Policing in America has made a drastic transformation over the mid-twentieth century. Local police agencies today are more federally funded, the "dress" like the military, they police more federal initiatives, and the constitutional and fiscal boundaries between local police and the federal government have been blurred. At the same time, conflicts between communities and the police have intensified and the trust between the two has diminished. Our paper investigates the transformation of local policing in a federal system. We analyze how the decisions of policymakers and agencies at the federal level can alter the choice set and associated payoffs faced by local police departments, and how that changes the nature of local policing services. We then discuss how this framework can be used to understand the transformation of U.S. local policing in the twentieth century by illustrating this intervention and providing preliminary analysis of the breakdown of community-oriented policing. Specifically, we outline the expansions of the civil asset forfeiture program, program 1033 and related procedures, and direct federal grants and discuss the incentives of local police to pursue federal initiatives, independent of the desires of the local population that they serve. These programs soften the budget constraints of state and local police and thereby shift police attention to their new funders--the federal government. Through the changes in the financing process, the federal government can create, on the margin, more federally-focused local law enforcement agencies rather than community-focused law enforcement agencies.