AG, DPS seek funds to replace declining forfeitures

Paulina Pineda//October 5, 2018

AG, DPS seek funds to replace declining forfeitures

Paulina Pineda//October 5, 2018

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Attorney General Mark Brnovich wants money.

But not from the anti-racketeering fund.

Currently, there are 21.5 full-time positions in the Attorney General’s Fraud and Special Prosecution Division that are paid for with revenue from the anti-racketeering revolving fund, which is supplied by civil asset forfeitures, or money seized from criminals.

But as civil asset forfeiture collections shrink, so too does the agency’s anti-racketeering fund. Part of the decline is due to stricter asset forfeiture laws.

In 2017, the governor signed sweeping legislation aimed at reforming the state’s civil asset forfeiture laws. HB2477, sponsored by Rep. Eddie Farnsworth, R-Gilbert, required greater oversight on spending, placed a higher burden of proof for police to seize property, and also made it easier for innocent property owners to appeal the seizures.

AG spokesman Ryan Anderson said continuing to use the fund to pay employees’ salaries won’t be sustainable in the long run. The agency is looking for a permanent funding source to pay the salaries so no one loses a job as the anti-racketeering fund dwindles.

Arizona Attorney General-elect Mark Brnovich
Arizona Attorney Generalt Mark Brnovich

In a budget request to the Office of Strategic Planning and Budgeting, Brnovich asked for $850,000 in fiscal year 2020 to pay the salaries of eight full-time employees who are now being paid by the anti-racketeering fund. All agencies are required by law, as part of the budget process, to submit budget requests to OSPB by September 1.

“This administration doesn’t believe funding public safety on forfeiture funds is fiscally responsible, we don’t think it is ethically responsible and we are hoping that the Legislature will heed our request to provide a dedicated funding source for our employees,” Anderson said.

The majority of the proceeds from court-authorized civil asset forfeitures go to victims and the law enforcement agency that initiated the investigation. Anderson said the Attorney General’s Office receives about 15 to 25 percent of the proceeds from forfeitures, but the amount the agency receives has been declining.

He said in fiscal year 2012, the agency received $5.6 million in anti-racketeering proceeds, but revenues shrunk to about $2.3 million in fiscal year 2018.

Anderson said while the agency has managed to shift dozens of positions that were being funded through the anti-racketeering fund to other more sustainable funding sources, which has helped slow the overall decline of the fund, the Legislature has not provided the agency with a long-term solution.

Anderson said there is enough money left in the fund to sustain the administration through another term, but if the issue is not addressed, whoever inherits the office will be faced with a budget deficit.

“We came into office and we inherited a giant fiscal mess and we’ve been able to address that problem without any layoffs and while increasing our caseload. We’ve been able to right the ship, but this is all a temporary fix. Our administration is going to be fine, but something needs to be done long term because we can’t just keep kicking the can or else the next attorney general is going to inherit the same problems we did,” he said.

Anderson said in fiscal year 2010, at the tail end of former Attorney General Terry Goddard’s last term in office, 22 positions were funded from the anti-racketeering fund.

That number shot up under Attorney General Tom Horne’s administration.

From fiscal year 2011 to 2015, the number of positions funded from the anti-racketeering fund more than doubled to 50, Anderson said, increasing the base funding requirement from $2.3 million to nearly $7 million. Prosecutors, special agents and support staff, almost entirely in the agency’s criminal division, were funded in this expansion, he said.

Anderson said it is the agency’s understanding that the expansion was partly motivated by rosy revenue projections. Anti-racketeering revenues were expected to dramatically increase over time after Goddard and Horne prosecuted several large asset forfeiture cases that provided significant amounts of money to the AG’s Office, he said.

But the projections didn’t materialize.

“I think people incorrectly assumed that those trends would continue for all time and that’s simply not the case,” he said.

Proceeds collected from civil asset forfeitures have declined in recent years, leaving law enforcement agencies and county attorneys scrambling to find money to fund vital programs.

Like the AG’s Office, the Arizona Department of Public Safety is also asking the Legislature for a permanent funding source in fiscal year 2020 to pay for various programs.

According to budget documents, the department is asking for nearly $3.2 million to help sustain the bomb squad, hazardous materials, SWAT, and canine units. Budget documents show that while the positions in those units are funded by appropriated money, operating costs are funded through the anti-racketeering fund, but that is not sustainable.

The department wrote that annual expenditures from the anti-racketeering fund have typically reached $6 million, but revenues are shrinking. The fund brought in $8.5 million in fiscal year 2016, $4.9 million in fiscal year 2017, and $2.6 million in fiscal year 2018.


That downward trend is likely to continue, the department wrote.

Trooper Kameron Lee, a DPS spokesman, said the department’s anti-racketeering fund currently has $400,000 in uncommitted funds. He said while DPS does not anticipate that the fund will run dry any time soon, he did acknowledge that the money obtained through forfeitures has declined and that could pose a problem for the department if it doesn’t receive additional funding.

“In the event that the fund runs low and additional funding isn’t received this coming fiscal year, the DPS will have to make some hard decisions about which programs should be funded and to what extent,” Lee said an email.

Anderson said the nature of crimes has changed, leading to a decline in forfeiture funds. He said during the Goddard and Horne era, the agency made a lot of money seizing funds from suspected wire fraud cases, and a settlement with Western Union provided a huge influx of cash to the agency.

But while the agency still handles wire fraud cases, the nature of financial crimes has evolved. Anderson said criminal enterprises aren’t moving money the way they used to because they realized it was easy to follow.

But for the AG’s Office, it’s more than just a realization that civil asset forfeiture is not a reliable source of income. Brnovich has made a conscientious decision not to aggressively pursue anti-racketeering funds as previous administrations did, Anderson said.

Anderson said while it can be a valuable tool to help shut down criminal networks and obtain justice and restitution for victims, it can be abused.

“Given Brnovich’s philosophy, I can say that the AG’s Office is not going to pursue forfeiture funds just for the sake of keeping the lights on. That’s not good policy,” he said. “I’m not saying the previous administrations engaged in abuse, but it shouldn’t be used as a mechanism in order to pad your budget and fund positions.”