In my feature on asset forfeiture for our February issue, I looked specifically at how civil forfeiture was being abused in the state of Indiana. Indiana's constitution requires that any forfeiture proceeds go to the state's public schools fund, though prosecutors can reimburse their own offices and police departments for the cost of conducting investigations. The schools fund requirement helps offset the perverse incentives when police departments and prosecutor offices directly benefit from the property they seize.

But Indiana law enforcement officials have gotten around the requirement by greatly overestimating the cost of investigations, or by settling with property owners out of court (meaning the property wasn't officially "seized"). Worse, many Indiana counties have actually made the incentive problem worse by contracting forfeiture cases to private attorneys, who then get a cut of what they win in court. Delaware County Prosecutor Mark McKinney was actually prosecuting criminal drug cases while also representing the county as a private attorney in civil forfeiture cases, where he'd get a cut of what he won. The Indiana Supreme Court will soon determine McKinney's punishment, though the county judge who oversaw the ensuing the investigation has recommended only a reprimand.

Over the last several months, the Indianapolis Star has been investigating the state's forfeiture abuses. The paper published its second installment over the weekend. A few highlights:

Indianapolis law enforcement officials have a broader—and more lucrative—interpretation of law enforcement costs. They argue that the phrase simply means the cost of enforcing the law in Marion County, and thereby justify holding on to every dollar of the nearly $1.6 million the county received from state forfeiture cases in 2009. "We don't break it down on a case-by-case basis," said Lawrence Brodeur, chief of Marion County's strategic narcotics prosecution division. "That doesn't make any sense. You could have one case where the officer makes a simple traffic stop, and there could be a quarter-million in cash that we seize. There could be months and months and months on another case, and we catch the guy with a lot of dope but not a lot of cash. Law enforcement, as you know, is more than one case at a time." Assets forfeited in Marion County flow into a designated law enforcement fund that benefits the Indianapolis Metropolitan Police Department and the Marion County prosecutor's office. But even Brodeur's definition of law enforcement costs is not as broad as the one endorsed by Putnam County Prosecutor Tim Bookwalter. In 2008, he made a $28,000 donation to fund spay/neuter services at the local Humane Society with forfeiture money. His argument: Stray dogs are a law enforcement problem.

Bookwalter and Putnam County were part of my story in February. Christopher Gambill, the private attorney who handles forfeiture cases for Putnam County, once made a $113,145.67 commission off a single case. That's more than all 92 Indiana counties have paid into the schools fund over the last two years combined.

More from the Star:

In Knox County, after council members started trying to keep a closer watch on Sheriff Stephen Luce's spending, Luce simply circumvented them. "The sheriff at that time felt like it was his money and his slush fund," County Council President Tim Ellerman said. "He was wanting to buy sniper rifles. Down here we don't really need sniper rifles with lasers because very seldom do we have hostage situations. Once we started scrutinizing, then all of the sudden the money stopped coming in." But not really. A 2007 audit revealed that police had not stopped seizing forfeiture funds. Nor had Luce stopped spending them. He had simply begun funneling the money straight from law enforcement coffers into his creditors' pockets, without ever depositing the money with the county or asking the permission of County Council members. For example, the 2007 audit found that after a public sale of seized assets, the attorney handling forfeitures for the prosecutor's office had written an $8,000 check—not to the county, but to Vincennes Ford, to pay for a vehicle. Kurt Webber, an attorney the council hired to sort out the mess, found that Luce had been buying police vehicles on credit, without council authorization, since 2003 and using forfeiture funds to pay them off.

Luce left the department during the investigation. He's now head of the Indiana Sheriff's Association.

The entire Star report is worth reading. Particularly interesting are the broad definitions of what constitutes a settlement, for purposes of allowing forfeited property to go back to the department instead of the schools fund. Until 2008, for example, police officers in Putnam County could negotiate a "settlement" on the side of the road, giving motorists the option of either facing an arrest and drug charges, or simply forfeiting all of their cash, at which point they'd be sent on their way. Gambill helpfully explains how this policy was effective at separating drug mules from their ill-gotten cash. Of course, it would also be effective at getting cash out of anyone who'd rather fork over some money than face the prospect of arrest, detainment, and felony charges.

Putnam County says it no longer allows such shakedowns settlements, but the Star notes that there's nothing in Indiana law preventing it from being used there or in other counties.