What the Legal Services Corporation Doesn’t Want Congress to Know

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LSC logoNLPC Chairman Ken Boehm has submitted this written testimony to the House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, which is holding a hearing today on funding for the Legal Services Corporation (LSC):

Members of the House Committee on Appropriations are certainly used to hearing from representatives of federally-funded programs about the good work done by such programs and why they need many millions more in taxpayer funds, despite the unsustainable national debt. This year the Legal Services Corporation has submitted a FY2013 budget request for $470 million.

As someone who served in senior positions within the Legal Services Corporation (LSC) from 1989-1994 (Counsel to the LSC Board, Director of the Office of Policy Development), I would like Congress to know what LSC does not want them to know.

Most funding for LSC-funded programs comes from non-LSC sources - not LSC.

But you would not find this important fact anywhere in the 34-page Legal Services Corporation Budget Request for 2013.

In fact, you would find quite a bit of deceptive rhetoric and graphics underscoring the need for more taxpayer support.

For example, the bar graph on page 4 of the 2013 budget request is entitled, "LSC Basic Field Grants and Other Core Funding in Decline." For 2010, the last year for which complete outside funding levels is available, there are bars depicting LSC appropriations, IOLTA funds and state grants. If you add the IOLTA funds and the state grant funds, you would see a total of $193.2 million, far less than the $394.6 million in LSC funding.

This graphic is deceptive because for 2010, the total non-LSC funding for Legal Services programs was $541,679,921, far more than the LSC Basic Field Grants appropriation. The source of this $541 million figure is LSC itself in its Legal Services Corporation Fact Book 2010.  And to get to the fact book, you just need to go three levels down on the LSC web page (www.lsc.gov), under "Media."  But don't expect LSC to tell this to Members of the House Appropriations Committee.

By leaving out over $348 million in other categories of non-LSC funds (such as private grants, funding from other federal programs, local grants, filing fee income, etc.) going to LSC-funded programs in 2010, anyone reading the 2013 budget request might well conclude that LSC-funded programs get most of their funds from LSC.

The reality is that most of their funding comes from non-LSC sources.

LSC apparently just does not want Congress to know this when Congress is deciding 2013 funding levels.

Most legal assistance to the poor does not come from LSC-funded lawyers.

But you would not find this important fact anywhere in the 34-page Legal Services Corporation Budget Request for 2013.

Overwhelmingly, most legal assistance to the poor comes from a variety of sources other than lawyers working for LSC-funded programs - and always has.

According to the American Bar Association's Standing Committee on Pro Bono and Public Service's 2009 report, Supporting Justice II: A Report of the Pro Bono Work of America's Lawyers, pro bono participation is on the rise among American lawyers.

Their survey indicated that 73% of respondents provided free legal services to persons of limited means and attorneys reported providing 41 hours of service during the previous 12 months.

Hundreds of private legal assistance groups do not receive LSC funding. One notable such group is the Indianapolis Legal Aid Society. Founded in 1941, this private group has served thousands of clients, receives no federal funds, and is the only group in central Indiana that provides legal access to the poor within 1-2 days.

Virtually every law school in the country has some type of clinical legal program, with many serving the poor in such areas as housing law. These programs typically involve third-year law school students under the supervision of law professors and experienced attorneys.

Several important trends are also undercutting the notion that only federally funded lawyers can provide justice to the poor.

The first trend is the long-term move toward fact-based small claims courts where parties argue the facts without the need for attorneys on a wide range of civil issues. And the jurisdictional amount has gradually crept higher.

The second important trend is toward increased mediation in a wide range of civil matters, especially where the amount in controversy does justify the time and expense of opposing lawyers running up considerable legal costs.

Former LSC Inspector General David Wilkinson, a Rhodes Scholar and former state attorney general, extensively studied pro bono services and determined there were 1,350 pro bono groups not receiving LSC funds.  His research was presented in Legal Services for the Poor: Is Federal Support Necessary published by the Capital Research Center as part of its Alternatives in Philanthropy series. He estimated that far less than 10% of the poor who receive legal assistance receive it from LSC-fund lawyers.

And as was already shown, far less than half of the funding to LSC-funded programs comes from LSC.

LSC-funded lawyers and LSC can ignore Congressional reforms.

And have been doing so for years.

Most federally-fund programs, agencies and departments are authorized as a pre-condition to being funded.  The best indicator of how controversial LSC is that its last authorization expired in 1980. The House rule requiring authorization must be waived annually for the LSC appropriations to pass.

