S. Hrg. 98-566
LEGAL SERVICES CORPORATION ACT
AMENDMENTS OF 1983
HEARING
BEFORE THE
COMMITTEE ON
LABOR AND HUMAN RESOURCES
UNITED STATES SENATE
NINETY-EIGHTH CONGRESS
FIRST SESSION
ON
CONSIDERATION OF EXTENDING THE AUTHORIZATION OF APPROPRI-
ATIONS FOR THE LEGAL SERVICES CORPORATION AND WAYS TO IM-
PROVE PROVISIONS RELATING TO OPERATION OF THE CORPORATION
AND LEGAL SERVICES PROGRAMS
MAY 4, 1983
Printed for the use of the Committee on Labor and Human Resources
S. Hrg. 98-566
LEGAL SERVICES CORPORATION ACT
AMENDMENTS OF 1983
HEARING
BEFORE THE
COMMITTEE ON
LABOR AND HUMAN RESOURCES
UNITED STATES SENATE
NINETY-EIGHTH CONGRESS
FIRST SESSION
ON
CONSIDERATION OF EXTENDING THE AUTHORIZATION OF APPROPRI-
ATIONS FOR THE LEGAL SERVICES CORPORATION AND WAYS TO IM-
PROVE PROVISIONS RELATING TO OPERATION OF THE CORPORATION
AND LEGAL SERVICES PROGRAMS
MAY 4, 1983
Printed for the use of the Committee on Labor and Human Resources
U.S. GOVERNMENT PRINTING OFFICE
29-379 O WASHINGTON : 1984
COMMITTEE ON LABOR AND HUMAN RESOURCES
ORRIN G. HATCH, Utah, Chairman
ROBERT T. STAFFORD, Vermont
DAN QUAYLE, Indiana
DON NICKLES, Oklahoma
GORDON J. HUMPHREY, New Hampshire
JEREMIAH DENTON, Alabama
LOWELL P. WEICKER, Jr., Connecticut
CHARLES E. GRASSLEY, Iowa
JOHN P. EAST, North Carolina
PAULA HAWKINS, Florida
EDWARD M. KENNEDY, Massachusetts
JENNINGS RANDOLPH, West Virginia
CLAIBORNE PELL, Rhode Island
THOMAS F. EAGLETON, Missouri
DONALD W. RIEGLE, Jr., Michigan
HOWARD M. METZENBAUM, Ohio
SPARK M. MATSUNAGA, Hawaii
CHRISTOPHER J. DODD, Connecticut
Ronald F. Docksai, Staff Director
Kathryn O'L. Higgins, Minority Staff Director
(II)
CONTENTS
Page
Text of S. 1133 6
STATEMENTS
Wednesday, May 14, 1983
Bogard, Donald P., President, Legal Services Corporation, accompanied by
Dennis Daugherty, Vice President, Operations; Charles Ritter, Vice Presi-
dent, Finance; Alan Swendiman, General Counsel; and Gregg Hartley, Di-
rector, Office of Field Services, Legal Services Corporation 15
Prepared statement 18
Eagleton, Hon. Thomas F., a U.S. Senator from the State of Missouri 5
Hollie, Nelwynne, director, Central Minnesota Legal Services Corporation,
Minnesota 195
Prepared statement 197
Jenkins, Diane R., citizen, Pittsburgh, Pa 36
Prepared statement 46
Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts 13
McCalpin, Wm. F., attorney, St. Louis, Mo 136
Prepared statement 144
Olson, William J., attorney, Washington, D.C 164
Prepared statement 167
Phillips, Howard, national director, the Conservative Caucus, Inc., Vienna,
Va 34
Raven, Robert D., Esq., chairman. Standing Committee on Legal Aid, Ameri-
can Bar Association, San Francisco, Calif 215
Prepared statement 220
Weiss, Jonathan A., Esq., director. Legal Services for the Elderly Poor, New
York, N.Y 194
ADDITIONAL INFORMATION
Articles, publications, et cetera:
Criticism of Poverty Law Program Laced With Inaccuracies, from the St.
Louis Dispatch, Sunday, August 23, 1981 64
Excerpt from hearing of October 16, 1982, Mr. Olson speaking 180
Excerpt from section 107(b)(6) of the Legal Services Corporation Act 174
List of Neighborhood Legal and Pennsylvania Legal Services directors 38
Communications to:
Hatch, Hon. Orrin, a U.S. Senator from the State of Utah, from Howard
Phillips, national director, the Conservative Caucus, Inc., May 9, 1983
(with enclosures) 82
Rudman, Hon. Warren, a U.S. Senator from the State of New Hampshire,
from Howard Phillips, national director, the Conservative Caucus, Inc.,
April 22, 1981 72
Weicker, Hon. Lowell P., Jr., a U.S. Senator from the State of Connecti-
cut, from Howard Phillips, national director, the Conservative Caucus,
Inc., May 1, 1981 69
Williams, Hon. Harrison A., a U.S. Senator from the State of New Jersey,
from Howard Phillips, national director, the Conservative Caucus, Inc.,
September 29, 1977 74
(III)
IV
APPENDIXES
Letter from Senator Hatch to Donald P. Bogard, President, Legal Services ^^^^
Corporation, April 26, 1983 236
Report by the Office of Field Services, Legal Services Corporation, July 23,
1983 241
Additional statement from Diann R. Jenkins 282
Responses from F. William McCalpin to questions submitted by Senator
Hatch, May 19, 1983 331
Responses from F. William McCalpin to questions submitted by Senator
Denton 398
Comptroller General advisory opinion in the matter of the personnel practices
within the Legal Services Corporation, April 5, 1983 404
Responses from Nelwynne Hollie to questions submitted by Senator Hatch,
May 26, 1983 413
Responses from Jonathan Weiss to questions submitted by Senator Hatch,
May 13, 1983 418
Additional statement by Robert D. Raven, chairman. Standing Committee on
Legal Services for the Elderly, New York, N.Y., May 19, 1983 420
Statement by Alliance for Legal Rights, Inc., May 4, 1983 453
Letter to Senator Hatch from Jimmy Davis, county district attorney, Castro
County, Tex., May 2, 1983 461
Letter to Senator Hatch from John C. Barrett, Legal Services Corporation of
Iowa, May 6, 1983 464
Letter and accompanying documents from Wesley J. Fastiff, May 17, 1983 467
Statement by Maxwell A. Miller, senior attorney. Mountain States Legal
Foundation, May 4, 1983 483
Letter to Senator Hatch from Anh Tu, Staff coordinator. Project Advisory
Group, May 9, 1983 497
Letter and accompanying documents from W. E. Weeks, executive vice presi-
dent, Texas Citrus and Vegetable Growers and Shippers, April 27, 1983 505
LEGAL SERVICES CORPORATION ACT
AMENDMENTS OF 1983
WEDNESDAY, MAY 4, 1983
U.S. Senate,
Committee on Labor and Human Resources,
Washington, D.C.
The committee met, pursuant to notice, at 2:20 p.m., in room SD-
430, Dirksen Senate Office Building, Senator Orrin G. Hatch
(chairman) presiding.
Present: Senators Hatch, Nickles, Humphrey, Denton, Kennedy,
and Eagleton.
Senator Denton. Good afternoon. This hearmg will come to
order.
The chairman, my distinguished colleague from Utah, will be
here shortly, and he requested that I open the hearing and preside
until his arrival. His opening statement is made a part of the
record at this point.
[The opening statement of Senator Hatch follows:]
Opening Statement of Senator Hatch
The Chairman. The subject of today's hearing is the Legal Serv-
ices Corporation, a Federal program which has rarely been exam-
ined in a dispassionate manner. Yet such an examination is desper-
ately needed, for a very real question exists as to whether the Cor-
poration is accomplishing its mandate— to provide the poor with
access to our judicial system in a manner that neither fosters nor
is subjected to the designs of political opportunists.
To question the activities of the Corporation and its 326 grantees
is, of course, politically disadvantageous. One is led to believe that
the nobility of the Corporation's purpose makes any question as to
the propriety of some of its activities nothing less than a vicious
attack on the poor themselves. This misinformed, oversimplified
presumption has scared away much needed review and has pro-
vided the Corporation with a congressional carte blanche to oper-
ate without oversight, without review, and without criticism. I have
yet to find, in my years as a Senator, a Federal agency or federally
funded corporation that would not benefit from occasional congres-
sional oversight. The Legal Services Corporation is no exception.
I have not introduced a bill prior to this hearing concerning legal
services because I am not confident that Congress has before it
even the most rudimentary facts normally considered to be a pre-
requisite to any consideration of funding or refunding. To this end,
I have sent Mr. Bogard, the President of the Legal Services Corpo-
(1)
ration, a five-page letter seeking what I believe to be basic informa-
tion about the Corporation's activities. I hope, Mr. Bogard, that we
will be receiving your answer in the immediate future.
Mr concerns with the Legal Services Corporation are really four-
fold. First, is the Corporation, as it is currently structured, the
most effective vehicle for providing legal services to the poor? For
example, some believe that the existing staff attorney system is not
only the best approach, but that these lawyers should focus more
on social reform, even to the exclusion of individual cases. Howard
Saks, a former board member, contended that, "The pursuit of
impact, even though it may require turning away some individual
cases, is a good strategy."
Others contend that the Corporation must be reformed. As
Thomas J. Wynn, the former president of the Massachusetts Bar
Association noted in 1982:
(The Corporation) was designed to be the primary vehicle for delivery of legal
services to the nation's poor. It was not intended to act as a social reform
movement . . . The solution to the dilemma seems straight forward. The LSC must
refocus its priorities and represent the legitimate needs of the poor. They must re-
frain from unauthorized lobbying or social reform and from the excessive litigation
on issues of questionable significance.
Still others contend that the misuse of corporate funds will
always continue until legal services is provided in some other
manner than a staff attorney approach.
My second concern is whether Congress should have any say in
how the Corporation distributes its funds, or in the kinds of activi-
ties its grantees engage in. Much ado has been made over the con-
gressional prohibition against lobbying by federally funded legal
service attorneys, but the prohibition, from a practical standpoint
is meaningless. Despite numerous congressional efforts, the Corpo-
ration and its grantees actively engage in lobbying; they instruct
staff on lobbying; they publish books on lobbying.
Moreover, under existing law, the lobbying prohibition contains
numerous exemptions. For example, the Corporation can lobby
Congress concerning its own reauthorization. If anyone has any
doubt about the sophistication and coordination of this activity, I
suggest they read a Corporation memorandum dated December 29,
1980. Its author, Alan Houseman, lays out what he describes as an
aggressive lobbying campaign to insure "The survival of commit-
ted, aggressive and political staff whether they are lawyers, parale-
gals, support staff or other advocates."
To be honest, there seems little indication to date that Congress
can effectively and practically control the activities of the Corpora-
tion and its grantees.
My third concern is whether there is a real need for an increase
in the Corporation's authorization. This year, the Corporation is
funded at $241 million and an effort is underway to raise this
amount to $296 million for fiscal year 1984.
Yet there seems to be much confusion over how much money is
available for use by Federal grantees. It has been estimated that
the Corporation's budget would be increased by $41 million with-
out any additional increase in Federal funding if grantees were not
permitted to hoard funds already provided them. According to the
Corporation, in 1982, 26 field programs had carryover funds in
3
excess of 50 percent of their annual grants. This is not a new prob-
lem. The General Accounting Office found, in 1980, that just 37
grantees accounted for more than $8.7 million in carryover funds
in 1979 alone.
This refusal to spend funds apparently stems from a concern
that these grantees might not be given equivalent funds in the
future. I can only wonder if the concern here is for the legal needs
of the poor or whether it is a concern by these local organizations
that they may not always be guaranteed permanent status as a
Federal grantee. And apparently, such permanence is not only ex-
pected but achievable.
Why else would such large percentages of grants be spent on the
purchase of real estate? For example, the Birmingham area Legal
Services Corporation purchased a building for $500,000, a figure
that represents half of its annual grant.
Moreover, it has been interesting to note that none of the discus-
sion over funding has acknowledged that the Corporation, accord-
ing to its own account, receives an additional $25 million each year
from other Federal programs, and $26.4 million in various State,
local, and private contributions. In other words, in fiscal year 1983,
the Corporation and its grantees actually really received not $241
million but $292.4 million.
My fourth and final concern is whether the Corporation, as it
now exists, is dedicated to the legal needs of the poor or to the po-
litical philosophy of its staff Were the poor people of Texas really
interested in preventing the special election in the Sixth Congres-
sional District or was the staff of Texas Rural Legal Aid interested
in preventing Phil Gramm from being elected as a Republican to
the House of Representatives?
Is one of the critical legal problems benefiting the poor today,
whether State governments should be financing sex change oper-
ations? Suits pursuing this objective were brought by local legal
service organizations in Montana in 1979, in Iowa in 1980, and in
Connecticut in 1981.
Are the poor best served by a Legal Service Corporation that
would settle a case if the employer stipulates that the Texas right-
to-work law is unconstitutional? In a current case, the employer
has warned that if it fails to agree to these conditions, legal serv-
ice attorneys will seek an additional $125,000 in damages from the
employer.
Are the poor best served by a Legal Services Corporation that is
attempting to block the State of Florida from requiring that stu-
dents pass a functional-literacy test before they can graduate from
high school? The Corporation's lawyers are concerned with the
stigma that would attach to students who fail such a test. No one
seems concerned with the more obvious need to make sure that all
students who graduate from our school systems are functionally lit-
erate.
I hope that today we will receive answers to these and other
questions about the Corporation so that we can consider Federal
funding of legal services from an informed and objective stand-
point.
4
Opening Statement of Senator Denton
Senator Denton. I will take this opportunity to comment briefly
as to my own position and attitude toward the Legal Services Cor-
poration. Without equivocation, I am a supporter of legal services
for the poor. I am not, however, disposed to be an ardent supporter
of the Legal Services Corporation. I believe the Corporation has
strayed widely from its mandate, which is to provide routine legal
services to the poor. It has, instead, on too many occasions and in
too many ways, become heavily involved in trying to formulate
public policy and to lobby for social change. The former responsibil-
ity properly is left to elected officials accountable to the public and
the latter one is scarcely fitting for the Legal Services Corporation,
considering its mandate.
Despite the administration's request that no money be provided
for the Corporation, Congress has continued to fund it. For fiscal
year 1983, $241 million is appropriated. Although Congress has, on
a number of occasions, placed restrictions or tried to place restric-
tions on the activities of the Legal Services Corporation grantees,
restrictions on lobbying, for example, these restrictions largely
have been ignored or circumvented by the Corporation and its
grantees. LSC grantees have absolutely no incentive to abide by the
restrictions or to strive to provide good service because they are en-
titled to presumptive right to refunding, making it extremely diffi-
cult to defund grantees that are ineffective or who blatantly ignore
the intent of Congress.
Thus, it has been more and more apparent that the Legal Serv-
ices Corporation grantees are accountable to no one and have free
rein to pursue whatever causes they want, often at the expense of
serving individual clients with routine legal problems. Attempts to
effect some substantive reforms are met by howls of protest from
the legal services community and personal attacks against those
recommending those changes in a number of cases.
The legal services community also claims that the reductions in
appropriations have severely restricted the number of indigent per-
sons who can be helped with their legal problems, yet it was re-
vealed that at the end of calendar year 1981, Legal Services Corpo-
ration grantees had carryover balances totaling $41 million that
presumably could have been put to use helping poor people with
their legal difficulties. The fact that this startling statistic was not
widely reported exemplifies the manner in which the controversy
surrounding the Legal Services Corporation has been presented.
While the goals of the Corporation are certainly laudable, no at-
tempt is made to show how the goals and actual practices ot the
LSC have diverged in many cases. Instead, those who propose alter-
native means of providing legal services are savaged as trying to
deny the poor access to our legal system.
Although I am pleased that under Mr. Bogard the Legal Services
Corporation seems to be concentrating on efforts to redress past
abuses and address themselves to the proper objectives, I believe
that a great deal more needs to be done to insure that the Corpora-
tion provides the routine legal services envisioned under the origi-
nal act.
I want to welcome my friend and colleague fron Missouri and ex-
plain to him that the chairman is delayed by a press event and
asked me to open this hearing, which I have done. I now turn it
over to you, sir.
STATEMENT OF HON. THOMAS F. EAGLETON, A U.S. SENATOR
FROM THE STATE OF MISSOURI
Senator Eagleton. Thank you, Mr. Chairman. I have a brief
opening statement and then we will get to our witnesses. I appreci-
ate the fact that Senator Hatch has called this hearing of the
Labor and Human Resources Committee to consider reauthoriza-
tion of the Legal Services Corporation Act.
As you know, I, along with nine of our colleagues on this commit-
tee, introduced S. 1133 to reauthorize the corporation for fiscal
years 1984 and 1985. I believe that both members of the committee
and the witnesses appearing before the committee today are famil-
iar with the provisions of the bill, and in the interest of time, I will
ask that the text of the bill and a summary of the bill's provisions
be included in the hearing record.
Senator Denton. Without objection, it will be included in the
record.
[The text of S. 1133 follows:]
II
98th congress
1st Session
S. 1133
To extend the authorization of appropriations for the Legal Services Corporation
and to improve the provisions relating to operation of the Corporation and
legal services programs.
IN THE SENATE OF THE UNITED STATES
April 21 Oegislative day, April 18), 1983
Mr. Eagleton (for himself, Mr. Weicker, Mr. Stafford, Mr. Cohen, Mr.
Cranston, Mr. Danforth, Mr. Dodd, Mr. Durenberger, Mr. Gorton,
Mr. Heinz, Mr. Kennedy, Mr. Matsunaga, Mr. Metzenbaum, Mr.
Pell, Mr. Randolph, and Mr. Riegle) introduced the following bill; which
was read twice and referred to the Committee on Labor and Human Re-
sources
A BILL
To extend the authorization of appropriations for the Legal
Services Corporation and to improve the provisions relating
to operation of the Corporation and legal services programs.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SHORT TITLE
4 Section 1. This Act may be cited as the "Legal Serv-
5 ices Corporation Act Amendments of 1983".
7
1 GOVERNING BODY
2 Sec. 2. (a) Section 1004(a) of the Legal Services Cor-
3 poration Act of 1974 (hereafter in this Act referred to as "the
4 Act") is amended by adding at the end thereof the following:
5 "All individuals appointed to the Board shall be fully sup-
6 portive of the underlying principle of the Act that it is in the
7 national interest that low-income individuals have equal
8 access under the law to comprehensive and effective legal
9 services. Individuals appointed to the Board who are general-
10 ly representative of the organized bar shall be individuals
1 1 who —
12 (1) have participated on bar committees concerned
13 with the delivery of legal services to the poor;
14 (2) have served on the governing body of an orga-
15 nization or entity involved in such delivery; or
16 (3) have engaged in the direct provision of legal
17 services to eligible clients through a staff attorney, or a
18 pro bono or reduced fee program.
19 Each individual appointed to the Board as an eligible client
20 shall be an individual who, when nominated, was eligible to
21 receive legal assistance under this Act.
22 (b) Section 1004(h) of the Act is amended by adding at
23 the end thereof the following: "At each meeting of the
24 Board, the presence of six qualified members who meet the
25 requirements of section 1004(a), at least one of whom shall
S 1133 IS
8
1 be an individual who when appointed was one of the ehgible
2 chents, shall be necessary to constitute a quorum.".
3 (c) Section 1002 of the Act is amended by redesignating
4 clauses (6), (7), and (8) as clauses (7), (8), and (9), respective-
5 ly, and inserting after clause (5) the following:
6 "(6) 'qualified' means, with respect to a member
7 of the Board, an individual who has been appointed by
8 the President, by and with the advice and consent of
9 the Senate, and who has taken the oath of office;".
10 POWERS, DUTIES, AND LIMITATIONS
11 Sec. 3. Section 1006(d)(5) of the Act is amended by
12 adding at the end thereof the following: "With respect to a
13 class action suit against the Federal Government or any
14 State or local government, the project director shall, prior to
15 filing such action, further determine —
16 "(A) that the class rehef which is the subject of
17 such an action is sought for the primary benefit of indi-
18 viduals who are eligible for legal assistance;
19 "(B) that the government entity is not likely to
20 change the policy or practice in question, and that the
21 policy or practice will continue to adversely affect eli-
22 gible clients; and
23 "(C) that the recipient has given notice of an in-
24 tention to seek class rehef and that reasonable efforts
25 to resolve the adverse effects of the policy or practice
S 1133 IS
9
1 without litigation have not been successful or would be
2 adverse to the interests of the client.".
3 GRANTS AND CONTRACTS
4 Sec. 4. (a) Section 1007(a) of the Act is amended —
5 (1) by redesignating clauses (3) through (10) as
6 clauses (4) through (11), respectively, and
7 (2) by inserting after clause (2) the following new
8 clause:
9 "(3) make available, in each fiscal year to the
10 extent feasible and consistent with clause (4), substan-
11 tial funds to provide the opportunity for legal assist-
12 ance to be furnished to eligible clients by private attor-
13 neys;".
14 (b) Section 1006(b)(5) of the Act is amended—
15 (1) by striking out "section 1007(a)(6)" and by in-
16 serting in lieu thereof "section 1007(a)(7)"; and
17 (2) by striking out "section 1007(a)(5)" and in-
18 serting in lieu thereof "section 1007(a)(6)".
19 (c) Section 1007(a)(4) of the Act, as redesignated by this
20 section, is amended by inserting before the semicolon a
21 comma and "consistent with the findings of the study con-
22 ducted under section 1007(g) of this Act, in effect prior to the
23 date of enactment of the Legal Services Corporation Act
24 Amendments of 1983.".
S 1133 IS
10
1 (d) Section 1007(a)(6) of the Act, as redesignated by this
2 section, is amended to read as follows:
3 "(6) insure that no funds made available by the
4 Corporation shall be used at any time, directly or indi-
5 rectly, to pay for any personal services, advertisement,
6 telegram, telephone communication, letter, printed or
7 written matter, or any other device intended or de-
8 signed to influence any Member of Congress or any
9 other Federal, State, or local elected official to favor or
10 oppose any Acts, bills, resolutions, or similar legisla-
11 tion, or any referendum, initiative, constitutional
12 amendment, or any similar procedure of the Congress,
13 any State legislature, any local council or any similar
14 governing body acting in a legislative capacity, except
15 when —
16 "(A) communications are made in response
17 to any Federal, State, or local official upon the
18 formal request of such official; or
19 "(B) the project director of a recipient has
20 expressly approved the undertaking of legislative
21 representation of an eligible client in accordance
22 with policy established by the governing body of
23 such recipient and has determined prior to ap-
24 proving the undertaking of such representation
25 that (i) the client is directly affected by provisions
S 1133 IS
11
1 of particular legislation or is in need of relief
2 which can best be provided by the legislature, and
3 (ii) that documentation specifically authorizing
4 such representation has been secured from the eli-
5 gible client, which documentation includes a state-
6 ment of the specific interest of the client; or
7 "(C) the project director of a recipient has
8 expressly determined that the legislative body is
9 considering an authorization, appropriation, or any
10 other measure affecting the authority, function, or
11 funding of the recipient or the Corporation, or is
12 conducting oversight of the recipient or the Cor-
13 poration.".
14 (e) Subsections (g) and (h) of section 1007 of the Act are
15 repealed.
16 FINANCING
17 Sec. 5. (a) Section 1010(a) of the Act is amended by
18 inserting immediately after the second sentence the following
19 new sentence: "There are authorized to be appropriated for
20 purposes of carrying out the activities of the Corporation
21 $296,000,000 for fiscal year 1984, and such sums as may be
22 necessary for each of the two succeeding fiscal years.".
23 (b) Section 1010(a) of the Act is further amended by
24 inserting "(1)" after "(a)" and by adding at the end thereof
25 the following new paragraph:
S 1133 IS
12
1 "(2) Whenever the Board includes less than six mem-
2 hers who have been appointed and are qualified in accordance
3 with section 1004(a) appropriations for that fiscal year shall
4 be used by the Corporation in making grants or entering into
5 contracts under section 1006(a) (1) and (3) so as to insure
6 that annual funding for each current grantee and contractor
7 is maintained uninterrupted for that fiscal year under the
8 same terms and conditions as were applicable in the previous
9 fiscal year. If the appropriation for the fiscal year to which
10 this paragraph applies is the same amount as was appropri-
11 ated in the previous fiscal year, the annual funding for that
12 fiscal year for each grantee or contractor shall be the same as
13 in the previous fiscal year. If the appropriation for the fiscal
14 year to which this paragraph applies differs from the previous
15 fiscal year, the annual funding for each grantee or contractor
16 for that fiscal year shall be an amount which bears that same
17 ratio to the total appropriation for that fiscal year as the
18 amount paid to each such grantee or contractor for the previ-
19 ous fiscal year bears to the total appropriation to the Corpo-
20 ration in the previous fiscal year.".
21 (c) Section 1010(c) is amended by striking out the semi-
22 colon and all that follows, and inserting in lieu thereof a
23 period.
S 1133 IS
13
Senator Eagleton. I will state only briefly that, in my view, the
evidence is overwhelming that there is a need not only to continue
the Corporation's activities but indeed to increase them. We are all
aware that the Corporation's budget sustained a 25-percent cut
back in 1982, and that funding reduction has meant the loss of
about 1,546, or 24 percent, of all legal services attorneys and the
closing of 354, or 24 percent, of all field offices. These staff and pro-
gram reductions, when coupled with skyrocketing demand, have
meant that the legal services programs in virtually every area of
the country have been forced to provide emergency services only.
The Greater Miami Legal Services entity reports:
We continue to do what we call "survival issues." That's our focus now. People's
food, shelter, and income. So in landlord tenant, we only do evictions and lockouts.
The Ohio State Legal Services Association reports:
Due to staff leaving, we've gone strictly to emergencies — either life threatening,
absolute cutoff of money, termination of heat during the winter, a spouse being bat-
tered — before we can take out a domestic relations case. Numbers of poor requesting
legal services who are being turned away because of budgetary limitations on the
corporation are shockingly high.
In the State of Utah, Senator Hatch's own State, the Utah Legal
Services had more than 10,000 requests for services in 1983, of
which they could handle only 2,500 and 700 to 800 cases are being
turned away each month.
In the State of Missouri, the eastern part thereof which includes
St. Louis, has seen a 100-percent increase in demand, receiving 350
calls a week, of which it can see only 50.
The bill that we have introduced will by no means restore the
goal of minimum access, which is defined as 2 lawyers for every
10,000 poor people. But at an authorized funding level of $296 mil-
lion in 1984, it would be a reasonable first step toward restoring an
adequate financial base for the program. Thank you, Mr. Chair-
man.
Senator Denton. Thank you. Senator Eagleton. I will recognize
the distinguished Senator from Massachusetts, who came in earli-
er, Senator Kennedy, and then Senator Humphrey.
STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR
FROM THE STATE OF MASSACHUSETTS
Senator Kennedy. Thank you, Mr. Chairman. It has been quite
some time since this committee held a hearing to consider the oper-
ations of legal services, and I am sure that everyone present today
is quite aware of the considerable activity that has occurred in the
interim. While I do not intend to chronicle those events in any
detail, I would like to make a few observations about their occur-
rence.
I found the pattern of hostility displayed by the administration
toward the Legal Services Corporation highly disturbing. Confron-
tations caused by this hostile attitude have disrupted the oper-
ations of the Corporation and its grantees around the country. And
in the end, the ones who pay for this disruption are the many poor
clients who depend so much on the effective legal representation
that legal services attorneys provide.
29-379 O— 84-
14
My concern over the treatment of the Legal Services Corporation
under this administration has also been heightened by the state-
ments and actions of some members of the Board that he has ap-
pointed. Their statements and actions have raised serious doubts in
my mind as to their dedication to the preservation of the effective
provision of legal services to the poor.
I think that this Congress has acted in both a cooperative and a
progressive manner, despite being forced into repeated confronta-
tions by this administration's actions. I prefer not to run the Gov-
ernment or an organization as important as the Legal Services Cor-
poration in a negative manner, constantly thwarting the will of the
President or constantly scrutinizing every action of its appointees. I
would prefer to cooperate with the President to have confidence in
his appointees. And I prefer to concentrate in improving the oper-
ation of the Corporation, expanding the effective provision of legal
services to the poor.
That is why I have joined nine other members of this committee
in cosponsoring legislation, introduced by Senators Eagleton,
Weicker, and Stafford, which would extend the authorization of the
Legal Services Corporation, which I believe would improve the Cor-
poration. But so long as the administration chooses confrontation
rather than conciliation, I and a majority of this Congress will con-
tinue to act to protect the program.
Mr. Bogard, as President of the Corporation, I understand that
you have appeared before other Senate and House committees to
ask for the removal of certain provisions which restrict the discre-
tion of any corporation board which is unconfirmed by the Senate.
I am sure that it comes as no surprise to you when I tell you that I
will work to insure those restrictions are not removed. So long as
this President, his appointees to the Board, and their officers and
employees continue to frustrate the will of the Congress and the
mandate of the law, you have no right to come here and ask for
such discretion to be returned. You and Board members have only
yourselves and the President to blame for the current situation.
