Predatory Public Finance and the Origins of the War on Drugs 1984-1989. Part 2

Police Interests in Federal Confiscations as a Sin Tax

Government seizure of property used in criminal activity is actually a long-standing practice. It was one stimulus for the king's involvement in law enforcement as early as the ninth and tenth centuries (Benson 1990), for instance, and was first used in the United States to combat smugglers who avoided import duties in the early nineteenth century. Now it is being used to combat the supply of illicit drugs. Federal officials confiscated over $100 million in 1983, and the Comprehensive Crime Act of 1984 broadened support for the practice as the law required the Justice Department to share the proceeds with state and local agencies participating in the investigations. Perhaps as a result of the cooperation this produced, confiscations roughly doubled every year beginning in 1985, reaching a total of almost $3 billion in cash and saleable assets, and $2 billion in unsold assets by the end of 1992 (Levy 1996, 151).

The 1984 federal asset forfeiture law was a bureaucratically demanded innovation that allowed for an expanded interbureaucratic network of cooperation. As Breton and Wintrobe (1982, 128) explained, cooperation through informal networks, both within and across bureaucracies, is an alternative to competition. A reduction in the intensity of competition allows bureaucrats greater discretion in the pursuit of their subjective goals. On the surface at least, this innovation apparently allowed local law enforcement agencies to generate revenues not limited by the interbureaucratic competition for resources that arises in the local budgeting process, because the statute mandated that shared assets go directly to law enforcement agencies rather than into general funds, education funds, or other depositories mandated by many state forfeiture laws. An increase in the revenues from drug-related seizures creates the potential for bureaucratic managers to expand their discretionary budget, thereby enhancing their own well-being directly and indirectly by rewarding supporters in the managers' networks with various "perks" (Breton and Wintrobe 1982, 137). After all, police have considerable discretion in how they allocate the resources they control, and monitoring generally does not limit their discretion in any substantial way. Therefore, inasmuch as this new source of revenue has increased the police's ability to control resources, it has probably increased their discretionary ability to generate perks.

Forfeiture has an obvious potential deterrent value in that it raises the costs associated with drug offenses. Indeed, the justification for asset seizures is precisely the same as the justification for an explicit excise tax on sin. The activity being taxed should be reduced as a consequence of the tax, whether the tax is explicit in the form of an excise charge on the legal sale of the sinful commodity or implicit in the form of the seizure of assets arising from the illicit sale of the sinful commodity. Sin taxes are also justified as a source of revenue that can be used to help correct the problems arising from the sin. Thus, cigarette taxes are often contended to be an appropriate source of revenue to fund health care due to alleged health costs arising from smoking. Similarly, because drugs allegedly cause crime, forfeiture policies that allocate the resulting revenues to law enforcement are said to be justified in that they can be used to recoup public moneys spent on enforcement of drug-induced crime. A manual designed to help jurisdictions develop a forfeiture capability (National Criminal Justice Association 1988) emphasized this practical aspect. Pointing out that less tangible law enforcement effects (such as deterrence) should be counted as benefits, the manual emphasized that the determining factor for pursuit of a forfeiture is "the jurisdiction's best interest" (40; emphasis added). This interest, of course, is viewed from the perspective of law enforcement agencies, a view that might put somewhat more weight on benefits for bureaucrats and somewhat lesser weight on communitywide (and uncertain) benefit of deterrence effects. After all, as Stumpf (1988) noted, we must "look past the external political and social determinants of criminal justice procedures and policies to understand the system in operation. The process is staffed by professionals and quasi-professionals who have their own agenda…[and] largely internal imperatives may be of even greater importance in explaining their outcomes" (316; see also Blumberg [1979]; Benson [1990]; and Ras- mussen and Benson [1994]). Indeed, if forfeitures are in the "public interest" because of deterrent impacts, and if police are exclusively motivated to serve the public interest, then they should willingly cooperate in forfeiture efforts no matter what government agency's budget is enhanced by these seizures. The 1984 federal confiscations legislation directed that all shared seizures go to law enforcement, however, because of lobbying efforts by law enforcement bureaucracies, and subsequent efforts to overturn this aspect of the legislation have been vehemently opposed by these same bureaucracies.

