REGIONAL REPORT : Seized Assets Underwrite the War on Drugs : Crime: The millions of dollars are buying new equipment and increased manpower for law enforcement. However, the bounty is accompanied by problems, mostly political.

By RONALD L. SOBLE

April 16, 1991 12 AM PT

TIMES STAFF WRITER

A motor home complete with sleeping quarters and a microwave oven has been pressed into service by the Santa Monica Police Department as a mobile command post.

A new intelligence center constructed under the El Segundo City Hall is coordinating the war on drugs in Los Angeles County’s coastal cities.

A sprawling Orange County ranch once used to process marijuana could be converted into a regional training center for narcotics officers, while two helicopters are on the Riverside County sheriff’s shopping list.

None of this is being financed by taxpayer dollars. It is being underwritten by narcotics traffickers snagged in the war on drugs.

Crime pays--for the cops, too. Since the mid-1980s, federal and state asset forfeiture laws have generated millions of dollars in seized drug cash--plus booty used by traffickers such as cars, planes and boats--which has been turned over to local law enforcement agencies.

Nowhere is this more apparent than in Southern California, which in the last few years has eclipsed southern Florida as the nation’s leading distribution center for cocaine.

In fiscal 1990, which ended last Sept. 30, the federal government returned more than $56 million in seized drug cash and property to law enforcement agencies in Southern California.

Separately, $49 million in cash and property was returned in 1989-90 to police, sheriff’s agencies and district attorney offices through a similar California program.

Reaping such bounties from the drug war is not without its problems, mostly political.

In Los Angeles, a tug of war exists between the Police Department and City Council over how to spend millions of dollars in seized drug money. The City Council wants the cash to put more officers on the street, while the Police Department says it needs the money for its narcotics unit to escalate its all-out war on drug dealers.

In San Diego, a political battle over the cash windfall became so intense that the former sheriff defied county supervisors, opening a separate drug assets account so he could spend the money as he saw fit.

In Orange County, one of the biggest drug-related forfeiture cases occurred after the 1987 raid of Daniel James Fowlie’s marijuana smuggling operation. Fowlie’s 213-acre spread, Rancho del Rio, located in a remote corner of southeast Orange County, was seized and returned by the federal government to the county.

Orange County Sheriff Brad Gates has coveted the ranch as a regional narcotics enforcement training center. County supervisors did not see it that way, and recently decided to put it up for sale. Gates hopes that private supporters will find the cash to keep his plan alive. “We’re not through, yet,” he said.

Aside from political bickering, there is another problem with the asset forfeiture program, according to the Glendale Police Department’s Lt. Michael Post, who heads that agency’s narcotics unit.

The sheer size of some of the forfeitures, he said, has captured the attention of many lawmakers to the point where they expect the revenue stream to continue indefinitely.

Post said he has seen evidence of other police departments “under pressure to be revenue producers” to the point where they use shortcuts to seize drug cash but do not follow up on their investigations in an effort to arrest the dealers.

“That’s not what we’re on God’s Earth to do,” he said. “We’re supposed to be sure that the end user on the street doesn’t have any product to buy.”

At the federal level, agencies such as the Drug Enforcement Administration and U.S. Customs determine how much seized cash and property should be returned to local law enforcement based on their participation in federal drug investigations.

The same principle applies to a California program under which county prosecutors decide how much seized cash or property local law agencies receive, also based on their participation in drug busts.

Because some of the nation’s largest drug seizures have occurred in Southern California in the last few years, local police agencies have received heavy cash infusions. In February, customs officials handed out $16.5 million to two dozen Southern California law enforcement agencies for their participation in a number of drug cases.

The West Covina Police Department received almost $3 million, its share of eight federal-local task force seizures in the West Covina and Pasadena areas.

The Los Angeles County Sheriff’s Department received a similar amount for participation in drug and money laundering cases in Los Angeles and Orange counties.

The smallest amount, $30,000, was handed over to the Santa Monica Police Department for helping to seize drug cash at Los Angeles International Airport.

The record drug bust in Sylmar in September, 1989--the result of a joint investigation conducted by the DEA and a number of local police agencies--uncovered about $12 million in cash, in addition to more than 21 tons of cocaine. The $12 million has been distributed to several Los Angeles-area police agencies.

What is believed to be the biggest cash seizure in Southern California has yet to be distributed by Washington: more than $100 million in assets confiscated in 1989 in a money laundering operation centered in the downtown Los Angeles jewelry district.

Aside from cash, a potpourri of items, such as sports cars, houses and boats, also have been returned to local police.

In one instance, Glendale police last year seized a 1986 black Ferrari 328 GTS worth more than $60,000, and put it on the auction block. Instead of asking for cash bids, the agency wanted vehicles they could use for surveillance.

“We got five new mid-sized vehicles for it,” said Post. In addition, he said, before the Ferrari was auctioned, “we put a patrol light bar on top of it and used it as a prop at (police) recruiting fairs.”

More often than not, police will forgo keeping the flashy cars once driven by drug dealers and auction them off for their cash value.

California Deputy Atty. Gen. Gary W. Schons, who is in charge of the state’s drug assets forfeiture program, said the reason for that is that high-profile autos stand out like sore thumbs in undercover work. “It’s not like ‘Miami Vice,’ ” he said.