You should be going to the President and not coming to the Con-
gress. Congress chose to tie your hands in this matter only after
considerable provocation, and this administration and its appoint-
ees must realize that they cannot pick and choose the laws they
want to enforce. Their obligation and yours is to see that all the
laws are faithfully executed, and that is your constitutional duty.
I quite frankly agree that this is no way to run a railroad, but we
acted as we did because we feared that there would be no railroad
left to run, as long as this administration continues what my col-
league. Senator Rudman, called "its unending guerrilla warfare to
undermine congressional action," we have no choice but to contin-
ue to run it in this manner.
I have heard the President and members of the administration
and some of the Board members that he has appointed say that
they support the concept of legal services for the poor. However,
they want to return to the old days when the private bar had the
exclusive voluntary duty to provide such services. They fail to rec-
ognize that the private bar alone cannot do the job, and the bar,
above all else, realizes that. The American Bar Association consist-
ently has been the biggest supporter of the creation of the Corpora-
15
tion, not because they want to shirk their social responsibihties — as
the President's adviser, Mr. Meese, has often implied — but rather
they recognize the stability and expertise provided by the federally
supported legal services program.
Critics have charged that legal services attorneys are overzealous
in their challenges to community institutions and, too often, in-
volved in controversial cases. They are right. Legal services attor-
neys, supported by the Corporation, do involve themselves in con-
troversial cases. They do challenge important community and na-
tional institutions. But these attorneys do so not to advance their
own political or social agenda, as so many of these critics charge.
They do so to defend the interests of the poor Americans who are
their clients, and these poor Americans deserve the same kind of
zealous representation that any other citizen would receive from
his or her attorney.
It is with these controversial cases that the American system of
justice is truly challenged to provide equal justice for all, and the
Legal Services Corporation allows it to meet that challenge success-
fully. Thank you.
Senator Denton. Senator Humphrey?
Senator Humphrey. I have no opening statement.
Senator Denton. Now our first witness, the President of the
Legal Services Corporation, Mr. Donald Bogard. Perhaps you would
care to introduce your colleagues at the table.
STATEMENT OF DONALD P. BOGARD, PRESIDENT, LEGAL SERV-
ICES CORPORATION, ACCOMPANIED BY DENNIS DAUGHERTY,
VICE PRESIDENT, OPERATIONS; CHARLES RITTER, VICE PRESI-
DENT, FINANCE; ALAN SWENDIMAN, GENERAL COUNSEL; AND
GREGG HARTLEY, DIRECTOR, OFFICE OF FIELD SERVICES,
LEGAL SERVICES CORPORATION
Mr. Bogard. Thank you, Mr. Chairman. It is a pleasure to be
here today to appear before this committee. The people with me at
the table are, on my left, Alan Swendiman, who is the General
Counsel of the Corporation, and Dennis Daugherty, who is the Vice
President of Operations. On my immediate right is Charles Ritter,
Vice President of Finance, and on his right is Gregg Hartley, who
is our Director of the Office of Field Services, which is our program
office.
I would like to extend apologies for Mr. McCarthy, our Board
Chairman who is not able to be here today. He had made some
scheduling changes when he thought the hearing was going to be
on the 3d, and when we ended up being here on the 4th, he had to
go back to California. But he wanted to thank you for the opportu-
nity to appear.
Senator Denton. I have been advised to ask you, on behalf of the
chairman, to summarize your comments in 5 or 10 minutes to
permit more questions.
Senator Kennedy. He could not stay the extra day, as Chairman
of the Board?
Mr. Bogard. He had some scheduling changes. He made some
shifts of things that were due today to tomorrow, and he was
unable to make that shift back on short notice.
16
We have prepared a written statement which we would like to
have included in the record, Mr. Chairman.
Senator Denton. It shall be included, without objection.
Mr. BoGARD. I would like to point out that we are here today
seeking reauthorization of the Corporation. We are here seeking
additional funding, as we have been before the House and Senate
Appropriations Committee, and before your counterpart in the
House, seeking reauthorization of the Corporation.
In November 1982, my predecessor recommended that the Corpo-
ration request an additional budget of 6.7 percent, which would be
an inflationary factor increase, to take us to the level of $257 mil-
lion. As you have indicated, we have been at $241 million for the
past 2 years. That recommendation was adopted by the Board at its
December meeting, and they instructed me to come forward with
that submission which we did make to the Congress.
We would like to see that amount of money granted to us. If the
Congress decides it would like to give us more money, we would be
pleased to have it. We will attempt to spend it in the most effective
and economical and efficient ways in which we can.
The Board, as another action it took in December, authorized me
to issue grants to all of the field programs at the same level at
which they were funded in 1982. As a result of that, the 292 basic
field programs, the Native American programs of which there are
10, and the 2 migrant programs were also refunded at their 1982
levels.
We feel that the Corporation is moving forward, that we are able
to provide the services that we need to be able to provide, and
would suggest that in the reauthorization you consider three or
four points that would be of benefit to our Corporation.
I would like to see the language of the second continuing resolu-
tion carried forward, which would relate to the governing boards of
the local recipients. That requires involvement by the majority
bars of the areas in which the recipient is being funded. We would
also like to see that the language of the second continuing resolu-
tion, regarding legislative activity, be carried forward. We would
like to see that there be some simplifying of the hearing process
regarding refunding. It is a very long, extended process at this
point, and we feel there should be some way to simplify that.
Fourth, we would also like to see a restriction removed that was
placed in the second continuing resolution. Specifically, I want to
refer to the restriction which requires us to refund grantees at
their previous level, in the absence of a confirmed board. The
reason that is important to us is, the 1982 grants were based upon
1970 census data. We did not have 1980 census data at the time the
grants were issued this year. Those data have been received and
show us that there has been a growth of approximately 1 million
poor persons over the country, but the important point is that they
have shifted in their locations. As a result, we would like to he able
to go into those programs that show a substantial increase in poor
people and give them more money. In effect, we would put the
money that we are given by the Congress to serve the people where
they actually reside.
We feel that the restriction on us now prohibits us from doing
that. The Board did request that there be a grant condition on each
17
grant last year, which gave us the authority but as a result of the
restriction in the continuing resolution, we are not able to utilize
that option.
We also would like to see that the private bar not be arbitrarily
excluded from the delivery of legal services. The decrease in fund-
ing that has happened in 1981 has had a significant impact on the
private bar. They are taking more and more cases, becoming more
involved in areas in which they can develop programs to insure the
delivery of legal services, and I would like to see that continue.
That concludes my remarks, Mr. Chairman. I would be delighted
to respond to any questions you have.
[The prepared statement of Mr. Bogard follows:]
18
TESTIMONY BEFORE THE SENATE COMMITTEE ON
LABOR AND HUMAN RESOURCES
By
Donald P. Bogard
President
Legal Services Corporation
May 4, 1983
Mr. Chairman and Members of the Committee:
It is a pleasure to appear before you today to offer testimony
regarding reauthorization of the Legal Services Corporation. I value
your advice and constructive criticism and look forward to working
closely with you during my term as president. In recent testimony before
the House and Senate appropriation committees, I requested a 6.7 percent
increase in our budget. Today, I am here to ask that the Legal Services
Corporation be reauthorized. I took this job to give LSC strong
leadership, sound management and responsible direction, not to dismantle
it or wind it down. I believe a proper legal services program should be
independent and non-political. It should devote its resources to the
delivery of services. I hope that my remarks today will assist the
Committee in the reauthorization process and in carrying out its
oversight responsibilities.
The Corporation and its recipients have largely succeeded in
maintaining a nationwide legal service delivery system. This has been
possible through consolidation of outlying offices to save overhead; more
use of WATS lines to reduce the need for outlying office expenses;
utilization of computers; greater emphasis on preventive law and trained
lay advocates; and finally the contribution of a substantial amount of
time by members of the private bar. During FY '83, the Corporation was
funded at the level of $241,000,000, the same amount of funding granted
by Congress for FY '82. At its December 16 - 17, 1982, meeting, the
Board of Directors of the Corporation voted to direct the staff to submit
a budget request to Congress for $257,000,000.
The decision of the Board was made following a staff recommendation
in November that an inflation factor of 6.7 percent be added to the
amount appropriated for FY '83. The basis for the 6.7 percent was the
estimated rate of inflation by the Office of Management and Budget in its
mid-session review. While that rate was not sufficient to offset the
actual amount of inflation for the past two years, the Board felt that it
was a realistic increase based upon the budgetary decisions this Congress
will be called upon to make.
Another decision made by the Board of Directors at its December
meeting was to fund all legal services programs for FY '83 at the same
19
level at which they were funded for FY '82. Thus, the 292 basic field
programs, the ten Native American programs, and the two migrant programs,
all received the same funding as last year. The Board also voted to fund
the 17 national support centers and the five state support centers at
their annualized levels, and to give those programs the first six months
of their grants while a study was being conducted regarding the
continuation of those grants. State support components of basic field
programs were likewise funded at their annualized levels for six months.
After the Board meeting, Congress passed the Second Continuing
Resolution, P.L. 97-377 which directed that the funds appropriated
thereunder were to be used to insure that the funding for all FY '82
grantees and contractors be continued at their same annualized funding
levels in FY '83 until action is taken by a Board of Directors confirmed
by the Senate. At its March 15 meeting, the Board voted to make three
more months of funding, previously placed in reserve for the support
centers, available at the same level. If there is no confirmed Board of
Directors by September 1983, the final three months of funding will be
made available at the same rate. We are conducting a review of national
and state support for the purpose of ascertaining whether our limited
resources pould be better used in the direct delivery of services than in
the purchase of support from those entities. Pursuant to those
directives, we have conducted a thorough review of existing literature
over the last few months and we will soon commence a survey of field
attorney needs for, and experience with, support services. I cannot
predict what the outcome of our review will be. I can assure you of our
intent to observe carefully the terms of the Continuing Resolution which
require that we maintain the FY '82 annualized funding levels for all
grantees absent decisions by a confirmed Board of Directors.
A third funding action taken by the Board at its December meeting
was to award an additional $1,000 to each of the basic field, migrant,
and Native American programs specifically for the purpose of providing
training for the client representatives sitting on the governing boards
of those programs. This funding will be used to assist those clients to
learn, more about the decisions they will be called upon to make during
their service to those boards.
During the past year, the Board of Directors made other decisions
which affected the operation of all legal services programs. One of
those matters involved approving an Instruction on Fund Balances. This
Instruction was adopted after the Board discovered in mid-1982 that the
field programs had fund balances of approximately $41,000,000. Realizing
that some fund balance carryover is to be expected from one year to the
next, but also desiring that the funds appropriated by Congress be
utilized to provide the direct delivery of legal services to the poor
during the year in which those funds were appropriated, the Board's
Instruction allows each program to carry over 10 percent of its
annualized grant and provides the right to petition the Corporation to
increase that percentage to 25 percent upon a showing of good cause. Any
carryover in excess of 10 percent or the level permitted by a specific
20
waiver will be set off against the succeeding year's grant award. This
circumstance illustrates the importance of making local legal service
recipients accountable to a strong Legal Services Corporation.
The LSC Board also decided to set aside resources to investigate
and promote 'New Directions for the Private Bar." Congressional interest
in greater participation by the private bar in legal services delivery
and the Corporation's commitment to leveraging its appropriation to
secure additional legal assistance from the private bar require adequate
financial support to accomplish those objectives effectively. These
funds can be made available for projects sponsored by state bar
associations, such as those designed to encourage private attorney
participation, implement innovations in local delivery systems, and
develop alternative sources of financial support. It is our expectation
that this relatively small amount of LSC funds will generate a
substantial return in the number and quality of attorney hours devoted to
assisting those unable to afford counsel.
In that regard, the Corporation jointly sponsored a national
conference in Tampa, Florida, to discuss a new program called lOLTA,
Interest on Lawyer Trust Accounts. I know from my appearances before
other congressional committees that those members who are familiar with
the lOLTA program are very enthusiastic about it. It holds great
promise, and I intend to move rapidly in assisting states that want to
implement it.
The lOLTA program first gained prominence in Florida. A voluntary
program was adopted in that state whereby funds held in lawyer trust
accounts could be invested in the newly created Negotiable Order of
Withdrawal (NOW) accounts if those funds were of a small amount or held
for a short duration so that they could not be invested for the benefit
of the client. By accumulating those funds into one account and paying
interest on the average monthly balance to a third party for the benefit
of legal services to the poor, bar leaders hoped to supplement LSC funds
by a significant amount. Thus far, after receiving funds since May, 1981
from nearly 15 percent of the Florida attorneys with trust accounts
(partially through the assistance of a LSC implementation grant) the
Florida Bar Foundation has received over $1,000,000 and is starting to
distribute grants. As the program's successes are publicized and more
attorneys sign up, even greater sums will be collected. Estimates are
that for every 2,000 additional lawyers added to the program in Florida,
$1,000,000 per year will be collected.
New Hampshire and California have approved lOLTA programs and are
now receiving interest. Other states have also approved lOLTA programs,
including Maryland, Colorado, Minnesota, Idaho, Illinois, Nevada,
Virginia and Oregon, although none of those states has started collecting
funds at this time.
After attending the Florida conference, I became aware that
substantial amounts of supplemental funds could be generated to provide
21
legal assistance to the poor in civil legal matters if most states would
adopt lOLTA programs. Thirty-five states are now in various stages of
studying those programs, and, therefore, the Legal Services Corporation
decided to provide the centralized organization needed to expand lOLTA
programs. In iate March, a meeting was held here in Washington. As a
result, plans are under way to establish a national lOLTA clearinghouse
which will be funded by a grant from the Corporation. That clearinghouse
will work with all of the states to transmit materials developed in other
states which can speed up the process of adoption of a program. In
addition, it will send recognized experts to work with the states in
accomplishing the adoption process. If a state determines to adopt an
lOLTA program, then LSC will make funds available by grant to implement
the program.
Based upon the Florida experience, it is realistic to estimate that
tens of millions of dollars could be added to current LSC funding to
provide legal services to the poor in civil matters if thirty to forty
states were to adopt lOLTA programs. This supplemental funding, created
from private sources through the catalytic efforts of the Legal Services
Corporation, will significantly enhance the direct delivery of daily
legal services to the poor.
A second program underway by the private bar which is equally as
exciting as the lOLTA program although not as expansive in scope, is the
pro bono effort sponsored by the American Corporate Counsel Association.
There are apprcximately 30,000 lawyers in the United States practicing as
in-house counsel to private corporations. The ACCA is attempting to
organize a nationwide program following the lead of various major
corporations such as Aetna Life and Casulty, Xerox, Boise Cascade, IBM
and others, whereby corporate counsel provide legal assistance to poor
people located in their communities. The Legal Services Corporation was
contacted by the ACCA and is attempting to determine in what ways it can
be of assistance. Representatives of LSC are now attending meetings of
the ACCA pro bono committee, reviewing training materials and offering
comments, making various publications and training materials available,
and examining other ways in which it can assist this very worthwhile
effort, just as the Corporation has supported past and continuing efforts
to increase private attorney involvement by the ABA, NBA, and others.
A third important decision by the Board was to create the Office of
Inspector General to provide an independent mechanism to investigate
problems or complaints which may arise concerning recipients and the
Corporation. The Inspector General, an Officer of the Corporation, will
report directly to the Board. Even though that function was only
recently created and has not been filled, the processing of complaints is
being organized and implemented by attorneys in the Corporation's Office
of Compliance and Review in anticipation of selection of an Inspector
General by the Board in the near future.
While all of this was going on, LSC recipients continued to provide
civil legal services to the poor. Recently collected figures show that
22
during FY '82, those recipients closed 1,141,481 cases compared to
1,221,594 cases in FY '81 and 1,203,853 in FY '80. Average salaries for
all personnel continued to rise as did the average years of experience of
attorneys, managing attorneys, and program directors. Most states
experienced increases during calendar year 1982 in the number of
attorneys in the basic field programs. Nationwide, there was an increase
in the total non-attorneys and secretarial/clerical employees in LSC
programs from 1982 to 1983.
At this time, nearly ninety-six percent of the requested FY 1984
budget is targeted for grants to qualified programs engaged in the direct
delivery of civil legal services to eligible clients. The remaining
amount will be allocated for central management and administration,
central and regional grant management, and the evaluation and monitoring
of local legal services programs.
During 1982, the Legal Services Corporation continued to maintain
nationwide geographical coverage, while taking significant steps to focus
LSC resources on the needs of individual clients seeking counsel and
courtroom representation. Congress prohibited legal services attorneys
from initiating communications with elected officials, either directly or
indirectly, which are designed to support or defeat legislative
proposals. That Congressional action makes available additional attorney
time for those critical access functions which, unlike lobbying, cannot
be performed by poor persons without the assistance of trained legal
counsel.
As President of LSC, I intend to see to it that these congressional
directives are carried out in letter and spirit. I would welcome
congressional action to incorporate in our authorizing legislation, those
riders or restrictions on appropriations bills which prevent our limited
funds from being diverted away from the delivery of legal services and
into inappropriate activities.
I would also urge Congress to remove several harmful provisions
which were attached to the Second Continuing Resolution in December
1982. At that time, Congress approved certain provisions which
contravene the clear intent of the Legal Services Corporation Act
guaranteeing the Corporation's independence from political influence.
Those provisions seriously restrict the Corporation's ability to fulfill
its obligation to oversee effectively the expenditure of S257 million.
As mentioned above, one proviso requires that each 1982 grantee and
contractor be funded in 1983 at the annualized level at which each such
grantee and contractor was funded in 1982 unless and until action is
taken by a confirmed Board. That proviso conflicts with several
statutory mandates of the Legal Services Corporation Act, including the
statutory mandate that LSC "insure that grants and contracts are made so
as to provide the most economical and effective delivery of legal
assistance to persons in both urban and rural areas." 42 U.S.C.
2996f(a)(3). It also conflicts with the responsibility of the
23
Corporation to determine what "grants and contracts (other than those to
programs furnishing legal assistance to eligible clients)... are
necessary to carry out the purposes and provisions of this title." 42
U.S.C. 2996e(a)(l)(R).
The LSC Act does not contemplate that either Congress or the
President would attempt to prescribe the identities of recipients of
Corporation funds or the amount of their grants. Such decisions were
committed to the president of the Corporation (42 U.S.C. 2996f(e)) who is
to avoid the consideration of political factors in making those
decisions. However, by P.L. 97-377, Congress has restricted the
independent judgment of the Corporation's president on the basis of a
distinction recognized by neither the Constitution nor the courts between
the powers exercised by officials appointed by the President of the
United States with the advice and consent of the Senate and those
appointed during the recess of the Senate pursuant to Article II, Clause
3 of the Constitution of the United States.
That action could also have serious consequences in its
application. Due to the unavailability of more recent information, 1982
funding levels were established utilizing 1970 census data which
identified the location of those who had an income below the Official
Poverty Threshhold. However, a grant condition was imposed on all 1983
basic field grants which provides that those grants may be increased or
decreased for the remainder of the grant year if the census data becomes
available and the Board determines to implement a change based upon that
data. Thus, the Corporation will be seeking relief from that provision
during 1983, and such a requirement should not be carried forward to FY
'84. Any mandate that the Corporation distribute funds in 1984 based
upon information gathered in 1970 will result in a deficiency of funds in
areas which e.xperienced substantial increases in the number of poor
persons since 1970. The use of 1970 census data, together with the
practice of annualizing some funding bonuses that were awarded certain
programs in the past, results in a very uneven pattern of legal services
funding across the country in relation to the underlying poverty
population. The Corporation's grant to Northeast Ohio Legal Services
amounts to $3.86 for every 1980 resident with an income below 100?o of the
official poverty threshold, while our grant to Alaska Legal Services
amounts to $17.20. Within California, funding ranges widely from $4.25
per capita to the Legal Aid Society of San Diego to $14.19 for the San
Francisco Neighborhood Legal Assistance Foundation. I urgently request
your assistance in obtaining freedom for the constraints of the
Continuing Resolution so that I can deal with these disparities.
Whatever circumstances existed in 1982 that prompted the adoption of this
proviso guaranteeing refunding at current levels in 1983 should not exist
in 1984 and must not be allowed to restrict the Corporation's ability to
reach those who in 1984 need its assistance.
A second proviso of P.L. 97-377 prohibits compensation of
Corporation Directors for services to the Corporation other than
attendance at meetings of the Board. This proviso seriously inhibits the
24
Board's ability to make informed decisions and to oversee the affairs of
the Corporation. Since 1975, when the Legal Services Corporation became
operational, it has been the Corporation's policy to compensate the
Directors for the time devoted to review and analysis of the various
programs and activities of the Corporation. Time spent on visits to
legal services programs, preparation tor Board and Committee meetings,
appearances before Congressional committees, and other activities of the
Directors related to their duties as members of the Board have been
compensated in accordance with Corporation regulations and clear
legislative history of Section 1006(d)(2) of the Legal Services
Corporation Act.
This proviso imposes a far more restrictive compensation standard on
a board charged with overseeing a quarter of a billion dollar corporation
than applicable to other boards and commissions with similar oversight
responsibilities. Such restrictions should not be continued in 1984.
It is important to reemphasize the extent to which LSC works through
local, independent programs. I have already mentioned that nearly 96
percent of our budget is given in grants to the field programs. Some
programs cover large areas or whole states, some are local. Most use the
staff attorney system but several use the Judicare system in which
private attorneys provide service on a reduced fee basis. Other programs
use a combination of delivery methods. Each recipient program is
governed by a board of directors with broad authority to set policy. The
local nature of our programs is a source of strength, but it is also the
source of some problems. This Corporation does not deliver legal
services, but selects and constantly monitors those who do and who, in
turn, are accountable to locally selected governing boards composed of
attorneys and eligible clients. The Corporation is the mechanism by
which Congress holds accountable a diverse network of independent
services providers.
I would urge the Congress to reauthorize the Corporation at a
funding level consistent with our request, adjusted by inflation for
succeeding years of the authorization.
25
Senator Denton. Thank you, Mr. Bogard. I hope that the chair-
man returns in time for me to depart for the vote which is now on.
If not, I will have to rely on Senator Humphrey getting back in
time, since a member of the majority is supposed to chair. Other-
wise, we will have to suspend for a few minutes.
Mr. Bogard, this committee heard last year that many attorneys
do not donate even a minimal amount of their time to do pro bono
work for the poor. What, if anji^hing, does the Corporation do or
have they been doing to promote private bar involvement?
Mr. Bogard. In 1981, there was the requirement that 10 percent
of the money granted to recipients be used for private bar involve-
ment. We are in the process now of seeing how that is working and
what kind of results we actually are getting from that expendi-
ture of funds. In addition, we are also taking a new pot of money
that was developed this year, called the New Directions for Private
Bar, a fund of about $3 million, and we are attempting to use that
in developing various programs for implementation of private bar
activities. One of those which is particularly important, I believe, is
the lOLTA program, the interest on lawyer trust accounts. That is
a program started down in Florida, whereby lawyers' trust ac-
counts are placed in a common account, as far as purposes of draw-
ing interest under the new negotiable order withdrawal [NOW]
accounts. This allows interest to be paid on checking accounts.
By taking these trust funds, which are held for a short period of
time or are of a small amount, and placing them in a common ac-
count, we are able to generate substantial amounts of funds.
Senator Denton. Excuse me, Mr. Bogard. I, too, will have to
depart, since we now have less than half the allotted time available
to get to the floor. I will recess the hearing for, we hope, no more
than 10 minutes. Assuming the chairman comes back before that
time, having already voted, it will be less than 10 minutes.
[Recess taken.]
The Chairman. Mr. Bogard, I apologize, but we were over on the
floor on the budget battle, and I just happen to have been fighting
one of the battles and I could not come at the time. But I under-
stand you have completed your formal statement.
I am going to submit a whole list of written questions to you, and
without objection, I will put my opening statement in the record at
the beginning of this hearing.
I understand that, unlike Federal employees, the legal services
staff attorneys may go out on strike. Are they also permitted to or-
ganize workers on behalf of the union?
Mr. Bogard. Yes, as long as it is not during office time.
The Chairman. As long as it is not during office hours, can they
unionize?
Mr. Bogard. Yes.
The Chairman. Are you aware that Gerald P. Cureton, a
member of a Philadelphia law firm, was prevented from testifying
before the House Subcommittee on Courts, Civil Liberties, and the
Administration of Justice due to a gag order obtained by the
Camden Regional Legal Services in Camden, N.J.?
Mr. Bogard. No; I was not.
26
The Chairman. Mr. Cureton was to testify that the Camden
office had organized migrant workers and encouraged them to
strike. Were you aware of that?
Mr. BoGARD. No, sir, I am not familiar with that.
The Chairman. Would you check that out for us and give us
whatever details you can give us?
Mr. BoGARD. We would be glad to.
The Chairman. Are legal services attorneys permitted to engage
in school desegregation or busing cases?
Mr. BoGARD. They are not, according to the statute. There has
been some interpretation which has been a little flexible, I think,
in the past. The statute clearly says that they cannot be involved
in matters relating to desegregation. But we have opinions of our
previous General Counsel, back in 1980, which has equated the term
^desegregation" with "busing," saying that when the Congress said
desegregation it really meant busing. So therefore, if a case does
not involve busing specifically, it is not a desegregation case and
you can be involved.
The Chairman. What is the average percentage of a staff attor-
ney's time spent on lobbying?
Mr. BoGARD. I have no way of knowing that. There are no
records in our Corporation that would reflect it.
The Chairman. Do you know that some staff attorneys are al-
leged to have been lobbying on behalf of various causes?
Mr. BoGARD. Yes, that is constantly brought to our attention by
complaints from people.
The Chairman. Do you agree with that; that they do lobby?
Mr. BoGARD. I agree that they do lobby. I do not agree that they
should. I think we have a very limited amount of funding, and I do
not believe that anybody feels we are meeting the need that we
need to meet, and therefore I think that funding should be directed
to the private direct delivery of legal services.
The Chairman. If you know, what is the average percentage of a
staff attorney's time spent on class actions?
Mr. Bogard. I do not have any records that would advise me of
that.
The Chairman. But I take it there is quite a bit of time spent on
class actions throughout the Legal Services Corporation?
Mr. Bogard. There are class actions undertaken, and we have
made an attempt to contact all of our recipients to make sure that
they advise us of the status of those, the numbers, and things like
that. But I could not tell you the amount of time involved.
The Chairman. Are staff attorneys required to keep timesheets
so that management has some idea of how they spend each of their
days?
Mr. Bogard. No.
The Chairman. Don't you think that would be a good idea?
Mr. Bogard. I think it would be an excellent idea.
The Chairman. Law firms have to do that. Almost any form of
outside business has to do it. Would it help if you instituted some
sort of management procedure so that they had to keep track of
their time, what cases they are working on, and so forth?
Mr. Bogard. I think it would be super. I just do not know if we
can get it accomplished. They are all independent local organiza-
27
tions, and they set their own procedures and operating methods.
However, we can indicate that it would be advisable for them to do
so.
The Chairman. What is the total amount grantees spend annual-
ly to pay for the cost of staff attorney membership in organizations
that lobby, if you know?
Mr. BoGARD. I do not know that figure. I understand there are
organizations which receive dues from le^al services recipients
based upon a certain percentage of their grant. For example, I be-
lieve the National Legal Aid and Defenders Association receives
something in the neighborhood of one-tenth of 1 percent of the
grants as dues. If we have $210 million of direct field funding
would be $210,000. There was some testimony last year, I believe,
regarding project advisory group, and I think they received some-
thing like $115 per $100,000, and the amount of money was ap-
proaching $180,000 altogether. But there are other organizations,
and I do not have any way of knowing how much all of those
amounted to.
The Chairman. I have a number of other questions, but I think I
will put them to you in writing and turn to Senator Eagleton at
this time.
Senator Eagleton. Thank you, Mr. Chairman.
Mr. Bogard, the budget for the Legal Services Corporation in the
last year of the Carter administration was $321 million is that cor-
rect?
Mr. Bogard. Yes.
Senator Eagleton. And for 2 years now, the Corporation has
been operating on about $241 million; is that correct?
Mr. Bogard. That is correct.
Senator Eagleton. Have you been able to handle the problems
and the litigation and the caseload and the clientele as satisfactori-
ly on the $241 million as you would had you had $321 million avail-
able, in terms of timeliness, in terms of the number of cases han-
dled, or the number of clients represented, by whatever measure
you care to use.
Mr. Bogard. We have figures which show the number of closed
cases each year that come in from our recipients. In 1981, I believe
the figure was 1.24 million. Last year, those figures were 1.14 mil-
lion, a decrease of about 100,000 cases. So in absolute totals, we are
serving fewer people. Now, the mix of cases may change. We may
be handling more education cases and less divorce cases, and that
may have some impact on the amount of time. But the numbers
are down.