The 1984 federal confiscations legislation followed a period of active advocacy by federal, state, and local law enforcement officials, who emphasized that it would foster cooperation between their agencies and increase the overall effort devoted to and the effectiveness of drug control; that is, law enforcement bureaus maintained that they needed to be paid to cooperate, whether the cooperation was in the public interest or not. For instance, in hearings on the Comprehensive Drug Penalty Act held before the Subcommittee on Crime of the Committee on the Judiciary of the U.S. House of Representatives, held 23 June and 14 October 1983, much of the testimony focused exclusively on the confiscations and forfeitures issue (U.S. House 1985). Among the organizations and bureaucracies presenting testimony in support of the forfeitures- sharing arrangement were the U.S. Customs Service, various police departments and sheriffs, the U.S. attorney's office from the Southern District of Florida, and the U.S. Drug Enforcement Administration. There was no representation of local government oversight authorities (mayors, city councils, county commissions) either supporting or objecting to such legislation. Furthermore, when the innovation was first introduced it appears that most non-law-enforcement bureaucrats did not anticipate its implications, probably due to the poor "quality" of information selectively released to these rivals by law enforcement bureaucracies and their congressional supporters. The only group that suggested problems with the legislation was the Criminal Justice Section of the American Bar Association. Two groups involved in drug therapy (the Therapy Committees of America, and the Alcohol and Drug Problems Association) also supported forfeitures sharing, but proposed that a share also go to drug therapy programs. The law enforcement lobbies prevailed.

Following passage of the initial law, interbureaucratic competition for the rights to seized assets, as defined by federal statutes, intensified. It became clear to state and local bureaucrats who compete with the law enforcement sector for the control of resources that the federal legislation was being used to circumvent state laws and constitutions prohibiting certain forfeitures or limiting law enforcement use of seizures. For example, North Carolina law requires that all proceeds from confiscated assets go to the County School Fund. Law enforcement agencies in North Carolina, and in other states where state law limited their ability to benefit from confiscations, began using the 1984 federal legislation to circumvent their states' laws by routinely arranging for federal "adoption" of forfeitures so they could be passed back to the state and local law enforcement agencies. As education bureaucrats and others affected by this diversion of benefits rec- ognized what was going on, they began to advocate a change in the federal law. They were successful, at least initially: the Anti-Drug Abuse Act of 1988 (passed on 18 November 1988) changed the asset forfeitures provisions established in 1984. Section 6077 of the 1988 statute stated that the attorney general must assure that any forfeiture transferred to a state or local law enforcement agency "is not so transferred to circumvent any requirement of state law that prohibits forfeiture or limits use or disposition of property forfeited to state or local agencies." This provision was designated to go into effect on 1 October 1989, and the Department of Justice interpreted it to mandate an end to all adoptive forfeitures (U.S. House 1990, 166).

State and local law enforcement officials immediately began advocating repeal of Section 6077. Thus, the Subcommittee on Crime heard testimony on 24 April 1989 advocating repeal of Section 6077 from such groups as the International Association of Chiefs of Police, the Florida Department of Law Enforcement, the North Carolina Department of Crime Control and Public Safety, and the U.S. attorney general's office. Perhaps the most impassioned plea for repeal was made by Joseph W. Dean of the North Carolina Department of Crime Control and Public Safety (U.S. House 1990, 20–28), who admitted both that law enforcement bureaucracies were using the federal law to circumvent the state's constitution and that, without the benefits of confiscations going to those bureaus, substantially less effort would be made to control drugs: Currently the United States Attorney General, by policy, requires that all shared property be used by the transfer for law enforcement purposes. The conflict between state and federal law [given Section 6077 of the 1988 Act] would prevent the federal government from adopting seizures by state and local agencies. …This provision would have a devastating impact on joint efforts by federal, state and local law enforcement agencies not only in North Carolina but also in other affected states.… Education is any state's biggest business. The education lobby is the most powerful in the state and has taken a position against law enforcement being able to share in seized assets. The irony is that if local and state law enforcement agencies cannot share, the assets will in all likelihood not be seized and forfeited. Thus no one wins but the drug trafficker.… …If this financial sharing stops, we will kill the goose that laid the golden egg. This statement clearly suggests that law enforcement agencies focus resources on enforcement of drug laws because of the financial gains for the agencies arising from forfeitures. Perhaps the stimulus for this practice was not that drugs are illegal, or that the president had declared the war on drugs, which induced the massive post-1984 policy effort against them, but rather the 1984 legislation that mandated that forfeitures generate benefits for police.

