The problem with the money going back to law enforcement agencies is of course that it creates a perverse incentive to “find” connections between money or property and illegal activity, even where none exists. A 2010 investigation by the Indianapolis Star found sheriffs and police chiefs essentially operating slush funds with forfeiture proceeds.
But this is a problem in many states. In Indiana, not only is the money not getting to the schools fund, in many counties prosecutors have contracted forfeiture cases out to private attorneys and law firms, who then get a cut of what they win in court. (I know this is also done in Kansas, and possibly in other states.) Back in 2008, one attorney who specializes in these forfeiture contracts made more than $113,000 on a single case. That’s more than all 92 Indiana counties contributed to the state’s schools fund from 2008 through 2009.
It gets better. For 10 years, one Indiana prosecutor simultaneously prosecuted criminal drug cases while referring the civil forfeitures in those cases to his own private law firm, from which he’d then get a portion of the proceeds. The Indiana Supreme Court eventually found that he had a conflict of interest and suspended his law license for 120 days. But sources in Kansas have told me that prosecutors in some rural counties still “refer” cases to their private law practices, then take a cut of what they win in court.