Senator Eagleton. In my opening statement, I read a couple of
quotes in the record, one from the Greater Miami Legal Services
operation there, where they said "We continue to do what we call
'survival issues.' That's our focus now." Then the quote went on to
expand on that. Then I quoted from the Ohio State Legal Services
Association, wherein they said, "Due to staff leaving, we have gone
strictly to emergencies" and then they elaborated on that quote.
Is it fair to say that in various parts of the country, Legal Serv-
ices operations, because of budgetary constraints, have had to cut-
back, and to reduce their staff, and to be more selective in the
number of cases or clients they represent?
28
Mr. BoGARD. That is probably an accurate statement. Our figures
show that the Greater Miami Legal Services is funded at the rate
of about $4.91 per poor person. As I mentioned in my opening re-
marks, if we were able to shift funding so that all funding was
equal on a per capita basis around the country, we could increase
their funding to $6.64. The restrictions prohibit me from doing
that. But they are definitely one of the areas that are underfunded,
assuming we are trying to reach a uniform goal on funding. Inci-
dentally, our average funding now is about $6.20, so you can see
they are substantially below the average.
Senator Eagleton. You lay some significant emphasis on the uti-
lization of the private bar in handling some of these matters, as op-
posed to Legal Services career personnel handling them. Would you
care to elaborate on how efficacious you consider the role of the
private bar in responding to the needs of the poor insofar as legal
representation is concerned?
Mr. BoGARD. I believe it is improving. Senator. I am not sure it
has been what it should be in the past. I certainly do not feel and
have said on previous occasions that the private bar can do the
entire job. However, there are enough attorneys out there that if
they would each take two cases, they would be able to handle more
cases than our Corporation did last year.
Senator Eagleton. But that is the big "if." If you look at the ab-
stract statistics and take the total number of lawyers licensed to
practice law in the 50 States— I do not even know what that
number is, but it is in the multithousands. If they each take two
cases a year, indeed that could make a real dent in this problem.
But the practicality is that they do not take two cases a year.
I have here an article from the Arkansas Gazette, and it talks
about, interestingly enough, the Miami area again. I do not want to
be picking on Miami, but that is what part of the article relates to.
This Arkansas Gazette article says the State bar president— that
means the Florida State bar, a fellow by the name of Sam
Smith— asked a committee headed by a Miami lawyer named Neil
Chonen to suggest ways in which that State's 29,000 lawyers might
give pro bono — public service — representation to the needy. In re-
sponse, 300 lawyers out of 6,400 in Dade County volunteered. So
the Chonen committee came up with what was termed by the bar
there as a shocking recommendation that every lawyer practicing
in Florida either contribute 10 hours a year to serving needy cli-
ents or donate the equivalent of 10 hours of billable time. That
would be $1,500 for a lawyer who charges $150 an hour. That, too,
was rejected, especially the $1,500.
I would encourage you to continue what you are doing to encour-
age the bar to try to take on a greater share of this burden, but I
would not want to hold my breath until the time you got up to that
two-case-per-lawyer figure. That should remain, I guess, as the Uto-
pian goal, maybe to be reached in the after-life.
Mr. Bogard, there have been some allegations about the individ-
uals that you have chosen to fill some of the top positions in the
Corporation. First, let me see if these are the facts.
Of those individuals who voluntarily left the Corporation or who
have been terminated from consulting positions or permanent posi-
29
tions since December 13, how many of those — was December 13
your date of beginning?
Mr. BoGARD. Yes.
Senator Eagleton. How many of those who have left from those
senior positions were women or minorities?
Mr. BoGARD. I really do not have a figure on that. I can get the
information.
Senator Eagleton. We are told that maybe one of your asso-
ciates with you at the table can clarify it, or perhaps some of your
people out in the audience. We are told that there have been 17
people who have left. Some left voluntarily and perhaps some left
under less than voluntary circumstances. But 17 left, and out of
those 17 that left, 12 were women and minorities.
Mr. BoGARD. I would seriously challenge that answer. I do not
think that is accurate at all.
Senator Eagleton. Could you supply then for the record those
folks who left and see if they were classified as women or minor-
ities. Now, of those that had been hired since that date to perma-
nent or consultant positions, how many of those hired have been
women or minorities?
Mr. BoGARD. There have been 12 permanent hires since Decem-
ber 13, and out of that, 5 are either minorities or women.
Senator Eagleton. Would you supply us with a breakdown of
that?
Mr. BoGARD. Yes.
Senator Eagleton. Does that include consultants?
Mr. BoGARD. No; it does not, just permanent hires. I do not have
figures on the consultants, but I could get those.
Senator Eagleton. OK. Get that for us. And of the permanent
hires, 5 out of 12
Mr. BoGARD. And those are positions all across the board, Sena-
tor.
Senator Eagleton. Consultants you will supply us for the
record?
Mr. BoGARD. Yes.
Senator Eagleton. Now of those 12 hired to those permanent
slots, how many had legal services experience?
Mr. BoGARD. I do not have a breakdown like that. I can get that
information.
Senator Eagleton. These are fairly high-ranking positions, are
they not?
Mr. BoGARD. They can be all ranges: secretaries, staff assistants,
attorneys, senior-level people.
Senator Eagleton. How many of the 12 would equate to manage-
ment-level employees, something above clerical?
Mr. BoGARD. We have the Director of Field Services, who is Mr.
Hartley. We have the Director of the Office of Equal Opportunity.
Those are senior-level people.
Senator Eagleton. Those are the two relatively higher up indi-
viduals you have hired since December 13?
Mr. Bogard. Other than my secretary; that is an executive as-
sistant level. We have hired some staff attorneys in that group, but
that does not necessarily mean that they are on
29-379 O— 84 3
30
Senator Eagleton. What about the General Counsel? When was
he hired?
Mr. BoGARD. The General Counsel is under a contract. He came
on about the first of February, I believe. He donated
Senator Eagleton. That is since December 13.
Mr. BoGARD. I am talking about permanent people. He is on a
temporary contract. He donated the first month of his time to us,
and he is now working part time.
Senator Eagleton. Are there other people of senior rank who
are in a category like the General Counsel — that is, they are going
to be there 1 year, iy2 years, or 2 years, whatever it is — who are
not permanent?
Mr. BoGARD. When I came on in December, out of the nine
senior staff positions, seven of the people were in an acting capac-
ity. At the current time, five of those people are in an acting capac-
ity, two of whom were in acting capacities prior to my coming on.
Senator Eagleton. I am not concerned about whether somebodv
is permanent there until the millennium or acting. The General
Counsel is an acting?
Mr. BoGARD. That is correct.
Senator Eagleton. What about the Deputy General Counsel, Mr.
John Meyer?
Mr. BoGARD. Yes; he is in an acting capacity. I am interviewing
people for that spot now. Incidentally, the General Counsel position
and the Deputy General Counsel position have both been posted, and
we are in the process of interviewing.
Senator Eagleton. When did Meyer come aboard?
Mr. BoGARD. I do not recall the date. I can supply that informa-
tion.
Senator Eagleton. The Director of Governmental relations, Mr.
Streeter, when did he come?
Mr. BoGARD. Again, I do not have the date. I suspect it has been
about 6 or 8 weeks.
Senator Eagleton; He is since December 13?
Mr. BoGARD. Yes.
Senator Eagleton. The Director of Public Affairs, Rex Rulen?
Mr. BoGARD. That is correct. He is also since December 13.
Senator Eagleton. Are any of those names that I have men-
tioned or are any of the positions we have discussed been filled by
either a female individual or a black or a Hispanic?
Mr. BoGARD. None that you have mentioned.
Senator Eagleton. Are there any others you would like for me
to mention?
Mr. BoGARD. As I indicated, the equal opportunity position has
been filled with a black male.
Senator Eagleton. One?
Mr. BoGARD. That is correct.
Senator Eagleton. Well, give us a complete list of all people
hired since December 13, with a salary level of above $30,000, who
their predecessor was, and the name of the individual they re-
placed, and indicate the sex and minority status of both the pred-
ecessors and the replacements.
Mr. BoGARD. All right.
31
Senator Eagleton. Was there a rule or something on the books,
or regulation, insofar as prior experience with legal services type
work in previous times?
Mr. BoGARD. Can you expand on what you mean by that?
Senator Eagleton. With respect to the employment of attorneys
with the Corporation?
Mr. BoGARD. Not that I am aware of.
Senator Eagleton. Was there a practice in previous times of
giving preference in terms of employment to lawyers who had legal
services experience?
Mr. BoGARD. There may have been. I have not seen anything to
that effect.
Senator Eagleton. Of all these people we have talked about a
few moments ago, how manj'^ of them had prior legal services expe-
rience?
Mr. BoGARD. As I indicated, I do not know all the people.
Senator Eagleton. These are pretty high-level positions. The
titles I read off go to the very heart of the Corporation. It would
seem to me you would know who it is that you are either hiring or
serving with, albeit they are in an acting capacity.
Mr. Bogard. The Director of the Office of Field Services, which is
our program office, is filled by a person on a permanent basis who
has legal services experience dating back to 1976. The governmental
relations, public affairs, and General Counsel do not have previous
legal services experience. Mr. Meyer, who is the Deputy General
Counsel, has had some legal services experience. The Deputy in the
area of field services, who is an individual I promoted, is a black male
and also has experience in legal services.
Senator Eagleton. What was your legal experience prior to this?
Mr. Bogard. I have no legal services experience, other than liti-
gating cases against the legal services organization.
Senator Eagleton. Was that your main function as an attorney,
litigating legal-service-type matters on the other side of the table?
Mr. Bogard. It was not my main function. It was just one of the
pleasures of the job. They are good adversaries.
Senator Eagleton. That is all I have, Mr. Chairman.
Senator Denton. Thank you, Senator. I will recognize, for the
chairman who has departed momentarily, Senator Nickles from
Oklahoma.
Senator Nickles. Thank you, very much.
Mr. Bogard, I apologize for not catching all of your statement. I
understand that you have been before this committee almost a
couple of hours now, as there has been quite a bit of activity on the
floor, as I am sure you are aware.
There have been a lot of complaints on legal services in the last
several years, with different activities that the Corporation has
been involved in, many of which many people felt were not in the
best interest of and should not be activities in which the Legal
Services Corporation should be involved. Some of these activities
have received some notoriety, and so on. Have some of those cases
which were quite common, particularly back in 1979 and 1980, still
being carried on to any extent? I will mention some if you want
examples.
Mr. Bogard. That may be more helpful.
32
Senator Nickles. There were some that dealt politically, lobbying
efforts
Mr. BoGARD. I am sure there are still lobbying efforts being un-
dertaken by some of our people, and I am sure there are controver-
sial cases being undertaken. If you have specifics you would like for
us to look at, we can make an inquiry to see what is going on.
Senator Nickles. Is it not illegal for the Corporation to be en-
gaged in lobbying activities?
Mr. BoGARD. Under the continuing resolution this year, there are
some new restrictions which cover that. Yes, sir.
Senator Nickles. But it is only under the continuing resolution?
Mr. BoGARD. That is correct.
Senator Nickles. Not under any statutory language as such?
Mr. BoGARD. None that has prohibited lobbying. It has been reg-
ulated somewhat, but it is now more regulated under the continu-
ing resolution.
Senator Nickles. Should we extend those prohibitions in the re-
authorization?
Mr. BoGARD. I have requested that be done, because I feel that
the money you do give us should be spent for the direct delivery of
legal services. I do not think that lobbying is an activity that
should be covered by the Corporation under the current status of
funding.
Senator Nickles. I would concur. If we did not have that prohibi-
tion in your reauthorization, would there actually be some lobbying
activities?
Mr. BoGARD. I have been advised by a number of people in the
programs that they feel that is a very essential aspect of their job,
and I am sure that there would be lobbying activities if there were
no restrictions carried forward.
Senator Nickles. I very much concur with your statement, and I
hope that if we do have legal services reauthorized, we would make
those prohibitions.
There were a lot of other cases. I am looking at some older
things that go back a few years. I am not going to start asking you
about these individual cases now, but I may submit them to you for
the record to see if these or any similar cases are still active and
whether we have taxpayers' dollars involved in some of this activi-
ty. I would appreciate your response. I recognize the chairman's
desire to move on, as we have several other panelists here and we
are still on our first panel. Again, I thank you, and we probably
will be submitting additional questions for you to find out maybe
some of the other cases that are involved, some of which are of a
controversial nature.
Mr. BoGARD. If I may. Senator, I have not taken the position that
it is my responsibility to go back and ferret out all the horror sto-
ries that existed prior to my time. It is my responsibility to make
sure that the organization functions effectively and efficiently now,
and that is where I have been placing my emphasis.
Senator Nickles. Are there still a lot of class action that have
been taken, filed in many cases against State or local governments?
Mr. BoGARD. We have been advised that the number of class ac-
tions represents something less than two-tenths of 1 percent of all
the cases. How that relates to the amount of time involved, I do not
33
know. The number of actual class actions is not great. How that
relates to the delivery of services because of the expenditure of
time, we cannot find out; it is not something that is in the records
of the Corporation. We have, however, made a request of the pro-
grams to give us a listing of all the class actions in which they are
involved.
Senator Nickles. Mr. Chairman, I have no further questions.
The Chairman. Thank you. Senator Nickles. Thank you, Mr.
Bogard.
Senator Eagleton. May I ask one final question, Mr. Chairman?
The Chairman. Sure.
Senator Eagleton. Mr. Bogard, yours is not a confirmable posi-
tion. Thus, we in this committee have not had an opportunity to
discuss matters with you, as it were. So as my final question, let
me ask you a philosophical one.
You are the head man now of the Legal Services Corporation.
You have an extraordinarily difficult job. Even under optimal cir-
cumstances, the job is difficult. But under circumstances where
there is a war between the President and at least some Members of
Congress over the Corporation and its future, it makes your job ex-
traordinarily difficult. Give us your vision of the Legal Services
Corporation. What is the beneficial role you can see it performing.
What are the services that you think your leadership can ably pro-
vide? You are a lawyer of prestige and good reputation. You want
to leave a fine record of public service, and that is what everyone
does who serves in a public capacity. He wants to be able to say to
his children or grandchildren; "I served well in my assignment."
What is your vision of the Legal Services Corporation?
Mr. Bogard. Senator, it is absolutely essential that we be able to
provide access to the court system for everyone. Poor people should
not be precluded from that access simply because they cannot
afford it. I, therefore, hope that the Corporation can focus on that
goal, which I think is the original intent of the statute. I would
hope that we can totally direct the Corporation to providing the
day-to-day legal services that people need. The emergency situa-
tions should be handled. Those other situations also should be han-
dled, and I would hope that we can get our recipients to direct
their efforts to that goal so that we can serve as many people as
possible with the funding that you give us.
Senator Eagleton. Well said. Thank you very much.
The Chairman. Thank you, Senator Eagleton.
Thank you, Mr. Bogard and j'our associates. We appreciate
having you here today. We appreciate the testimony you have
given, and we will keep the record open until the end of this week
to send written questions to you, and we hope that you will answer
them as expeditiously as possible.
Mr. Bogard. We shall.
The Chairman. Our next two witnesses will be Mr. Howard Phil-
lips, the national director of the Conservative Caucus, Inc., in
Vienna, Va., and Diann Jenkins, from Pittsburgh, Pa. We will be
happy to hear your testimony at this time.
I will just say this, having read through some of the testimony
today, it is clear that several of the witnesses will raise serious al-
legations about Corporation activities. In order to get to the bottom
34
of these complaints, I would like for my staff to keep a list of these
allegations, so that we can contact the legal service grantees in-
volved for their response and, if necessary, ask Mr. Bogard to have
the Corporation perform an investigation if necessary.
We will turn to you, Mr. Phillips. We would like you to summa-
rize, but we want you to feel that you have enough time. Then we
will go to you, Ms. Jenkins.
STATEMENT OF HOWARD PHILLIPS, NATIONAL DIRECTOR, THE
CONSERVATIVE CAUCUS, INC., VIENNA, VA.
Mr. Phillips. Senator Hatch, Senator Denton, Senator Nickles,
Senator Eagleton, I appreciate the opportunity to be here.
On July 18, 1974, the Legal Services Corporation Act was ap-
proved by the U.S. Senate. On July 25, 1974, it was signed into law
by Richard Nixon, who resigned the Presidency 2 weeks later. Next
year will be the 10th anniversary of that enactment.
Federal funds appropriated to the Corporation have already to-
taled nearly $2 billion. The Corporation has continued as a nonprof-
it corporation, chartered in the District of Columbia, without a new
authorization since October 1, 1980. Present direct funding for the
Corporation and its grantees goes forward at the rate of $241 mil-
lion per year under a continuing resolution. Indirect Federal fund-
ing and support from other sources amounts to millions more.
During the past decade, this committee has sanctioned the activi-
ties and employment of more than 20,000 public policy activists
whose guaranteed salaries and control over the supply of a service
made free by taxpayer subsidy have given them the freedom to or-
ganize, propagandize, lobby, litigate, patronize, and proselytize
their preferred causes — unchecked either by market accountability
or the close scrutiny of the people's elected representatives.
On those occasions when public attention has been drawn to the
program's controversial activities, whether in the organization of
political action groups, or involvement in ballot referendums, or
the formation of lobbying coalitions and networks, or assistance to
extremist causes of the radical left, the congressional reaction, if
any, all too often has been to look the other way, amid pious pro-
nouncements that such abuses are either incidental or unavoidable.
On other occasions. Congress has sought to contain abuses by
passing regulations against proabortion activism, against homosex-
ual proseljdization, against representation of illegal aliens, against
lobbying. Predictably, despite biennial assurances that the latest
reforms have at last cured the abuses, the abuses have continued,
ever more blatantly, ever more comprehensively.
There are many Members of Congress, perhaps a majority, who
are genuinely concerned about Legal Services Corporation-related
abuses, who at the same time do not wish to be characterized as
being opposed to federally financed guarantees of legal representa-
tion of the indigent.
It is my hope that this year the Labor and Human Resources
Committee will seek to accommodate genuine desires for reform
during a period when, for the foreseeable future, continued funding
of the Legal Services Corporation is assured and time for careful
reflection is available.
35
Having gone for nearly 3 years without an authorization, there is
no reason why, at a time when future funding is not in jeopardy,
this committee cannot take a few months more to carry out the
oversight responsibilities which have for so long been given a low
priority by responsible authorizing committees in both Houses of
Congress.
The American people have the right to observe and to inquire:
This corporation is nine years old. Where have our dollars gone? What are the
political objectives and organizational alliances of those who control the 325 inde-
pendent private corporations which benefit from LSC funding? To which organiza-
tions have tax dollars been reassigned? To which groups have dues been paid and
benefits accorded? To which political training sessions and conferences have travel
costs been subsidized?
What grassroots lobbying coalitions and activities have been inspired and coordi-
nated by full-time Legal Services personnel? What publications, press releases, and
media campaigns have been organized and produced at taxpayer expense to influ-
ence public opinion? To what degree have ideological activist groups, like the Na-
tional Lawyers Guild and the American Civil Liberties Union, been subsidized by
the in-kind assistance of the LSC, its grantees, and other groups to which funds
have been laundered or personnel assigned?
On which policy questions and before which decision-making authorities have
LSC-funded policy activists arrogated to themselves the right to define the public
interest and to assert their self-proclaimed authority to act in behalf of the poor as
a class? What obligations and commitments are made by LSC-funded groups and
their personnel when, for example, they join a highly political union, such as the
United Auto Workers? What obligations arise when LSC grantees or personnel
accept supplemental funding from private foundations and other entities with policy
agendas which may be in conflict with limited objectives intended for the Legal
Services program by Congress?
In what ways are taxpayers subsidizing political activism when Federally-subsi-
dized Legal Services personnel accept positions of responsibility with groups in
active support of, for example, the Palestine Liberation Organization or various
Central American Marxist-Leninist movements? Are quotas always in the interest
of the poor? Is abortion advocacy or homosexual proselytization necessary to serve
and uplift the Nation's needy? To what degree does the pursuit of supplementary
legal fee awards, rather than the pursuit of justice, motivate attorney behavior or
influence program priorities.
To the extent that, following a thorough review, abuses are
found to exist — whether they are random or the result of asserted
designs — I submit that remedies are to be found not in more regu-
lation but in a fundamental redesign of the legal services pro-
gram. True reform can be achieved by relying upon the checks and
balances of a fee-for-service client-accountable system, rather than
by continuing a bureaucratic system, however much regulated, in
which satisfaction of consumer need and market demand is entire-
ly at the discretion of subsidized service providers.
I believe that a conscientious effort by your committee to place
the LSC in the sunshine of full disclosure and accountability will
document the problems which, over the years, have been protested
by thousands of concerned citizens. I am hopeful that you will un-
dertake a comprehensive review of the LSC, asking its grantees to
end the secretiveness which has all too often characterized their ac-
tivities and to voluntarily subject themselves to the disclosure re-
quirements of the Freedom of Information Act from which they are
now exempt.
It is not unreasonable to ask that you withhold judgment, at
least with respect to the nature of any future authorization, until
all the facts are in. With respect to future funding, I recommend
that you require grantees to self-certify at the time they apply for
36
new funding, under penalty of law, that they will refrain from cer-
tain specifically delineated proscribed activities. And to assure that
the program will serve the interests of the indigent legal consumer,
rather than the salaried LSC professional, I hope you will move to
a system of service delivery which permits eligible clients to choose
their own lawyers, whether through a lawyer-referral program uti-
lizing the private bar, through vouchers, or through a process of
permitting attorneys in private practice to take a charitable tax
credit or deduction for indigent representation.
Thank you.
The Chairman. Thank you, Mr. Phillips.
Ms. Jenkins?
STATEMENT OF DIANN R. JENKINS, CITIZEN, PITTSBURGH, PA.
Ms. Jenkins. Mr. Chairman and members of the committee, I
thank you for allowing me to come and speak with you today.
On November 6, 1981, a press release from the office of Pennsyl-
vania Gov. Richard Thornburgh stated the following, expressing his
gratitude at the safe release of the remaining hostages at Graterford
State Prison:
While we have achieved the most important result of obtaining the safe release of
these hostages, there are lessons for the future to be learned from this situation
which should not be ignored. The ringleader in the attempted escape and hostage-
taking is a three-time convicted murderer. He murdered a police office and, while in
prison, murdered a warden and a deputy warden. Nevertheless, Community Legal
Services of Philadelphia insisted upon pushing for a court order in 1975, requirmg
that this convict be returned to the general prison population at Graterford. [Thus]
one lesson that must certainly be taken from this situation is that never again
should government permit "cause" groups or even the courts to place the purported
rights of vicious criminals above the safety of law enforcement and correction offi-
cers without the strongest possible opposition.
According to Howard Thorkelson, executive director of the Penn-
sylvania Legal Services Center in Harrisburg, there is a difference
between the kinds of cases taken on by legal services attorneys and
those taken on by public interest legal groups. To quote, "It's ac-
ceptable for public interest groups to herald a cause." He continued
on to say, "That's not true in legal service." How much further
from the truth can we get? We have the Governor of Pennsylvania,
a former U.S. attorney, stating it and the people who have been
touched by and the resulting victims of the causes are fully aware
of it.
m August 1981, I and three others filed suit against Neighbor-
hood Legal Services Association in Pittsburgh. The suit was filed in
the Allegheny County Court of Common Pleas as a complaint in
equity. Specifics of the suit covered four main areas: First, payment
of expert witness fees in violation of Pennsylvania State Supreme
Court rulings; second, representation and litigation of class action
suits in violation of the national and State charters of LSC; third,
refusal to represent clients in matters of civil law, in direct viola-
tion of charter; and fourth, the names of the Neighborhood Legal
Services board of directors, information which is supposed to be
public but is not.
Our complaint, though encompassing payment of witness fees in
two specific cases, both of which were class actions and covering
questions of State law, was immediately carried to the Federal
37
court to a very sympathetic judge. Strangely, our attorney was
never notified of the petition for removal to Federal court until a
handwritten order from the judge was received.
The Chairman. Who was the judge in this case?
Ms. Jenkins. Gerald Weber. He was chief judge. He has now
stepped down for Judge Teitelbaum but is still active on the bench.
In conversation with the Neighborhood Legal Services office, the
attorney indicated that this was an oversight and he just forgot to
mail the petition copy to us. In a flurry of paper, massive in its
volume to cover a short period of time, the Federal judge deter-
mined that this case belonged in Federal court, citing that Neigh-
borhood Legal Services was a Government agency and the employ-
ees were Federal officers. The case was dismissed by him because
the questions asked were properly handled in the State courts
where we had originally filed the suit. Additionally, he and the
Third Circuit Court of Appeals to whom we took our case, stated
that according to State and Federal laws, suits in equity could only
be filed by stockholders in the corporation or by the board of direc-
tors. As a nonprofit corporation, Legal Services has no stockhold-
ers. As to the board of directors, we were asking for their identities
in the suit because it was not public information.
As a matter of record, I eventually did receive a copy of the
Neighborhood Legal and Pennsylvania Legal Services directors in
August 1982, through direct pressure of my State senator, Frank
Pecora, and my State representative, Mr. Ron Cowell. They, too,
had difficulty but eventually obtained the list from the then Penn-
sylvania Secretary of HEW. For the benefit of a local newspaper
reporter, who has still to this date not received a copy of this list, I
respectfully request that it be made a part of these hearings.
The Chairman. Without objection, we will make it a part of the
hearings.
[Information subsequently supplied for the record follows:]
38
Ncig
hboihood Legal Services Association l^i^SM/p^
Ollicc ol inc Director
429 ro.bc:. Av.-.mk- lOm Ploor. Allcglicny DuHcImg P.llibufgn. Pennsylvania 15210
(.112)255-0700
K'CIGllDORllOOD LEGAL SERVICES ASSOCIATION
ROBERT V. RACUNAS, ESQUIRE
EXECUTIVE DIRECTOR
l^RESinENT:
County OEO
JOHN R. COOK, ESQUIRE
300-C Arcadia Court
9370 McKnight Road
Pittsburgh, PA 15237
366-0980
FIRST VICE PRESIDENT:
Allegheny County Bar Assoc.
JOANNE ROSS VJILDER, ESQUIRE
816 Frick Building
Pittsburgh, PA 15219
261-4040
SECOND VICE PRESIDENT:
Northside Target Area
MS. DOROTHY ANN RICHARDSON
2304 North- Charles Street
Pittsburgh, PA 15214
321-8169
SECRETARY:
Carnegie - County OEO
MR. JOHN COLL •
315 Thomas Street
Carnegie, PA 15106
276-4180
ASSISTANT SECRETARY;
Allegheny County Bar Assoc.
JAY L. FINGERET, ESQUIRE
505 Mill Street
Coraopolis, PA 15108
264-8222
TREASURER:
Lawrence County
MR. PAUL WARD
517 Bell Avenue
New Castle, PA 16101
654-0559
ASSISTANT TREASURER:
University of Pittsburgh
ROBERT B. HARPER, ESQUIRE
University of Pittsburgh
School of Law
3900 Forbes Avenue
Pittsburgh, PA 15260
324-3911
39
MS. DOROTHY GELLAS
llazelwood Target Aioa
55 Cust Street
Pittsburgh, PA 15207
5 21-6005
TllUODOHE BROOKS, ESQUIRE
C . A . P .
Law (. Finance Building
Pittsburgh, PA 15219
765-3535
DALE IlERSllEY, ESQUIRE
Lawyer Member
4 2ncl Floor - 600 Grant
Pittsburgh, PA 15219
566-6050
Street
BERNICE HUHMERT, ESQUIRE
City Solicitor's OfCice
313 City Covinty Building
Pittsl:)urgh, PA 15219
255-2017 or 281-6311
MS. EMELIA CROWLEY
Lawrencevi He Target Area
277 38th Street
Pittsburgh, PA 15201
603-5045
MS. MARIAN DETMAN
County GEO
598 East Seventh Avenue
Tarenturn, PA 15084
226-1925
THOMAS KERR, ESQUIRE
C.A.P.
624 Oliver Bui Id ing
Pittsburgli, PA 15219
471-3490
R. HAIIONE,
of
GLENN
C.A.P.
1811 Boulevard
Pittsburgh, PA
201-6747
SQUIRE
Allies
the
15219
MR. GEORGE DUDLEY
Beaver County
438 Monaca Road
Aliquippa, PA 15001
378-1779
MS. DOLORES MANN
Homewood-Br ushton Target Area
012 N. Braddock Avenue
Pittsburgh, PA 15208
241-4790
ARNOLD EPSTEIN, ESQUIRE
^Lawyer Member
19 Floor Commonwealth Building
Pittsburgh, PA 15219
281-0776
NORMAN MATLOCK, ESQUIRE
C.A.P.
Kellura & Matlock
6508 Frankstown Avenue
Pittsburgh, PA 15208
MS. CHRISTINE GARDNER
Hill District Target Area
920 Bryn Mawr Road
PitL-jluugh, PA 15 219
60 3-5341
FR/aslK McCLELLAN, ESQUIRE
Duquesne University
Duquesne University
School of Law
8th Floor Rockwell Hall
Pittsburgh, PA 15219
434-6184 or 434-6182
CHRIS F. GILLOTTI, ESQUIRE
Allegheny County Bar Assoc.
