Government on all levels is finding frightening new uses for the power of eminent domain, which is the legal right of governments to seize property for public purposes.
In recent years, many governments have changed their definition of eminent domain in order to seize property for almost any reason. That includes economic development and other schemes to seize private property and turn it over to politically connected businessmen or investors.
The US Supreme Court upheld the eminent domain authority of governments in an infamous 2005 case criticized by civil libertarians.
The most bothersome expansion of eminent domain power is occurring in Richmond, California, where the city government wants to seize foreclosed homes. The foreclosed property would be turned over to a group of investors called Mortgage Resolution Partners.
The firm is a mortgage real estate investment trust, or a group of investors organized by a hedge fund. Mortgage Resolution Partners wants to get its hands on the properties so it can sell them and make money.
Critics claim that the group is really trying to seize valuable mortgage-backed securities. Attorney John Ertman told The Los Angeles Times he thinks that the Partners group will end up costing retirement funds and other investors a lot of money. Ertman and his firm were hired by the mortgage holders to sue the city and the Partners in an attempt to stop the eminent domain scheme. Ertman accused the partners of stealing the retirement savings of average citizens.
“MRP is renting local government power to take money out of the pockets of savers and retirees across the U.S. and line their own pockets,” John Ertman said.
Richmond may be the first city to try and go ahead with such an eminent domain scheme. Mortgage Resolution Partners organized a similar plan in San Bernardino County, California last year. That plan failed after major Wall Street investors expressed strong opposition.
Federal Government Seizes Border Property
Another kind of eminent domain abuse is going on in Arizona, where the federal government is seizing properties and paying the owners at a fraction of their value. The properties are supposed to be used to build the so-called border fence to stop illegal immigration.
Property owner Tony Sedgewick told a TV station that the Department of Homeland Security was planning to seize a large portion of a ranch his family has owned since the 1950s. The department wants to put a surveillance tower on the land to watch what goes on along the border.
An unidentified property owner said the federal government was going to pay her $6,000 in compensation for two lots. She estimated the value of the seized lots at $10,000 apiece — $20,000 total.
Tony Sedgewick said he could sue but it would cost him $60,000 in legal fees, with no guarantee of a victory.
“What is not fair is that we don’t have a voice in all this,” Sedgwick said. “It’s very difficult to go against the U.S. government.”
Intimidation by Federal Law Enforcement Alleged
Many property owners in the area were afraid to go on camera to criticize the plan, apparently afraid of the Border Patrol that operates in the area. Not only are militarized federal police patrolling the area, but they are apparently intimidating citizens. This, of course, is being done in the name of national security and securing the border.
“If your neighbor had lights shining on your property, you would call police,” Tony Sedgwick said. “Who do I call? They are the police.”
It is becoming easier than ever for big government and big business to seize your property and harder for average citizens to protect it.