THE STEERMAN: Wealth decline and what our AG does about it

First a quick question: what is worse than having your property convicted or called for payment as “just compensation”?

The answer: to have your property taken without payment. Taxation is of course one way of doing this. But it can also happen when personal property such as cars and money are linked to certain crimes. Property can expire without trial, compensation, and sometimes even without criminal charges against the owner. The attorney general oversees this type of property.

In Report No. 18-09, the State Auditor examined the Attorney General’s oversight of confiscated property and came to some surprising results.

First, there was no written document informing internal staff about how the program was working, nor was there any administrative instruction to educate the public and other authorities (e.g. law enforcement agencies). That led to frustration among law enforcement agencies like the county police who seized property related to illegal activity (and wanted to benefit from it, as explained below) and among people whose property was seized who wanted to show that it was not them with crime connected and the property could be returned.

The program manager in the office of the WG also had tasks outside of the program, and as a result, the supervision of the program was piecemeal and at best secondary. It took an average of 561 days (approximately one year and seven months) to process applications for administrative recovery. Worse, the office couldn’t explain some of the cash or property it was supposed to have.

Finally, property confiscation laws stipulated that the confiscation authority and the public prosecutor’s office associated with that authority would each receive a 25% reduction in the cash or sales proceeds of the confiscated property. The auditor also noted that 20% of the balance should be used to support education, prevention and rehabilitation programs on substance abuse. The 20% allotment was news to the AG office at the time, as not a cent had been spent on drug abuse programs.

The auditors recently issued Report No. 21-09 on the implementation of their 2018 recommendations. The auditor found the following:

While the AG has administrative regulations for the program, they were easy to repeal as the law in force allowed the AG to enact the regulations without a public hearing. However, the AG has not put in place any internal procedures to manage its own employees. There is therefore the possibility that there is a certain arbitrariness within the office of the AG, as the employees react in any case to their own facts.

The rules seemed to help with the backlog of the office. The average processing time for administrative recovery requests decreased from 561 days to 204 days. The good news is that they cut the turnaround time by a year. The bad news is that it will take them seven more months. That’s a long time before a person can get by without a car when, for example, it is discovered that it has not been lawfully confiscated.

The auditor also found that the employees of the AG were better able to book the seized funds, but still did not keep an inventory of the hard goods.

And when it came to the fact that 20% of the money should be used to support education, prevention and rehabilitation programs against drug abuse, the employees of the AG could not find the legal requirement. So they ignored the auditor’s point of view. The position of the AG is defensible here. Although the law passed by the legislature said that the legislature wanted to introduce a 20% requirement, there was nothing in the law that actually created it. If the ministry spent money on drug abuse containment, legitimate criticism could follow. Legislators should take note of this and ensure that their intent as set out in a draft law is consistent with the law they want to enact.

We are making progress, it seems; maybe not as fast or as smoothly as people would like it to be, but the program is better now than it was when the auditor first looked at it.


Tom Yamachika is President of the Hawaii Tax Foundation.