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Sunday, February 17th, 2019Last Update: Thursday, January 31st, 2019 08:02:19 PM

Governor Suspends Use of ERAD Card Readers

By: Constitution Staff

Controversy erupted in June when it was learned that the Oklahoma Department of Public Safety (DPS) had purchased Electronic Recovery and Access to Data (ERAD) equipment for installation in Oklahoma Highway Patrol cruisers. The device can reveal the balance of prepaid debit cards and gift cards, and allow troopers to seize the money if they decide it is suspicious.

The deployment of the card readers reignited the debate over civil asset forfeiture in Oklahoma. State and federal laws allow law enforcement agencies to seize property and cash that is believed to be associated with illicit drug trade and take ownership of the assets through a civil-court action. Since the procedure is a "civil" action related to the asset, rather than a "criminal" action against the owner, criminal charges are usually not filed and the law enforcement agency keeps the assets unless the owner takes steps to prove the assets were not involved in illegal activity.

Oklahoma was at the forefront of the debate over civil asset forfeiture reform last year, prompted by cases of law enforcement agencies taking cash and property from innocent people. State Sen. Kyle Loveless (R-Oklahoma City) introduced legislation that would require a criminal conviction before property can be forfeited. His proposal also included transparency measures to document seizures and track how forfeited assets are used. Law enforcement groups lobbied against the legislation and it failed to be reported out of the senate committee for a vote.

The new devices would take civil asset forfeiture to a new level, allowing law enforcement to not only seize money in physical possession of the person being stopped, but taking funds from a financial institution holding the money loaded onto a prepaid card. Law enforcement officials in Oklahoma and other states say fewer people are carrying cash and the ERAD technology is a necessary tool to keep up with criminals who have begun putting money on prepaid cards to avoid having cash seized by police. But critics say there are many innocent individuals who also use the cards and are in danger of having their funds taken.

The devices consist of a standard credit/debit card terminal used by ordinary retailers, coupled with specialized software designed to capture data for tracking purposes and to allow the instant seizure of funds. The technology began as a federal government project, originally developed for the Department of Homeland Security during President Barack Obama's first term in office. It has since become available to state and local agencies from a private for-profit company now known as the ERAD Group. The Texas-based company promotes the product to law enforcement agencies:

Welcome to ERAD, a patented platform available only to Law Enforcement Agencies. This complete investigative solution provides Law Enforcement with the ability to inventory and interrogate any plastic card found during an arrest. The ERAD platform will help you document every confiscated credit, debit and prepaid card, and instantaneously provide key card issuer information that's critical to your investigation. And if some of those cards are prepaid cards, ERAD gives you the ability, right at the point of arrest, to determine the value and immediately secure or freeze those funds. With this information, and proper legal authority, Law Enforcement personnel can transfer the money associated with a prepaid card directly to a designated Law Enforcement bank account to protect the integrity of the evidence and ensure the funds are available for trial or forfeiture.

Over 100 law enforcement agencies in about 25 states have contracted for the product and associated services.

Oklahoma paid $5,000 for the devices, $1,500 for training, and the company gets a 7.7 percent processing fee for any funds seized and forfeited through use of the devices. The agency purchased 20 card readers, with 16 to be assigned to troopers. The bid solicitation documents show that DPS specifically sought capability for the devices to gain access to an individuals' bank account. However, the ERAD Group declined this function, noting that providing such access would be a violation of federal banking and financial privacy laws.

On June 17, Governor Mary Fallin directed her cabinet secretary of Safety and Security to delay the use of devices. The Oklahoma Highway Patrol has had the ERAD readers for about a month, but apparently none of the devices had yet been used to seize funds.

Secretary of Safety and Security Michael Thompson, who also serves as commissioner of the DPS, claimed that before troopers may use the readers, they must have reasonable suspicion to believe a crime has occurred. Troopers typically would not use the devices unless a motorist was stopped traveling with dozens of cards. Some groups and lawmakers have raised concerns that the devices could be misused and raised suspicions that troopers were scanning everyone's information.

"The Department of Public Safety needs to formulate a clear policy for using this new technology," said Fallin. "Taking time to develop policy for the use of these devices and to educate the public will help calm the fears of the motoring public."

Following Governor Fallin's order to delay use of their ERAD card readers, Sen. Loveless said, "On behalf of freedom-loving Oklahomans across the state, I want to thank Governor Fallin for taking this issue seriously. Suspending OHP's card scanner program is the appropriate response until we know exactly what the full capabilities of these device are." Sen. Loveless pledged to again push legislation to reform the asset forfeiture process in Oklahoma.

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