The implication that law enforcement agencies benefit from the discretion arising through forfeitures was also corroborated by other testimony, including that of the commissioner of the Florida Department of Law Enforcement (FDLE) (U.S. House 1990, 13–14). In fact, a statement by the U.S. attorney for the Eastern District of North Carolina, in support of repealing Section 6077, actually implied that law enforcement agencies were focusing on confiscations as opposed to criminal convictions (U.S. House 1990): "Drug agents would have much less incentive to follow through on the asset potentially held by drug traffickers, since there would be no reward for such efforts, and would concentrate their time and resources on the criminal prosecution" (26).

Indeed, forfeitures can be successful even if arrest and prosecution are not. Forfeiture laws are supposedly designed to protect lien holders and owners whose property is used without their knowledge or consent, but owners' rights are tenuous because most states prohibit suits claiming that the property was wrongfully taken. This prohibition, coupled with the fact that the procedure takes place in a civil forfeiture hearing, diminishes the capacity of property owners to defend themselves. Generally, owners whose property is alleged to have been used in a drug offense or purchased with the proceeds from drug trafficking have the burden of establishing that they merit relief from the forfeiture proceeding (National Criminal Justice Association 1988, 41). The owners must prove not only that they are innocent of the alleged crime, but that they lacked both knowledge of and control over the property's unlawful use if someone else used it for criminal purposes. For example, if a drug seller places a drug order by phone from a friend's business, that property can be seized unless the owner proves lack of both knowledge and control. Thus, forfeiture activity can be a lucrative source of revenue for a police agency, without regard for the actual criminality of the potential victim of such seizures. The power of confiscation is shown by a March 1991 drug raid in which federal agents confiscated three University of Virginia fraternity houses after they seized drugs valued at a few hundred dollars. The houses were valued at $1 million, and the rents from these buildings were subsequently paid to the U.S. Justice Department.

Many law enforcement agencies have benefited from asset seizure laws. More than 90 percent of the police departments with jurisdictions containing populations of 50,000 or more and more than 90 percent of the sheriffs' departments serving populations of 250,000 or more received money or goods from a drug asset forfeiture program in 1990 (Reaves 1992, 1). Furthermore, the Drug Enforcement Administration seizes millions of dollars at ports, airports, and bus stations. Congress began investigating alleged abuses by the DEA in May 1992. Indeed, asset forfeiture by law enforcement agencies has become increasingly controversial throughout the nation. Highly publicized criticism in the print and electronic media has raised constitutional issues such as the erosion of Fourth Amendment rights, protection of innocent parties, and the proportionality of punishment to the crime. Whether large portions of the seizures come from criminals or not cannot be determined because many seizures do not involve arrests, and the costs associated with recovering wrongfully seized assets from federal authorities can run into thousands of dollars. Despite widespread misuse of the forfeiture laws all over the country, however, the police lobbies won the battle over federal legislation. Section 6077 of the Anti-Drug Abuse Act of 1988 never went into effect. Its repeal was hidden in the 1990 Defense Appropriations bill, and the repeal was made retroactive to 1 October 1989. In appears that the police bureaucrats have won the competition over the property rights to forfeitures, at least as it has been waged at the federal level.

Competitors for budgets at the local level may recognize the significant discretionary gains police enjoy as a consequence of asset seizures. If they do, then they might be able to convince local sponsors that police budgets should be reduced accordingly; that is, change procedures so returns from asset forfeiture do not necessarily represent a net gain to local police agencies even when they are given to the agencies. Pressure from other local bureaucrats competing for resources may lead administrators and politicians with whom bureaucrats bargain for agency budgets to view the flow of money from seizures as a substitute for regular budget increments. After all, one alleged purpose of asset forfeitures is to make drug enforcement efforts to a degree self-financing. If these gains are fungible in the budget bargaining and review process, and local commissions, councils, or mayors face strong pressures to take full advantage of this possibility, these officials could refuse to approve police budgets that are not reduced to offset expected confiscations.

