OPINION:
If you can’t understand why some people consider entrenched governmental power dangerous, you should read the recent New York Times piece about the federal practice of seizing the savings of Americans who haven’t been accused of breaking any law and against whom there is no evidence of any wrongdoing whatever. Not surprisingly, the agency at the center of this storm is the Internal Revenue Service.
A woman in Iowa who had run a modest Mexican restaurant for nearly 40 years had her savings of some $33,000 seized without warning. A Long Island candy and cigarette distributor had $447,000 taken from him by the government. An army sergeant from Arlington, Va., lost $66,000, money he had been saving for his daughter’s college education.
According to The New York Times, the IRS seized money from 639 people and businesses in 2012, up from 114 in 2005. The median amount taken was $34,000, according to a group called the Institute for Justice. For those who want to fight in court, legal costs can hit $20,000 or more.
As so often happens, these poor folks got caught up in a dragnet of sorts designed to catch drug traffickers, racketeers and terrorists by tracking their cash. According to the newspaper, “The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.”
This form of governmental piracy has a history, which goes like this: To track bad guys, the government passed a law called the Bank Secrecy Act, requiring financial institutions to report cash deposits greater than $10,000. However, the government also wants to make sure nobody is getting around the law by making multiple deposits below $10,000, so banks also are supposed to report suspicious transaction patterns involving those below $10,000. Last year the government received some 700,000 suspicious-activity reports.
One such report involved Carole Hinders, the Iowa restaurateur. She had been told by her mom that if she made bank deposits of less than $10,000 it saved the bank some paperwork. So she did, which generated a pattern of what the government considers suspicious behavior. Up to this point, perhaps all this governmental intrusion into the lives of ordinary citizens, just to catch a few evildoers, can be justified. It’s debatable, though.
From this point, however, there is no getting around the reality that the feds’ behavior amounted to a governmental mugging. The government reached into Ms. Hinders’ private savings, grabbed the whole amount, and dared her to challenge it. If she wanted her money back, she had to prove her own innocence as though she were presumed to be guilty of some crime for which she had not even been accused. Of course, proving her innocence would cost money — which she didn’t have because the government had taken it.
The New York Times reports that when a reporter asked the IRS to explain all this, the agency’s head of criminal investigations, Richard Weber, promptly announced that it would thenceforth curtail the practice — “focusing instead,” as The Times put it, “on cases where the money is believed to have been acquired illegally or seizure is deemed justified by exceptional circumstances.”
This raises a question: If the abuse was so obvious to Mr. Weber that he ended it when confronted by a newspaper reporter, why couldn’t he see how inappropriate it was before the inquiry was made? Or perhaps he just didn’t care until it became clear the abuse would be exposed — rather like: “Oops, got caught; better beat a tactical retreat.”
The newspaper reports that under the law, law enforcement agencies get to keep a share of whatever is forfeited. This malign incentive has led to a whirl of activity in this area, with more than a hundred multiagency task forces combing through bank reports, looking for accounts to seize.
Back in 1940, James Burnham, a leading public intellectual of his day, wrote a book called “The Managerial Revolution,” positing the thesis that the great clash of our era wasn’t between capitalism and communism, as many then believed, but between capitalism and a new managerial elite that was emerging, largely through burgeoning government, and would acquire ever greater increments of power and prerogative far into the future.
The future has arrived. It goes by the name of Richard Weber and millions of other governmental minions toiling away in the warrens of officialdom, ever looking for ways to aggrandize their power and prerogative by extending their reach into the everyday lives of mere citizens, who have little choice but to cower before this managerial class.
There will be more exposures such as the recent New York Times piece, and more tactical retreats as a result. However, the trend is clear: More and more power to government and more and more abuse as officialdom gets more and more emboldened.
Taking people’s money for no established reason is thievery. Refusing to give it back when it’s clear there is no wrongdoing involved is thuggery. The only way to address this abuse is to take power away from the federal government and give it back to the people. That’s what Ronald Reagan wanted to do in the 1980s. That’s what the Tea Party is all about. All the trends of our time, notwithstanding these efforts at pushback, are moving in the opposite direction, though, and so governmental abuse will likely increase. I just hope the next victim isn’t you.
Robert W. Merry is political editor of The National Interest. His latest book is “Where They Stand: The American Presidents in the Eyes of Voters and Historians”(Simon and Schuster, 2012).
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