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This month, Attorney General Eric Holder issued a memo establishing a new policy aimed at civil asset forfeiture reform.

The new policy, effective immediately, prohibits federal agencies from accepting or "adopting" property seized by state and local law enforcement unless the owner is convicted of a crime.

The practice of seizing a persons property without evidence of a crime has been around since the height of the drug war, when Congress turned the federal civil asset forfeiture law into a weapon against the illicit drug trade.

The program was meant to take a guy out for selling $1 million in cocaine or who was trying to launder large amounts of money, said Mark Overton, a police chief who once oversaw a federal drug task force in South Florida. It was never meant for a street cop to take a few thousand dollars from a driver by the side of the road.

But under the federal governments Equitable Sharing Program, state and local law enforcement have a strong incentive to seize property, whether or not there is proof of wrongdoing. Under the program, which was established in the 1980s, the proceeds of liquidated seized assets are shared between state and federal law enforcement. State and local authorities are allowed to keep up to 80% of the proceeds of adopted seizures, with the rest going to federal agencies.

The programs clear conflict of interest has come under intense scrutiny. A 2014 report by the Washington Post revealed that "hundreds of state and local departments and drug task forces appear to rely on seized cash." The Post found that local and state police routinely pulled over drivers for minor traffic infractions, pressed them to agree to warrantless searches and seized large amount of cash without evidence of wrongdoing.

As a result, the Justice Departments federal forfeitures fund increased from $27 million in 1985 to $556 million in 1993. By 2007, it had reached $2.6 billion.

When police make a seizure, they can bring it to a federal agency, which can approve or adopt it under the Equitable Sharing Program. State and local law enforcement can continue to seize assets under their own state laws, even after Holder's announcement of the new policy, but Equitable Sharing is the preferred, easier, and more profitable route.

Holders announcement is a step toward civil asset forfeiture reform, but it does not mean an end to the abuse of the practice, says ReasonSenior Editor Jacob Sullum, citing the DOJ memo which states, The new policy applies only to adoptions, not to seizures resulting from joint operations involving both federal and state authorities, or to seizures pursuant to warrants issued by federal courts.

In other words, state and local law enforcement can still partner with federal agents through joint task forces for forfeitures not permitted under state law.

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Eric Holder Takes Step Toward Disincentivizing Drug War ...