COSTS AND INTEREST.

       Amends 28 U.S.C. Sec. 2465 to provide that, with limited 
     exceptions, in any civil proceeding to forfeit property in 
     which the claimant substantially prevails, the United States 
     shall be liable for (1) reasonable attorney fees and other 
     litigation costs reasonably incurred by the claimant; (2) 
     post-judgment interest; and (3) in cases involving currency, 
     negotiable instruments, or the proceeds of an interlocutory 
     sale, any interest actually paid to the United States, or 
     imputed interest (except where the property was in use as 
     evidence or for testing).

     SEC. 5. SEIZURE WARRANT REQUIREMENT.

       Amends 18 U.S.C. Sec. 981(b) to require that seizures be 
     made pursuant to a warrant obtained in the same manner as 
     provided for a search warrant under the Federal Rules of 
     Criminal Procedure, with limited exceptions.

     SEC. 6. CIVIL FORFEITURE OF REAL PROPERTY.

       Implements United States v. James Daniel Good Real 
     Property, 510 U.S. 43 (1993), which held that real property 
     may not be seized, except in exigent circumstances, without 
     giving a property owner notice of the proposed seizure and an 
     opportunity for an adversarial hearing. All forfeitures of 
     real property must proceed as judicial forfeitures. Real 
     property may be seized before entry of an order of forfeiture 
     only if notice has been served on the property owner and the 
     court determines that there is probable cause for the 
     forfeiture, or if the court makes an ex parte determination 
     that there is probable cause for the forfeiture and exigent 
     circumstances justify immediate seizure without a pre-seizure 
     hearing.

     SEC. 7. APPLICABILITY.

       Provides that all changes in the bill apply prospectively.

  Mr. LEAHY. Mr. President, asset forfeiture is a powerful crime-
fighting tool. It has been a particularly potent weapon in the war on 
drugs, allowing the government to take the cars and boats and stash 
houses amassed by drug dealers and put them to honest use. Last year 
alone, the government was able to seize nearly half a billion dollars 
worth of assets, cutting a big chunk out of criminals' profit stream 
and returning it to the law-abiding community.
  Unfortunately, our nation's asset forfeiture is not fail-safe; it can 
be abused. In hearings on this issue, the Judiciary Committee has heard 
examples of what happens when prosecutorial zeal skirts the boundaries 
of due process, leading to the taking of private property regardless of 
whether the owner is innocent of, or even cognizant of, the property's 
use in an illegal act.
  In recent years, our nation's asset forfeiture system has drawn 
increasing and exceedingly sharp criticism from scholars and 
commentators. Federal judges have also added their voices to the 
growing chorus of concern. In 1992, the Second Circuit Court of Appeals 
stated, ``We continue to be enormously troubled by the government's 
increasing and virtually unchecked use of the civil forfeiture statutes 
and the disregard for due process that is buried in those statutes.'' 
Four years later, the Eighth Circuit rebuked the government for 
capitalizing on the claimants' confusion to forfeit over $70,000 of 
their currency, and expressed alarm that:

       the war on drugs has brought us to the point where the 
     government may seize . . . a citizen's property without any 
     initial showing of cause, and put the onus on the citizen to 
     perfectly navigate the bureaucratic labyrinth in order to 
     liberate what is presumptively his or hers in the first 
     place. . . .

[[Page S14634]]

     Should the citizen prove inept, the government may keep the 
     property, without ever having to justify or explain its 
     actions.

  Similarly, the Seventh Circuit recently expressed its belief that 
``the government's conduct in forfeiture cases leaves much to be 
desired,'' and ordered the return of over $500,000 in currency that had 
been improperly seized from a Chicago pizzeria.
  Civil asset forfeiture rests upon the medieval notion that property 
is somehow guilty when it causes harm to another. The notion of 
``guilty property'' is what enables the government to seize property 
regardless of the guilt or innocence of the property owner. In many 
asset forfeiture cases, the person whose property is taken is never 
charged with any crime.
  The ``guilty property'' notion also explains the topsy-turvy nature 
of today's civil forfeiture proceedings, in which the property owner--
not the government--bears the burden of proof. Under current law, all 
the government must do is make an initial showing of probable cause 
that the property is ``guilty'' and subject to forfeiture; it is then 
up to the property owner to prove a negative--that the property was not 
involved in any wrongdoing.

