Bust You For It Now, Tax You For It Tomorrow

Vale, Oregon

“I’m going to be burning weeds today – the right kind, that is,” Bill Esbensen wryly informed me as we met at his abandoned rental property. He was careful to obtain the required permit before igniting the assembled yard debris. Since he will be on probation until June 2016, Bill could wind up in prison for even the most trivial ordinance violation, the people running what passes for the “justice” system in Oregon’s Malheur County have an incontinent lust to send him there.

A few weeks earlier, in a courthouse a few blocks away from the rental home in Vale, the Malheur County DA’s office briefly considered confiscating the property before deciding that it wasn’t worth the effort. The two-story house had been remodeled to contain a greenhouse and a “grow room” for the production of marijuana.

The college-age renters who abandoned the house while Bill was in jail grew and used marijuana legally and without harassment from the same people who put him behind bars, and have destroyed him financially.

“I am wiped the hell out,” said Esbensen. “I have no money at all, and unless a miracle occurs I’m going to lose this house and the dispensary in Ontario. But I suppose that I’m fortunate, because unlike a lot of people I had properties to lose. There are plenty of people who have it worse than I do.”

The dispensary, or at least the attention it attracted from powerful and opportunistic people, was the source of his problems. The building – a repurposed butcher shop — housed the 45th Parallel medical marijuana co-op, which dispensed a legally recognized palliative remedy to qualified clients.

On September 11, 2012, the co-op, along with more than a dozen other sites on both sides of the Oregon/Idaho border, was raided by the High Desert Drug Enforcement Task Force. Hundreds of pounds of marijuana – most of it still unaccounted for – were seized, along with a substantial amount of money and the co-op’s business records.

In June, following a bench trial, Bill and his former business partner Scott Kangas were convicted of “racketeering” under a law that was no longer in effect. Despite the ardent desire of Malheur County Deputy DA William Dugan, they were sentenced to probation, rather than prison. One condition of Bill’s probation is the requirement that he liquidate the 45th Parallel Corporation, which he cannot do without access to his business and tax records. On October 15, trial Judge Gregory Baxter denied a motion requesting the release of those records.

“I’m ordered to liquidate the 45th Parallel by the same judge who won’t let me have the records I need to carry out that order,” he pointed out to me. “I can’t just guess where the taxes are concerned. I need the records.” Caught between the pit and the pendulum, Esbensen at this point will either violate a term of his probation, or risk trouble with the IRS.

This is not the only way in which Esbensen is required to make bricks without straw. He has also been ordered to pay $18,000 in “restitution” costs to the Malheur County DA’s office, which had already seized tens of thousands of dollars from him through the state-licensed larceny called “civil asset forfeiture ,” and used the money to prosecute him. When Esbensen’s defense attorney, Susan Gerber, sought details about that seizure, Judge Baxter suffered a courtroom meltdown, and the DA’s office obtained a motion in limine forbidding her to pursue that line of inquiry.

“I sold my car lot in Idaho to begin this business several years ago,” Esbensen points out. “And it wasn’t as if the 45th Parallel was a hugely profitable enterprise. Over the course of three years I cleared about $18,000.”

That figure translates into about $500 a month, which doesn’t suggest that Esbensen and his associates were building a narcotics empire.  Yes, he did expect that Oregon would soon decriminalize the recreational use of marijuana.

The same is true of the people on the other side of the Malheur County criminal” justice” system. Esbensen was depicted in court as a “kingpin” – an embryonic Heisenberg or Tony Montana – by the same people who are positioning themselves to profit from the same “illicit” activity for which they sought to send him to prison.

Next week, barring widespread electoral fraud, Oregon will probably enact Proposition 91, a measure that will decriminalize (but alas, not deregulate) the recreational use of marijuana. On October 28, in anticipation of that development, the Vale City Council approved a measure imposing a 5 percent tax on gross sale of medical marijuana, and 10 percent on gross sales of recreational marijuana.

By this time next year – assuming that Oregon’s experience is in any way similar to those of Colorado and Washington – Vale’s municipal government will be reveling in marijuana-derived revenue. Vale is the seat of Malheur County, which abuts Puritanical Idaho. This means that county he potential for marijuana tourism is immense, as is the anticipated tax windfall for the county and city governments.

Renee Churchill, administrative manager for the Vale City government, told me that the marijuana taxation measure was approved by three members of the City Council – Travis Johnson, Heidi Zanotelli, and Randy Seals. Significantly, Johnson is both a member of the Vale City Council and Undersheriff Malheur County. His colleague on the City Council, Brad Williams, is a Malheur County Sheriff’s deputy and was the chief investigator in the 45th Parallel case.

