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Feds Take in Billions with Forfeiture Powers
Today’s Wall Street Journal has part 2 of its critical look at the powers of federal law enforcement agencies and the focus of this article is on the power to seize cash, cars, homes, and other assets from people who have not been convicted of a crime. It’s called “civil asset forfeiture” because there is no criminal prosecution. Here’s an excerpt (subscription only):
New York businessman James Lieto was an innocent bystander in a fraud investigation last year. Federal agents seized $392,000 of his cash anyway.
An armored-car firm hired by Mr. Lieto to carry money for his check-cashing company got ensnared in the FBI probe. Agents seized about $19 million—including Mr. Lieto’s money—from vaults belonging to the armored-car firm’s parent company.
He is one among thousands of Americans in recent decades who have had a jarring introduction to the federal system of asset seizure. Some 400 federal statutes—a near-doubling, by one count, since the 1990s—empower the government to take assets from convicted criminals as well as people never charged with a crime.
Last year, forfeiture programs confiscated homes, cars, boats, and cash in more than 15,000 cases. The total take topped $2.5 billion, more than doubling in five years, Justice Department statistics show.
The expansion of forfeiture powers is part of a broader growth in recent decades of the federal justice system that has seen hundreds of new criminal laws passed. Some critics have dubbed the pattern as the overcriminalization of American life.
Last year, Cato hosted an event on the problem of forfeiture law and before that published numerous books and studies and articles. It’s nice to see the Wall Street Journal highlighting this problem for its readership.
Early Lessons from Libya
Fighting rages in Tripoli, and Muammar Qaddafi’s regime hangs by a thread. Although much remains unknown, it is worthwhile to ponder the next steps, as well as look back on the assumptions that guided U.S. policymakers to become involved in the first place, and that may shape U.S. foreign policy going forward.
Specifically, while Qaddafi’s ouster will be a good thing for Libya, the lessons that are likely to be drawn from it, and especially of the U.S. role in it, might not be good for the United States. That is because the Libya story will be fit into a familiar narrative, one in which the United States is portrayed as uniquely suited to be the world’s government, with the U.S. military as a global constabulary, responding to threats large and small, distant and proximate. The Libyan intervention, according to the defenders of the status quo, demonstrates that there is no alternative.
Most Americans disagree. Such an approach to the world has taxed our military, and overburdened U.S. taxpayers, with no obvious benefit to U.S. national security. If Qaddafi falls, and what comes after him is a marked improvement, that doesn’t mean that the U.S. military needed to become involved, and it doesn’t mean that it must do so in other places, or in similar circumstances, in the future.
First, the most important question: Who will replace Qaddafi? We might know more about the rebel movement than we did in March, to the extent that the Transitional National Council represents them. But does it? (Recall Paul Wolfowitz’s response at an event at AEI in March. Asked who the rebels were, he told the questioner to “Google and find out”). More to the point, does the TNC command sufficient popular support that it will have the authority to govern Libya? We may soon find out.
And what does U.S. intervention in Libya signal for the future of U.S. foreign policy? Will U.S. warplanes soon be flying over Syria? Will U.S. bombs soon be raining down on Iran? Or on any other country that has the misfortune of being ruled by an incompetent or venal government? Once, the answer was clearly no; now we just don’t know.
When President Obama chose to intervene in Libya, with authorization from the UN Security Council, but not from the U.S. Congress, he violated nearly every one of the principles of the venerable Weinberger-Powell Doctrine: the war didn’t advance a vital U.S. security interest, and it lacked public support, a clear military objective, and an obvious exit strategy. It will be unfortunate if the likely outcome of the war in Libya — Qaddafi’s ouster — is used to repudiate the W‑P doctrine once and for all. If it does, we are likely to see even more U.S. interventions, in a whole host of places that have not even the slightest connection to U.S. national security.
Finally, there is the question of Congress’s role in foreign policy. As the war dragged on, I was appalled by the rhetorical gymnastics that the Obama administration employed to evade the Constitution’s provision that vests the war power exclusively with the Congress. It will be tragic if the Libyan experience is taken as proof that this portion of the Constitution is null and void. Those who were willing to challenge the Obama administration’s claims should not abandon their posts just because Qaddafi’s forces have.
A few weeks before the start of the U.S./NATO campaign against Libya, Malou Innocent reminded us of British philosopher John Stuart Mill’s thoughts on revolution and political reform. In his classic text A Few Words on Nonintervention Mill explained that the subjects of an oppressive ruler must achieve freedom for themselves. And he worried “that if they have not sufficient love of liberty to be able to wrest it from merely domestic oppressors, the liberty which is bestowed on them by other hands than their own, will have nothing real, nothing permanent.”