Asset Seizures and Police Discretionary Budgets

The extent to which police agencies can increase their budgets via forfeiture activity is explored in Benson, Rasmussen, and Sollars (1995) using data from Florida policing jurisdictions. Confiscations were found to have a significant positive impact on police agencies' budgets after accounting for demand and local government budget-constraint factors. As expected, the impact was larger in more populous jurisdictions. It appears that forfeitures offer police an attractive policy option: an activity that can be justified politically because of its potential strong deterrent effect and because it suggests that drug enforcement is, to a degree, self-financing, while it generates direct benefits to the police bureaucracy by increasing the bureau's discretionary budget. Relatively small amounts of money from seized assets can mean substantial increases in budget discretion.

Florida data provide an indication of the importance of confiscations as a source of discretionary spending. The estimated elasticity of noncapital expenditures with respect to confiscations is 0.04 for all jurisdictions and 0.07 for the larger ones (Benson, Rasmussen, and Sollars 1995), but this seemingly modest elasticity belies the potentially large impact of asset forfeiture on decision making, since only a small fraction of noncapital expenditures is discretionary. The elasticity of discretionary spending with respect to confiscations can be approximated as the estimated elasticity divided by the proportion of all discretionary noncapital expenditures. Thus, if 10 percent of noncapital expenditures are discretionary, the relevant elasticity lies in the 0.4 to 0.7 range. Because the portion of budgets committed to specific uses is probably larger than assumed here, these figures most likely represent a significant underestimate of the impact confiscated assets can have on the discretionary budget. These results, combined with the evidence of more intense drug enforcement after 1984, are consistent with the hypothesis that police have incentives to respond to the Comprehensive Crime Act of 1984 by focusing on drug enforcement.

The asset forfeiture provisions of the federal statute created an exogenous change in state and local law enforcement agencies' bureaucratic incentives, inducing them to join in the federally declared war on drugs. Police agencies seeking to increase their budget discretion were encouraged to use an increasing portion of their resources against drug offenders and to devote fewer resources to other crimes. Thus, changes in police behavior since 1984 are consistent with the proposition that these agencies responded to the incentives created by this law. The relative allocation of state and local law enforcement resources has shifted dramatically toward drug enforcement, the major source of asset confiscations. Therefore, sin taxes continue to be an integral part of public policy toward drug markets, despite the fact that criminalization of narcotics and marijuana has occurred. When a sin is legal the sin tax is called an excise tax; when the sin is illegal the sin tax is called asset seizure or asset forfeiture. Sin taxes are intended to alter the behavior of sinners but, as explained here, the allocation of the resulting revenues can have a dramatic effect on the behavior of the tax collectors. The resulting practice of predatory public finance can be seen by looking at the interstate variation in asset seizure laws and drug enforcement policy.

Differences in Drug Enforcement Across States and Cities

The federal confiscations statute appears to help explain the nationwide conduct of a drug war, but it does not explain the large differences in drug enforcement activities across states detailed in table 1. However, under the federal adoption procedures, federal authorities keep 20 percent of the confiscated assets they handle. Thus, there are incentives for police to avoid federal adoptions if their state laws allow them to keep seized assets, as the laws do in a number of states. In fact, the importance of the federal statute receded by 1990, as many state legislatures followed the federal government's lead and police bureaucrats' demands by incorporating the forfeiture process into their standard law enforcement procedures. Now many more states have a forfeiture statute that allows expanded opportunities for seizures and directs the proceeds toward law enforcement. Items most often subject to seizure include material used in drug production, paraphernalia, containers, motor vehicles, and money, but most states now also allow confiscation of real estate used in the "furtherance of illegal drug activity." Only seven states allowed confiscation of real estate in 1984, but statutory changes in- creased this number to 17 by 1988, and it reached 43 in 1991. Beyond that, a growing number of states have more general forfeiture provisions, allowing seizure for nondrug "contraband" offenses and felonies. State racketeering laws that authorize the forfeiture of property obtained as a result of numerous illegal activities are even more conducive to law enforcement interest. Nonetheless, state statutes are not all as accommodating to police as the federal statute, leaving the federal law a useful vehicle by which many police bureaucracies can enhance their discretionary budgets.