2C0 Lawyers Building
Pittsburgh, PA 15219
391-4242
LESTER G. NAUHAUS, ESQUIRE
Public Defender's Office
311 Jones Law Building
Pittsburgh, PA 15219
355-5801
SCOTT HENDERSON, ESQUIRE
Lawyer Member
2900 Grant Building
Pittsburgh, PA 15219
288-7784
MR. FRANK POPOVICH
County OEO
1110 Farragut Street
Munhall, PA 15120
40
MR. JAMES I. SMITH
Allegheny County Bar Assoc.
9th Floor City County DuiUin'j
Pittsburgh, PA 15219
261-0518
MS. DONNA SNYDER
Butler County
115 Wick Street
Butler, PA 16001
287-8678
E.J. STRASSBURGER, ESQUIRE
Lawyer Member
3101 Grant Building
Pittsburgh, PA 15219
281-5423
THOMAS THOMPSON, ESQUIRE
County OEO
57th Floor - 600 Grant Street
Pittsburgh, PA 15219
562-8000
MS. PEARL' WILSON
County OEO
B-28 Cochrandale
Box 544
Duquesne, PA 15110
466-4497
MARTHA ZIEGLER, ESQUIRE
Butler County Bar Association
145 Pittsburgh Road
Saxonburg, PA 16056
352-1630 or 282-2749
41
C'lborr Jtr . r_i
Hon. K. Stj .COP W
Court of Cotrjnon I'lcjs
ShuCTan Center
Pittsbur<(h, PA ;S20b
412/35b-S953
Term 1904
lii:'. .r â– â– ' .â– c'-or Au;:ointccs
It-.crt rrcr.k M. ^.cClellan, Esq.
Temple Law School
IVIS North Broad Street
Philadelphia, PA 19122
215/787-8974
Term 1981 •
Harry Eoyer, President
AKL-CIO of Pcnnsy Ivani. 1
227 North Front Street
llarrisburq, PA 17101
717/238-9351
Term 1979 •
Louise Drookins, Chair
State W.R.O.
1727 Ontario Street
Philadelphia, PA 19140
215/684-3600
Term 1981 •
Pennsylvania Bar ftssocintion AppointriL-nts
David H. Lehman, Escj. Peter P. Roper, Esq.
hcNces, Wallace & Nurick Executive Director
100 Pine Street Pennsylvania Bar Assoc.
Harrishurcj, PA 17108 ' 100 South Street
717/232-8000 Harrisburg, PA 17103
Term 1984 717/23B-6715
Term 1983
Mercer D. Tate, Esq.
Gratz, TatG, Spiegel,
Ervin 6 Ruthrauff
Two Girard Plaza, 25th i'l.
Philadelphia, PA 19102
215/563-1900
Term 1984
J. Richard Gray, Esq.
Windolph, Burkholder,
Stainton t. Gray
53 North Duke Street
Lancaster, PA 17602
717/299-7374
Terr» 1982
Allan H. Reuben, Esq.
Wolf, Block, Schorr
S Solis-Cohen
12th Fl. Packard Building
Philadelphia, PA 19102
215/569--;000
Term 1982
Legal Serv ice r Ronres?ntJt ivos
Robert Racunas, tsq.
Executivo Director
Neighborhood Legal Services
Association
429 Forbes Avenue
Pittsburgh, PA 15219
412/255-6700
Term 1983
Ernest E. Jones, Esq.
Executive Director
Community Legal Services
Sylvania House
Juniper & Locust Streets
Philadelphia, PA 19107
215/893-5342
Term 1934'
Harvey Strauss, Esq.
Executive Director
Montgomery County Legal
Aid Service
107 East Main Street
Norristown, PA 19404
215/275-5400
Term 1984
Harold Funt, Esq.
Executive Dii-'ector
Lehigh Valley Legal Services
203 West Fourth Street
Bethlehem, PA 18015
215/691-2473
Term 1982
F. Charles Petrillo, Esq,
Executive Director
Northeastern Pennsylvania
Legal Services
410 Bicentennial Building
Kilkes-Barre, FA 1B701
717/825-0567
Term 1982
Client Representatives
Dorothy Richardson
Priority Planning Project
508 Martin Building
119 Federal Street
Pittsburgh, PA 15212
412/231-4466
Term 1984
Jay Neuman
Resources for Living
Independently
4721 Pine Street
Philadelpliia, PA 19143
215/476-2217
Term 1983
Vickie Freeman Roberts
State W.R.O
1231 North Franklin Street
Philadelphia, PA 19122
215/235-0119
Term 1984
Marian Detman
598 East Seventh Street
Tarentum, PA 15004
412/226-1925
Tern 1983
Ernestine Watlington
2504 Evergreen Road
Harrisburg, PA 17109
717/234-142X
Term 1984
Alice Scott
2009 Tustin Street
Pittsburgh, PA 15219
412/261-5579
Term 1984
Lila Savage
912 Wallls Street
Farrell, PA 16121
412/981-4371
Term 1985
Theron McNeil
711 McXlvain Street
Chester, PA 19013
215/874-7363
Term 1905
Officers: President - David H. Lehman
Vice President - Ernestine Watlington
Secretary - Peter P. Roper
Treasurer - Dorothy Richardson
2/23/82
Notci Terms expire the day after the March annual meeting of designated year
• Continuing in office pending gubernatorial action
42
Ms. Jenkins. Having obtained a copy of the two boards, the
names and affiUations struck me Uke a "Who's Who" of sorts. One
name in particular came up in late July 1982. She was a witness
against HUD in a class action case in the Federal court, called by
Neighborhood Legal Services to give testimony. It was never appar-
ently mentioned that she is a member of the State board of direc-
tors, the Neighborhood Legal Services board of directors, is second
vice president of Neighborhood Legal Services, and treasurer of the
Pennsylvania LSC.
A copy of a letter which I sent to the U.S. attorney arguing the
case may be of interest to you and is enclosed in your packets. It
was too late to impeach the witness by the time he got this infor-
mation, but I feel it was grossly unethical for Neighborhood Legal
Services to call one of their own board members and officers and
not identify her as being so.
Mr. Chairman, as private citizens having collected money from
door-to-door to pay an attorney to represent us, we fmd that the
general public has no means of protection and no way to obtain
relief from the local legal services offices. Constraints put on them
by the Congress are continually violated, and there is absolutely
nothing that can be done about it. In a report furnished to all of
you, which I request be made a part of the record of this hearing,
there are at least 18 fully documented class-action suits, all insti-
gated by legal services recipients in just Pennsylvania. I respectful-
ly suggest that there are many more that I am not aware of
Mr. Chairman, I am a layman, unschooled in the law and not
privy to all of the information available to the legal community lo-
cally or nationally, and yet I have been able to compile some very
interesting and amazing information.
The reasons for the requests for information in our suit may be
of interest to you. The people in the area in which I live were
under attack by legal services. Our school district was being elimi-
nated, along with four others, in a school busing and so-called
school desegregation case. Because of the name-calling being perpe-
trated, we wanted to know just who was in charge to allow such
things to happen. We wanted to know why they would object so ve-
hemently as to go to court to obtain a gag order against us because
we protested what was happening. They had a permanent injunc-
tion ordered without benefit of hearing, which I understand is sup-
posed to be illegal.
We wanted to know why, in direct violation of State law, they
were hiring expert witnesses, paying them thousands of dollars
with supposed promises of more fees coming, when that money
should have been spent on representing the poor. We wanted to
know by what right they protested the hiring of Attorney John
Hickton in Pittsburgh as solicitor of this forced-merged school dis-
trict and subsequently had him fired by the judge.
We wanted to know why they were permitted to continue a class
action case for over 10 years, when they had no apparent client
except their own employee, a paralegal with no children in a public
school. We wanted to know by what right they were being directed
to object to a high school marching band, marching in a local com-
43
munity day parade. And we wanted to know why they apparently
were trying to bring our transit authority to its knees and to the
verge of total bankruptcy.
In that case, they were representing another organization,
ACORN and were again hiring expert witnesses, paying large fees
to a college student to design ridership fare zones. Community
Legal Services in Philadelphia was simultaneously representing
ACORN in a similar suit against the transit authority in Philadel-
phia. It was always my understanding that legal services was not
permitted to represent organizations, and yet here were two non-
profit organizations being represented by two nonprofit law firms.
The legal services offices were supposedly chartered to represent
eligible clients in matters of civil law. What in the world were they
doing with activist organizations, spending their funding on suits
such as this.
Their money, Mr. Chairman, was going into class action litiga-
tion. To quote one of their attorneys in a newspaper interview,
"class action cases are usually costly." We already know that in
the western Pennsylvania area, Mr. Chairman. What cannot be ig-
nored is the fact that in all of these cases, the taxpayers are paying
the costs of both sides in the litigation.
In the class action suit on behalf of the inmates of the Allegheny
County Jail in Pittsburgh, the legal services attorney filed for reim-
bursement of fees of $57,000, plus $7,000 in court costs. In Septem-
ber 1982, the Federal judge awarded more than $63,000 to Neigh-
borhood Legal Services, to quote the legal services attorney in the
case, "I worked for almost a year on that case." The attorney also
said he did not originally plan to ask for fees when he brought the
suit, but he said that the county's failure to cooperate with him
all through the case made him change his mind. Mr. Chairman,
that case was in the Federal court less than 2 years, and Neighbor-
hood Legal Services filed for reimbursement of a total of $64,000. Is
that not double-dipping into the public tax coffers?
The case in Philadelphia, known as the Whitman Park case, has
been called "The granddaddy of legal services class actions." Accord-
ing to the Philadelphia Bulletin in March 1981, Community Legal
Services filed for reimbursement of $4,505,255.63 in legal fees for
their handling of this case alone. But I fear we have not seen any-
thing yet.
The Hoots case in western Pennsylvania has been in the courts
since June 1971, and I have been informed by two local reporters
that Neighborhood Legal Services in Pittsburgh is in process of tab-
ulating all of their costs in preparation for filing for reimburse-
ment I will be very interested to see those figures. The best guess-
timate we have from the local legal community is that this case,
covering both sides of argument, has exceeded the $10 million
mark substantially.
You must remember that in this case, as well as in the case
against the county and the transit authority, it is all being fully
paid by the taxpayers.
By using their funding to pursue cases such as the Hoots case, to
pursue something that literally nobody wanted and without the di-
rection of any known eligible client, the use of tax money to keep
after this case gives the appearance of a total misuse of public
44
funds and a complete lack of fiscal responsibility on the part of
Neighborhood Legal Services.
Last October, the Pittsburgh police were called to the Neighbor-
hood Legal Services board meeting to stop disturbances at that
meeting. I have enclosed news clippings covering the incident, to
which attention should be paid.
Charges of violations of ethics against some of the legal services
attorneys were leveled by the board, and charges of budget mis-
management were leveled against the board by the attorneys. Who
did what? We, the people who foot the bill for all of this, have no
way of knowing. Their records are locked up tight, and the public
has no access to them under any circumstances. In a letter I re-
ceived from former Legal Services Director Dan Bradley in 1981, I
was informed that the Freedom of Information Act does not apply
to Legal Services or its recipients, and I fear that even Congress
could not obtain full information on LSC; they are answerable only
to themselves.
In conclusion, Mr. Chairman, let me make a very personal state-
ment. I am wholly in favor of legal representation being available
for people who cannot afford it. I feel that the original concept of
legal services, as envisioned by the Congress in the 1960's, was
commendable. But what we have now is a Legal Services that has
been so bastardized as to render it useless to the poor and self-serv-
ing to those who are looking for a political gain. Too much money
has been poured into the program without restraint and control,
and at this point there may be nothing that can be done to salvage
it.
It may be that the only true recourse Congress may have is to
eliminate this program and to start something which follows the
mandate. It is clear that the Legal Services Corporation has ig-
nored laws and stepped far away from its mandate in order to
create its own form of social change through the courts and remov-
ing that power from our elected representatives at all levels of gov-
ernment, including here in Washington.
As a final note; citizens are under no legal compulsion to take
any interest or share in the Government or to insure that the polit-
ical setup in city. State, or Nation shall be efficient, progressive, or
even honest. But the absence of legal compulsion cannot absolve
them of moral responsibility. Those who fail to make use of their
political liberty can hardly be called good citizens, and on them
falls the penalty for their negligence. They will get a government
just as bad as they deserve.
If the citizens fail too long and too fully to exercise their political
liberties, they may even lose them. To quote G. K. Chesterton:
A despotism may almost be defined as a tired democracy. As fatigue falls on a
community, the citizens are less inclined for that eternal vigilance which has truly
been called the price of liberty, and they prefer to arm only one single individual to
watch the city while they sleep.
It is time for those watchers, mainly you, to take the steps neces-
sary to eliminate Legal Services totally and to replace it with
something truly concerned for the welfare of the poor. It is time to
remove this very serious and dangerous national blight. Mr. Chair-
man, I thank you for your time and your attention, and I will be
happy to try to answer any questions you may have.
455
The Chairman. Thank you, Ms. Jenkins.
[The prepared statement of Ms. Jenkins follows:]
29-379 O— 84 4
46
Testimony of :
DIANN R. JENKINS
Before the U.S. SENATE COMMITTEE ON
LABOR AND HU^4AN RESOURCES
Wednesday, May 4, 19 83
INTRODUCTION
ON NOVEMBER 6, 1981, A PRESS RELEASE FROM THE OFFICE OF PA GOVERNOR
RICHARD THORNBURGH STATED THE FOLLOWING EXPRESSING HIS
GRATITUDE AT THE "SAFE RELEASE OF THE REMAINING HOSTAGES AT
GRATERFORD STATE PRISON" "WHILE WE HAVE ACHIEVED THE MOST
IMPORTANT RESULT OF OBTAINING THE SAFE RELEASE OF THE HOSTAGES,
THERE ARE LESSONS FOR THE FUTURE TO BE LEARNED FROM THIS SITUATION
WHICH SHOULD NOT BE IGNORED." "THE RINGLEADER IN THE ATTEMPTED
ESCAPE AND HOSTAGE-TAKING IS A THREE-TIME CONVICTED MURDERER. HE
MURDERED A POLICE OFFICER, AND WHILE IN PRISON, MURDERED A WARDEN
AND DEPUTY WARDEN. NEVERTHELESS, COMMUNITY LEGAL SERVICES OF
PHILADELPHIA INSISTED UPON PUSHING FOR A COURT ORDER IN 19 75
REQUIRING THAT THIS CONVICT BE RETURNED TO THE GENERAL PRISON
POPULATION AT GRATERFORD." "(THUS) ONE LESSON THAT MUST
CERTAINLY BE TAKEN FROM THIS SITUATION IS THAT NEVER AGAIN SHOULD
GOVERNMENT PERMIT 'CAUSE' GROUPS, OR EVEN THE COURTS, TO PLACE
THE PURPORTED RIGHTS OF VICIOUS CRIMINALS ABOVE THE SAFETY OF LAW
ENFORCEMENT AND CORRECTION OFFICERS WITHOUT THE STRONGEST POSSIBLE
OPPOSITION."
47
ACCORDING TO HOWARD THORKELSON, EXECUTIVE DIRECTOR OF PENNSYLVANIA
LEGAL SERVICES CENTER IN HARRISBURG, THERE IS A DIFFERENCE BETWEEN
THE KINDS OF CASES TAKEN ON BY LEGAL SERVICES ATTORNEYS AND THOSE TAKEN
ON BY PUBLIC INTEREST LEGAL GROUPS. TO QUOTE, "IT'S ACCEPTABLE FOR
PUBLIC INTEREST GROUPS TO HERALD A CAUSE " HE CONTINUED ON TO
SAY "THAT'S NOT TRUE IN LEGAL SERVICE."
HOW MUCH FURTHER FROM THE TRUTH CAN YOU GET?
WE HAVE THE GOVERNOR OF PENNSYLVANIA, A FORMER U.S. ATTORNEY,
STATING IT AND THE PEOPLE WHO HAVE BEEN TOUCHED BY AND THE RESULTING
VICTIMS OF THESE CAUSES ARE FULLY AWARE OF IT.
********
48
TESTIMONY
IN AUGUST, 1981, HAVING PURSUED SOME SPECIFIC INFORMATION FOR
OVER A YEAR, I AND THREE OTHERS FILED SUIT AGAINST NEIGHBORHOOD
LEGAL SERVICES ASSOCIATION IN PITTSBURGH. THE SUIT WAS FILED IN
THE ALLEGHENY COUNTY COURT OF COMMON PLEAS AS A COMPLAINT IN EQUITY.
SPECIFICS OF THE SUIT COVERED FOUR MAIN AREAS. 1) PAYMENT OF EXPERT
WITNESS FEES IN VIOLATION OF PA STATE SUPREME COURT RULINGS.
2) REPRESENTATION AND LITIGATION OF CLASS ACTION SUITS IN VIOLATION
OF NATIONAL AND STATE CHARTER OF LSC. 3) REFUSAL TO REPRESENT
CLIENTS IN MATTERS OF CIVIL LAW IN DIRECT VIOLATION OF CHARTER.
4) NAMES OF NLSA BOARD OF DIRECTORS - INFOPJyLATION WHICH IS SUPPOSED
TO BE PUBLIC BUT IS NOT.
OUR COMPLAINT, THOUGH ENCOMPASSING PAYMENT OF WITNESS FEES IN TWO
SPECIFIC CASES, BOTH OF WHICH WERE CLASS ACTIONS, AND COVERING QUESTIONS
OF STATE LAW, WAS IMMEDIATELY CARRIED TO FEDERAL COURT, TO A VERY
SYMPATHETIC NLSA JUDGE. STRANGELY, OUR ATTORNEY WAS NEVER NOTIFIED
OF THE PETITION FOR REMOVAL TO FEDERAL COURT UNTIL A HANDWRITTEN
ORDER FROM THE JUDGE WAS RECEIVED. IN CONVERSATION WITH THE NLSA
OFFICE, THE ATTORNEY INDICATED THAT IT WAS AN "OVERSIGHT" AND HE JUST
FORGOT TO MAIL THE PETITION COPY TO US.
IN A FLURY OF PAPER, MASSIVE IN ITS VOLUME COVERING A SHORT TIME,
THE FEDERAL JUDGE DETERMINED THAT THE CASE BELONGED IN FEDERAL COURTVj
CITING THAT NLSA WAS A GOVERNMENT AGENCY AND EMPLOYEES WERE FEDERAL
OFFICERS. THE CASE WAS DISMISSED BY HIM BECAUSE THE QUESTIONS ASKED
WERE PROPERLY HANDLED IN THE STATE COURTS. ADDITIONALLY, HE STATED
THAT ACCORDING TO STATE AND FEDERAL LAWS, SUITS IN EQUITY COULD ONLY
49
-2-
BE FILED BY STOCKHOLDERS IN THE CORPORATION OR BY THE BOARD OF DIRECTORS.
AS A NON-PROFIT CORPORATION, LSC HAS NO STOCKHOLDERS PER SE !
AS TO THE BOARD OF DIRECTORS WE WERE ASKING FOR THEIR IDENTITIES
IN THE SUIT BECAUSE IT WAS NOT PUBLIC INFORMATION!
AS A MATTER OF RECORD, I EVENTUALLY DID RECEIVE A COPY OF THE NLSA
BOARD OF DIRECTORS AND OF THE PA LSC DIRECTORS. THIS WAS RECEIVED
THRU DIRECT PRESSURE OF MY STATE SENATOR, FRANK PECORA, AND MY
STATE REPRESENTATIVE, RON COWELL. THEY_TOO/^AD DIFFICULTY BUT
EVENTUALLY OBTAINED THE LISTS FROM THE THEN SECRETARY OF HEW.
FOR THE BENEFIT OF A NEWSPAPER REPORTER IN PITTSBURGH WHO HAD ALSO
BEEN ATTEMPTING TO OBTAIN THOSE NAMES FOR NEARLY A YEAR, I ASK THAT
A COPY BE MADE A PART OF THE RECORD OF THESE HEARINGS.
HAVING OBTAINED A COPY OF THE NLSA BOARD, THE NAMES AND AFFILIATIONS
STRUCK ME LIKE A WHO'S - WHO OF SORTS.
ONE NAME IN PARTICULAR CAME UP IN LATE JULY OF 19 82. SHE WAS A WITNESS
AGAINST HUD IN A CLASS ACTION CASE IN FEDERAL COURT. CALLED BY NLSA
TO GIVE TESTIMONY, IT WAS NEVER APPARENTLY MENTIONED THAT SHE IS A
MEMBER OF THE STATE BOARD OF DIRECTORS, THE NLSA BOARD OF DIRECTORS
AND IS SECOND VICE PRESIDENT OF NLSA AND TREASURER OF PA LSC.
A COPY OF A LETTER WHICH I SENT THE U.S. ATTORNEY ARGUING THE CASE
MAY BE OF INTEREST TO YOU AND IS ENCLOSED. IT WAS TOO LATE TO IMPEACH
THE WITNESS BY THE TIME HE GOT THE INFORMATION, BUT I FEEL IT WAS
GROSSLY UNETHICAL FOR NLSA TO CALL ONE OF THEIR OWN BOARD MEMBERS
AND NOT IDENTIFY HER AS BEING SO.
50
-3-
MR. CHAIMAN, A3 PRIVATE CITIZENS, HAVING COLLECTED MONEY DOOR-TO-DOOR
TO PAY AN ATTORNEY TU REPRESENT US, WE FIND THAT THE GENERAL PUBLIC
HAS NO MEANS OF PROTECTION AND NO WAY TO OBTAIN RELIEF FROM THE
LSC LOCAL OFFICES. CONSTRAINTS PUT ON THEM BY CONGRESS ARE CONTINUALLY
VIOLATED AND THERE IS ABSOLUTELY NOTHING THAT CAN BE DONE ABOUT IT.
IT IS MY ITNDERSTANDING THAT THE LSC ACT OF 19 74 AS AMENDED EXPRESSLY
PROHIBITS CLASS ACTION LITIGATION. BUT IN THE PITTSBURGH AREA ALONE
WE ARE WATCHING "HOOTS VS PA", "ACORN VS PORT AUTHORITY", "SMITH VS.
WETTICK","LAWSON VS COON" AND MANY MORE.
IN A REPORT FURNISHED TO ALL OF YOU, WHICH I REQUEST BE MADE A PART
OF THE RECORD OF THIS HEARING, THERE ARE AT LEAST 18 FULLY DOCUMENTED
CLASS ACTION SUITS - ALL INSTIGATED BY NLSA AND OTHER LSC RECIPIENTS
IN JUST PENNSYLVANIA. AND I RESPECTFULLY SUGGEST THAT THERE ARE MA^]Y
>ANY MORE THAT I AM NOT AWARE OF.
MR. CHAIRMAN, I AM A LAYMAN - UNSCHOOLED IN THE LAW AND NOT PRIVY
TO ALL OF THE INFORMATION AVAILABLE TO THE LEGAL COMMUNITY - AND YET
I HAVE BEEN ABLE TO COMPILE SOME VERY INTERESTING AND AMAZING
INFORMATION.
THE REASONS FOR THE REQUESTS FOR INFORMATION IN OUR SUIT MAY BE OF
INTEREST TO YOU. WE, THE PEOPLE OF THE COMMUNITY IN WHICH I LIVE,
WERE UNDER ATTACK BY NLSA. OUR SCHOOL DISTRICT WAS BEING ELIMINATED
ALONG WITH FOUR OTHERS IN A SCHOOL BUSING AND SO-CALLED SCHOOL
DESEGREGATION CASE. BECAUSE OF THE NAME-CALLING BEING PERPETRATED,
51
-4-
I WANTED TO KNOW JUST WHO WAS IN CHARGE TO ALLOW SUCH THINGS TO
HAPPEN.
I WANTED TO KNOW WHY THEY WOULD OBJECT SO VEHIMENTLY AS TO GO TO
COURT TO OBTAIN A GAG ORDER AGAINST US BECAUSE WE PROTESTED WHAT WAS
HAPPENING. THEY HAD A PERMANENT INJUNCTION ORDERED WITHOUT BENEFIT
OF HEARING WHICH IS SUPPOSED TO BE ILLEGAL!
I WANTED TO KNOW WHY, IN DIRECT VIOLATION OF STATE LAW, THEY WERE
HIRING JN EXPERT WITNESSES, PAYING THEM THOUSANDS OF DOLLARS WITH
SUPPOSED PROMISES OF MORE FEES COMING, WHEN THAT MONEY SHOULD HAVE
BEEN SPENT ON REPRESENTING THE POOR.
I WANTED TO KNOW BY WHAT RIGHT THEY PROTESTED THE HIRING OF
ATTORNEY JOHN HICKTON AS SOLICITOR OF THIS FORCED-MERGED SCHOOL
DISTRICT AND SUBSEQUENTLY HAD HIM FIRED BY THE JUDGE!
I WANTED TO KNOW WHY THEY WERE PERMITTED TO COSlTINUE A CLASS ACTION
CASE FOR OVER TEN YEARS WHEN THEY HAD NO APPARENT CLIENT EXCEPT
THEIR OWN EMPLOYEE, A PARALEGAL WITH NO CHILDREN IN A PUBLIC SCHOOL.
I WANTED TO KNOW BY WHAT RIGHT THEY WERE BEING DIRECTED TO OBJECT
TO A HIGH SCHOOL BAND MARCHING IN A COMMUNITY DAY PARADE.
ADDITIONALLY, I WANTED TO KNOW WHY THEY WERE APPARENTLY TRYING TO
BRING OUR TRANSIT AUTHORITY TO ITS KNEES AND TO THE VERGE OF TOTAL
BANKRUPTCY.
IN THAT CASE, THEY WERE REPRESENTING AN ORGANIZATION - ACORN - AND .
WERE AGAIN HIRING EXPERT WITNESSES, PAYING LARGE FEES TO A COLLEGE
STUDENT TO DESIGN RIDERSHIP FARE ZONES. CLS IN PHILADELPHIA WAS
SIMULTANEOUSLY REPRESENTING ACORN IN A SIMILAR SUIT AGAINST SEPTA,
THE TRANSIT AUTHORITY IN PHILADELPHIA.
52
-5-
IT WAS ALWAYS MY UlvIDERSTANDING THAT LEGAL SERVICES WAS NOT PERMITTED
TO REPRESENT ORGANIZATIONS AND YET HERE WERE TWO NON-PROFIT ORGANIZATIONS
BEING REPRESENTED BY TWO NON-PROFIT LAW FIRTHS! THE LSC OFFICES WERE
SUPPOSEDLY CHARTERED TO REPRESENT ELIGIBLE CLIENTS IN MATTERS OF CIVIL
LAW. WHAT IN THE WORLD WERE THEY DOING WITH ACTIVIST ORGANIZATIONS
SPENDING THEIR MONEY ON SUITS SUCH AS THIS?
DURING THE PERIOD OF 19 80-81, WHILE AT THE PEAK OF THEIR FUNDING BOTH
FROM THE FEDERAL GOVERNMENT AND FROM STATE GOVERNMENT, NLSA BEGAN
TO TURN AWAY CLIENTS ON A WHOLESALE BASIS. THE BLITZ IN THE MEDIA
BEGAN THAT THEY DID NOT HAVE THE MONEY TO HANDLE ANY MORE CLIENTS.
WHERE WAS IT GOING? THEY WERE AT THE ULTIMATE OF FUNDING BUT NOT
DOING THE JOB THERE CHARTERS CALLED FOR.
THEIR MONEY, MR. CHAIRMAN WAS GOING INTO CLASS ACTION LITIGATION.
TO QUOTE ONE OF THEIR ATTORNEYS IN A NEWSPAPER INTERVIEW, "..CLASS
ACTION CASES ARE USUALLY COSTLY." WE ALREADY KNOW THAT IN THE
WESTERN PENNSYLVANIA AREA.
WHAT CANNOT BE IGNORED ALSO, IS THE FACT THAT IN ALL OF THESE
CASES, THE TAXPAYERS ARE PAYING THE COSTS OF BOTH SIDES.
IN THE CLASS ACTION SUIT ON BEHALF OF INMATES IN THE ALLEGHENY COUNTY
JAIL IN PITTSBURGH, THE NLS ATTORNEY FILED FOR REIMBURSEMENT OF FEES
OF $57,000 PLUS $7000 IN COURT COSTS. IN SEPTEMBER, 1982, THE FEDERAL
JUDGE AWARDED MORE THAN $63,300 TO NLSA. TO QUOTE THE NLSA ATTORNEY
ON THE CASE.... "I WORKED FOR ALMOST A YEAR ON THAT CASE." "I HAVE
KNOWN OF SUCH CASES WHERE THE ATTORNEY INVOLVED WOULD HAVE ASKED TWO
OR THREE HUNDRED THOUSAND DOLLARS . "
53
THE ATTORNEY ALSO SAID HE DIDN'T (ORIGINALLY) PLAN TO ASK FOR
FEES WHEN HE BROUGHT THE SUIT. BUT HE SAID THE COUNTY'S FAILURE TO
COOPERATE WITH HIM ALL THROUGH THE CASE MADE HIM CHANGE HIS MIND.
