Speech on the Criminal Proceeds (Recovery) Bill
20 March 2007

And now for something completely different. As Simon Power said, this bill has been a long time coming. But unlike him, and it seems unlike most other members of the House, I do not celebrate its introduction. I had hopes that the Government, once Minister Goff had been moved aside, would have finally come to its senses on this draconian and outrageous legislation. but, no—it is the same shameful sham laid on the Table today as had been discussed in Government policy.

According to the “General policy statement” of the explanatory note, “This Bill seeks to make more effective provision for the confiscation of property that either represents the profits of criminal offending or was used to facilitate the commission of crime.” The statement notes that “The existing Proceeds of Crime Act 1991 provides for confiscation …” but that “The total amount confiscated under that Act has been relatively small.” It makes the point that “Other jurisdictions … have introduced legislation that enables criminal proceeds to be targeted without a conviction necessarily being obtained. These regimes are proving considerably more effective than previous laws in terms of the value of criminal proceeds confiscated.” That is interesting. It reminds me of the conversation I had at the Home Office in Britain, when discussing its criminal proceeds legislation on which this is so clearly based. Officials were boasting to me about how successful their regime was - it was wonderful; they had collected all this money. So I asked them what evidence they had that the legislation had impacted upon offending, at all. “Oh,”, they said, “we haven’t looked at that.” But they said it was successful as a piece of legislation because they had got millions and millions of pounds. If that is how we judge the success of criminal justice legislation in this House, then I think we really are barking up the wrong tree.

What does this bill do? It repeals the Proceeds of Crime Act and replaces it with a 'convictions-based forfeiture regime limited to instruments of crime … and a non-conviction-based confiscation regime to deal with all other property representing the proceeds of crime or assessed to be the value of a person’s unlawfully derived income'. The non-conviction-based regime … 'will operate completely independently of any criminal proceedings …', says the General Policy Statement. 'Consequently, the same person may be the subject of criminal prosecution (including potential forfeiture of instruments of crime) and confiscation action under the civil process.'

Well, that sounds a bit like double jeopardy to me. A person is being stung twice for the same offence under totally different regimes. But even worse than that is the fact that that person does not necessarily have to be the subject of both regimes, because he or she does not even have to be prosecuted. A person does not even have to be charged with a criminal offence for this stuff to apply. If people are charged and acquitted - that is, there is no conviction - it still applies. People can be acquitted of a crime and this stuff will still apply to them - they will have proceeds confiscated from them. Even worse, they can be convicted and have their convictions quashed on appeal, and this provision will still apply.

I remind members of the House that on appeal one is not starting de novo - to overturn a conviction on appeal there is a very high threshold to pass. But even if someone manages to quash his or her conviction on appeal, this forfeiture regime will still apply.

What does it do? OK, in a general sense, the explanatory note says that “Civil action will be able to target property that has been acquired as a result of unlawful activity, even though it may not be possible to prove beyond reasonable doubt that the owner has committed a specific criminal offence.” It enables two types of confiscation orders: “one for the forfeiture of property to a specified value that represents the profits of significant criminal activity; the other for forfeiture of a specific asset or assets derived directly or indirectly from … criminal activity. There is also provision for a restraining order to be made to preserve property while the Crown is gathering evidence …”.

I would like to touch on these things in a little bit more detail - first of all, on this restraining order. The basis for making a restraining order is that the authorities have reasonable grounds to believe that the specific property is tainted property, and they will freeze it, or that the person against whom the order is made has unlawfully benefited from significant criminal activity, which raises the question in my mind of whether we will target casinos. I think their proceeds are probably “lawful” proceeds of crime. Casinos are well-known to have the No. 1 money-laundering operation in this country. I received some information from the Problem Gambling Foundation, which claimed that about 45 percent of pathological gamblers had committed crimes solely for the purpose of financing their gambling. Of those, 28.3 percent had been convicted of a crime at least once, and 44.4 percent of youth with pathological gambling problems had admitted borrowing or stealing money to cover gambling debts. The most common offences were obtaining finance or credit by deception and cheque fraud, and the most common ways of disposing of proceeds were gambling and using proceeds for living expenses. The mean amount of actual loss was $218,000. So will we be seizing the assets of casinos? Well, I suspect not. Again, it reminds me of my discussions at the Home Office. What they were doing there was quite deliberately targeting people on housing estates, because they told me that it was important to send a symbolic message to criminals that crime does not pay - but to only the low-level ones. They were not going to touch the big fellows in their big country estates driving Jaguars. No, no - they would not touch them, because it was not important socially to send a message that big crime did not pay.

What we are doing with this bill is sending a signal that middling crime does not pay; if people want to have their crime pay, then they have to be one of the big boys. “In the case of a restraining order relating to an instrument of crime … the respondent must have been charged with a qualifying forfeiture offence … with which the instrument of crime is associated, or there must be reasonable grounds to believe that the person is about to be charged …”. Well, OK! “A court may make a restraining order subject to any conditions the court thinks fit ... . The court may allow … the following to be met out of the respondent’s restrained property …: reasonable living costs …: reasonable business expense …: the payment of any specified debt …:” and “any other expenses allowed by the court.” - but members should get this - “… the court may not allow legal expenses to be paid out of the restrained property ...”.

So if my assets have just been frozen—they are being restrained, and I cannot do anything with them, I cannot dispose of them - I am supposed to fund a major criminal defence. It is not even a criminal defence, I am supposed to fund a defence to this piece of trash. How am I supposed to do that if all of my assets have been frozen? The bill specifically states that the court must not allow legal expenses to be taken out. It is absolutely outrageous and I defy anyone in the Government to explain to me how that will allow for any kind of fair trial. I have not heard anyone talk about that yet. All we have heard is how wonderful it is that we are targeting criminals. We have not heard any argument about how the serious New Zealand Bill of Rights Act breaches will be rectified in this bill.

Damn, I am running out of time and I am just getting started! The bill refers to assets forfeiture orders confiscating specific property, that is, tainted property. Tainted property is defined as: “… any property that has, wholly, or in part, been— (i) acquired as a result of significant criminal activity;”. “Significant criminal activity” is one where there is a maximum term of imprisonment of 5 years or there is a purported value of property, proceeds , or benefits of over $30,000. A maximum of term of imprisonment of 5 years is given for crimes such as possessing forged bank notes, and a feigned marriage - that is a good one. A feigned marriage carries a maximum of 7 years. If, as a result of that feigned marriage, I paid one mortgage payment on my house that I had been buying for the last 30 years, suddenly it has partly been acquired as a result of criminal activity and the whole house is now forfeit on the basis of a feigned marriage. Is that really what we are trying to get here?

The other kind is a profit forfeiture order that deprives the respondent who has benefited from significant criminal activity of interest in a property that represents the value of that benefit and that goes back over a period of 7 years. Now $30,000 over 7 years is $82.52 per week. If I have been doing something—or have not been doing it but there is a reasonable belief that I have been doing it, that has given me $82.52 a week for the last 7 years, I can have my assets frozen and potentially taken on the basis of that order.

As I said, I am only just getting started and my time is up. There is a whole lot more in this legislation that is absolutely outrageous and I thoroughly recommend this House to bin this trash right now.