Submission

Below is my submission on the Criminal Proceeds (Recovery) Bill. It's a bit of a monster - my longest submission yet - but it represents two years of research and blogging. Hopefully it won't be a wasted effort.

1. I support a conviction-based forfeiture regime of the sort implemented by the Proceeds of Crime Act 1991. Seizing the proceeds and instruments of crime from those proved beyond a reasonable doubt to have engaged in serious criminal activity seems entirely justifiable. But I oppose the Criminal Proceeds (Recovery) Bill for the following reasons:
2. The bill deliberately breaks down the barriers between civil and criminal penalties, and constitutes an attempt to punish suspected criminals without the Crown having to face the burden of a criminal trial or prove its case beyond a reasonable doubt.
3. The regime proposed – a lower standard of evidence and a reverse onus of proof – violates the minimum standards of criminal procedure affirmed in the New Zealand Bill of Rights Act 1990 and in various international human rights instruments to which New Zealand is a party. This leads to a substantial risk of injustice, which will see innocent people lose their life savings based on nothing more than the suspicion of police that they are criminals.
4. The bill would also result in the imposition of lesser criminal penalties on the rich than the poor - a basic violation of the right to equality under the law.
5. Finally, I oppose the suggestion by some that revenue from assets seized under the bill flow directly to the police. Overseas this has led to police corruption and significant abuses of power, including torture and murder.

   Criminal punishment

6. The regime proposed by the bill is clearly aimed at punishing suspected criminals without the burden of a criminal trial or proving guilt beyond a reasonable doubt.
7. The claim that this is not a criminal punishment, but a civil one is a legal fiction. Statements from politicians make it very clear that the asset forfeiture regime is intended to punish criminals, particularly gangs. Ministry of Justice briefing papers from the policy development process refer to it explicitly as a means of “penalising criminal conduct”. And the bill itself recognises that it is a criminal penalty, by requiring judges to take forfeited assets into consideration in sentencing decisions. Such a balancing process would not be required if this was purely a civil proceeding with nothing to do with criminal law.
8. More generally, the loss of assets is a penalty, and is used as such by the criminal justice system (e.g. fines). This penalty will be applied on the basis of suspected serious criminal behaviour, and the coercive power of the state will be used to impose it. Those refusing to cooperate with the regime will face criminal sanction. Those subject to the regime will be left in no doubt about what is going on: an attempt to punish criminal behaviour.
9. This attempt to impose criminal penalties without the safeguards and evidentiary burden of criminal law is counter to the deepest values of our justice system, and violates the minimum standards of criminal procedure affirmed in s25 of the New Zealand Bill of Rights Act 1990, and of Article 14 of the International Covenant on Civil and Political Rights.
10. Penalties for criminal behaviour should only be imposed if the Crown can overcome the basic safeguards of a fair trial: innocent until proven guilty, and proof beyond a reasonable doubt. If the crown can not convict someone under these rules, then it has no business punishing them.

    Ahmed Zaoui standards of evidence

11. The proposed standards of evidence in the bill – asset restraint on “reasonable grounds to believe”, forfeiture on “the balance of probabilities”, and a reverse burden of proof – undermine basic procedural safeguards and will lead to a significant risk of injustice. These are the sorts of rules applied to Ahmed Zaoui, and have no place in the justice system of a civilised country which supposedly respects human rights.
12. As noted above, the use of a civil standard of proof (the “balance of probabilities”) is entirely unsuitable to a criminal punishment. For the state to punish for criminal behaviour, it should be required to prove its case beyond a reasonable doubt.
13. The requirement for those whose assets are subject to a restraining order to prove they were lawfully acquired essentially amounts to a demand that they prove themselves innocent of any crime – a violation of the fundamental principle that people are innocent until proven guilty affirmed in s25 (c) of the New Zealand Bill of Rights Act 1990.
14. The ability to restrain assets on nothing more than “reasonable grounds to believe” that they are the proceeds of crime, combined with the automatic forfeiture of assets if restraint is not challenged raises the spectre of those who can not afford it (e.g. being ineligible for legal aid while also too poor to afford a lawyer – a not uncommon situation) losing substantial sums of money based on nothing more than the suspicions of police.
15. Procedural safeguards and criminal standards of evidence are no doubt inconvenient to the Crown, but they serve a vital purpose: preventing miscarriages of justice. Undermining those safeguards and weakening those standards will significantly increase the risk of injustices occurring. This fact is explicitly recognised by the Ministry of Justice in its policy development documents:

    If a civil standard is applied (whether under the “more likely than not” test or the Briginshaw test), this inevitably allows for the possibility that a substantial number of mistakes will be made; those mistakes are neither identified nor publicised precisely because the application of a lower standard justifies the decision.