MR. CHAIRMAN, THAT CASE WAS IN THE FEDERAL COURT ONLY TWO YEARS AND
NLSA SUED FOR REIMBURSEMENT OF A TOTAL OF $64,000. IS THAT NOT
DOUBLE DIPPING INTO THE* TAX COFFERS?
THE CASE IN PHILADELPHIA, KNOWN AS THE WHITMAN PARK CASE, HAS BEEN
CALLED THE "GRANDDADDY OF LSC CLASS ACTIONS. ACCORDING TO THE
PHILADELPHIA BULLETIN IN MARCH, 19 81, COMMUNITY LEGAL SERVICES
FILED FOR REIMBURSEMENT OF $4,505,255.63. IN LEGAL FEES FOR
THEIR HANDLING OF THIS CLASS ACTION CASE. BUT I FEAR WE HAVEN'T
SEEN ANYTHING YET.
THE HOOTS CASE IN WESTERN PENNSYLVANIA HAS BEEN IN THE COURTS SINCE
JUNE OF 19 71 AND I HAVE BEEN INFORMED BY TWO LOCAL REPORTERS THAT
NLSA IN PITTSBURGH IS IN PROCESS OF TABULATING ALL OF THEIR COSTS
IN PREPARATION FOR FILING FOR REIMBURSEMENT. I WILL BE VERY
INTERESTED TO SEE THOSE FIGURES. THE BEST "GUESTIMATE" WE HAVE
FROM THE LOCAL LEGAL COMMUNITY IS THAT THIS CASE, COVERING BOTH
SIDES OF ARGUMENT, HAS EXCEEDED THE $10,000,000.00 MARK SUBSTANTIALLY,
YOU MUST REMEMBER THAT IN THIS CASE, AS WELL AS THE CLASS ACTION
AGAINST THE COUNTY AND THE TRANSIT AUTHORITY, IS BEING FULLY PAID
FOR BY THE TAXPAYERS. BOTH SIDES ARE FROM OUR OWN POCKETS!
54
-7-
IN THE SUIT BROUGHT BY NLSA FOR ACORN AGAINST THE PORT AUTHORITY,
LEGAL FEES BY MID AUGUST, 19 81, WEREESTII4ATED BY THOSE INVOLVED
TO BE AT THE $500,000 MARK AND THE CASE WAS JUST BEGINNING ITS
APPEALS STAGE. THIS FIGURE ADMITTEDLY DID NOT COUNT THE COST
OF STAFF AND PERSONNEL TIME. THAT SUIT HAD BEEN IN THE COURTS
FOR LESS THAN ONE YEAR AND LOOK AT THE COSTS!
WITH THE EXPENDITURES OF THIS SORT, VAST SUMS OF MONEY ALLOCATED
TO NLSA IN PITTSBURGH ARE BEING SIPHONED AWAY FROM THEIR MANDATED
COURSE OF REPRESENTING ELIGIBLE CLIENTS,
BY USING THEIR FUNDING TO PURSUE THE HOOTS CASE ALONE, TO PURSUE
SOMETHING THAT LITERALLY NOBODY WANTED AND WITHOUT THE DIRECTION
OF ANY KNOWN ELIGIBLE CLIENT, THE USE OF TAX MONEY TO KEEP AFTER
THIS ONE CASE GIVES THE APPEARAl^CE OF A TOTAL "MISUSE OF PUBLIC
FUNDS AND A COMPLETE LACK OF FISCAL RESPONSIBILITY ON THE PAJ^T
OF NLSA.
THRU- THE HISTORY OF THE HOOTS CASE, MORE THAN 900 DOCKET ENTRIES ARE
LISTED DATING FROM JUNE OF 19 71 to MAY, 19 81 - PRIOR TO ANY APPEALS
BEING FILED.
THE WORD BARRATRY HAS BEEN SPOKEN TIME AND AGAIN PERTAINING TO THE
NLSA HANDLING OF THE HOOTS CASE. THEY ARE CONSTANTLY IN COURT
DEMANDING SPURIOUS INFORMATION; DISCIPLINARY INF0FJ4ATI0N AND DATA
BASED ON RACE; LISTS OF ALL TEXT BOOKS BEING USED OR PLANNED TO BE
USED; RACIAL MAKE-UP OF ALL SOCIAL AND EXTRACURRICULAR ACTIVITIES
IN THE SCHOOL DISTRICT AND FOR THREE YEARS PRIOR TO THE FORCED
MERGER. IT HAS BECOME A WITCH HUNT, AN INQUISITION!
55
-8-
IN SEPTEMBER, 19 81, THE NLSA STAFF IN PITTSBURGH FORMED A UNION -
THE IRON CITY LEGAL ASSISTANCE WORKERS. THEIR UNION REPRESENTATIVES
HAVE BEEN ACTIVELY INVOLVED IN THE FORMATION OF THE WESTERN PA
CHAPTER OF THE FAIR BUDGET COALITION - AN ADVOCACY AND POLITICAL
ACTIVIST GROUP. THEY ARE INVOLVED HEAVILY IN VOTER REGISTRATION
DRIVES AND DETERMINING VOTING BLOCKS TO PUT IN THEIR OWN CANDIDATES
IN PUBLIC OFFICE. THEY WORK WITH OTHER GROUPS TO ORGANIZE DEMON-
STRATIONS THROUGHOUT WESTERN PENNSYLVANIA.
I AM NOT SAYING THAT NLSA IS THE IMPETUS OF THE ORGANIZATION BUT
THEY ARE DEFINITELY A PART OF THE MAKE-UP.
IT IS MY UNDERSTANDING THAT LSC EMPLOYEES ARE NOT PERMITTED TO
WORK WITH POLITICAL ACTIVIST GROUPS AND ARE NOT PERMITTED TO LOBBY
THE GOVERNMENT BUT I, AND YOU, BOTH KNOW THEY DO IT CONSTANTLY.
IN OCTOBER, 19 82, THE PITTSBURGH POLICE WERE CALLED TO THE NLSA
BOARD MEETING TO STOP DISTURBANCES AT THE MEETING. I HAVE ENCLOSED
THE NEWS CLIPPINGS COVERING THAT MEETING WHICH SHOULD BE PAID ATTENTION
TO. CHARGES OF VIOLATIONS OF ETHICS AGAINST SOME OF THE NLSA ATTORNEYS
WERE LEVELED BY THE BOARD AND CHARGES OF BUDGET MISMANAGEMENT WERE
LEVELED AGAINST THE BOARD BY THE ATTORNEYS. WHO DID WHAT? WE,
THE PEOPLE WHO FOOT THE BILL FOR ALL OF THIS HAVE NO WAY OF KNOWING.
THEIR RECORDS ARE LOCKED-UP TIGHT AND THE PUBLIC HAS NO ACCESS TO THEM.
IN A LETTER I RECEIVED FROM FORMER LSC DIRECTOR, DAN BRADLEY, IN 19 81
I WAS IMFORMED THAT THE FREEDOM OF INFORMATION ACT DOESN'T EVEN APPLY
TO LSC OR ITS RECIPIENTS. I FEAR THAT EVEN CONGRESS CANNOT OBTAIN
INFORMATION ON LSC OR ITS RECIPIENTS. THEY ARE ANSWERABLE ONLY TO'
THEMSELVES .
56
IN CONCLUSION, MR. CHAIRMAN, LET ME MAKE A VERY PERSONAL STATEMENT.
I AM WHOLLY IN FAVOR OF LEGAL REPRESENTATION BEING AVAILABLE FOR
PEOPLE WHO CANNOT AFFORD IT.
I FEEL THE ORIGINAL CONCEPT OF LEGAL SERVICES AS ENVISIONED BY
CONGRESS IN THE MID 1960 "S WAS COMMENDABLE.
BUT WHAT WE HAVE NOW IS A LEGAL SERVICE THAT HAS BEEN SO BASTARDIZED
AS TO RENDER IT USELESS TO THE POOR AND ONLY SELF-SERVING TO THOSE
WHO ARE LOOKING FOR A POLITICAL GAIN.
TOO MUCH MONEY HAS BEEN POURED INTO THE PROGRAM WITHOUT RESTRAINT
AND CONTROL AND AT THIS POINT, THERE MAY BE NOTHING THAT CAN BE
DONE TO SALVAGE IT. IT MAY BE THAT THE ONLY TRUE RECOURSE CONGRESS
MAY HAVE IS TO ELIMINATE THIS PROGRAM AND TO START SOMETHING WHICH
FOLLOWS THE MANDATE. IT IS CLEAR THAT LSC HAS IGNORED LAWS AND
STEPPED FAR AWAY FROM ITS MANDATE IN ORDER TO CREATE ITS OWN FORM
OF SOCIAL CHANGE THRU THE COURTS AND REMOVING THAT POWER FROM OUR
ELECTED REPRESENTATIVES AT ALL LEVELS OF GOVERNMENT INCLUDING HERE
IN WASHINGTON.
I ASK THAT THE BACK-UP INFORMATION WHICH I HAVE FURNISHED TO YOU BE
MADE A PART OF MY STATEMENT AND I THANK YOU SINCERELY FOR LISTENING
TO SOMEONE WHO CARES DEEPLY ABOUT THIS SUBJECT AND WHAT HAPPENS
WITHIN THE WALLS OF THIS ILLUSTRIOUS SENATE AND THE CONGRESS.
THANK YOU FOR YOUR TIME AND IF YOU HAVE ANY QUESTIONS PERTAINING TO
ANY OF THE INFORMATION I HAVE COVERED I WILL TRY TO ANSWER THEM
FOR YOU.
57
As a final note: Citizens are under no legal compulsion to take any
interest or share in the government, or to insure that the political
setup in city, State or Nation shall be efficient, progressive or even
honest. But the absence of legal compulsion cannot absolve them of
moral responsibility. Those who fail to make use of their political
liberty can hardly be called good citizens, and on them falls the
penalty for their negligence — they will get a government just as bad
as they deserve. If the citizens fail too long and too fully to
exercise their political liberties, they may even lose them. As
G.K. Chesterton said, "A despotism may almost be defined as a tired
democracy. As fatigue falls on a community the citizens are less inclined
for that eternal vigilance which has truly been called the price of
liberty, and they prefer to arm only one single individual to watch the
city while they sleep."
The Chairman. Let me start first with Mr. Phillips. Do you be-
lieve that the current congressional prohibitions against lobbying
by staff attorneys are effective?
Mr. Phillips. I do not believe that there are any regulatory pro-
hibitions which have been on the books or which are likely to be on
the books which could effectively preclude a full-time staff attorney
from engaging in lobbying activities. The fact of the matter is that
there are States in which full-time legal services attorneys or rep-
resentatives of legal services organizations are registered with the
State legislature or performing representative services elsewhere.
I notice in the bill which Senator Eagleton has introduced that
there is a provision, and correct me if I am wrong, for attorneys
from the legal services program to provide lobbying assistance
upon request when the interests of the program are directly affect-
ed. Senator, I believe that the problem with the program is not
that it is not sufficiently regulated. No matter how many regula-
tions you have, people in a free country can do things on their
lunch hour, on their coffee break, on their own time.
I think the problem is that this is a program in which the power
of purchase has been vested in the providers of services rather
than the consumers of services. When you have a service which is
free, the demand for that service will be unlimited. When there is
a limited supply, those who control the supply will determine
which demand gets satisfied. Since legal services is free, legal serv-
ices attorneys can determine which requests for representation
they can respond to.
It is understandable that legal services attorneys, in dealing with
thousands of poor people with legitimate grievances, will reach the
conclusion that it is more important to change the law than it is to
provide representation in a specific case. I can understand the frus-
tration of an attorney who says, **Gee, I have taken the same case
over and over again, and the problem still exists. What we really
need to do is lobby for changes in the law." Now, he has a perfect
58
right to do that. My objection is, I do not think it is appropriate for
the Congress or for the executive branch to determine who shall be
subsidized to define the public interest. I think that it either should
be done in the private sector, in a manner which is accountable to
the checks and balances of the marketplace, or it should be done in
a way that the system vests the power of purchase in the consum-
er, the client, the poor person, rather than the attorney.
In other words, what I am saying is, instead of a staff attorney
system, you should move to a voucher system, you should move to
a tax-deduction /tax-credit system, or you should move to a lawyer-
referral-service system, rather than having a separate, segregated
system of justice for the poor, where some people have the right to
define the public interest.
The Chairman. There has been much congressional debate over
the use of class actions by legal services attorneys as a means to
furthering their own political beliefs. Do you believe that by re-
stricting the use of class actions the Congress can curtail political
manipulation of the legal services program?
Mr. Phillips. Once again, I would have to say I do not think reg-
ulation is the answer. Senator. The answer is to structure the pro-
gram in such a way that the program is client-accountable rather
than lawyer-accountable. Class-action suits do concern me to the
degree that an attorney with a guaranteed salary is able to say.
"This is the best way to spend my time. I am going to spend all of
my time on this." I do not have $241 million to have access to all of
the information that Mr. Bogard or this committee can have access
to, but from reading newspaper articles, I observe, for example,
that in Orlando there was an organization called Greater Orlando
Alliance for Legal Services, which supposedly only had two class-
action suits. But there was a report in the Orlando newspaper that
they spent the majority of the organization's time on those two
class-action suits.
My concern is not just with that kind of distortion of accountabil-
ity in this program. My concern is with the organization and repre-
sentation of groups. It is the indirect subsidy of groups like the
ACLU, the National Lawyers Guild. It is paying for conferences
like the one that was held in Puerto Rico after the 1980 election,
planning political strategy. There are many programs in the Feder-
al Government concerning which I have philosophical disagree-
ments, but the reason why this one concerns me most profoundly is
not because of the lawsuits they bring, it is because of the lobbying,
it is because of the organizing, it is because of the efforts to form
public opinion and organize grassroots coalitions.
The Chairman. In your estimation, how important have the na-
tional and State support centers been in improving legal represen-
tation to the poor?
Mr. Phillips. In improving it?
The Chairman. Yes; do you think they have improved it?
Mr, Phillips. I believe that public policy is best determined by
the elected representatives of people, or people who are duly ac-
countable to those elected representatives.
I have a concern when I read, for example, the publication called
Health Advocate, the newsletter of the National Health Law Pro-
gram funded bj' Legal Services, which talks at taxpayer expense
59
about how if you deny women a federally funded abortion, you are
doing them a great disservice. And there are similar publications
by other legal services projects. I think that people in the private
sector have a perfect right to argue about what ought to be public
policy on abortion, but I do not think it is right to assume that the
proabortion position is necessarily what is good for poor people.
Frankly, I think abortion is especially bad for the poor, and feder-
ally financed abortion is especially bad for the poor.
On other issues there are two viewpoints, and I respect the right
of people to have diverse viewpoints. But I would request that they
respect my right not to have to subsidize the advocacy of their
viewpoint.
The Chairman. Do you believe that there is a right to an attor-
ney in civil actions as well as criminal actions.
Mr. Phillips. No, Senator, and I know there are not a great
many people who share my view. But I agree with the Supreme
Court that while a case can be made for a right of representation
in a criminal proceeding, the problem of applying that to a civil
proceeding is that if you require the taxpayers to subsidize that, in
many cases you have a situation where taxpayers themselves who
are unable to afford legal representation are subsidizing it for
others.
I would be less concerned about assuring it, I would be less con-
cerned about the dollars expended, if there were a consumer-ac-
countable system, if instead of having lawyers with guaranteed sal-
aries who are in a position to set priorities you spent that amount
of money through clients who came, for example, to the bar associ-
ation or a lawyer referral service and said; "Here is my problem,"
and the referral service said; "Here are the attorneys in private
practice. Pick one and go from there."
The Chairman. I have a lot of other questions for you, Mr. Phil-
lips. What I would like you to do is submit to the committee, if you
can, for this record as many illustrations that you can come up
with of what you consider to be wrongful approaches by
Mr. Phillips. Senator, let me respectfully decline your invitation.
My organization does not receive $241 million from the Federal
Government. We have a membership which contributes money to
our support to work on a variety of projects. I do not believe it is
my responsibility to find out what the Legal Services Corporation
is up to. I think that is your responsibility, and I would argue that
since this program will be celebrating its 10th anniversary this
year, since it has done without an authorization since October
1980, since there is no immediate threat to its continued funding,
since because of the Weicker amendment there is no authority on
the part of Mr. Bogard to rearrange the grantees by their level of
funding, that you use the time available to get this information
yourself. I say that with all due respect, sir.
The Chairman. I understand. I do not disagree with you. What I
am saying is, I am leaving the record open for you to submit any
and all illustrations that you do have or that you have been able to
uncover. I realize that you do not have $241 million, but you are
and have been very concerned about the Legal Services Corpora-
tion, and we want you to have every opportunity
60
Mr. Phillips. Senator, let me share with you some of my frustra-
tions.
The Chairman. Sure.
Mr. Phillips. I will submit these for the record. I submitted
leads, based on newspaper articles, to the Appropriations Commit-
tee, to Senator Weicker, to Senator Rudman, and others, and re-
quested that some effort be made to inquire of the Corporation
about the validity of the implications of those articles. There has
been no action taken on those requests by my part. Several years
ago, I asked
The Chairman. Let me interrupt you at that point. Submit those
to us as well and let us see if we can
Mr. Phillips. I will resubmit them to you, sir.
The Chairman [continuing]. I personally believe that some of the
issues you have raised here are very serious. In fact, all of them
are. I agree with you, we have an obligation to oversee this Corpo-
ration, and frankly we should do a thorough job. To the extent that
you can help us to do that job better, we would appreciate your co-
operation.
Mr. Phillips. Senator, I will try to help you ask the right ques-
tions and show you where you can get answers to those questions.
The Chairman. We will look forward to having any help you can
give us. We would appreciate that.
Senator Eagleton.
Senator Eagleton. Thank you, Mr. Chairman.
Mr. Phillips, your antipathy toward the Legal Services Corpora-
tion or its predecessor entity as a component part of the Office of
Economic Opportunity is longstanding; is that fair to say?
Mr. Phillips. My concerns about the legal services program go
back many years. Senator.
Senator Eagleton. Back in 1966, Congress passed a law making
a legal services representation function part of the Office of Eco-
nomic Opportunity. That would have been under the Johnson ad-
ministration; is that correct?
Mr. Phillips. I will rely on your memory, Senator.
Senator Eagleton. Then President Nixon came in, in January
1969. Mr. Rumsfeld was the first Director of OEO under President
Nixon, and you replaced Mr. Rumsfeld; is that not correct?
Mr. Phillips. Well, you are leaving a couple of people out. Bert
Harding was named to be Acting Director and served for a period
of time before Mr. Rumsfeld was designated. Subsequent to Mr.
Rumsfeld's designation, Frank Carlucci, to whom I served as spe-
cial assistant, served. Then after Frank Carlucci, Phillip Sanchez
was the Director. And after Phillip Sanchez, I was appointed to
serve as Acting Director,
Senator Eagleton. OK. For what period were you the Acting Di-
rector, roughly?
Mr. Phillips. Well, there are legal scholars who would disagree. I
would argue that I was Acting Director from January 31, 1973,
until June 30, 1973.
Senator Eagleton. About 6 months.
Mr. Phillips. Five months.
Senator Eagleton. What act, if any, as the Acting Director
during that period of time, did you take to terminate the legal serv-
61
ices function then under your direction, because it was part of OEO
back then?
Mr. Phillips. I sought to use the fullest discretion available to
me to change the priorities of the legal services program away
from what I perceived to be public-interest-style advocacy in the di-
rection of representation of the indigent. In 1971, at the request of
the White House, I helped draft, together with Patrick Buchanan,
Richard Nixon's veto of the Legal Services Corporation Act, the
Mondale Act, of that year.
You are correct in saying that I was a critic of the legal services
program from the time when I became familiar with it. I had been
a supporter of the program prior to my arrival in the Govern-
ment — not a well-informed supporter but a supporter nonetheless.
Senator Eagleton. After your tenure there, who was your suc-
cessor in June 1973?
Mr. Phillips. My immediate successor was Alvin Arnett.
Senator Eagleton. Did Mr. Arnett or his successor during the
remaining Nixon or Ford years, up until mid-1974, do anything to
terminate the activities of the legal services component of OEO?
Mr. Phillips. Not to my knowledge, Senator.
Senator Eagleton. Then in mid-1974, Congress passed a law set-
ting up the Legal Services Corporation, and as you pointed out in
your testimony, that bill was signed by President Nixon shortly
before he left office.
Mr. Phillips. I believe it was the last piece of legislation he
signed.
Senator Eagleton. From the time you left Government back
then, you have served as a pamphleteer, and as a radio broadcast
commentator, and an editorialist, and so on in various first amend-
ment forensic capacities, have you not?
Mr. Phillips. I have expressed my views in the private sector.
Senator Eagleton. Frequently, I hear your views on WTOP
Radio.
Mr. Phillips. I think you may be confusing me with Kevin Phil-
lips, but there was a period of time when I subbed for Pat Buchan-
an on WRC.
Senator Eagleton. That is right. It was WRC. You almost caused
me to have an accident one night.
Mr. Phillips. I apologize. [General laughter.]
Senator Eagleton. I swore I would never listen to you again, in
the interest of safe driving.
Now, I listened to your testimony carefully, and I listened to the
exchange between you and Senator Hatch. You are very careful
today to unload your broadsides against the Legal Services Corpo-
ration in the most generic of terms. Well phrased, articulate, hard-
hitting, good pamphleteering in the noble tradition of pamphleteer-
ing, but you shy away from specific examples, except you did point
out, in answer to a question from Senator Hatch I believe, some-
thing about a situation down in Orlando, Fla. But your prepared
testimony is broad and sweeping, accusatory, denunciatory, but
rather unspecific. And you refused Senator Hatch's request to come
forward with the Howard Phillips' horror stories.
Why is that? You say that is our job. That is Hatch's job. That is
the staffs job. You are interested in saving public money. You are
29-379 O— 84-
62
interested in Senator Hatch not having to go out and hire 10 inves-
tigators. If you have files replete with documented case-by-case fail-
ures of the Legal Services Corporation, why would you not in the
interest of just saving the public money, if nothing else, give Sena-
tor Hatch those files?
Mr. Phillips. Senator, I believe that the best way to save the
public money is for the elected representatives of the people to
carry out their oversight responsibilities.
Senator Eagleton. That is a glib answer, Mr. Phillips.
Mr. Phillips. Senator, let me finish and try to respond more
fully to your question. There are many issues in which I am in-
volved and in which my organization is involved. This is an issue
which is tangential to some of the other priorities of our organiza-
tion. We are supporting a 10-percent flat tax, we are supporting
military aid for El Salvador, we are involved in legislation to limit
tax-funded advocacy, and so on.
I have to be accountable to my members. And frankly, for the
last year or two, we have not devoted a great deal of time to exten-
sive research — which is in effect a cost to our private supporters in
this area. What I have, I pick up from reading other publications
and reading the publications of the National Lawyers Guild and of
the Legal Services Corporation. I am aware, for example, of Texas
Rural Legal Aid's involvement recently in trying to delay the spe-
cial election of Congressman Phil Gramm in that new election situ-
ation in Texas. I am aware of other situations.
To the extent I can do so without failing to fulfill my obligations
to those to whom I am responsible, I will try to be cooperative. Sen-
ator. But I have to tell you that over the last 2 years, I have had
other priorities on my time.
Senator Eagleton. Well, we are in the same boat. As members
of this committee, we serve on other committees, and we have
other issues that demand some of our attention. So our time is
spread thinly.
Mr. Phillips. Senator, you have the authority to require the
Legal Services Corporation to be forthcoming with information. I
do not have that authority, and information I have sought repeat-
edly has been denied. Beyond that, you have the authority to at
least propose that the Freedom of Information Act be extended to
cover those 325 or however many there are local grantees of the
Corporation.
Senator Eagleton. Well, I submit, Mr. Chairman, there may be
another reason why Mr. Phillips is reluctant to get very specific.
Tax supported advocacy, the phrase Mr. Phillips uses, is one of the
favorite fundraising techniques that can get people all excited and
send in $10. There are other hot issues, and you send out the hot
letter, and get a hot response if you have a hot list. Maybe El Sal-
vador is one of those now. Tax-supported advocacy, to use Mr. Phil-
lips' phrase, is one of them.
I submit that the reason he may not want to get very specific is
that when he used to get specific, he used to be dead wrong. The
St. Louis Post Dispatch, probably one of Mr. Phillips' most unfavor-
ite papers
Mr. Phillips. I am sure it is one of your favorites.
63
Senator Eagleton. And it is one of my favorites — wrote an arti-
cle in 1981, a big, long article, with a lot of detail, with his picture:
"Criticism of Poverty Law Program Laced With Inaccuracies."
That is the headline. William Freivogel, St. Louis Post Dispatch.
The campaign to abolish the Federal program providing lawyers for poor people
has been waged with several inaccurate, unsubstantiated, and misleading allega-
tions, an inquiry by the Post Dispatch has found. The program's most active and
outspoken opponent is Howard Phillips, Chairman of the Conservative Caucus * * *
Further on, about six paragraphs down, "The Post Dispatch
sought documentation of about 20 allegations cited by Phillips. Doc-
umentation was found for two." That is a batting average of 100.
Mark Belanger hit more than 100 when he was playing with the
Orioles.
If my track record were such that when I made accusations and
cited the Orlando case, the Texas case, and the this-or-that case,
and then when a check was made on the facts, it came up short, I
think I then would become an advocate of a different style.
Mr. Phillips. Senator, may I respond?
Senator Eagleton. Let me finish, Mr. Phillips. I waited for you
to finish yours; let me finish mine.
So paint with a broad brush, attack with a huge meat ax, go in
with a large bevy of dynamite, and just blast away generally at a
program and hope something sticks. But shy away from anything
specific because if you get too terribly specific, sometimes the facts
do not back you up. I submit that is a viable possibility.
Mr. Phillips. May I respond. Senator?
Senator Eagleton. Sure.
The Chairman. Sure.
Mr. Phillips. Senator, I would submit that even Members of the
U.S. Senate find journalists to whom they are unprepared to speak.
I remember a time when you were not returning Jack Anderson's
calls because you had some questions about his accuracy. I would
regard Mr. Freivogel as the Janet Cooke of the legal services com-
munity, and I would suggest that it is not my responsibility as a
private citizen to help William Freivogel, who is an active support-
er of the Legal Services Corporation, to write his stories for him.
Simply because Mr. Freivogel was unable to put together informa-
tion in support of those charges he selected to report is no basis for
concluding that those charges are inaccurate.
Senator Eagleton. I will say this, Mr. Chairman, and then I am
finished.
The Chairman. I can see that the two of you really like each
other. [General laughter.]
Mr. Phillips. Senator, I have a personal high regard for Senator
Eagleton. I respect his support for the prolife movement and his
position on some other issues, but I respectfully disagree with him
on this issue.
Senator Eagleton. I have no animus toward Mr. Phillips, and I
am a great believer in the first amendment. Thank God we both
can practice it, here and elsewhere.
I will suggest this and then I am through. I am going to ask that
the Freivogel article be printed at this point in the record.
The Chairman. Without objection, it will go into the record.
[Material supplied for the record follows:]
64
SIIDUIS POST-DISPATCH Sun., Aug. 23. 1981 JJJ^A.
nuctsmAJT Poverty „ , ^
Laced With Inaccuracies
By Wiillafn f\ei^gU^^
Hg»l -Oi>p»tch W a^inflton Butwu
I ha camv-aiijo ;o abulish ihe federal
rmtff^ pri)\';oiiig lawyers lor poor
l>nic!e has \xen waged with several
!r,»cc'irati>, uniiubstantltttei) and
pii>le.idir.K ailugaiions, an Inquiry by
ihi- Pusl Dispaiih has found.
Ilic i.rugi 'ir.i'i m-Kt active and
..iiNlK-li.ti i:)ij»niie-il li Howard Phillips,
vliaiii.ian o; the tonijrvative Caticus
I lie
In (.ongreisMinal lestlmony and
neivspaper advertlsemenU, he ha*
made unsupported cUitns of abuwt In
(he program. Some have been reputed
by the Reagan admlnislrallon.
Some of the unsupported allegaliona
turned up in an administration
"working paper" circulated thli
summer on Capitol Hill. The working
paper was an attempt to muster
support for Ihe adminlslration't
proposal to permit states to determine
how much money goes Into legal
services
Rep. Sam B. Hail Kri, t>-Texts, t
congressional critic of the prugram,
. repealed some of the same rUorges in a
congressional ' document apposing
financing of the Legal Services Corp.,
which runs the program. ,
Iklost of the alluttailon^ attempt UK
link the corporation ".iih Cominunlsl
group* or liheral c.iusf-s Phillips has
maintained thai the coiporaiion Is a
captive of radical leftists.
For example. Phill.ps all(>(!<rd that
the , corporation died "Itllgation to
compt.'l the New York City Transit
Authority tc hire former hei<?ln
addicts."