Given the variation in state laws regarding forfeitures and the costs associated with using the federal authorities, it might be that these factors help explain the cross-state variation in drug enforcement activities. Rasmussen, Benson, and Mast (1994) explored this issue using a reduced-form econometric model of the demand for and supply of drug enforcement in a sample of large U.S. cities. Included in the model are variables that control for the extent of drug use, the opportunity cost of police resources, and socioeconomic factors affecting the demand for drug enforcement. The variable of principal interest is the presence of a confiscation law that permits police to keep some of the proceeds from seized assets. They report that the level of drug use, as measured by the percentage of arrestees testing positive for any illicit drug use, is a highly significant determinant of drug arrests. More important for our purposes here, they found that a state law that allows the police to keep any portion of seized assets was associated with significantly more emphasis on drug arrests. Indeed, the laws have a large and important impact on the allocation of police resources: the existence of a confiscation law favorable to the police raises the drug arrests/total arrests ratio between 35 and 50 percent, depending on the model specification. Allowing police to profit from the confiscation of assets from alleged drug offenders apparently provides a powerful incentive to law enforcement agencies, thereby changing agency behavior.

Conclusions: The Drug War Winds Down

Escalation of the war on drugs, when measured by drug arrests relative to Index I arrests, apparently ended in 1989. In the United States the drug arrest/Index I arrest ratio fell from 0.46 in 1989 to a 1990 figure of 0.36, a decline of 24 percent. This decline in drug enforcement is not inconsistent with bureaucratic incentives, however, including those created by asset forfeiture legislation. Police may simply be arresting "smarter," for example, concentrating on drug offenders with some potential yield via forfeiture. For instance, if police agencies are seeking seizure opportunities, they are likely to reduce juvenile arrests relative to adult arrests, as youthful offenders are less likely to own property that can be seized. This implication is particularly interesting because, from a theoretical perspective, increasing juvenile participation in the drug trade can be expected during the period of rising drug enforcement. The war on drugs included greater arrest rates for drug offenses, a greater probability of conviction given arrest, and longer sentences, but these increased costs were imposed primarily on adults rather than juveniles, who generally received relatively lenient sentences for identical offenses. Therefore, drug traffickers had increasing incentives to reduce their risk by both lengthening the distribution chain and using more juveniles in the process. Yet, in the United States, persons under eighteen accounted for 11.95 percent of all drug arrests in 1984 but only 7.47 percent in 1990, a 37 percent decline. This reallocation of police effort against drugs is consistent with the hypothesis that police have been increasingly interested in the agency yield from drug enforcement through the seizure of assets. As a high-ranking U.S. antidrug official recently noted: "Increasingly, you're seeing supervisors of cases saying, 'Well, what can we seize?' when they're trying to decide what to investigate. They're paying more attention to the revenues they can get…and it's skewing the cases they get involved in."

It is also possible that opportunities for seizures are being reduced as drug market entrepreneurs adjust to the increasing focus on confiscations. For instance, marijuana growers are increasingly using national forests and other public lands rather than private land because "this technique precludes the use by the government of the legal remedy of confiscation of the land on which the illegal activity is being perpetrated" (Office of the Attorney General 1989, 12). Drug dealers can rent or lease houses, apartments, cars, and other assets rather than purchase them, and hide assets abroad. Indeed, increasingly sophisticated efforts to hide assets (e.g., money laundering) make seizures more and more costly.

Another factor may be the growing recognition that the drug war has not been living up to its billings. Indeed, public opinion in support of the drug war has decreased since 1989. Opinion polls report a consistent public preference for tougher treatment of criminals. But despite this trend, preferences regarding drug policy are becoming much more ambiguous, and they do not necessarily support a law enforcement approach to the problem. Public opinion might be expected to support the continued "get-tough" policies against drugs if claims promulgated by law enforcement interests that such a focus would reduce other kinds of crime were widely accepted. However, it is becoming increasingly clear that the war on drugs is not being won, and that the negative consequences of the war are substantial. Today, for example, many states are wrestling with the prison-crowding problem, which many citizens recognize is at least in part a consequence of the get-tough policies against drugs that occurred during the 1984–89 period, including the large increases in arrests and convictions and the longer mandatory sentences. The Florida legislature was forced to hold a special session in 1993 in order to allocate more funds to prison construction and avoid the "gridlock" that was anticipated late in 1993, when no criminals eligible for early release would remain in the system (many prisoners cannot be released early under statutes regarding habitual offenders and various specific crimes, many of which are drug related), and the 1994 legislature allocated funds to expand the state's prison system by an additional 27 percent. Given recognition that drug enforcement policy is a major determinant of recent trends in prison crowding, and that the drug war has not produced the benefits its supporters claimed it would, public opinion may turn against the drug war. It is clearly the case that the media have begun to focus on some negative consequences of the drug war, and the media's change in focus seems to reflect changing public sentiments.