Officials from several small police agencies say asset sharing has been a boon allowing them to purchase sophisticated equipment that normally would be rejected out of hand because of local budget constraints.

Capt. Jim Lewis of the Rialto Police Department in San Bernardino County said his agency has used drug cash to purchase exotic items such as night-vision binoculars. “Let’s face it,” he said, “this type of equipment never flies in the city’s budget. It’s kind of nice because you need sophisticated equipment you wouldn’t get otherwise.”

But high-tech is not high on everyone’s list. “We don’t go after a lot of gadgets,” said Cmdr. John Distelrath, who is in charge of investigations for the West Covina Police Department. Instead, he said, much of his agency’s emphasis is on attacking the drug problem at its roots in West Covina’s elementary and high schools.

“It’s our feeling that’s what the asset sharing program is for,” he said.

Local law enforcement officials interviewed by The Times had high praise for the asset forfeiture program in helping to underwrite the war on drugs.

“The beauty of the program is that assets can be removed from narcotics traffickers and returned to the local law enforcement level,” said San Diego County Sheriff’s Capt. Joseph G. Cellucci, who manages his agency’s forfeiture program.

“The program has certainly given us some money we wouldn’t have had otherwise,” said Paul E. Myron, chief of the detective division of the Los Angeles County Sheriff’s Department and manager of the agency’s forfeiture program.

About $41 million returned to the Los Angeles County sheriff in the last six years has paid for two dozen more narcotics detectives, drug education programs for students and first-time drug offenders, underwritten the purchase of computers, and even provided a seized boat, which the department uses to patrol Pyramid Lake, Myron said.

Smaller agencies, such as the Riverside County Sheriff’s Department, saved the cash turned over to them by the federal government. As a result, said Lt. T. J. Smith, the county saved $1.7 million to purchase two helicopters to help patrol the 7,000-square-mile county.

Since Congress authorized the return of drug assets to local law enforcement agencies in 1984, the program has come under fire from more than one federal agency.

In a report issued last June, the U.S. General Accounting Office, Congress’ investigative arm, criticized both U.S. Customs and the Justice Department for inadequate management of the program.

“The bottom line is that neither agency has a good way of measuring the effectiveness or efficiency of its operations,” the GAO concluded.

Three months later, the Justice Department’s inspector general also complained about the program’s management. Cited were the DEA and the FBI for not processing forfeited cash and property in a timely manner.

The DEA and FBI explained that many of the problems resulted from personnel shortages, but that that has been corrected and backlogs are minimal.

Once the money reaches the local police, it often can become a political football with law enforcement and politicians squabbling over how to spend it.

On paper, the Los Angeles Police Department, operating in a city awash with cocaine traffickers, should be hip deep in cash generated by drug busts. But the department has been generally unable to purchase state-of-the-art equipment and greatly expand its force of narcotics officers.

Much of the problem, said Cmdr. L. C. Kramer, head of the narcotics group, has to do with the City Council.

Between 1984 and 1990, the Police Department received approximately $41 million from its participation in federal and state drug investigations. Yet, only about $8 million has been returned directly to Kramer’s unit. The balance--approximately $33 million--was used by the council to hire more officers, a legal expenditure since the cash can be used for any legitimate law enforcement purpose.

“It’s terribly frustrating,” Kramer said in an interview. “We have a dire need for equipment to keep pace with the crooks.”

A spokesman for Councilman Zev Yaroslavsky, chairman of the council’s Budget and Finance Committee, said lawmakers believe that it is more important to expand the police force than to pour the cash into specific channels of narcotics enforcement. “While I sympathize with Kramer, I don’t think he’s being very realistic about the available money,” said KatharineMacdonald.

The San Diego County Sheriff’s Department produced a similar controversy between county supervisors and recently retired Sheriff John Duffy. Since 1984, the agency has received almost $5 million through the federal program.

Last year, Duffy caused a major controversy by failing to deposit more than $300,000 seized in drug raids into the county treasury, as required by local law. Instead, he set up a separate account after a decision by supervisors prohibiting him from spending the money without their approval. Duffy, who was sheriff for 20 years, maintained that he had the right to determine how the money should be spent for law enforcement.

Duffy would never talk much about the controversy before he retired earlier this year. “He’s been making mystifying decisions for 20 years,” reflected one of his assistants.

With millions of dollars still flowing into local law enforcement coffers, is the end of the war on drugs in sight?

Myron, of the Los Angeles County Sheriff’s Department, believes that using illicit drug cash to underwrite narcotics education programs is a big step toward snuffing out the ubiquitous dealers. But years of hard work remain, he said.

“It will take a generation to take effect,” he said.

SEIZED ASSETS

Funds returned to local police agencies based on participation with federal government in successful investigations of illicit narcotics operations. Figures for Treasury also include property:

U.S JUSTICE DEPARTMENT (includes Drug Enforcement Administration and FBI)

Nationally

‘86: $17.1 million

‘87: $47.3 million

‘88: $77.2 million

‘89: $155.9 million

‘90: $176.8 million

Central district of California*

‘86: $5.6 million

‘87: $12.8 million

‘88: $25.7 million

‘89: $31.9 million