That isn’t inevitable in the case of Libya, and I hope that it doesn’t play out that way. The Libyan people were clearly not well-served by the clownish, megalomaniacal Qaddafi, a man so naturally farcical that it is difficult to distinguish the genuine article from the SNL spoof of him. I am happy that the Libyan people appear poised to take control of their country. And I wish them well.
Related Tags
Is It ‘Well Worth the Money’?
A former congressional page tells the Washington Post that the recently ended page program was “well worth the money.” At the Encyclopedia Britannica Blog, I note:
Well, it would be, wouldn’t it? For those who benefited from it, it is indeed well worth the money. But, as with all government programs, the beneficiaries weren’t paying for it. Did the program do the taxpayers much good? Yes, in the days when members of Congress needed a way to get documents to one another, the page program may well have been an efficient use of resources. But times change; technology has eliminated a lot of jobs in the private sector, and there’s no reason to think it shouldn’t have the same impact in the public sector. Cynics point out that pages were mostly the children of people with good political connections. And then they make better connections: The writer who thought the program was “well worth the money” now runs a company that boasts of having made more than 500 million political robocalls over the past 30 years. So we all owe something to the page program!
Much more on the problem of concentrated benefits and diffuse costs, some appalling examples, and a suggestion as to how we might determine whether each government program is “well worth the money.”
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A Challenging Question
If having more maids, valets, and drivers uplifted the world’s poor, could you do it? Or does maintenance of your egalitarian sensibilities require them to stay in their place?
Anarchists for Big Government
Three months ago I wrote a long, thoughtful (ahem) critique of the Washington Post’s use of the word “anarchists” to describe people outraged at the possibility that governments might finally be forced “to cut social benefits and slash public payrolls.”
“Odd anarchists,” I harrumphed, who “object to the state reducing its size, scope, and power.”
Today, Michael Cannon made the same point to many more people in a few pithy sentences on the Post’s letters page:
Anne Applebaum informed us that “the anarchists in Athens wanted more government spending” [“The smartphone riots?” op-ed, Aug. 11]. Which is it? Were they anarchists, who want no government? Or were they statists, who want more government?
The lesson? Write letters to the editor. People read them.
Meanwhile, two other letter-writers on the same page complain that the Post should not reveal how our tax dollars are spent, lest the masses turn against Washington. I disagree.
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When an American Company Redomiciles to the Cayman Islands, What Lesson Should We Learn?
Another American company has decided to expatriate for tax reasons. This process has been going on for decades, with companies giving up their U.S. charters (a form of business citizenship) and redomiciling in low-tax jurisdictions such as Bermuda, Ireland, Switzerland, Panama, Hong Kong, and the Cayman Islands.
The companies that choose to expatriate usually fit a certain profile (this applies to individuals as well). They earn a substantial share of their income in other countries and they are put at a competitive disadvantage because of America’s “worldwide” tax system.
More specifically, worldwide taxation requires firms to not only pay tax to foreign governments on their foreign-source income, but they are also supposed to pay additional tax on this income to the IRS — even though the money was not earned in America and even though their foreign-based competitors rarely are subject to this type of double taxation.
In this most recent example, an energy company with substantial operations in Asia moved its charter to the Cayman Islands, as reported by digitaljournal.com:
Greenfields Petroleum Corporation…, an independent exploration and production company with assets in Azerbaijan, is pleased to announce that the previously announced corporate redomestication … from Delaware to the Cayman Islands has been successfully completed.
Because it is a small firm, the move by GPC probably won’t attract much attention from the politicians. But “corporate expatriation” has generated considerable controversy in recent years when involving big companies such as Ingersoll-Rand, Transocean, and Stanley Works (now Stanley Black & Decker).
Statists argue that it is unpatriotic for companies to redomicile, and they changed the law last decade to make it more difficult for companies to escape the clutches of the IRS. In addition to blaming “Benedict Arnold” corporations, leftists also attack low-tax jurisdictions for “poaching” companies.
Libertarians and conservatives, by contrast, explain that expatriation is the result of an onerous tax system that imposes high tax rates and requires the double taxation of foreign-source income. Expatriation is the only logical approach if companies want a level playing field when competing in global markets.
I cover this issue (and also explain that the Obama administration is trying to make a bad system even worse) in the video below.
My recommendation, not surprisingly, is that politicians fix the tax code. Unfortunately, politicians prefer the blame-the-victim game, so they attack the companies instead of solving the underlying problem (and then they wonder why job creation is anemic).