In the face of apparent growing recognition by taxpayers that the war on drugs has not achieved its exaggerated purposes, police may be reducing their drug control efforts in order to control nondrug crimes. After all, as Breton and Wintrobe (1982, 149) noted, with the passage of time, the perceived responsibility for the failure of a policy (e.g., crime control through the control of drug-market activity) shifts from outside forces (e.g., the drug dealers, the recession, and so on) to the government and, within the gov- ernment, to the bureaucracy, so pressure arises for bureaucrats to account for what is going on. Indeed, prison officials are now starting to blame the war on drugs for the consequences of their early release programs. Consider the example of Frank Potts, who was released from the Florida prison system in 1988, after serving six years of a fifteen- year sentence for molesting an eleven-year-old girl, despite the report of a parole examiner who noted there was a very high probability of recidivism if Potts was released. He is now being held on charges of molesting another eleven-year-old girl, but in addition an intense investigation is underway regarding allegations that Potts has killed as many as thirteen people. A Florida Department of Corrections spokesperson explained the early release by noting that "the agency is bound by mandates from the courts and the legislature. In the mid-1980s, the prison system was inundated with inmates carrying minimum mandatory sentences during the country's initial skirmishes in the war on drugs." Thus, policies tend to cycle. An uninformed public can be misled by bureaucrats and policymakers for a while, as the agencies push their own agenda, but if the policy does not work it will ultimately have to be altered in recognition of its failure. This does not mean that a rollback to the pre-1984 level of drug enforcement is to be expected, but it does suggest that the increase in drug enforcement over the 1984–89 period cannot be sustained indefinitely.

Another important consideration for police in their increasing emphasis on nondrug crime after 1989 is that "a growing number of states, such as Texas, Florida, and New Jersey, apply their forfeiture laws to any criminal activity" (Reed 1992, 2). Police have learned from their drug forfeiture experience that seizures can be very lucrative. The 1984 federal statute pertained to drug crime alone, but with changes in state laws, forfeitures are increasingly targeted at property owners in general, not just criminally culpable property owners engaged in drug market activities. A family home is fair game in some jurisdictions, for instance, if anyone (e.g., a son, relative, or friend of the owner or of the owner's family) uses the property unlawfully. But the spread of forfeiture activities to nondrug crime areas means "that property owners must police their property against all such activity, drug related or not" (Reed 1992, 2). In effect, property owners are being forced to act for the police in preventing all sorts of crimes on their property, and failure to do so can result in a very high tax—forfeiture of the person's property. With the ever-broadening scope of forfeiture possibilities, drug activity may become a less important target of police efforts, at the same time as it is probably becoming a more difficult target to attack and a politically less viable policy to stress. Thus, a relative winding down of the drug war appears to be the product of the same forces that led to its escalation: changing incentives that affect police bureaucrats, including the opportunity to collect sin taxes from sins other than those associated with drug markets.