Although Williams wasn’t present for the October 28th City Council vote (Churchill told me he was attending a function in Bend), there is no record that he opposed the marijuana taxation measure, which was actively supported by Johnson, his superior officer in the MCSO.

Deputy Williams was involved in every phase of the 45th Parallel case. He was approached by Dustin Bloxham, a corrupt, Boise-based DEA agent, about mounting an investigation of the co-op. Williams was cc’d in the March 29, 2012 email from Bloxham to assistant US Attorney for Idaho Marc Haws after Esebensen had been subjected to a pretext traffic stop and illegal search of his car by the Task Force. During that search, the business records for the 45th Parallel were confiscated.

“Thought maybe if you guys had a moment, you might be able to look through [the records] and see if they are doing some good business,” Bloxham suggested to Haws and Williams. “I had glanced over it and it appears to me that some decent money is coming out of the business.”

Acting outside his jurisdiction, and without authorization from US Attorney Wendy Olson, Bloxham targeted Esbensen and his business. In doing so he committed at least two acts of interstate wire fraud, and suborned a physician in Idaho to falsify medical records so he could qualify – under the pseudonym “Dustin Hankins” — for an Oregon Medical Marijuana Program card. His marijuana purchases at the 45th Parallel were made with petty cash provided to him by Deputy Williams out of the MCSO’s budget.

In those transactions, the personnel from the 45th Parallel acted in good faith and in strict compliance with Oregon laws and regulations. If Bloxham couldn’t claim “qualified immunity” – which may not apply here, given that he acted without authorization from Wendy Olson, or being deputized by the MCSO – he would probably face prosecution for several felonies, as would Brad Williams, his accomplice.

It’s worth pointing out that Scott Kangas was charged with “racketeering” solely because he was Esbensen’s partner in a government-licensed business. (He was also being punished for turning down a deal in which he would testify against him). The same theory of criminal liability that justified the racketeering charge against Kangas should apply to Brad Williams’ colleagues at the MCSO – particularly Undersheriff Johnson, who was present for the marijuana tax vote on October 28.

The behavior of the MCSO and Malheur County DA’s office in this case was that of a privileged criminal syndicate. Rather than protecting the public, they were using the “justice” system to profit from “illicit” marijuana sales, until they would be able to accomplish the same thing through taxation.

Brad Williams was in attendance during every day of Esbensen’s trial. When the guilty verdict was pronounced on June 6, Judge Gregory Baxter ordered that Esbensen be taken directly to jail. The officer who carried out that order – wearing full uniform and a triumphant, self-satisfied smirk as he handcuffed Esbensen – was Brad Williams.

By this time next year, as a member of the Vale City Council, that same Deputy Williams will be deeply involved in the same “criminal” activity for which Esbensen is still being punished: Receiving money as a result of marijuana sales. The most significant difference is that Esbensen received those proceeds through honest commerce, while Williams and his comrades will do so through the state-consecrated form of theft called “taxation.”

The Malheur County Sheriff’s Office, meanwhile, will continue to bank money it receives in the form of fines imposed on more than a dozen members of the 45th Parallel. It has already taken in tens of thousands of dollars in fines and confiscated funds – and we shouldn’t forget that nobody has properly accounted for most of the hundreds of pounds of marijuana that were seized in the September 11, 2012 raids.

The MCSO found another way to leverage funding out of the 45th Parallel case: Earlier this month it was announced that Malheur County “has been listed among 26 counties in 11 states designated as high-intensity drug trafficking areas,” according to the Argus Observer.

Given what we know about the bureaucratic perversities that characterize drug prohibition, it’s likely that the HIDT designation was, to some extent, a reward for the 45th Parallel case – and we can expect to see the MCSO do everything it can to duplicate that triumph. Sheriff Brian Wolfe explained that with the coveted HIDT designation his agency will receive funding to pay overtime costs and to “make larger purchase[s] that can lead to bigger drug busts.”

What this will mean, in all likelihood, is that Deputy Williams and Undersheriff Johnson will tirelessly seek to ensnare people on drug charges during the day, while moonlighting as state-employed marijuana “kingpins.” Meanwhile, Bill Esbensen, like countless others, will continue to serve a sentence inflicted on him as punishment for doing something no longer considered to be a crime, even by those who foolishly believe that government has the authority to regulate what people freely choose to consume.