Ihe allegation Is repeated almost
v«rbatlm In <ne administration wuiklng
paper ajid a itporl Ijy Hall.
But the flew York suit was not filed
by the l^gul Services Corp It was tiled
by Ihe New York I .egal Action Center, a
private organization with no affiliation
with the gavernment-tlnanced
program.
Tlic administration report was
written Dy Michael lloruwilz, special
coun.sel of the Ofiice ut Management
and Badget. He agreed that soitie of the
suinniaties of taias in the report
appeared lu be misleading or
unsubsiutittdted. He said he had not
checked titem hirnSel.'.
He niainl,iiii>xl that ilid not alter the
basic poaiiinu u( Ihe paper: "A group of
people have ca;>lured the progiam and
nui it in accordance with their bankrupt
ideolfpgy "
A spukfsnian tor Hall said he had
not checkeo the ali>.-^(< tinns
independently. The H|>ukr:>ma:i btiiJ
Hall's main reasiin for (•pposiiig in>
corporation was us acuvii l>. ; I'.i I f >..ib
The Post-l>is',)atch lias tniJ
unsuccessfully over a p,rii<l il j-^v^'ai
weeki to reach Phillips. Aliin-Ui/ii I."-
refused to be liiteivit-wv'd. t/o i'r'-:i
Dispatch lorwardea a seius oi
questions to him ;,skin(* the r>.jsts xf
some of his allegations
Larry Wuldt, director o'
See LEGAL, Hage U
65
Legal
ai 1 l.OM (•\<it ONI.
(t:(itfiuM\a'-ii hills !ur the Conservative
i.tu. â– .!-.. n-siMHidi'il lu lilt' int|uiriL's He
â– oiil ;ifW.-,,jj|Ai ;tiul rnjgdzine tlip[ii(ij;s
'..I ^ij-.i--:!! a ffw of thf ;i!lt'g;itionr.,
Aflt-r '!u:ri Ih.ill a irimlh. he sjul he
I, i.l ri.it (miiu) llif i!o<u!iifnlaiiiiii fur llie
.ilicr .iUt.'i',„ipii!b. ilul nut havt time to
â– Mnh fi r II an.! i)io!<e off coiituci with
ihc i'iiS!-l)|:,;-ai- It
Nnmy |.<utm ;i( llie allrgiKiuils
..iLtiai- â– â– VV.il.ll said.
I'liillipi ;i.i% i;,ld 1,'gal Sel-vicis
l.iv.y(i.s li.ivi' oDjiuM-i] prayer ill
â– ' limis, filed '.uii> c iulleiiJing parents'
. ;.iliJlily lu iiueieepl mail addressed lu
it.eir -rhilJieii .in.t .supported fitiycutls of
' 'it^ ihai have nut ratified the Kgual
Kl^jhts Aineildmelit.
/\vai[.it;ie eviden' e indicates thai the
l.i.'/yers !i,.ve iioi Tieen involved in those
â– i-'tivittei
ile has said Icjial services lawyers
!:ave repi t .eiiSe.1 "pri>-Caslro groups
111." ihei.ijy I'aiHlie'.s "
1 (a (;i:»y I'atiiheis is an js^ociuiion
.( older (•■.-jpie. it s.iys it.-i only
â– lai'i, iii.iii with liilia IS thai it once
•.vh'diiltj a trip to study how oUler
:'.-')t»le were treatt 1 tlieie.
WoIUl -.aid It was unfair to write a
ijiy aldwi the ilk/itions Phillips
. (lUid out iiuioTueni when he was able to
PK'W W pen rut uf what he said about
it;e cuiporation
'*:>!d! sa;d the I'aM Oispalch was
'..lasi J m ravorol the eor.xjrdtioii "Mr.
r'aiihpi. s,.i i he mu:»;i as well he talking
I.l ilii' put.'ie ieL((iiin-> Jep.iiiiiK-nt of
I e^ra! Seiv.i vs Co;i.*iratl^ll." he s.iul.
ih:' f'o.'.t t'l:.patcli suuf?hl
'^'k.iinent.moM oi .iSwiii 20 atle-palions
I 'ied by I'ltiilipi l>ov.uri)eiiiation was
KfLi;:ii liir r.vu-
1 et.al Service-;, lawyers have filed
iiil> 1"! ohialii .L^iivei niiieiit-pald
â– 'â– â– lu ..1 ^i.-- :alils fix pe-isiilis seeking
.''HI li.iiii:' Opel ..I ions. And the
uiporaiioi;. has lili-d suits seeking
^i.viiuiii .'Ji li!.ai;i ln^ lit abuition!. /.ir
nio! Waliiell^
I he ((a{Miiatiun says that in these
iiii.lroversial eases, it was seeking te
P' ;ti el I a.;b'ished legal rights for poor
p-ii'ie. l.ie cci:!. apeed with the
iuip_iira!ijn liii the sex change
e] i rJtiuco .in.i^iideieit the guvernineiit
:.. pi:y niiuie li beiiefils 1 jr them.
I he ci.-:f;<j:ath'n eventually lust the •
.if'^ir'iun ia .e when the Supreme Court
lale^i that siao?-; em. Id relase lo provide
SIM I. niedu al b*.'ne''ts loi p;»or wunien
litn Ayeis, a sjiokesinan fur the
. laiviruti. II saiJ the eoniroversial
lasts weie oaiy a small pioporliun of
tile i/Mptll at Kill's at lions.
Miist ef tiie SOILS i'hiUip^ ciilicizes
a:e elas:. e. lion »-uits in which the
L..-iij<'- atitiii repre-.,ents a group ul (jooi
p.-.ip'.e chalie:it;ing a guveriinient
iH'Sie;, Aye IS said t»'ss liian 1 percent of
le,;..^ serve ('., .suits are elass-aitmn
le.:.
iM:;si -.i.-.^it.' involve prohltnis sotS as
Ci. laee-;.. evi''ia»;r- and rHt-or^sessions.
.1- .. U'i t
!:i;!:i;i. h„^ l..\: lac Coii.s.;rvatiVi:
iP.eia.i.! '..I l^e legal sc— necs
,a"i-.i.iM. sLi'.ie 'he '.'any 1S7US. '.vne;! ii::
tried to cut it back as then- President
ttiihard M, Nixon's director of the
OffK of licononnc Opportunity,
He renewed l.is campaign last year
m a series of mailings, newspaper
adverlisements and appearances
before coi.gressiona! committees, lierc
are some of the major accusations;
In le.itimuny March 'l^ before the
House Jo'luiary .SulMomniittee on
Couils, Civil liberties and Ih;
Administration of lustice, Philiips said
legal seiviies lawyers were lobbying
against congressional eflorts lo allow
voluntary prayer in public schciols.
He cited a quotation from
Clearinghouse Review, a publication of
the Leg.il Services Corp. that reports on
legal develupmcnls relevant to the
poor.
He relayed llie quotation this way:
"Hie most politically controversial
access issue uf the ytiili Congress was
the effort to remove by statute all
federal court jurisdiction over school
prayer issues . If the forces seeking
lo eliminate school prayer jurisdiction
succeed, Ihey are likely to move on lo
other issues more diiectly affecting the
poor, including alxiilton and school
desegregaiKMi."
What Phillips left out o/ the
quolalliin, where an ellipses appeared in
his lesliinoiiy, was lliis phrase:
'While school prayer is not a legal
sei-.ires i.ssue. the underlying question
of Congi^ess's authority to limit federal
euurl juridictii"! over constitutional
claims is "
Ayeis. ihe l-^gal sei-vtces spokesman,
says the Lejal S rviecs Corp has never
argu"d ag.iinst ~t!ii»il prayer.
Ill an advertiseuieiii June 16 in the
Washington Post and m testimony to a
Senate Appropriations subconjmittee,
Phillips accu'»l legal sei^vtces lawyers
of lielpiiiE "pioCastro aciivlsl groups
like the Gray Panthers."
The Gray Panthers Is an
organisation of older piiiple that argues
in court and lubljies in Congress for the
rights of the eldtily The Legal
Services Coip sometimes represents
the group None of the assistance has
involved suits relating to Cuba.
The basis for Pniltips' allegation is a
trip the Gray Paniiiei s planned to make
lo Cuba to stiiilv .lie life of older people
there
Woldt .said an article in a Gray
Panthers puhlicaiion describing the trip
showeid thai the group is pro-Castro.
Ihe article said "In Cuba, the word (or
'iclir..-e' IS jubifado, literally
'jubilated.' 1 h'iut.'h Cuban jubila<*w
oft^fn cunfiuiit the loneliness and
boredom furled on many of the aged
here, their rt iireineitt is not mandatory
and thus, many opt (or a still
PiiKliicive lifesiyle afl'-r tV u-!e o( 6!)
".V.cording to Sievtr, Wayne, who
*ilh Maggie Kulin is organizmfc the
!ri;> "iiio niir.y oe^.p',;: h ve n t'isloiied
vi^'.w Of life ill Colli! and it ^iwM be our
daly ill pi ", .,le ■• iti(;.>rciit
perspective.' "
Ms Kuhn, head of the group, denied
It was pro-Castro. She s.-tid hei group
hns consultative status at the United
Nations. It was in ihr.i role that the
group planneil a trip if "5e<5 whal
Castro was doing and sec the dyaiiniics
of age discrimination in the Castro
regime," Ms. Kuhn said
The group has tcavoltd .\\z\\ tu
Micronesia, Kenya. M.".l5j : ; .1 'he
People's R- public ot Chiiif . si.c '., id.
* « ir
An advertisement t<y t/ie
Conservative Caucus May 4 in tine
National Law Jouit.uI satu "LSC-
fuiided activists . , . support boycolls of
states that have not ratified IRA."
Phillips cites a quttation from
Clearinghouse Review that "the
eamomic boycott against non-ratifying
stutes has been vindicated in the
context n( the ERA as a tool ti.i
women's advocare.s."
rhe article he citer Is atxiui 7i>urt
decisiiins atfei'iuiig women. The quoted
materia) is at the begiru'lng pf a
summary of the federal court declsioiu
rejecting Missouri Atloiney "Iciieral
lohr D. Ashi rofl'3 challenge lo the
tjoycott in Missouri.
The Legal Set vices Corp decided not
to boycott Slates that have refused to
ratify the Equal Righto Amendment.
Ayers said, kecently, legal services
groups have met in Florida and
Missooii, slates thai have refused to
lut.ify the amendineni.
Nor was the corpi^ratiun involved in
t'.ic fedfcial coun case that upheld the
riplii ol 'wuinens' groups lo boycott
stoles ilial iiive lefused to ratify ine
fcrneiiomeiit.
<r Vi ft
III a iunv-raising letter on Sopt 8.
1980, Plili:i.>t) wrote ihat all legal
services projects "are cnminil'eil to the
tmplemoiitaiion of ;. radical social and
political agenda which has included . . .
lawsuits by /uung children tr^ challenge
the author.ty of their parents on
malleis like ai.res'! to pctstinal mail,
choice ft .-rem, Is, ui.J the like , , ,"
PluMips made tnucti i'e.e sume
charge in an article in Human Events
on Jan. !•! iS/t I here In- citcl a suit by
the Sill F-i-O'-'isro NeiRliljorhLOd Legal
A;.3l.sldnce 'rnuniiaiiun .in bel'.a't ol a '."-
year-ciid girl whose lather ii.tercepied
her mail.
The S.e. l-raacisco Naigbborhood
66
Legal Assistantu roiuid.iliun ri'5|Kind«)
at ihe time lli.il ilit dllt-gaiiim wus
false, thai no such suit existed and that
legal sei-vices altum'?)'; were not
rrpreseiuing such a g;il.
Wuklt was unable to present
Pvideme c.( siili chall-jnging parental
au'hoiity over inail and choice o(
schools He said he kjitw ui a rase ni
will- h liie ci/ri«'i.ii'.'u. tc|)rc->tiiled a
leljrdvrd child in a suit liy !hv' child's
faihtr :-,(cKini', ciMnrnl over her affairs
He declined lo ninvul'.- details.
(nr.er allegiiion. by Phillips and
other t.ritico, while iiol unsubstantiated,
urnit some details.
On March M in House testimony.
Phillips criiicizi d ll'.e Legal .^id Society
of Coluinlms, Ohio for representing
penitentiary inmates in "exAensive
iitigatiun ... on such matters as
'inniate idleness' and inadequate
'recieaiional scivicc-s."
The sociciy sued in 1978. challenging
coiidiiioiis at tl-.e UO-year-old state
ptnii'Mitiaiv m Columbus, where
prisonei s were al:ov;eil mit ol their cells
only (or meals ;;iid two hours ol
rc-ciealioit u sV'X-k
Inmates were Ivj'iscM in dimly
lii;h!i-d. luilie^ted cells without hot
water Duni.g tlu wider, temperatures
in the c -ll him 'k.', dipfK;.; into the 30s
The state iiad closc-.l the prison in the
early 1970s bat mioc'a'-xl it when a new
peniieniiao' ol Lu. asville became
overt loNt'dud.
Ihe Justice r>epa:tineiu joined the
• sun against ihr- ("oluinbiis facility. It.
197'J. the stale agret-ii lo cli^se it in I9s3
and upgrade conditions until then.
Ill Senate testimony April 22 and in a
Con.servativc Caucus adveiTisemenI in
the Wishipgtoii Post ;in June 16.
PinlMps all.-geU !l-.at Legal Seiviccs
employee:. pariici;'aled in raising
limils lor the anti-American Castroite
terrorists ami fcuorrillas in Ll
Salvador.'"
That alleg.iiion isb.isedun an article
on Jan. 2S. 1131, in Ihe Daily World, a
left-wing iii\v.,| dpc-r. It describes a
meeliiig of uniup kaders in New York
who agrocd to participate in a
Cf.iitpaigii lo sell boi.Us to pay (or
I'umatiii.iriaii aid to bl Salvador. The
article says that ii.inibers of a union
itpr- .seniing lejjal services lawyers hi
New Voik attended.
The money raised by sale of the
bonds was to be sent lo a Catholic
aichi'ishop in Mexico. The bonds
indic.itc-d Ihe money was •■for a free Kl
Salvador '
Woldt iuid he had no other evidence
that inoie-y <â– ^aâ– : b. m? ised to finance
icruii i.sis a:iM Buei ' illis in lil Salv iJci .
Sp»kef.;i!.': for Hie legal seiviccs
union 111 Nev. YoiK denied ?ny
invjlvenn'ii' m rr.^u'-i lur.^Js lor
Uiio.isls. .'. sprikesina I said llie union
did not srr.id A nrpr - .enlaiivc to the
nit. iiiifi Hid is i.o! sclii If Ihe ixinds
I,-..- K.is.ai. j-.im. •liatior. v.orking
Howard J. Phillips
Alleges Communist ties
paper also left out key fact:, n
criticizing corporation case:> i or
example, the report stated:
"California Rural Legal A-.sisi.iritv
sued Madera County lo ovenum
regulations rtxiuiring welfare rc«- tpi.ni.^
to accept available agricultural work
on penalty of jeopardizing their welfan
eligibiltly."
It did not ex|iluin ih.ii Ihe I'."'-, -..m
was brought on behalf of ly f •Illllu^
wiiose welfare bi-ncdtj li.id hec:. i i,.l -d
Ix'cause Ihey had lelu-.t-d lo send I'-.i u
children into the (ioliis to li.*'-' .i
grapes
()neof the clients was Je:us S- i,ovia,
his wife and four daughters S'-(>^ i.\
was blind, his wife disabled And o','- ;il
the daughter^ meitt.iily reiartSed [hi
t^^alifomia Supreme ComiI sa,r.ii..n i.'ej
the facts this way
"Social worker Svhieich (ar. a, . u-
and employee of the W;-lfiic
IVnartment) allegi-dly Innateiud '.i
Segovia with termihation unli-s- â– I,.
and her four daughleis ri'iKiri^d t.i i i- 1.
grapes. ... The (..inily {c.i:^-il
leiminatioii and dccult-ij to w.<ti.
However, Mrs Sepovia li.is a du; li d
arm, and her lf.-ycai-uld •l..ii.-:\..
.^lmandlna. is mentally uiarded'i'.d
cannot work without clcsc* p^ivcc.i
suiiervisoii These iwo Iheicfoie si.ivt i
home.
"1 hree other Sc(;i*via daaKi-tf!
aged 10. 11. and |7, we.ii lo il.r !iv!.
accompanied hy thi ir siipi 'lit i
recipient of Aid loilm Blind. v^I o t. .i»
for their safety In Ihf fi-'.d 'If:
was allegetlly no toilet, ivi I'la' e M • 1
one's hands, and n" fir^.l ..id 'itn
"That same afHio-wi :.c:i.i i>
allegedly came to tt'.e tious. and tolt'.
Mrs Segovia that her dis:.t.!ed ai i;, w.
insullicient extus.- tt.r :>•.. -vtMi.'i;)'. .m.;
tliai --die would bt- ii I U.lUi'.ed Jlll- s vhc
A.aked On Ihursday and iri'..v
th-..iifote. all Inn 'he menl.illy mo ••■d
mild win'. Ill I'v ftelil-
"On Thursday. Sept 21. Srhhiili
allegedly phoned the home, louiid
Aiinandina there, and so verbally
assaulted her that she *a-, tiH
emotionally distraught whe'i the fji.i::y
returned that evening . .
"The state teimmaled the h<.rvi.;s '
Benedts of another n- •tber weit
ended after s'ne refused lo .serai her
children, 11 and Ifa, hjck i'. il-.e (iil'ls
after they became snk (lom working in
the sun
The Calilornia Supreme- Coiot Miit .'
that the county had no right to â– ui .uf
the benefits
Ronald Reagan, '.hjn S"vcri.t • ol
California, criticued that -uii a^
"frivolous and haiassng" in a loa; -
running battle wi'h the !ei;al senh .-^
piograni A cotim'.'-iee .ipix.mii â– ; '..
the Nixon adinu'.isir.dn.a to inve..;,, 'i.
Reagan's alltgaiit'iis lOiicItith-l in-u i*
•A-as neiihei frivolon.-. nor haia^.-.in,'
Itt.rOiViii. acKiLtiwlcdf'id lli.-l Iti--
delall.-. c.isl the -..r ll. a j.uVlei.' llilll
an lie nuestioiiei whethci tin 1 r d
sei"vi--es urgaiir-'ion had ined '. ..i.i
ewiugh lo sellle tie issoes l-eloic 'i e j
•iuii
67
Senator Eagleton. The record, of course, customarily will
remain open for several days. If during that period of time there is
anything Mr. Phillips wishes to add in connection with this article
or any other facet of it, he has the full privilege to do so, and it
will be printed in full in the record.
The Chairman. Without objection, we certainly will allow Mr.
Phillips that opportunity. I will keep the record open for 2 weeks,
and if you need more time we will be happy to see what we can do
to get more time.
I will say this, that we have done some investigation. We certain-
ly have not done as much as you probably would like us to do. But
I can say this, that there have been some things that you pointed
out and some that I can point out that really concern me. When I
came here to the U.S. Congress I supported the Legal Services
Corporation. Because of some of these things that we have found,
especially recently, questions have arisen in my mind. Let me say
that I still support the concept. I do not think any poor person should
do without legal representation. But I question, like you, whether
the present program is the right way to do it.
I also know, as a former practicing attorney myself, that attor-
neys have a tendency to be activists. I would like to see this organi-
zation be less activistic and more legalistic in its approach to help
the poor.
I will just give you a couple of illustrations that I had in my
opening remarks, which I put in the form of questions. Are the
poor people in Texas really interested in preventing the special
election in the Sixth Congressional District, or was the staff of the
Texas Rural Legal Aid interested in preventing Phil Gramm from
being elected as a Republican to the House of Representatives?
That question needs to be raised. It is just not right for us to be
funding political activism to help one party or the other. I do not
want them helping the Republicans; I do not want them helping
the Democrats. I think they ought to be helping the poor.
Mr. Phillips. Senator, may I interject something?
The Chairman. Sure.
Mr. Phillips. And perhaps Senator Eagleton would have an in-
terest in this. I cannot tell you with precision. Senator, which of
the various 15 lobbyists and 100 groups that belong to the Coalition
on Block Grants and Human Needs has received funding, directly
or indirectly, through the Legal Services Corporation. I do know
that some of them have. I know that specifically, to mention one
today, the Food Research and Action Center, through an indirect
grant from the Western Center on Law and Poverty, if not through
other sources, has received money involved in this.
There is an article in the May 9 edition of Business Week which
credits this coalition with having pushed through an additional x
billions of dollars in social spending in response to their efforts.
Here is another publication in which you might be interested.
This is a book called "Lobbying on a Shoestring, How to Win in
Massachusetts and Other Places." It has endorsements from
Barney Frank, from ACORN, from AFCSME, and if you read the
inside page, the acknowledgments page, it says, among other
things, "Thanks to the Legal Services Corporation who provided
the funds for this book and has given us permission to use it." I
68
have a lot of these things to look at, and I would be happy to
submit these items to the committee for the record so that they can
examine them.
[Material supplied for the record follows:]
69
The
Conservative
Caucus. Inc
National Hvadquutan 422 Mapta Avanua East Vlann^ Virginia 22130 (703) S93-1 550
Proiact Omca 47 Wast Straat Soaton. MaasachusattsOZm -iSIT) 4ZS-7ia8
Admmiatntlva Offlca 7777 LaasOurg Pikai Faltti ChuIC^ '/Irginia 22043 • (703) 393-1 550
May 1, 1931
Hon- Lcwell ?. Weicker, Jr.
Chairman
Appropriations Subconuaittee on State,
Commerce, Justice and Judiciary
U.S. Senate
146 A The Capitol
Washington, D,C. 20510
Oear Sena-tor Weidcer;
On April 22, 1981, Dan Bradley, President of the legal
Services Corporation, in answer to a question concerning
class action suits engaged in by Corporation-fur.iad
grantees, stated that less than two-tenths of one percent of
all LSC cases were class actions. This "statistic" vas not
challenged.
As part of your oversight responsibilities, I think it is
important for you to determine what percentage cf I.3C
attorney time and what portion of the budget of each of the
more than 320 LSC grantees is spent on class action
suits?
As a private citizen, I do not have the resources to provide
an answer to that question. The Subcommittee, however, can
and should obtain this information for each grantee before
any further funds are. appropriated for the Corporation,
provided there is an authorization in law against which the
Committee iiay appropriate funds.
3ased on the three following examples, I believe that a trae
accounting of time and money spent on class action suits by
Corporation grantees is substantially more than suggested by
Mr. 3radlev.
1. The Orlando (Florida) Sentinel Star of January 27, 1981
reports that the Greater Orlando Area Legal Services
Soara ol Olrason Naoanal Vmcmr Naeonai nwd OIncta, . Prmdamut Pqiier P^iart Puwteaoon
Howart Phiinoa Chamrin Howart PT^itlioa ?mm ± Thomij Bng. G«a ^•'Q;on Knignt USA iSatJ Stnw issuvs ^e^tooM
?«iv .. rncn«» 3«cnar, 9ir»c:3, Senan fitvon
Lav<r»oe» ^ S3»». it, Trsuun, ExacuiN* Olraew Olr»e«or of PHid Svn^m aiatms, S/»« Haiti
S«siartO»nam F. Anov ««s»ift J-. Caoreliwoon Auatjni oa»aof ucmeo-s .9«ooii
.. Alui UacKay £ne ai«ex«n
Atfmtnisantv« vi«a Oa ir i w u w w«dl« OIf«ctar/Se«ciai P^wcta
C^l^••Cmao«Tr Oii^erw of niwaavwi Larr^ A. .volar
ma P'jollcaroni
3uaan £ P^n**c3
70
(GOALS), wbleii r«caiv«d 9527,335 I^at 7«a7, bad 'only two
/" Tff^* aeftlon ^ni^^ onH a£ aortt t&aa 4000 cases > But t2ie
f 1 n tr'T* » '' and aangcmmr- costs o£ those two class action suits
»..ar* far graatar titaa thoa* o£ th* individual casas.*
(cli?9iag attac2wd>.
Xpparsntly aora than t^at,? e£ the $527,835 grant is being
osad for just tera class actions.
2. Xa testiaony in April, 1931, before tbe House Judiciary
Subeomaittao on Courts, CirLl Liberties, and the
Adainistraticn of Jusliiea, the county attorney of Orange
CouBty, Bet* ToriCr wlso defended tbe county against a class
action, suit brouqttt by t2ia Mid- au dsoa. Legal Servicss, Inc.
($531,929 in LSC funds last year] stated tbat Mid-3udson
sp«xt at leas-t 215 scan days of tisa on tbat suit. Tbis is
the eqai'valent of aora than a year of tiaa of one person .
Tb* Oairaan o£ tbe Beard of Mid-Hudson testified at the
sasaa bearing that: Xid-Sudson eoaloys only 10 lawyers.
Ob^cusly a Large aanunt of tiaa was s^ent en this one
ease. Ho one will ]cncH how aany poor pecale with individual
problena ceuld not. be assisted because of this one class
action.
3. ^ n^ new coses the granddaddy of all the Legal Services
CorpcratioB-funded class actions. According to Adrian Lee,
Cola3ais& of the Tbiladelpblz Bulletin, in two coluans wbich
apoeared on Starch 15, and IS, isai (attached), the Coosaisity
Legal Servicas,. Inc. (CS of Philadelphia) (52,277,972 in
LSC funds las^ year) is claiaisg $4.5 aiUion in legal fees
for what ia Philadelphia is popularly jcncwn as the Wbitaan
?a^ suit involving 120 units of lew incsae bousing.
?lv organisation has been iaforsed by an attorney who was
involved ia the litigation of this case that this Wbitaan
9ade case was a class action.
the daia for $4.5 Billion in fees in this case indicates
that at their current .annual rate of funding, CLS spent 100%
of their resources on this one suit for the equivalent of
alaost txo yearsl
71
Stated another way: If tJse claim for 54-S million were
costed out at the rate of $100 per hour, it would mean that
CLS spent 45,000 hours on this one case. This would be
43,000 hours of assistance that could have been spent
solving individual legal problems of poor people- Since
Legal Services attorneys are not paid at the rate of 3100
per hour, it la possible that many more than 45,000 hours
were spent on this case and away from individuals' problems.
Based on these three examples, I believe the Subconaittae
ought to obtain from the LSC, and fully review, an
accounting of the amount of time and money expended by each
LSC grantee on class actions. This information should be
made part of the hearing record, so that everyone may revoew
it.
Anv action to appropriate funds without this information
will be a signal that the Committee does not really care how
tSC and its grantees use the taxpayer's money.
I respectfully request that this letter a.nd attachr.a.nts be
made part of the hearing record.
Sinceraly
Mati -lal Director
The Conservative Caucus, Inc.
72
The
Conservative
Caucus inc
National Haadquatan 422 Mao<*Av«iii«EattVIann^Vii^irw 23 ISO (703) 393-1 SSO
Prolaet OMea 47 Waat Straat 3oitoa MaMacftuaaia 021 11 MSI 7) 426-7188
Hr1 iiiiiil wtl »aOme»7T77 Liai n iii^ PIV« Fma Oiuiei Vifqima 22043 -(703) S93-1S£0
April 22, 1981
Son. tfarren Sudman
Onited States Senator
3313 DirJcaen Building
traabington, 0. C. 20510
Dear Warren:
Tljanlc ycu once again Cor giving me the opportunity
to testify concern.ing Legal Services before your
subccmwittae.
Z partlealarly appreciate your willingness and that
o£ S«nator Weidcer to enter into the record the
transcript o£ the Legislative Advocacy seminar held
ia Saa Juan, Puerto Rico just a£tsr the election.
X also appreciate your agreeing to include Cor the
record the freedom of information request filed by
th* Conservative Caucus Research, Analysis, &
Education Foundation, together with the reply
received from the Legal services Corporation. Your
intention to directly pursue the same inforsiation
encourages mm greatly.
It vill be a pleasure Cor 3s to take a fair look at
the inforaation which you develop, and work with you
in trying to cone to a responsible solution to this
very significant public policy debate.
With your indulgence, I will, from time to ti-iie,
send you inforsation which cones to 3y attention
concerning the Legal Services program- For
starters, I hope you will take a Icok at the
enclosed correspondence concerning the relationship
between the Legal Services Corporation and the
pro-?I.O National Lawyers Guild.
As you will note, the then leadership of t-'ie Legal
Services Corporation, personified by Thomas Shriich,
and Senator Harrison 'Williams of New Jersey, who
chaired the authorising committee, were singularly
unresponsive to the questions which t raised.
Pnm±n>aa»a
an Sm-UBMn Kn«n, us* («•«
S^oat* faumm fi
Oirw
OtaenrofFltM
aw<gm Sms^ar
SOMMflOon
*MaM»i»aiiwa*
Mansvs <9aea(i
cneaaow
Bnirnr a««»n«iun
LurrKitaat
â– M PaoiieaiMna
SisiiS.PWhes
73
Perhaps Sanator Weic3cer and you will have grsater
success on this score.