  It is time to reexamine the obsolete underpinnings of our civil 
forfeiture laws and bring these laws in line with more modern 
principles of due process and fair play. We must be especially careful 
to ensure that innocent property owners are adequately protected.
  The Hatch-Leahy Civil Asset Forfeiture Reform Act provides greater 
safeguards for individuals whose property has been seized by the 
government. It incorporates all of the core reforms of H.R. 1658, which 
passed the House of Representatives in June by an overwhelming 
bipartisan majority. The Hatch-Leahy bill also includes a number of 
additional reforms which, among other things, establish a fair and 
uniform procedure for forfeiting real property, and entitle property 
owners to challenge a forfeiture as constitutionally excessive.
  During our hearing this year on civil asset forfeiture reform, the 
Justice Department and other law enforcement organizations expressed 
concern that some of the reforms included in the House bill would 
interfere with the government's ability to combat crime. The bill we 
introduce today addresses the legitimate concerns of law enforcement. 
In particular, the bill puts the burden of proof on the government by a 
preponderance of the evidence, and not by clear and convincing 
evidence. The preponderance standard is used in virtually all other 
civil cases, and we believe it is sufficient to protect the interests 
of property owners.
  We have also removed provisions in H.R. 1658 that would allow 
criminals to leave their ill-gotten gains to their heirs, and would bar 
the government from forfeiting property if it inadvertently sent notice 
of a seizure to the wrong address. These provisions did little more 
than create procedural ``gotchas'' for criminals and their heirs, and 
are neither necessary nor desirable as a matter of policy.
  The Hatch-Leahy bill also differs from the House bill in its approach 
to the issue of appointed counsel. Under H.R. 1658, anyone asserting an 
interest in seized property could apply for a court-appointed lawyer. 
There is no demonstrated need for such an unprecedented extension of 
the right to counsel, nor is there any principled distinction between 
defendants in civil forfeiture actions and defendants in other federal 
enforcement actions who are not eligible for court-appointed counsel. 
Moreover, property owners who are indigent may be eligible to obtain 
representation through various legal aid clinics.
  The Hatch-Leahy bill authorizes courts to appoint counsel for 
indigent claimants in just two limited circumstances. First, a court 
may appoint counsel in the handful of forfeiture cases in which the 
property at issue is the claimant's primary residence. When a 
forfeiture action can result in a claimant's eviction and homelessness, 
there is more at stake than just a property interest, and it is fair 
and just that the claimant be provided with an attorney if she cannot 
otherwise afford one. Second, if a claimant is already represented by a 
court-appointed attorney in a related federal criminal case, the court 
may authorize that attorney to represent the claimant in the civil 
forfeiture action. This is both fair and efficient, and eliminates any 
appearance that the government chose to pursue the forfeiture in a 
civil proceeding rather than as part of the criminal case in order to 
deprive the claimant of his right to counsel.

  For claimants who were not appointed counsel by the court, the Hatch-
Leahy bill allows for the recovery of reasonable attorney fees and 
costs if they substantially prevail in court. The bill also makes the 
government liable for post-judgment interest on any money judgment, and 
imputed interest in certain cases involving currency or negotiable 
instruments.
  Another core reform of the Hatch-Leahy bill is the elimination of the 
so-called ``cost bond.'' Under current law, a property owner that seeks 
to recover his property after it has been seized by the government must 
pay for privilege by posting a bond with the court. The government has 
strongly defended the ``cost bond,'' not as a device for ensuring that 
its court costs are covered, but as a way of deterring frivolous 
claims. Of course, we are all in favor of deterring frivolous claims, 
but there are ways to deter frivolous claims without offending the 
fundamental principle of equal and open access to the courts, a bedrock 
of our American system of justice. The Hatch-Leahy bill provides that a 
person who challenges a forfeiture must file his claim on oath, under 
penalty of perjury. Claimants also remain subject to the general 
sanctions for bad faith in instituting or conducting litigation. 
Further, most claimants will continue to bear the substantial costs of 
litigating their claims in court. The additional financial burden of 
the ``cost bond'' serves no legitimate purpose.
  Under current law, a property owner has only 20 days from the date of 
first publication of the notice of seizure to file a claim challenging 
an administrative forfeiture, and only 10 days to file a claim 
challenging a judicial forfeiture. It is therefore unlikely that anyone 
who misses the first of three published notices will be able to file a 
timely claim. The Hatch-Leahy bill extends the property owner's time to 
file a claim following administrative and judicial forfeiture actions 
to 30 days. The bill also codifies current Department of Justice policy 
with respect to the time period for sending notice of seizure, and 
establishes a 90-day period for filing a complaint. The bill leaves 
undisturbed current laws and procedures with respect to the proper form 
and content of notices, claims and complaints.
  Finally, the Hatch-Leahy bill will allow property owners to hold on 
to their property while a case in process, if they can show that 
continued possession of the government will cause substantial hardship 
to the owner, such as preventing him from working, and that this 
hardship outweighs the risk that the property will be destroyed or 
concealed if returned to the owner during the pendency of the case. 
Unlike H.R. 1658, the Hatch-Leahy bill adopts the primary safeguards 
that the Justice Department wanted added to the provision--that 
property owners must have sufficient ties to the community to provide 
assurance that the property will not disappear and that certain 
property, such as currency and property particularly suited for use in 
illegal activities, cannot be returned. As amended, the hardship 
provision in the Hatch-Leahy bill is substantially similar to the 
hardship provision in another civil asset forfeiture bill, S. 1701, 
which the Justice Department has endorsed.
  The fact is, the Justice Department has endorsed most of the core 
reforms contained in the Hatch-Leahy bill. Indeed, the Department has 
already taken administrative steps to remedy many of the civil 
forfeiture abuses identified in recent years by the federal courts. For 
this, the Department is to be commended. But administrative policy can 
be modified on the whim of whoever is in charge, and the law remains 
susceptible to abuse.
  It is time for Congress to catch up with the Justice Department and 
the courts on this important issue. Due to internecine fighting among 
law enforcement officials whose views Congress always wants to take 
into consideration, action on civil forfeiture reform has been delayed 
for far too long. The Hatch-Leahy bill strikes the appropriate middle 
ground between the

[[Page S14635]]

House bill and S. 1701, providing comprehensive and meaningful reform 
while ensuring the continued potency of civil asset forfeiture in the 
war on crime.
  Senator Hatch and I share a longstanding and deeply-held appreciation 
for law enforcement and the officers who work on the front lines to 
protect our families and communities, and we have worked together on a 
number of crime-related issues in the past. I want to commend him for 
his commitment, not just to law enforcement, but to the rights of all 
Americans. It has been my pleasure to work with him on this issue, to 
bring balance back in the relationship between our police forces and 
the citizens of this country.
                                 ______