The official blog of the Libertarian Party
July 09, 2007
California Blocked From Looting
Last month, in what is one of the few court decisions to come out of California that actually supports the Constitution, a U.S. District court judge placed an injunction on a California program that seized "dormant" assets the state believed to be "abandoned." One of the victims of the program, Richard Valdes, had $25,000 worth of stocks in an escrow fund seized 15 years ago that he had set aside and simply forgotten about. He says today the stocks are estimated to be valued around $100,000.
Valdes is one of millions of people who have seen their financial accounts and safe-deposit boxes drained under the state's "unclaimed property" law, which generates about $400 million in annual revenue for Sacramento, according to the state controller's office.
And how does the state find these assets? They pay auditors to search through financial records to find abandoned accounts. These financial "bounty-hunters" are paid 6 to 12 percent of what they find. I assume the state also has a department poised to start looting after an earthquake, given this is just about the same in principle.
But it isn't just that the state steals property from citizens that makes this program a horrid attack on liberty, it's also how they go about doing it. The state eliminated a task-force that alerted owners their property was about to be seized, and also reduced the amount of time an account can sit dormant before it is fair-game for the state to acquire:
The locator unit was disbanded around 1985, and through the 1990s and the early part of this decade the Legislature steadily reduced the amount of money the controller could spend on notifying owners of unclaimed assets. In 2003, it eliminated the state's obligation to pay interest on new claims from property holders.
Californians were also given less time to claim their property before it was seized by the state. In 1977, the so-called escheat period — the amount of time an account could be inactive before being turned over to the state — was reduced from 15 to seven years. It is now three years.
The state currently has about $5.1 billion dollars from acquisitions of unclaimed assets.
Fortunately for the citizens of the People's State of California, the 9th Circuit of Appeals-normally the scourge of liberty for that area of the country-decided the program violated due process mandated by the Constitution that ensures citizens are secure in their private property.
On April 30, the U.S. 9th Circuit Court of Appeals reversed a federal district court decision, sending the case back to Shubb with instructions to grant a preliminary injunction that temporarily halted the state's sale of unclaimed property. The appeals court noted that citizens have a due-process right to be notified of the possible loss of their property.
The whole situation is entirely bizarre and corrupt. I'm assuming this started out as a relatively benign operation (although I fail to see how state-sponsored theft can be nonviolent in any situation), but over the years it was slowly adapted into a revenue generator for the state. This seems to be obvious from the state's scramble to replace the money that the program generated, which had been built into the budget years ago.
The entire article can be found here if you want to read more on what is just another example of how California is nearing a full-on encounter with socialism.
Posted by Andrew Davis at July 9, 2007 12:26 PM
Reader Comments:
It seems to me, no one should have ever allowed the process to occur in the first place, especially where real estate is not involved. Wouldn't the bank that held an account be it's guardian until withdrawn by the account holder? If the account holder never used the account, forgot about it, died, moved, etc it seems the bank was still entrusted to the money until someone with rights to it came along and collected. If anything, a state's responsibility would be to protect that property so the rightful owner DOES NOT forfeit it to any other entity unjustly. I can't believe with all the lawyers in CA this wasn't challenged sooner.
You think California's use of these so called "bounty hunter" auditors is bad, someone ought to investigate Delaware's relationship with them. It boarderlines unethical!
Borderlines unethical? BORDERLINES?!?
This doesn't borderline anything. This is, "If you don't use it, we're gonna take it. We're NOT gonna notify you taking it, we're NOT gonna allow it to become part of your estate, we're NOT gonna even attempt to justify it as being legal. We're just gonna steal your property outright and defy you to do anything."
That's armed robbery, that's what that is. If it borders anything, what it borders is pillaging the citizens of an occupied country.
I hope my governor (Jim Doyle - WI) doesn't read this. That greased pig SOB will take anything he can get his hands on. Anyhow, kudos to the 9th circuit court for actually recognizing the Constitution's existence.
Actually this is a small fraction idea of Nazi Germany. Do you think they will stop there?
I would cite Godwin's Law, but you may actually be making a valid point there 'What next'...
Why would they stop there? Know what a random sobriety checkpoint is? It's when an agent of the government can detain you for *no reason whatsoever* with a demand to see your papers.
Nazi Germany, Stalinist USSR, the modern day US.... seems like I'm gettin more and more color blind in my ability to tell between em.
Sam, I think a lot of people would call you crazy for that last statement. I happen to think you're not that far off. I have made a similar argument about the slippery slope to some Republicans and of course they think everything is just awesome right now.
I'm sure a lot of people *would* call me crazy. This even though the quite obvious facts, for anyone who cares to *look*, say that random drunk stops are a tactic straight out of Nazi Germany. This even though 'eminent domain' is a tactic straight out of the Stalinist USSR. This even though the current trend toward networking and organizing everything along quasi-military lines is straight out of Mussolini's Italy.
Given what allegedly 'sane' people in this country call "normal", I consider sanity highly overrated anyway. But if people are gonna think of me as crazy because I *use* my brain occasionally and am *not* in denial.... oh well, let em.
It only takes a light and quite cursory reading of history to notice things as obvious as the above. I guess the *real* reason I'm crazy is because *GASP* I read books and >>>>DON'T<<<< watch TV.
I guess I'm crazy because I DO watch TV. But, I read, too, and I find ways to educate myself. We are dangerous to the establishment because we think for ourselves. Shame on those of us here that continued to learn after government school graduated us.
If anyone has the time, check out a National Geographic Channel documentary about North Korea. It aired the other day, but they usually re-air most of their programs. Truly frightening at the indoctrination there. We have to fight for liberty so we don't end up like them. Thinking for themselves waved bye bye a long time ago.
I am all for checking people for being drunk and not having a liscense. It is such a huge problem in California with hit and run. You have the right to be a free citizen, but driving a 4000 lbs car is a responsibility. I think all drivers must go to driving school and car should be inspected periodically for road worthiness. Even if you do not have a liscense that doesn't mean your personal affects should be rummaged through. I live in Kern County, Ca. They run this place like a Nazi concentration camp!
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It seems to me, no one should have ever allowed the process to occur in the first place, especially where real estate is not involved. Wouldn't the bank that held an account be it's guardian until withdrawn by the account holder? If the account holder never used the account, forgot about it, died, moved, etc it seems the bank was still entrusted to the money until someone with rights to it came along and collected. If anything, a state's responsibility would be to protect that property so the rightful owner DOES NOT forfeit it to any other entity unjustly. I can't believe with all the lawyers in CA this wasn't challenged sooner.
Posted by: Nick at July 9, 2007 12:42 PM