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The Marijuana Tax Act was nominally a revenue-producing act that imposed taxes on physicians who prescribed marijuana, pharmacists who dispensed it, and others who might deal in the drug. The nonmedical possession and sale of the drug were made illegal, however, and all those in the production and distribution chain for medical purposes were required to keep detailed records and pay annual fees. These onerous record-keeping requirements, taxes, and fees effectively ended the legal use of the drug for medical purposes as well. . Bureaucrats often try to influence the demand side of the political process (Berk, Brackman, and Lesser 1977; Congleton, 1980; Breton and Wintrobe, 1982; Benson 1983, 1990; Mbaku, 1991). They have incentives to "educate" the sponsor regarding interest-group demands that complement their own and to "propagate" their own agenda. Furthermore, they may have a relative advantage in the lobbying process because they have ready access to the sponsor with whom they are often informally networked (Breton and Wintrobe 1982, 41–42), and they are naturally called upon, due to their expertise. This is clearly the case with law enforcement bureaucracies (Glaser 1978, 22). Additional discussion of the role of bureaucrats as demanders of legislative action appears in the next two sections of this paper. . Many states mandated that confiscated assets be turned over to a general government authority, whereas others required that some or all seized assets be used for specific purposes, such as drug treatment or education. Various states also limited the kinds of assets that could be seized. For instance, in 1984, only seven states allowed seizure of real estate used for illegal drug activities. The federal statute had no such limitation. . See Reuter (1991), Benson and Rasmussen (1991, 1992), Benson and others (1992), Rasmussen, Benson, and Sollars (1993), Sollars, Benson, and Rasmussen (1994), Rasmussen and Benson (1994), and Zimring and Hawkins (1992). . A large literature has developed following in this Niskanen/Migué-Belanger framework: see Toma and Toma (1980), Gonzalez and Mehay (1985), Benson and Greenhut (1986), Wyckoff (1988, 1990a, 1990b), and Kress (1989). . This competition is multidimensional. It includes general competition for resources as well as competition for positions and promotions in the formal bureaucratic structure and membership in the informal networks that bureaucrats develop to facilitate nonmarket exchanges of benefits, information, and support among network members. Competitive strategies employed include "(i) alterations in the flows of information or commands as these move through or across the hierarchical levels of the organization; (ii) variations in the quality or quantity of information leaked to the media, to other bureaus in the organization, to special interest groups, and/or to opposition parties and rival suppliers; and (iii) changes in the speed of implementation of policies as these are put into effect" (Breton and Wintrobe 1982, 37–38). These strategies and selective behavior in general are possible because of the way bureaucratic organizations and hierarchies work, including the fact that monitoring by sponsors is costly and the measurement of bureaucratic performance is generally difficult or impossible. Indeed, the use of such strategies can increase monitoring costs and make measurement of performance even more difficult. . See Musto (1987, 13–14, 21–22), Thornton (1991, 56–60), and Klein (1983, 31–55). . Bonnie and Whitebread (1974), Helmer (1975), Musto (1987), and Nadelmann (1993). . See Himmelstein (1983), Becker (1963), Bonnie and Whitebread (1974), King (1957), Dickson (1968), Oteri and Silvergate (1967), Lindesmith (1965), Hill (1971), and Reinarman (1983). In fact, as Thornton (1991, 62, 66) and Morgan (1983, 3) stressed, all of the various self-interests mentioned (bureaucrats, professionals from the American Medical Association and American Pharmaceutical Association, and groups attempting to suppress certain races or classes) interacted with still more groups (temperance groups, religious groups, and so on) to produce policies against drug use. Interest groups and bureaucratic entrepreneurs continue to dominate modern drug policy as well. These groups include "civil rights, welfare rights, bureaucratic and professional interests, health, law and order, etc." (Morgan 1983, 3). For instance, the pharmaceutical industry had a significant impact on the Comprehensive Drug Abuse Prevention and Control Act of 1970: "In this case as in most others, the state's policy makers were buffeted by law enforcement interests and professional interests" (Reinarman 1983, 19). . See Stutmann and Esposito (1992) for a very revealing examination of the actual activities of a DEA agent, and note the tremendous amount of time and effort that this agent spent in competing for resources. Also note the significant role that politics played in determining the allocation of drug enforcement resources. This entire book could be easily set in the context of the Breton- Wintrobe model of bureaucratic entrepreneurship. . King (1957); Lindesmith (1965); Klein (1983, 32). . Becker (1963); Dickson (1968); Oteri and Silvergate (1967); Lindesmith (1965); Hill (1971); Bonnie and Whitebread (1974). . This is suggested by the second strategy listed in note 6, and arises in part because of the high cost of monitoring bureaucrats. . Richards (1982, 164). For details see Kaplan (1970, 88–136), Lindesmith (1965, 25– 34), Himmelstein (1983, 60–62), and Bennett and DiLorenzo (1992, 237–39). . Lindesmith (1965); Kaplan (1970, 1983); Richards (1982); Michaels (1987); Bennett and DiLorenzo (1992); Rasmussen and Benson (1994). . See Benson and others (1992), Sollars, Benson, and Rasmussen (1994), and Benson and Rasmussen (1991). Rasmussen, Benson, and Sollars (1993) provide evidence that violent crimes may also be caused by drug enforcement; see also Reuter (1991) in this regard. . Note with Breton and Wintrobe (1982) that "one need not assume Machiavellian behavior, deceit, or dishonesty on the part of bureaucrats, because in all likelihood the pursuit of their own interest will be, as it is for everyone else, veiled in a self-perception of dedication and altruism" (152). . Once a prohibition policy is in place, police have incentives to make large drug seizures in order to demonstrate their effectiveness in controlling drug-market activity. In fact, as one of their "selective distortions," police have incentives to exaggerate the magnitude of the seizures they make. Thus, drug seizures are always reported in terms of their "estimated street value" no matter at what stage of the distribution and processing chain the seizure is made. Claiming that pure cocaine has a value equal to its retail value after it has been processed and distributed as crack is like claiming that the two or three cents worth of wheat that goes into a loaf of bread is worth the dollar consumers pay for that loaf of bread: it ignores the other inputs that must be added to turn the wheat into a marketable loaf of bread, such as transportation costs, processing costs, packaging, distribution costs, and advertising. . The role of informal networks within and across bureaucracies is very important in the Breton-Wintrobe model (1982, 78–87, 99–106). These networks are the nonmarket institutions of exchange through which individual bureaucrats cooperate in order to obtain benefits. Thus, competition for positions in networks is also an important determinant of bureaucratic behavior (Breton and Wintrobe 1982, 99), and to the extent that this expanded network is able to generate more benefits for bureaucrats, competition to enter the network should intensify. However, competition for positions within a network actually tends to increase the potential for discretionary or selective behavior in Breton and Wintrobe's model (1982, 103). . Stumpf (1988, 327–32); Williams (1984, 77–105); Benson (1990, 132–46, 163–68); Rasmussen and Benson (1994, 32–37). . Recall that North Carolina requires that all forfeited assets go to education. . "Turning Drug Busts into a Profit Center," Washington Post Weekly Edition, 19 April 1991. In a series of Orlando Sentinel articles during June 1992, Jeff Brazil and Steve Berry describe, in vivid detail, the asset seizure program in Volusia County, Florida, which netted over $8 million in four years. . Dennis Cauchon and Gary Fields demonstrated this in a series of articles on "Abusing Forfeiture Laws" in USA Today, 18 May 1992. See also Brazil and Berry's commentary in the Orlando Sentinel appearing on various dates in June 1992. . "Turning Drug Busts into a Profit Center," Washington Post Weekly Edition, 19 April 1991, 32. . When asked about the most effective way to deal with the drug problem, survey respondents generally favor treatment over incarceration. Fifty-seven percent of survey respondents in 1989 thought building more federal prisons would not reduce illegal drug use, for example, while 80 percent thought more money for drug treatment would be effective. Over 90 percent responded that more spending on drug education in schools would be effective in reducing drug use (Department of Justice 1991, table 2.95). A 1990 Gallup Poll revealed similar skepticism of the efficacy of arresting drug offenders. Only 4 percent believed the most money should be spent on arresting users, and 19 percent thought arresting sellers was the most effective use of resources. In contrast, 40 percent thought early education was the best way to combat drug use (treatment to overcome addiction was preferred by only 5 percent of respondents in this poll, however; Department of Justice 1991, table 2.96). . For example, the Tallahassee Democrat has picked up a number of stories from other newspapers and news services with themes such as those in the following sampling: (1) from Knight–Ridder's Washington Bureau: Aaron Epstein, "Tide of Opinion Turns against Harsh Sentencing for Drug Offenders," 7 May 1993, 4A; (2) from the Associated Press: Michael White, "Cases Indicate the War on Drugs May Be Overdoing It," 2 November 1992, 3A; (3) from the Chicago Tribune: Jon Margolis, "Punishment Should Fit Drug Crime," 5 July 1991, 15A; and (4) from the Miami Herald: Ronnie Greene, "Skip Town, Judge Tells Drug Suspect," 8 October 1992, 4C. Further, asset seizure policies have received significant negative coverage. It is not obvious whether the media are leading or following public opinion in this regard. . Associated Press, "Probe: Potts Granted Early Release," Tallahassee Democrat, 10 May 1994, 5B.