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Finders keepers?

California should put the lid back on a dubious pot of gold: assets that the state claims have been abandoned.

July 10, 2007

IT IS HARD TO IMAGINE a more naked misuse of governmental power than California's sustained grab of assets it conveniently labels unclaimed property. For years, the state has been hunting for bank accounts, safe deposit boxes and other assets that it believes have been forgotten, then scooping up the proceeds and using them to balance its budget. Are those assets genuinely unclaimed? The truth is that the government does hardly anything to find out. In fact, it does just the opposite. It hires accountants and auditors who sift bank and real estate records looking for pots of gold and then take a commission on what the government seizes.

Back in the 1980s, the government took over property only after it had made considerable efforts to track down the owners. It pored through public records and placed newspaper ads listing names and the accounts it believed to be abandoned. But that had the unwelcome effect of working, so every time the government found an owner, it denied itself the chance to steal the property. The solution? Stop looking so hard.

The budget for the so-called locator unit was cut, and the government stopped running detailed public notices. The money then flowed more readily, and to date, California has seized well over $1 billion. It's pretty clear that the government did not exactly break a sweat in searching for some of the owners. A quick trip through the state controller's website Monday showed assets unclaimed by Antonio Villaraigosa, Willie Mays, Angelina Jolie and Brad Pitt -- to name a handful of California's more recognizable figures. These people can't be difficult to track down. Mays is being honored at baseball's All-Star Game in San Francisco tonight; perhaps the state could have him paged.

A lawsuit in federal court has halted the government's property seizures and will prevent it from resuming until California can demonstrate that it has put into place better notification rules. A bill by state Sen. Michael Machado (D-Linden) would do just that by requiring the controller to establish an outreach program and implementing procedures for locating and notifying owners. Machado's bill deserves to pass, but the government should not wait on the Legislature. It should act immediately to end a practice that has fattened the state treasury at the expense of due process.

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