GOP senator wants to change the rules the government has to follow when it seizes your assets

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) said Monday that he's writing a bill to reform U.S. asset forfeiture laws, and hopes to prevent agencies from using seized money as a way to fund their own operations.

Grassley said asset forfeiture is a helpful tool to help law enforcement agencies fight crime. But he admitted that the tool can be misused, and has been in several high-profile cases, including one case in Iowa in which a restaurant owner had nearly $33,000 in cash seized by the IRS for a year and a half.

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) said Monday that he's working up a bill to change federal asset forfeiture laws. Image: AP

"Investigations by journalists and civil liberties advocates have exposed perverse incentives that have nudged enforcement of these laws way off kilter with basic fairness," Grassley said in a speech at the National Press Club.

Grassley indicated that the bill he's working on would prevent agencies from using the assets they seize, which he indicated can be an incentive for agencies to seize more and more assets.

"I'm working to draft bipartisan reforms to fix the flaws," he said in a speech at the National Press Club. "For starters, the direct quid pro quo between asset forfeiture and funding should be eliminated. A law enforcement agency's operations shouldn't be funded based upon the assets they seize."

Other changes he wants to make include putting in place a better system for appealing decisions to seize assets. He said that would include "prompt timelines" for government action and the ability to challenge these seizures "promptly before a judge."

In some cases, he said, people need access to their assets in order to hire a lawyer to fight for their right to those assets. He said his proposed bill would somehow reverse a Supreme Court decision that lets agencies block access to that money.

In Iowa, restaurant owner Carole Hinders had nearly $33,000 seized in 2012 by the IRS, which seemed to suspect her of a crime because she was depositing less than $10,000 at a time into her bank. That pattern can sometimes be a tip-off that the depositor is involved in criminal activity, since the bank doesn't have to report deposit of less than $10,000.

But Hinders was never accused of any crime, and it took her about a year and a half to finally get her money back, an event that finally happened late last year.