Please call wa whenever I may be of assistance.
Hith personal best wishes, X am
Sincerely ,
74
Tne Gonsarvstr/e Caucus, Inc
^taiieimi Httirfrfnartm
7777 LBsbtttj PiSt»
^Us Cnuca. VlrgpoA 22SU
(7a3)853.«n
S<griir^«T 29, X977
Hon. aarrlsea A. TUUaas
dalroaa, Ceaa±eSa« a
OniGad srwfm Swifn
352 g-^^^-" auiJiUa?
aashingcoa, O.C 20S10
gave S«na«ar RHUaass
Xfc ba« COBS %e Bf ^^-»w<-'>^^" tiiac tha ttefiannl L2W7crs Suild va-tsd a« « XS7S SaHrniT
SeaeaSLrm '»"-r^ aaaCia? Co "yssvida la^al a ujia a rs and reaoareas' in aid Co Shs causa
o£ t!ta Palaceia* LITiaT-H-'nn Or gnniTal-'m
Oa B'f y f X, 1S77, a ta u -q awL ar dala^afiion aC tha Sasiocel Sat«7a=s <i>i±ld, vhleh had
" spanb t lii ' aa ■■iiTi ■ia Cha "*■*•"* Sase, hald a oraas ee=£*ransa charglaq Ua^ rs=aal,
^ pzaeSlsad ^inadco&lanal racLss,' rsatlaa tsrSsza, xsd "palltlsal rapraoalon cnfarsad.
b; ailltar? courts' agaissC .^rzbs ll'via? la rtrt« l a=d £:ha ^sat 3asii. Tua waa::^ laCar,
tha ear=a£ije Balasdna Ujatfacicn Or^nni.raMnn aaos ana a£ Iss a.H. raprases^advas
to »>~ ::a'ei^aaJL Lascars Suild nrtnnal eanruncLan ia Saaesla v>.ara tha Sollawi.r.9 saao-
•tiTf^fitt --■»» sutadctsd ^7 ens ~^'** ^^^''■^»''" of Caavac:
TIRESZaS, tha 7alaae±jiiaa gmogl* vara ^Elvaa Srcs thalr horalasd br Cha Zioaiss
•iBESSas, •^<-"^«^ ia X racxsti idaolo^ nsad !:? tha Israall roLir.? '*lmn a=d gavarr.
laii isoarloIijSB ts aujij-aaa tha saaaas a^ P a ia st-'Ttian and coc-Palaar^ n i a a ^aaslas>
to dlvlda ^><'" j*^ cuua j c? tha raal assLy o' tha ;aa?la of tha :iiddla SasC; asi. .
. '» uk iT ii c tha ?ala3t±2iaa L12»rasicn ar?»n'-T-'r-t (?L3} ia tha Ia<?ir'"T£a and rs-
—rjn-t ^if^ re9xesan«3t±v<» od tha PaJ.as f ni ■nn rtipla ; oiid
■■[ u- -iL ' - g , « ^^ 5at±onatI. La»yar3 '^■'•'"'' has g javl j3al7 goca on xacard ia sissert ai
f^m. ^ ^ r l ^ J ' J ^'*^ of tha gaogla of tha third 'â– :arid aeainat .inni*-' n1 t'CTT and its aqests.
ana aznzrcss 3e it aEsoEvsDr
1. That '•''^ Sadonal Iju>7«cs Guild harsh? 9093 oa raesrd in s ugjart of tha 3t=us>;.
of »^^«t ?alas&iaiaa jaosla Ca rat-j v a r their •—naTarrA a=u aztionai. rlghu; opeosas Zia=i2=
as a rsacdoosTT' idaslaqr arcanCad h;" tha '^TTTiaT - an' -n? r^.i-n and gavn—T7u>£. 3od i==9=-
ialisa; racaqaizaa ths ?I<a as tha La^-'ianta raTrssantstivs of tha ?2l.a£C±nian pssals.
2. dae tha tratioaal Ltsrfmra Guild ssnduct ed=>:atian«I 'orrus ia, its various
chapters oa tha struqgla of tha P nla^flniap jsopla.
3. That '•^^ T- «-f.'t^ «i«-i^~nT Cosaittca arzaaee 'or a rcpraccntativa af tha ?alj3-
»-i-<-i jn loiarrtioa Or^iairatioa to ari-'-iiT-t ths« csaihartiiia oH tjia Guild at a liatijr.il
Ksatia^ ia tha near ftitnra caacaming tlia ctru'yjla oi cha ?aljssiaiaa p»a?lj.
4. Tiiat tha liasioaal Za-v^^srs Guild irraaea and soaasor a nasiair.;idj aaaiiviac taur
"07 a zsjrcaantatiTe of tha PtO.
5. Tliat tha tJaticnai Ejw/^ra Ciiilii s«ad a lattar oif solidarity ts tha '-'SO a=-
'jodytau tha suiaatanaa of this rasolutiaa.-
75
TSa TederavL Laqal SortricBS progxaa oparatea through 315 privacaly-controllad
non-profit arganisatioaa , which aro recipient- of ^ur.ds £:oa tiia Corporation.
I aa iamoXy concamed thac so=a aaploycas o2 the La^ol Services Carporseioa zsd
oiZi.ci.ala at individual legal servicea prograa grant ses, ara active in tha itationai
Ljiwyars Guild, and that the reacurcaa of the Legal Sssrisea progras which ara pro-
vided by the Sserieaa taxpayer, are taeizg used to ^rthsr the objactivss of tha
national laiwyezs Guild, which is so casplitaiy out of step with tha prlncialas oa
vhich oar eop ncj-y was founded, and with the think' ig of tha Anezicaa psoala.
Indeed, it is a fact that scaa grantees of tha Ij^al Ser-zices Corporation, which
has heen n n''"'' ♦•'"» jurisdiction of your osrsiittss, assign seats oa their bsaras,
to be WT*^ at the diserstion of tha national La^-yars Suild.
1 am. calliag upon you to initiate public haarings to investigata the connection
betseen the Federal Legal Services pxogrss and tha radical Rational Lauysira
X udLll vserxciata ynos proepS aCtantion tj this is^ry-.
Wish bast wishes, X am
76
T'le
Conservarive
Caucus. Inc.
NatlcnsI Headquarters 450 Maple Avenue East. Vienna. Vrgmia 22180 ii'03) 393-1550
January 4, 1983
^
MEMORANDUM FROM: HOWARD PHILLIPS
Enclosed is a xerox of the book. Lobbying on a
Shoestring , by Judith C. Meredith and Linda Myer. Please
note that this book was published by the Federally funded
Massachusetts Poverty Law Center, 2 Park Square, aoston,
Massachusetts 02116, and that it is dedicated, "To CBHN
(Coalition for Basic Human Needs), LIFE (Living is For
the Elderly), MTO (Massachusetts Tenants' Organization),
ACORN (Association of Conmiunity Organizations for Reform
Now) MUPHT (Mass. Union of Public Housing Tenants) — and
all the other groups who represent the needs and
interests of Legal Services clients."
The acknowledgements page says :
"This book grew out of an earlier work — A Manual on
Massachusetts Legislative Advocacy for Legal Services
Proqrauns Clients and Staff by Terrence McLarney, et al .
This was published in 1979 as a handbook for participants
in legislative advocacy training conferences sponsored
jointly by Massachusetts Law Reform Institute and Greater
Boston Legal Services. While the original book focused
specifically on Massachusetts and on the lobbying efforts
of particular Interest to Legal Services clients and
their lawyers, the current version attempts to broaden
this base into lobbying in any state and for any group of
interested citizens.
"Although this book has ;aetamorph08ed into a new
creature, we'd like to thank all those who provided the
raw material in the earlier version: Terrence J.
McLarney, Rochelle Lefkowitz, Robert A. Schaeffer,
Kathleen 0" Grady, Robert James, Arlene Sen, Mary Kay
Leonard, Maureen O. Holland, Frankie Lieberman, Robert
Ritchie, Katherine Currier, Judy Marcoux, Claunett
Valliere, Marcia Herman, and Janice Smith. Also, thanks
to the Legal Services Corporation who provided the funds
lor this book and has given us permission to use it. "
Board ot Oirecton
^G^ard Phitlips Cr^p•rr^an
Peter J Thomas. Secreiarv
Liwrence J Straw J'. Tr.iasurer
Ricna'i* Dert)ani
J ^.ar MacKay
NaUonal EMraetor
Howarj Phillips
£x<»cut«v«Cir«ctor
Oiractcr c»
»ubiicu:ion»
- Indy McisiPO Jr
Adntiristrattve S6fvk:e«
Ifrifi ;ssi.e£ v^j.cc'O.*
Admini«tr3tiv* Vic« Chairman
Mafgie .V'H".r.s -
Charres Ornc^rtf
National Svcuiity Taafc Force
Fi«M CcordlnatcK
Ptig. General Alb.on Knigm USA
iHeti
'^â– -''^uâ– il fiepo.-"
Monroe TnofT^as
Oiwctof
C. rs"?fva'if; ^fani'f-i/o
FtnanciAl Sacraiai-y
Peggy Cross
am* PubilcsTiona
Joyce Roriyon
77
Endorsements for the book, listed on the back page,
include quotes from officials of ACORN, AFSCME, the
Massachusetts Public Interest Research Group, as well as
from liberal Democratic Congressman Barney Frank.
Why is it not a matter of public controversy that public
funds are being used in this manner?
HP:cj
Enclosure
(NOTE: In the interest of economy, the publications submitted
to the Committee by Mr. Phillips entitled, "Lobbying on a Shoestring"
and "Just Us," were retained in the files of the Committee where the
material may be researched, upon request.)
29-379 0—84-
78
The Chairman. That will be fine. I might also add that I asked
this question: Is one of the critical legal problems benefiting the
poor today whether State governments should be financing sex
change operations? Suits pursuing this objective were brought by a
local legal service organization in Montana in 1979, in Iowa in
1980, and in Connecticut in 1981.
Are the poor best served by a Legal Services Corporation that
would settle a case if the employer stipulates that the Texas right-
to-work law is unconstitutional? In a current case, the employer
has been warned that if it fails to agree to these conditions. Legal
Services attorneys will seek an additional $125,000 in damages
from the employer. What is a Legal Services lawyer trying to
assert his will with regard to right-to-work laws.
Are the poor best served by a Legal Services Corporation that is
attempting to block the State of Florida from requiring that stu-
dents pass a functional literacy test before they can graduate
from high school? The Corporation's lawyers are concerned with
the stigma that would attach to students who fail such a test. It
kind of makes you wonder if President Gardner and the others on
this Presidential Commission on Education, putting out this book
"A Nation At Risk," are not right.
Mr. Phillips. Senator, I would argue that there are questions of
judgment involved in every legal proceeding and choice of proceed-
ing. I would argue that there is no regulation you can write that
will prevent circumstances like that occurring. I would suggest
that the best way, if you are committed to spending money for civil
representation for the indigent, is to write a lav/ which permits the
indigent to choose their own lawyers and not to have a system of
full-time staff attorneys who are in a position of functioning as
public interest lawyers setting their own priorities.
The Chairman. That is an interesting comment. Now let me ask
you this, in the presence of my friend, Tom Eagleton. If you had a
system like that, would you be willing to provide it with more
funds? You see, I personally do not believe $241 million will do the
job. Would you be willing to fund it more if you had a system simi-
lar to the ones you've described?
Mr. Phillips. Senator, my own view, which I recognize is not a
majority view here, is that this is not an appropriate function of
the Federal Government in any event. However, there are levels of
disagreement. I disagree with other things the Federal Government
does. I would argue that the program would be a significantly
better program and not a priority concern of its critics, not if you
change the funding level so much as if you change the way in
which services are delivered.
I am persuaded by what Bill Harvey, the former Chairman of the
Legal Services Corporation Board had to say, when he made the
point that it is much more expensive — thank you. Senator, for
hearing me out. According to Chairman Harvey, it would be much
more effective for the poor if, instead of subsidizing a staff attorney
system, where you have to buy a library, where you have to buy all
the political support, where you are paying dues to the United
Auto Workers, where you are going to the meetings of the National
Lawyers Guild, where you are going down to San Juan^ P.R.,
if instead of doing that, you simply permitted attorneys in the
79
private bar to provide representation up to a ceiling of $30 an hour,
and if you prorated the money out among the States on the basis of
the indigent population.
Even more than class actions, I am concerned about group repre-
sentation. Even more than group representation, I am concerned
about the organization of grassroots coalitions.
The Chairman. There are Senators who greatly disagree with
you on this committee, but I think some of your ideas are very
good.
Mr. Phillips. Senator, I know you have to move on. One last
word. I hope you will take the time to get the facts that are needed
to legislate. When you determine that the time has come to move
to legislating, I have taken the liberty of preparing some draft
pieces of legislation that would provide a different approach to
legal services, at the same funding level perhaps or at a different
funding level — whatever the committee determines
The Chairman. We would be delighted to look at them.
Mr. Phillips [continuing]. But which I think would build in
checks and balances which, far better than any regulatory system,
would restrict the abuses in this program.
The Chairman. We will be delighted to look at those. If you will
stay a few more minutes, we may have one or two more questions.
Let us turn to you, Diann. We appreciate your taking the time to
be here today. In your prepared testimony, you claim that Neigh-
borhood Legal Services in Pittsburgh is currently engaged in sever-
al class actions which are costing the organization to waste needed
funds. Could you be a little more specific on that?
Ms. Jenkins. Yes; Senator, I can. Neighborhood Legal Services
has been representing ACORN in the class action suit against
HUD. That case has just been completed in the Federal court. So
far, we do not know of any suit for reimbursement of fees, but I am
sure that will be forthcoming. HUD has been in and out, up and
down. The documentation covering that suit is in the package of
information which I have supplied to all members of the commit-
tee. In there, you will also find that the HUD attorney has also ac-
cused Legal Services of conspiracy in what they were doing and the
way they were handling the suit
Additionally, we have the ACORN suit against the port authori-
ty. We have Lawson v. Coon, which is the suit over the jail. There
was another case several years ago — I do not know for certain that
it was a class action, but I feel it very likely was because of the
surroundings. It was a suit against the warden at the penitentiary,
requiring transportation for gynecological exams for one of the
female inmates. We have another suit, again a class action, just
filed this past winter — winter a year ago — against a juvenile court
judge. That one is a good one because the judge involved happens
to be one who stepped up the political ladder by hanging on Legal
Services' name in other class action litigation.
The Chairman. I want to thank you again for coming to testify,
Ms. Jenkins. I understand that your lawsuit with Legal Services
has not been a very pleasant experience for you, and of course it
has cost you much of your own time and money. I assume that no
organization is funding you in your effort, but that basically it is
80
your own resources pitted against those of the Federal Government
through Legal Services; is that correct?
Ms. Jenkins. That is correct, Senator. I have to tell you that
even all the paperwork that is here right now is personal cost. I get
nothing from the Federal Government. I work for a living. I have
to do this on my own time, and I do not get paid to do it. I resent
my tax money and the tax money of my friends and my neighbors
and the people all across this country who have to pay to sue them-
selves and at the same time go into the same pocket and pay to
defend themselves. It has to stop somewhere. We cannot afford it
anymore.
The Chairman, Senator Eagleton, do you have any questions?
Senator Eagleton. No, Mr. Chairman.
The Chairman. Mr. Phillips, we are very happy to have the com-
ments you made today. We will be happy to look at the legislative
suggestions that you have, and of course, we will continue to see if
we can oversee the Legal Services Corporation in a manner that is
beneficial to all citizens in this country. It is very difficult to do
because we only have so many resources ourselves.
Mr. Phillips. I commend you for your interest in considering
oversight, and I would encourage you, as we approach the 10th an-
niversary of the Corporation, to take a look at what has been done.
If you are committed to continuing the program, to seeing how you
can remove the concerns which many people in the private sector
have.
The Chairman. Thank you very much.
Ms. Jenkins. Senator Hatch, may I interrupt just one moment,
please?
The Chairman. Yes.
Ms. Jenkins. There is one final note that I think all of you and
your staff should be aware of — unfortunately there are only two
Senators in the room right now. In September 1981, Neighborhood
Legal Services in Pittsburgh formed a union, the Iron City Legal
Assistance Workers Union. The union representatives have been
actively involved in the formation of the western Pennsylvania
chapter of the Fair Budget Coalition, which is an advocacy and po-
litical activist group. They are involved very heavily in voter regis-
tration drives and in determining voting blocks in order to put
their own candidates in public office. They work with other groups
to organize demonstrations throughout the western Pennsylvania
area.
I am not saying that Neighborhood Legal Services is the impetus
of the organization, but they are definitely a part of the makeup
and they are a part of the advisory boards of these activist organi-
zations. There are funds contributed to make up this Fair Budget
Coalition in order to be part of the membership. Something has to
be done to check on these activities, sir. This is their blue book. I
have to tell you that I sat in an organizational meeting, and they
did not know who I was. When I walked out of that meeting, I was
shaking. I felt like Herbert Philbrick in the 1950's in "I Led Three
Lives." Senator, this is dangerous, and someone has to listen to
what is going on here.
I have sent this information to all levels of government. I sent it
to the Legal Services Corporation and I could not tell you how
81
many different committees. No one pays attention. They think
these people sitting out there are dumb and stupid. They are not.
These people are very smart, and something has to be done to stop
this activity.
The Chairman. Would you be kind enough to leave that with the
committee for part of our record?
Ms. Jenkins. I certainly will.
The Chairman. We appreciate your taking the time, as a citizen,
to be in front of this committee today.
[Material supplied for the record follows:]
82
The
Conservative
Caucus. Inc
National Headquarters 450 Maple Avenue East. Vienna. Virginia 22180 (7031 893-1550
May 9, 1983
Senator Orrin Hatch
Chairman, Senate Labor and Human
Resources Committee
428 Dirksen Building
Washington, D.C. 20510
Dear Chairman Hatch:
I am glad to know of your determination not to
reauthorize appropriations for the Legal Services
Corporation until your committee has fully reviewed
expenditures during the first nine years of the
Corporation's history.
The American people have a right to know how nearly two
billion dollars has been used before the authorization of
additional millions of their tax dollars for this program
goes forward.
As I indicated in my testimony, this is a particularly
appropriate time for you to initiate a genuine oversight
of the Corporation, given the fact that, for the
foreseeable future, ongoing funding is being provided
through a continuing resolution.
Since the Corporation has survived since October 1980
without an authorization, there is no valid reason why an
authorization must now be railroaded through in the
absence of an honest oversight process.
No private organization has the authority to require the
Legal Services Corporation to produce factual information
about the manner in which tax funds assigned to it have
been spent.
The 325 grantees of the Legal Services Corporation are
not covered by the Freedom of Information Act and the
personnel at Corporation headquarters have not been
particularly forthcoming in making significant facts and
documents available.
Board of Directors
Howard Phillips. Chairman
Pel*?i J Thomas Secretary
Lawrence J Srraw. Jr Treasurer
Richard Dcrham
J Alan MacKay
National Director
Howard Phillips
Executive Director
F Andy Messing Jr
Administrative Vice Ctiairman
Charles Orndor+t
Field Coordinator
Monroe Thomas
Financial Secretary
Peggy Cross
Director of
Administrative Services
Margie Wilkins
National Security Tasit Force
Bng General Albion Knight, USA (Rel )
Director
Director of Research
and Publications
Joyce Runyon
PubMcatioi>s
Senale /ssues Yearbook
Senate Report
Grass Roots
Members Report
Annual Report
Conserva/ive Manitesto
83
To cite just one example of the "coverup" which has been
implemented, I am enclosing a letter, dated December 4,
1981, in which one J. Kenneth Smith, Director of Regional
Operations and Support Services in the Office of Program
Support of the Corporation, contacted a beneficiary of
Corporation support, stating
"It would be extremely helpful to us if you would
rework your grantee reporting form and delete the
references to voter-education, legislative and
political process. Perhaps you could rephrase the
language to say something to the effect that the
project focused on citizenshii? and advocacy."
I am enclosing some other materials for you, such as
(a) the book Lobbying on a Shoestring , which was
produced with funding from the Legal Services
Corporation,
(b) the Information Directory on National Support
Projects , published in October 1981 by the Research
Institute on Legal Assistance of the Legal Services
Corporation,
(c) School Discipline and Student Rights; An
Advocate's Manual , published by the Center for Law
and Education, a Legal Services grantee,
(d) In Defense of the Undocumented , a publication of
the National Immigration Project of the National
Lawyers Guild, Inc., which involved the
participation of Peter Schey, who has headed the
Legal Services' funded National Center for
Immigrants' Rights,
(e) The Health Advocate , a newsletter of the
National Health Law Program, pointing out
pro-abortion activities by the Legal Services
back-up center, and, most revealing,
(f) Just Us , "A guide to community building allies
and their resources", which cites in specific the
involvement of numerous Legal Services funded
projects in explicitly political activities.
(Editor's Note: In the interest of economy, items (a), (b),
(d), and (f) referred to above, were retained in the files of
the Committee due to their voluminous content.)
84
Having supplied this documentation of heavily politicized
activities carried out under the aegis of the Legal
Services Corporation, let me reemphasize another point
which I made in ray testimony on May 4th.
So long as you retain the staff attorney system, there is
no regulation which you can impose which will serve to
prevent the Legal Services Corporation and its grantees
from serving as "shock troops" for the implementation of
ultra liberal political activities throughout the United
States .
As has been proven over the years, so long as you place
full-time, salaried people in the field with a mandate
for law reform, group representation and organization,
"community education", economic development, as well as
client representation, you will continue to see what can
be seen today if Congress will only bother to look:
grass roots organizing, elaborate strategies for
influencing public opinion, the formation of political
coalitions, involvement in a wide range of political
issues, both foreign and domestic, direct lobbying, and
the comprehensive manipulation of administrative,
judicial, and legislative decision-making processes.
I personally do not believe it is constitutionally
appropriate for the Federal government to spend money to
buy civil representation for any class of citizens.
If, however, you or the members of your committee are
committed to the continuing provision of funds for the
purpose of subsidizing civil legal representation, and if
there is a genuine desire to depoliticize the manner in
which such funds are used, you may wish to give
consideration to the two draft pieces of legislation
which accompany this letter.
One bill incorporates the concept of a Federally
subsidized legal referral system in which eligible
indigents could choose attorneys in private practice to
represent them.
The other bill proposes tax credits for private attorneys
who represent the indigent.
In any event, I appreciate your consideration of these
points and hope you will have the fortitude to persevere
in your stated objective of documenting, exposing, and
preventing a recurrence of the abuses which have
85
occurred, prior to any further authorization.
With personal best wishes, I am
Sincerely,
â– -//>,' fy-A â– â– ,
Howard Phillips
National Director
HP: jbr
Enclosures
P.S. Some questions which I believe you ought to require
of the Legal Services Corporation before even
beginning to consider reauthorization accompany this
letter.
86
To carry out its oversight responsibilities, the Labor and
Human Resources Committee should require the following
information with respect to each organization, individual, or
other entity which has received funding from the Legal
Services Corporation during the past two years:
1. The articles and by-laws for each such entity.
2. A list of all local, state, and Federal agencies from
which each recipient has received or sought funds, the amounts
of such funds, as well as the specific purposes to which such
funds actually received have been applied.
3. A listing of all personnel who are compensated from
sources other than the grant assigned by the Legal Services
Corporation, with full details regarding the other activities
on which they are working.
4.
re
A copy of an all audits over the past three Fiscal Years
lating to the organization's' activities.
5. The names and resumes, including facts about present and
past employment and organizational affiliations, and addresses
of the individuals who make up the Boards of Directors and
staffs of each such entity.
6. Amounts of compensation for each employee of a recipient
entity.
7. Total amounts of legal fee awards received during the past
two years .
8. Total number of hours assigned by each entity in
connection with class action suits, test case litigation, or
law reform activities.
9. Copies of all editions of all publications produced by
each recipient entity.
10. Copies of all available news clippings on file concerning
the activities of each recipient entity.
11. Copies of ail program reports, including evaluation and
inspection reports, concerning each recipient entity.
12. Copies of all Federal, state, and local lobbying
registrations of employees, board members, and recipient
entities .
13. A list of all law, reform, economic development, policy
advocacy, and community education activities of each recipient
entity, together with publications and reports concerning such
activities .
87
14. A list of all associations and organizations with which
recipient organization has had dealings during the past two
years, particularly noting any and all groups to which the
recipient or its employees, using LSC funds, pays dues or with
which it is affiliated.
15. Documentation of all meetings and conferences attended by
recipient personnel and board members acting in behalf of the
recipient entity.
16. Evaluation priorities with respect to each recipient
entity.
17. Copies of any and all union agreements entered into by
recipient entities.
18. Identities of all organizations in whose behalf each
recipient entity has sought Federal funding.
19. All instances of funds received by a recipient entity
being assigned to other organizations.
20. A list of each grantee and contractor of LSC with address
and phone number, annotated with the amount and budget period
of the latest grant or contract to the grantee, or
contractor.
21. For each grantee and contractor, a listing of all
subgrantees and subcontractors with address and phone number,
with the amount and budget period of each subgrant or
subcontract. (For example. North Carolina Legal Services has
15 subgrantees who in 1981 received a total of $6.8 million
with the grantee retaining about $900,000). Please break out
how much of each subgrantee received.
22. The names and addresses of (a) Executive (Project)
Director and (b) each board member of each grantee and
subgrantee.
23. The total income to each grantee and subgrantee during the
last completed budget period by source of income: a) other
Federal grants (list each separately with Federal agency
identified), b) other state or local grants (list each
separately (For example, in 1980-1981, Pennsylvania Legal
Services, an umbrella organization of LSC grantees and others
in Pennsylvania, received an appropriation from the state
legislature of $2,300,000. In 1981, HUD Community Development
Block Grant funds were given to an LSC grantee in Toledo,
Ohio. Orange County, California, gave $360,000 Federal
general revenue sharing funds to Orange County Legal Aid
Society and LSC Grantees in Pennsylvania received funds from
88
Title XX of the Social Security Act . ) # c) rent or royalty
income (list each property with address, if applicable), d)
fee recovery for ech grantee and subgrantee ( list each
separately), and e) interest and dividends (account for each
separately). In 1982, in testimony before the House
Appropriations Subcommittee, former President Bradley said he
would supply the information about interest.
24. For each grantee and subgrantee, facts about each class
action suit pending during the most recent completed budget
period (1982) annoted with number of hours spent on each class
action suit with a notation of what percentage that number of
hours on each case represents of the total hours available to
grantee or subgrantee.
25. For each grantee and subgrantee, the carryover balance,
1980 to 1981, 1981 to 1982, 1982 to 1983. (For example, from
1980 to 1981, Legal Services of Alabama carried over
$2,262,080; Georgia Legal Services carried over $1,095,960;
and Legal Services of North Carolina carried over $1,122,788.
East Carolina Legal Services subgrantee carried over $58,478
out of a grant of $411,024.)
26. For each grantee and subgrantee, a list with addresses of
all real property owned, including property once owned but
conveyed to another owner. For each property
a) date of acquisition and initial cost, b) cost paid and
source of funds for renovation or remodeling, and c) either
sale price or current market value. (In testimony in 1982
before the House Appropriations Subcommittee, Former LSC
President Bradley said he would provide information on real
property to the Subcommittee. For example, in 1980, Legal
Services of North Carolina owned seven separate properties,
but one property was renovated with $110,500 in program funds
from East Carolina Legal Services.)
27. For each grantee and subgrantee, a list of all other
property owned with an initial purchase price of $5,000 or
more. (Note that Legal Services Corporation's own guidelines
restrict the disposition of any property of $1,000 of value or
more . )
28. For all grantees and subgrantees, lists of all suits filed
against the grantee or the subgrantee with a one sentence
description of the suit and the disposition of the current
status of the suit. (For example. Legal Assistance of North
Dakota was in 1981 Camden Legal Services was sued for
unprofessional conduct. Suit is currently pending against
Coastal Bend Legal Services on an employment matter concerning
a former attorney for that grantee. In 1981, Legal Services
Corporation of Iowa was sued concerning its lobbying
89
activities. Neighborhood Legal Services in Pittsburgh was
sued by former clients in 1981 concerning that grantee's
advancing fees to expert witnessess in violation of state
law. That same grantee is now being sued by its own
employees for lack of public meetings. In 1979, employees of
Western New York Rural Legal Services, a subgrantee of Monroe
County Legal Assistance Corporation, were arrested for
trespass on a farmer's property while they were trying to sign
up migrant workers as clients. The migrant workers did not
want to be bothered by LSC lawyers. Although the employees of
the LSC grantee were acquitted, the LSC grantee is suing the
migrant workers, who are supposed to be the beneficiaries of
the LSC program, and others, claiming the LSC lawyers rights
were and are being violated. (In 1981, a Federal District
Court found that Legal Assistance of North Dakota had engaged
in barratry in connection with the case Ost vs. Collection
Bureau, Inc . )
29. For all grantees and subgrantees, listsof all amounts paid
on behalf of the program or any of its employees for
professional or union dues. List separately amounts paid to
a) National Legal Aid and Defenders Association, b) Project
Action Group, c) American Bar Association, d) union dues
(provide name of union), e) C.O.D.E. or other political action
group, and f) all others. (For example, NLADA, in a July 22,
1982, letter to then LSC President Caplan, said that for 1982,
NLADA projected dues income from civil programs of $330,000.)