    (Ministry of Justice, briefing paper on “Proceeds of Crime”, 16 April 2004, p. 4).

16. This higher risk of injustice will see innocent people at some stage lose their homes and livelihoods, and possibly even their lives – people commit suicide over less. We have already had a disturbing number of innocent people convicted of crimes in New Zealand due to police fixating on them and building a case around the suspect rather than the evidence (Arthur Allen Thomas and David Dougherty spring to mind). Lower standards of evidence and a reversed burden of proof will make it even easier.
17. The ability to pursue seizure proceedings independently of or in parallel with criminal proceedings violates the s26 (2) BORA bar on double jeopardy. As argued above, this is a criminal punishment; double jeopardy should apply. As it stands, the crown could even begin seizure proceedings against someone acquitted of a crime after their trial – making a mockery of the entire criminal process.

    Unequal sentences

18. If the arguments of the government that asset seizure is not a criminal punishment are accepted, then the changes to the Sentencing Act 2002 requiring sentencing judges to take asset forfeitures into account will see richer criminals effectively buying their way out of jail by surrendering assets.
19. This fear is borne out by the US experience. In Reefer Madness, Eric Schlosser reports that in some cases, a defendant's willingness to hand over assets is more important in determining their sentence than their degree of actual guilt; in one case, “a major cocaine dealer with a fleet of Learjets” served less than four years in jail - despite being caught with twenty tons of cocaine (p. 61).
20. This dependence of sentencing upon wealth violates the basic principle of equality under the law affirmed in Article 14 (1) of the International Covenant on Civil and Political Rights.

    Revenue should not go to the police

21. Finally, it has been suggested that the bill be amended to allow seized assets or the resulting revenue from their sale to flow directly to the police. I oppose such an amendment.
22. Such an amendment would create a dangerous incentive for police to pursue cases aimed primarily at asset seizures rather than criminal convictions in order to meet budgetary targets. It could also lead to police corruption.
23. Again, this has been the US experience. Two examples from Schlosser’s Reefer Madness (p. 62).

    In California, thirty-one state and federal agents raided Donald P. Scott's 200-acre ranch on the pretext that marijuana was growing there. Scott was inadvertently killed by a deputy sheriff. No evidence of marijuana cultivation was discovered, and a subsequent investigation by the Ventura County's District Attorney's Office found that the drug agents had been motivated partly by a desire to seize the $5 million ranch. They had obtained an appraisal of the property weeks before the raid.

    In New Jersey, Nicholas L. Bissell, Jr., a local prosecutor known as the Forfeiture King, helped an associate buy land seized in a marijuana case for a small fraction of its market value.

24. The potential for this sort of corrupt behaviour and seizure-driven case should rule out any return to the police of revenue.
25. If such a return of revenue is considered desirable, it is vitally important that individual police officers not be able to benefit from seizures, either directly or through the payment of performance bonuses. This would create direct financial incentives to frame people, or for criminal behaviour. Again, this is borne out by the US experience. In 2004 in Tennessee, Lester Eugene Siler was tortured by a group of police officers in an effort to get him to sign a consent-to-search form which would in turn have allowed them to seize his assets. He was beaten, waterboarded, and suffered electric shocks to his genitals (William Norman Grigg "Because They Can: The Logic of the Torture State"; see also Siler's Wikipedia entry). Clearly, the ability to directly benefit had created incentives for the officers involved. We should avoid creating such incentives for the New Zealand police.
26. For these reasons, I ask that the Select Committee recommend that the bill not proceed.
27. I do not wish to make an oral submission to the Select Committee