If lawmakers want to make progress toward reforming Hawaii’s controversial asset forfeiture law this legislative session, they would need to agree on when law enforcement can perform seizures and how much taxpayers should potentially pay for storing confiscated property.

Last legislative session, Sen. Karl Rhoads sought to change the state’s law with Senate Bill 294, which would have allowed law enforcement to seize assets from a person only after a felony conviction. 

But SB 294 stalled late in the session. At issue was how much it would cost the state — and ultimately, taxpayers — to store forfeited property as a suspect worked through the judicial process.

This year, Rep. Scot Matayoshi said he plans to introduce a measure that is a “compromise” to SB 294. His bill, he said, would allow police departments to confiscate assets as soon as a formal charge is filed against a suspect. 

Rep. Mark Nakashima reiterated during a news conference following the Legislature’s opening day Wednesday that although last year’s efforts were stymied they have not yet given up.

“We continue to work with the prosecutor’s office on fine tuning the asset forfeiture law,” Nakashima said. “We are looking at trying to resolve the issues so that we can pass something this year.”

For years, Hawaii’s current asset forfeiture law has been criticized for what some believe is a policy that lacks accountability. The statute allows law enforcement agencies to confiscate cash and property from people who they believe are tied to a crime — even before they are formally charged.  

Even more concerns were raised after a 2018 state audit revealed 26% of asset forfeiture cases that were closed during the 2015 fiscal year were not actually tied to a criminal charge. 

“Under the current process, no one has to be convicted to have your property taken away and that’s the problem,” Rhoads said. “The lawyer in me says I don’t see how that’s constitutional.”

But there is more the House and Senate would need to work out, including where to direct money from the sale of confiscated property.

Hawaii’s four county police departments seized an estimated $963,055 in cash, vehicles and property in fiscal year 2020, according to a report from the state Attorney General’s Office.

Under the current law, half of the cash or proceeds from the sale of property is put into a criminal forfeiture fund managed by the AG’s Office. What’s left is divided in half between the prosecutor on the case and the police agency that took possession of the property. The money is expected to be used for law enforcement purposes.

However, Matayoshi said he’s heard of instances where seized property, mainly vehicles, isn’t sold. Instead the property is borrowed by police agencies – for example, during sting operations – and never returned to the AG’s Office.

Matayoshi’s measure, which he plans to introduce next week, would only allow police departments to borrow seized property for up to 12 months. In addition, the majority of the proceeds from a sale would go into the general fund to be used “for schools and everything else we need money for here.”

“There was that perception law enforcement was being overzealous in seizing because it was profitable,” said Matayoshi. “I wasn’t saying that it was or wasn’t happening, but that perception would go away with this bill.”

However, one group, the Institute for Justice, believes lawmakers should change direction altogether, including eliminating financial incentives for law enforcement. The nonprofit, public interest law firm described Hawaii’s forfeiture laws as “among the nation’s worst.”

“What legislatures should focus in on is the work of prosecutors,” said Institute for Justice Managing Attorney Lee McGrath. “Hawaii should change from a civil litigation process to a criminal forfeiture process so that the question of forfeiture is treated as a sentence or a fine. No Hawaiian should have their property forfeited until he is convicted in criminal court.”

The AG’s office declined to comment on asset forfeiture and instead directed a reporter to testimony from last session.

In written testimony last year, the AG’s office said that “the civil forfeiture laws are designed to deter crime, not to fund the State’s general operations.”

But critics, such as McGrath, point out the AG’s office is not transparent about how many innocent people have had their property confiscated by law enforcement.

According to the last report by the AG’s Office, two requests for a judicial review had been settled and seven petitions were filed to have property or proceeds from sales fully or partially returned to their owners.

The report, however, does not go into detail on the settlements or whether the petitions were denied or granted. McGrath said that’s a problem.

“Prosecutors and police like to keep legislators in the dark where data is available,” McGrath said. “Greater transparency would benefit legislators and the public because all would see exactly how the civil process is being misused to supplement the budgets of prosecutors and police.”