Congress has tried for years to reform LSC.  The last major attempt was in 1996 when a series of appropriations riders were passed forbidding LSC-funded lawyers from doing drug-related public housing evictions, prisoner lawsuits, challenging welfare reform, engaging in abortion litigation, lobbying, representing illegal aliens and litigating Congressional redistricting cases.

The first thing Legal Services lawyers and their allies did was to try to litigate to overturn all of the reforms.  That didn't work.

Then - as recently as 2010 - Legal Services activist lawyers and their allies supported legislation aimed at gutting the reforms. That didn't work either.

Meanwhile, year after year, Congress continued to pass the 1996 reforms and restrictions as part of the LSC appropriations.

But there were still other methods to resist the Congressional reform efforts.

Under the LSC Act, the Legal Services Corporation is technically a non-profit corporation. No one but LSC may enforce the LSC Act and regulations.  More often than not, the LSC board is stacked with LSC supporters openly hostile to the reforms and restrictions.

The case of Regional Management Corp. v. Legal Services Corp. decided by the U.S. Court of Appeals for the Fourth Circuit in 1999 dramatically illustrates how unaccountable LSC and its programs can be.

A third party believing itself harmed by lobbying of LSC-funded lawyers before the South Carolina legislature filed a complaint with LSC accusing the lawyers of violating both Federal law and LSC regulations. LSC dismissed the complaint.  The complainant then went to federal court seeking judicial review.

The trial judge found that LSC had failed to fully investigate the charges and that LSC did not have a rational basis for determining that the lawyers did not violate federal law.

Rather than investigate the complaint, LSC appealed the case and argued that it was a private corporation set up by Congress and was not subject to judicial review. LSC won. The LSC-funded lawyers who violated the restriction by Congress against lobbying were never punished by LSC.

The morale of the story is that LSC and the programs it funds openly thumbed their noses at the restriction against lobbying.

Worse, the LSC board passed a resolution commending the law firm that won the case, praising them for winning the case because a loss "could have had a chilling effect on the legitimate and vital advocacy work of these programs."

Never mind that Congress had repeatedly passed an appropriations rider that explicitly forbade lobbying by LSC-funded lawyers.

If this were an isolated incident, it would perhaps be explainable as overly zealous lawyers at the field program, LSC management and the LSC board.

Unfortunately, this pattern of ignoring the will of Congress is the rule not the exception.

LSC and the programs it funds have repeatedly been the focus of critical reviews by the U.S. Government Accountability Office for everything from general mismanagement (Legal Services Corporation: Improvements Needed in Controls over Grant Awards and Grantee Program Effectiveness, GAO-10-540, June 2010) to cooking the books on the integrity of the Legal Services case counts provided to Congress (Substantial Problems in 1997 Case Reporting, GGD-99-135R, June 1999).

In that case over-counting scandal, LSC presented the exaggerated claims of legal services cases to the House Appropriations Committee, even though a professional staffer from the LSC Inspector General's office had told LSC that the numbers were faked. That brave staffer resigned his position and became a whistle blower in order to tell the Committee that the case numbers were wildly padded.

After the Associated Press ran a story nationally on the scandal and after the GAO - at the request of Congress - investigated and confirmed the wide pattern of falsified case numbers, LSC claimed it had solved the problem.  Now a bit dubious as to LSC's credibility, Congress had the GAO run another review. They discovered the problem was still not solved. In fact, GAO found that 62 LSC-funded programs did not certify to LSC that their case counts were correct. (More Needs to be Done to Correct Case Service Reporting Problems, GAO report T-GGD-99-185, September 1999)

Exasperated by the scandals and mismanagement, Congress sought to use report language accompanying appropriations bills, letters to LSC, oversight hearings and other methods to get LSC to abide by the reforms.

Other examples of abuses abound. Congress had mandated competitive grants for LSC grants since past practice was to give programs new grants, regardless of the quality of their work.  As was argued at the time the reforms were adopted, rewarding mediocre programs with "presumptive refunding" is hardly the way to encourage excellence.

The programs and LSC ignored the requirement with only a handful of programs having any competition and fewer still not receiving grant renewals. The same problem exists today.

The list of problems besetting this troubled program far exceeds the space limitations here.

While LSC's contentious history of undermining the best efforts of Congress to reform it is troublesome, Congress must remember what LSC never wants to disclose:

1.   Most of the funding for LSC-funded programs does not come from LSC.

2.   Most legal aid to the poor comes from non-LSC sources.

Perhaps a program which cannot get reauthorized for 32 years and a program which celebrates its ability to ignore Congressional reform is an ideal candidate to have its funding eliminated.