30. For each grantee and subgrantee, facts about which union
contracts are now in force and which positions each contract
covers. The name of the union should be provided with each
contract listed. Inclusive dates of each strike engaged in by
unionized employees against Legal Services Corporation
grantees and thereby their clients should be set forth.
31. The names of all organizations to which Reginald Heber
Smith fellows, subsidized with funds of the Legal Services
Corporation, have been assigned during the past two years and
the activities in which they have been involved. Specific
information should also be requested concerning networking
activities, coalitions, legislative drafting, press releases,
radio and television communications.
32. Details of all instances in which recipient entities are
known to have violated prohibitions against involvement with
illegal aliens, abortion, and homosexual activity.
90
98TH CONGRESS
1ST SESSION
To repeal the Legal Services Corporation Act
and to provide tax credits to those
rendering professional legal assistance
to eligible clients,
and for other purposes
A BILL
To repeal the Legal Services Corporation Act
and to provide tax credits to those
rendering professional legal assistance
to eligible clients,
and for other purposes
3E IT ENACTED
BY THE SENATE AND HOUSE OF REPRESENTATIVES
OF THE UNITED STATES OF AMERICA
IN CONGRESS ASSEMBLED,
SHORT TITLE
SECTION 1. This Act may be cited as the "Legal Assistance Tax
Credit Act of 1983. "
REPEALER
SECTION 2. Subchapter X of Chapter 34 of Title 42 of the United
States Code, the Legal Services Corporation Act (H 42 U.S.C.
2996-29961) is repealed one year from the effective date of this
Act.
DECLARATION OF PURPOSE
SECTION 3. To encourage the provision of civil legal assistance
91
to eligible clients in this Nation by allowing tax credits to
individual attorneys who provide such assistance without
compensation.
SECTION 4. Subpart A of Part IV of Subchapter A of Chapter 1 of
the Internal Revenue Code of 1954 is amended by adding the
following new Section:
"§ 44 I. CREDIT FOR LEGAL ASSISTANCE TO INDIGENTS
(a) General Rule ; There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an
amount equal to twenty-five (25) percent of the value of civil
legal assistance provided by individual attorneys without
compensation and without charge to eligible clients during that
taxable year.
(b) Definitions ; For the purpose of this section, the word:
(1) "attorney" means a person who is admitted to
practice law and render legal advice in the jurisdiction
where that person provides legal assistance and
representation. to eligible clients;
(2) "eligible client" means any individual person whose
annualized income is at or below the poverty level as
determined by criteria issued by the Office of Managment and
Budget; however, an individual shall not qualify as an
92
eligible client where his lack of income results from
refusal or unwillingness, without good cause, to seek or
accept employment;
(3) "legal assistance" means the provision of civil
legal advice and representation to eligible clients;
(4) "value of civil legal assistance" means the normal
hourly or flat rate fee and costs that an attorney would
ordinarily charge, for the particular legal assistance
rendered, to a client who is not an eligible client.
(c) Limitation on Credit ;
(1) The tax credit allowed by subsection (a) for any
taxable year shall not exceed the amount of tax imposed by
this Chapter, reduced by all other credits allowable.
(2) The tax credit allowed by subsection (a) shall not
be allowed for any of the following:
(1) any political activity;
(2) attempts to influence the opinion of the public
or any segment thereof;
(3) attempts to influence the issuance, amendment,
or revocation of any executive order by any
Federal, State or local agency or official;
(4) attempts to influence the passage or defeat of
any legislation by the Congress of the United
93
states, or by any State or local legislative
bodies;
(5) attempts to influence or participate in ballot
measures, initiatives, referenda or recall
petitions?
(6) any legal assistance with respect to any
criminal proceeding or in the case of a
juvenile, proceedings which would be criminal if
involving an adult;
(7) providing any assistance with respect to the
initiation, formation or organization of any
coalition, group, committee, association,
corporation, federation, or similar entity? or
(8) providing legal assistance to any person who
does not qualify as an eligible client. "
APPROPRIATIOiSI
SECTION 5. Section 1010(a) of the Legal Services Corporation Act
(42 U.S.C. 2996i(a)) is amended by inserting, immediately after
the second sentence, the following new sentences:
"There is appropriated for the purposes of carrying out the
activities of the Corporation for the fiscal year 1984 the
sum of $241,000,000. Said funds shall be utilized by the
Corporation and recipients in such a manner as to provide
29-379 O— 84 7
94
for the orderly transition to provision of legal assistance
to eligible clients solely by attorneys providing such
assistance as provided in § 26 U.S.C. 44 I. Mo new eligible
clients may be represented by use of the funds hereby
appropriated. The Corporation and recipients which employ
or compensate attorneys who currently provide legal services
to eligible clients, shall assure that, not later than one
year after the effective date of this amendment, eligible
clients are represented by attorneys:
(1) who the eligible clients have agreed to have
represent them; and,
(2) who are qualified to provide legal assistance to
the eligible clients as provided in § 26 U.S.C. 44 I."
RIGHT TO AMEND, ALTRR OR REPEAL
SECTION 6. The right to alter, amend, or repeal this Act at any
time is expressly reserved.
EFFECTIVE DATE
SECTION 7. This Act shall take effect upon the date signed by
the President of the United States.
SEVERABILITY
SECTION 8. If any provision of this Act, or the application
95
thereof to any person, organization or circumstance, is held
invalid, the provision to other persons, organizations or
circumstances shall not be affected thereby.
LLJS1-3J
96
98TH CONGRESS
1ST SESSION
To repeal the Legal Services Corporation Act
and to provide appropriations to the States for
provision of legal assistance for additional
fiscal years, and for other purposes
A BILL
To repeal the Legal Services Corporation Act
and to provide appropriations to the States for
provision of legal assistance for additional
fiscal years, and for other purposes
BE IT ENACTED
BY THE SENATE AND HOUSE OF REPRESENTATIVES
OF THE UNITED STATES OF AMERICA
IN CONGRESS ASSEMBLED,
SHORT TITLE
SECTION 1. This Act may be cited as the "Legal Assistance
Amendments of 1983."
REPEALER
SECTION 2. Subchapter X of Chapter 34 of Title 42 of the United
States Code, the Legal Services Corporation Act (§§ 42 U.S.C.
2996-29961) is hereby repealed.
SECTION 3. Chapter 24 of Title 31 of the United States Code is
amended by adding the following new subchapter IV:
97
"SUBCHAPTER IV - INDIGENT LEGAL ASSISTANCE
§ 1270, DECLARATION OF PURPOSE.
To provide indigents, with civil legal problems, access to
the Nation's legal system at taxpayer expense.
§ 1271. DEFINITIONS.
As used in this Subchapter, the word --
(1) "attorney" means a person who is admitted to
practice law and render legal advice in the jurisdiction
where that person provides legal assistance and
representation to eligible clients;
(2) "bar association" means the bar association with
overall jurisdiction in a State;
(3) "eligible client" means any individual person who
meets the eligibility requirements for receipt of taxpayer
supported legal assistance, established in accordance with
this Subchapter;
(4) "legal assistance" means the provision of civil
98
legal advice and representation consistent with the purposes
and provisions of this Subchapter;
(5) "State" shall include each of the several States
of the United States and the District of Columbia;
(6) "State instrumentality" shall mean either a
State's Supreme Court or bar association, which shall have
been designated in a State's enabling legislation as the
instrument for providing legal assistance in the State
pursuant to the provisions of this Subchapter;
(7) "State Supreme Court" means the court of ultimate
jurisdiction or last resort in a State.
§ 1271. TRUST FUND.
(a) (1) There is hereby established on the books of the
Treasury of the United States a trust fund to be known as
the "Indigent Legal Assistance Trust Fund" (hereinafter
"Trust Fund"). The amounts in the Trust Fund may be used
only for payments to State instrumentalities as provided in
this Subchapter.
(2) The Secretary of the Treasury shall be trustee of
the Trust Fund and shall report to the Congress not later
than May 15 of each year on the operation and status of the
Trust Fund during the preceding fiscal year.
99
(b) There is appropriated to the Trust Fund, out of amounts
in the general fund of the Treasury not otherwise appropriated,
for the purpose of fulfilling the purposes of tViis Subchapter,
$241,000,000 for the fiscal year 1984, and ?241,000,000 for the
fiscal year 1985.
(c) The Secretary of the Treasury is authorized to disburse
the monies in the Trust Fund to the several State
instrumentalities in such a manner that the total amount of funds
distributed to any one State is proportionate to the total number
of eligible clients in that State as to the total number of
eligible clients in the United States (which shall be calculated
so as to include eligible clients in the District of Columbia),
as of September 30 of the fiscal year preceding the fiscal year
for which an appropriation is made by Congress to further the
provisions of this Subchapter.
§ 12/3. DESIGNATION OF STATE INSTRUMENTALITY.
(a) To qualify for disbursement of any funds from the Trust
Fund, each Stace shall De required to enact enabling legislation
designating either the State Supreme Court or the State's bar
association as the instrumentality for administration of a
program of legal assistance to eligible clients in that State.
The enabling legislation shall also provide for compensation of
100
attorneys representing eligible clients in that State by at least
one of (but none other than) the following:
(1) Empowering the designated State instrumentality to
directly compensate individual attorneys in private practice
for legal assistance to eligible clients as the attorneys
provide proof to the State instrumentality of services
actually rendered on behalf of eligible clients; or,
(2) Establishment of a method of direct payment of
funds, by the State instrumentality, to eligible clients or
their attorneys in private practice based upon a voucher
system or other method whereby proof of services actually
rendered on behalf of eligible clients is provided to the
State instrumentality.
(b) In their enabling legislation, States shall provide
eligible clients the right to select and retain individual
private attorneys of their choice.
(c) In their enabling legislation. States shall insure that
attorneys compensated with monies from the Trust Fund are so
compensated only for rendering legal assistance to individual
eligible clients.
(d) From any Trust Funds disbursed to a State
instrumentality pursuant to the provisions of this Subchapter,
the State instrumentality shall have available to it, for payment
of the cost of program administration and overhead, not more than
101
five (5) percent thereof. All other funds shall be used solely
to compensate attorneys providing legal assistance to eligible
clients. The State instrumentality shall issue regulations to
assure the greatest number of eligible clients receive legal
assistance with the funds available. These regulations may
include, but are not limited to:
(1) a prioritization of the types of cases which can be
handled by attorneys providing legal assistance to
eligible clients;
(2) a limitation upon the amount of compensation which
can be paid to any one attorney during any year; or
(3) any other reasonable method for preventing the
amount of attorney claims for compensation from
exceeding the funds available.
§ 1274. ELIGIBILITY.
An individual shall be deemed an eligible client and
authorized to receive legal assistance pursuant to this Act if
his annualized income is at or below the proverty level as
defined by criteria issued by the Office of Management and
Budget. An individual shall not qualify as an eligible client
where that individual's lack of income results from refusal or
102
unwillingness, to seek or accept employment.
§ 1275. COMPENSATION OF ATTORNEYS.
Attorneys providing legal assistance to eligible clients
shall be compensated at the rate of not more than $30.00 per hour
for each hour of services actively rendered on behalf of eligible
clients. The State instrumentality shall determine the precise
hourly rate of compensation to attorneys in the State. The State
instrumentality shall also adopt accounting procedures to assure
attorneys actually provide the legal assistance for which
compensation is sought pursuant to this Subchapter.
§ 1276. PROHIBITED PRACTICES.
Funds disbursed from the Trust Fund may not be used to pay
compensation to any attorney for the purpose of:
(a) any political activity;
(b) attempting to influence the opinion of the public, or
any segment thereof;
(c) attempting to influence the issuance, amendment, or
revocation of any executive order by any Federal, State, or local
agency or official;
(d) attempting to influence the passage or defeat of any
legislation by the Congress of the United States, or by any State
or local legislative bodies;
103
(e) attempting to influence or participate in State ballot
measures, initiatives, referenda or recall petitions;
(f) providing any legal assistance with respect to any
criminal proceeding or in the case of a juvenile, proceedings
which would be criminal if involving an adult;
(g) providing any assistance with respect to the initiation,
formation, or organization of any coalition, group, corporation,
committee, association, federation, or similar entity; or,
(h) providing legal assistance to any person wlio does not
qualify as an eligible client.
<> 1277. AUDITS.
(a) Each State instrumentality shall annually provide the
Secretary of the Treasury with an audit of the State
instrumentality's legal assistance program books and records for
the fiscal year. Each audit shall be prepared and conducted in
accordance with generally accepted auditing standards by
independent certified public accountants, certified by a
regulatory authority of a State. The audit shall be received by
the Secretary of the Treasury not later than January 1 of the
year succeeding any fiscal year during which the State
instrumentality received any funds from the Trust Fund.
(b) The Comptroller General of the United States shall have
access to such audits and may, in addition, inspect the books.
104
accounts, records, files and alL other papers or property of a
State instrumentality which relate to the disposition or use of
funds received from the Trust Fund.
(c) The Comptroller General of the United States shall, on
or before May 15 of each year, provide the Congress with a report
as may be necessary for Congress to evaluate the provision of
legal assistance pursuant to this Subchapter.
§ 1278. FAILURE TO DESIGNATE STATE INSTRUMENTALITY.
In the event a State shall fail to designate a State
instrumentality, as provided in Section 1273, within one hundred
and eighty (180) days of the effective date of this Act, the
Secretary of the Treasury shall thereafter be prohibited from
disbursing Trust Funds to that State.
§ 1279. RIGHT TO REPEAL, ALTER, OR AMEND.
The right to repeal, alter or amend this Act at any time is
expressly reserved.
â– 5 1280. APPLICABILITY OF OTHER PROVISIONS OF LAW.
(a) Funding of legal services recipients, provided in
accordance with the Legal Services Corporation Act (42 U.S.C.
2996-29961), which is repealed hereby, shall continue at current
levels for ninety (90) days after the effective date of this Act
105
to permit an orderly transition of legal representation of
elibible clients.
(b) Upon the expiration of ninety (90) days after the
effective date of this ^ct, an attorney representing an eligible
client pursuant to the Legal Services Corporation act iTiay
continue to represent the eligible client at the hourly rate
provided in Section 1275, should the eligible client so desire.
Should the eligible client determine to secure the services of
another attorney, the attorney which represented him pursuant to
the Legal Services Corporation Act shall cooperate in the orderly
transition of the eligible client's case files to the new
attorney.
§ 1281, SEVERABILITY.
If any provision of this Act, or the application thereof to
any person, organization or circumstance, is held invalid, the
provision to other persons, organizations or circumstances shall
not be affected thereby. "
EFFECTIVE DATE
SECTION 4. This Act shall take effect on the date signed by the
President of the United States.
[ LJS 1 ]
106
LEGAL SERVICES CORPORATION
733 Fifteenth Street, N.W., Washington, D.C. 20005
E>an J. Bradley
Pretident
Wfiier's Direct Telephone
(202) 272-4210
Mr. B. A. Johnson
P.O. Box 572
Wadley, GA 30477
December 4, 1981
RE: Community Congressional Education Project
Wadley - Bartow Citizens League, Inc.
Dear Mr. Johnson:
We have reviewed the Phase II documentation you provided us on your
LINCs/CAP grant. It would be extremely helpful to us tf you would rework
your grantee reporting form and delete the references to voter-education,
legislative and political process. Perhaps you could rephrase the language
to say something to the effect that the project focused on citizenship and
advocacy.
I have enclosed the original form that you completed, along with a
new form. If you have any questions or need any additional inforroatton,
please contact Floyd Price or me.
Thank you in advance for your cooperation in this matter,
you continued success on your project.
I wish
Sincerely,
2nneth Smith
director
'Regional Operations and
'â– Support Services
Office of Program Support'
JKS:1bm
Enclosures
BOARD OF DIRECTORS -
Steven L. Efigeli>erg
VTiMtinflon, DC
Rc^ioi O Onm«. Jr
Netfc OrleJn%, LouiMuia
Hillary Rodham. Chainnan. Linic RocL. AfVanui
Cecilia D liMfUcr
Phoenia, AnzAia
Ho^.ar<J R Sackk
Weu Hanford, Conncctioil
I
MKhacI Kant«if
Los Angeles, Caiifonua
Ra;llofia Shump
Topeka, Kansas
RoScnJ Kuul
Omaha. NcbT2sl.a
Richard Trudfll
Oaldand, Cahfoniu
F Willum McCalpin
Si Louit, Mis5«un
JOKOhine Wonhy
Holyoic. Mastadiiucni
107
i'0Vl8 1981
LINCS/CAP â– -'- â–
PHASE II
â– " - FORM 2-B â– _ â–
Evaluation Requirements
Grantee Reporting Form
LINCS/CAF Project Title: (a)^^Utirh^ ( J>n^r'^<;.Cl^n/^ j k^^<-'>no^Tf'^y'fr ~
Orqam'zation: Yva.il/u^ ncit-l^uO diTiiehK Lf^<\u.e ^nc.
Address : ftN r. 'B • A- . 'sd r^X-nt^
1. Give a brief overview of program to date. \AJ^ Uc,of ( ^ f^ (k <^ (.-T-f^
•2'. Describe any (alternative measures wnicn you nave found necessary relating , •â–
'f- to original goals. H)^ o r -T^ Vtsor /V-. 1/ g; T '>>/gi • /a (rr-cXc y^
Why were these 'alternative measiires' necessary? / p Ar-oUS^ ik^jv/ '^S^'
3. Actual dates of activity: beginning and ending: USXl. M>, l^'^J
I i
4. Has technical assistance been implemented? Yes '^' No
5. If yes, by whom: Name Title Address
'Vv)^iL ,6/4. j„.
108
6. How are objectives being reasured?
? Ci^ V<S QOn^t^ <f/.
i^A P^A i^ •-'' "
Wo.
rt-range objectives.
^
Or Ci^Se
I
7. 'Demonstrate achievement of sno _ ^
1 Xi^ plA'^^f _ pry c>r.5-r.
-T -^ 8. What iTBterials are hfeing used or produced? /^^6 \\-eAr . 'I^^\J.^^
^
i
f/A
9. List any problems encountered in Phase I of the program, fj hxJ^ &U A >
't 10. Briefly describe how the problem was solved, or planned activities.^
11. Who is the person primarily responsible for this project?
Name
Address
P^s-j- T)^^.^ n^oy: ^7a
City/State/Zip code XiL^l^'. ; Co A 3b^n'7 :
Telephone number Cfl ^J 3l <:^ -^ ^^7 1 °^ fej igX-///^
Name of person completing this form: \)Onl^Cv»^ p. \3 /t>'n >fr'
109
Note: Upon successful completion and return of this form, the remaining
fifteen percent of the grant will be awarded. . . - :. . .
Signature of person completing this form Date/ /
29-379 O— 84 8
no
PROGR^Jd ;- 1-wCt
taed
/
(5) CHA;<CE in YEAft Etro
During I960 NlleLP chAnged tcs fiscal year end to December to corLeapond
vl ch Itc »nnu«l funding period froo LSC. Hanagenenc decided to h«ve th«
1980 audit delayed froo June to December 31, 1980 and cover Che eighteen
Boiitha then ended. Because of tlie change In year end and the long
accounting reporclnt period for 1980, aaiiageueni. elected to not Include
conparaclve Balance Shecta and Staceioencc of Support and Expenditures and
Changes In Fund Balances In these financial scateaents*
VctUM
(6) COST BEIMbURSEMEffrS - NORMAL PRgCtUM WOKJC
Cost relfflburscuencs during the ycur ended December 31, 1981 consisted of
Che following: '
Travel $ 8,485
Printing 151
r-"iUT"- t.iio
Other 1.757
$13,273
(7) UNUSUAJ. ITEMS
In a Olac^er before the Dtscrlcc of Columbia Office of Human Righto, Shells
Albright, i former employee of NHeLP, sought Injunctive and ccupensscory
relief agalnsc MHeLP for alleged discrimination in enploymenc o.i che basis
of her race and sex. The plslnclff demanded conpensacory damages of
$30,000. In February, 198;, chls matter ua« settled with the payment of
$8,000 and dlamljssl of che Ijwsult. The amount of the settlement sod
related legal costs of $2,402 have been accrued at December 31, 1981.
In a separate matter, management determined thac Ic was not probable chat
the Program would collecc a receivable of $2,130 from a former landlord ac
die Program's old SanCa Monies Ipcacton. Accordingly, the uarecovcrsble
depoclc uss vrlccen off In 1981.
Tlie lltlgBClon tettlemenc and the unrecoverable deposit are unusual and
non-reeurrlng expenses for che Program and hsve been Included in che
caption "Unusual Items" In che Scatemenc of Support and Expenditures and
Changes In Fund Balances, as follows:
Payment In secclument of Albrluhr litigation $ 8,0(>0
Legal fees relating to che above
.402
Write off of old rune deposlc 2, 130
$12,532
WIULJAM R. '-UCAS & COMrAHT
CCKTiriCO nj«i.lC ACCOUMTAMT«
Ill
HEA
NIATIOMAL KEAJ.TH LAW RJOSWv.
2^501 Main Siieet
Son1o Mcnica. CA. 9W05
(213) 392-4811
B-onch Office:
1^24 16th Sireet. NW. *3W
V^'cshinglon DC. 2CD36
(202) 232-7061
Aciing Edilor: GefoWine Dcliek
ISSUE NO. 105 JANUARY 1980
NEW NHeLP STAFF
• Judith Waxnan, formerly an attorney
vith KZU's Public Health Division, has
joined hMeLP in our D.C. office.
Geoffrey Broun, currently editor of Sur-
vival , an anti-nuclear power newsletter,
has joined the west coast staff as editor
of the Health Law Newsletter. WELCOME.
AMERICANS WANT NHI '
Cooprehensive National Health Insur-
ance is still an identified goal of the
aajority of Aaericans. Results of an
August, 1979 Gallup poll show that:
(1) 67% of the public feels that there is
a need for National Health Insurance and
of these, 54Z feel strongly Chat there is
a need. Only 20Z feel that there is no
need for NHI.
(2) Support for NHI is strongest among
non-whites, low social-economic groups,
union members, central city residents and
persons living in £ast,ern states. A ma-
jority of all groups, however, (whites
and non-whites, inslired and uninsured,
rural and urban, etc.) support NHI.
(3) 51Z of those interviewed expressed
little or no confidence in their ability
to pay for a major illness and 35Z were
not too or not at all confident of their
ability to pay for usual medical costs.
(4) Given the choice and projected cost
of a comprehensive plan, a 102 deductible
plan, and a catastrophic plan, 36Z chose
the comprehensive plan, 26Z chose the lOZ
deductible plan, and 21Z chose the cata-
strophic plan.
(5) 43Z of those interviewed would like
to pay for the plan through preaiums com-
pared to 38Z who prefer to pay through
taxes.
(6) '5Z would prefer private Insurance
companies to administer a NHI plan vAiile
38Z would prefer the government.
(7) While a plurality of the public be-
lieve that government regulation in-
creases the cost of health care, a major-
ity feel the benefits of regulation out-
weigh the drawbacks'.
ANOTHERlWEDICAib CUTBACK SCHEME^
New 7ork and a number of other states
have found an effective way to cut their
Medicaid rolls. The State has been auto-
matically terainating from their Medicaid
program all persons who lost their Sup-r
pleaental Security Income (SSI) eliglbll^
ity.
Notice of SSI teralnatlon is sent to
New Tork from the Social Security Admin-
istration on a weekly computer tape. The
fact that the information on the . tape
could be in error, includes persons \ftio
were illegally terminated from SSI or in-
dividuals who might still qualify for
Medicaid has mattered not one whit to
State officials. Off SSI, off Medicaid.
SSI is the federal welfare program for
the poor aged, blind and disabled. All
state Medicaid programs include SSI
Tbe NitioDil Health L>w Program U « Legal Sertieaa back,
up center funded b]r tbe Legal Servleaa Corpotaboo.
Waikingloa. D.C Tbe Healib Law Newilettet la diatzlbuted,
Iree, lo Legal Servicea diesU and attoEOe]'! aad to beallb
providen and cooaumera who with to lean about haaitb-
ralaied problema of tbe poor. Pleaaa endoae your old addrma
label when movlnj.
112
NATlON/>J. HEALTH LAW RO&'VJv
2<J01 Moirt Siieel
Sonio Monica. CA^ <?0<a05
(213) 392-4811
Bfonch Office:
1424 16th Street. NW, #304
WcshinglOTi DC. 20036
(202) 232-7061
Eciilor: Geoffrey Bro>«n
ISSUE NO.106 FEBRUARY 1930
=iHYDE"DECLAREp UNCONSTITUTIONAL.
'•.In" a iandoaric victory for" lo«-incorae
vomen and pro-choice advocates. Federal
Diitrlct Court Jjdg» John T. Doollng
ruled the Hyde Aoendment unconstitu-
tional. - â–
la a 352-page opinion, issued on
' ' January 15, 1979, Judge Dooling held that
the denial of Medicaid funding for abor-
tions violates the First (religious lib-
erty) and Fifth (equal protection, due
process, privacy, vagoeness) Aaendaents.
The long-awaited ruling is the result of
a nationwide class action lawsuit, McRae
- V. Harris (foraerly McRae v. Calif ano ),
filed in 1976 by the Center for Constitu-
tional Rights, the jtoerican Civil Liber-
ties Union and Planned Parenthood of New
yortf City.
The ruling that the Hyde Anendnent
violates constitutional freedoms of reli-
gion is the first of its "kind in an abor-
tion case. Discussing at length the
teachings of several religions. Judge
Dooling found that religious beliefs dif-
fer widely over the morality of abortion.
The court found that the Hyde Amendment
was thus religious rather than policitl-
cal in nature and that its enactment was
significantly inflot-iced by religious
considerations — especially by the actions
and tenants of the Roman Catholic
Church.
The Court therefore found that Hyde
was the imposition of a single rellgion'i
beliefs on a woman's conscientious deci-
sion whether to bear a child.
"A woman's conscientious decision,"
», the Court wrote, "in consultation with
her physician, to terminate her pregnancy
because that is . medically necessary to
her health, is an erercise of the most
fundamental rights, nearly allied to her
right to be, surely part of the liberty
protected by the Fifth Ajiendment, doubly
protected when the liberty is exercised
in conformity with religious belief and
teaching protected by the First Amend-
ment. ..The irreconcilable conflict of
deeply and wiaely held view* on this is-
sue of individual conscience exclude* any
legislative intervention except that
which protects each individual'* freedom
of consclentlouc decision and conadcn-
tlous non-partldpation."
The opinion details the' horrebdou*
consequences for' pcor uomea and their
families «f Hyde restrictions. From
extensive medical and psychological te*-r -
tlmony, Judge Dooling concluded that
abortions are a nedlcally necesaary *«r-
vice and must be reimbursed under the
Medicaid program: "The evidence wmrrant*
the finding that poverty entrains en-
hanced health rlslcs, nutritional defi-
ciencies, and limitation* on acceas to
health care that make the Incidence of .
medically necessary abortion markedly
higher among the poor than among tho*e
who have the means to maintain uell-
nourished life and regular health care."
The "life endangerment* and severe and
longlastiog physical health damage"
standards of the 1978-79 Hyde Amendacnt
are so 'alien to current medical stand-
ards," Judge Dooling found, that they
"exclude the greater part of the case* in
which the profession would recommend
abortion as a medically necessary
The Ndiiwal Health l.rw Pra(na U • Lcf •! S r vlcas bttk.
up cenlar inndcd br tl>t Ufd Ssrvlea* CorponrtHe.
WubiDftoa. D.C Tbc Hultb Law N«w«t«nv is diitiftatadi
fre«. 10 Legal 5ml c— eUnIa and attecaar* ud » kaallh
previdea asd coB«»«n who «ri*k to laara aboat baaltfc.
ralaied problem of tb* poet. Pleax cadoat year old addraaa
label when movlag.
113 -
January 11, 1980
NKeLP WASHINGTON ADVOCACY QUESTIONNAIRE
The National Health Law Prograo uould like to increase the involvement of legal
services workers and cocnunity organizations in Washington legislative and
administrative advocacy. Tnis increased involvenent wKsuld include an expanded
inforaation service for field attorneys, paralegals, and clients as well as
additional opportunities for field iaput in Washington advocacy. The sooner thl»
for? is completed and returned, the quicker u>e can add your name to our advocacy
network.
' In completing the following questions, please use the following nunerlcal code
for subject areas of Interest:
1. Medicaid 11. Civil Rights
2. Medicare 12. Regulatory Refom ' .'•.•■•â–
3. Cost Containnent 13. Reproductive Freedom
i. Health Planning 14. Long Term Care
5. Public Hospitals 15. HMOs
6. Child Health 16. Health Hanpower-Kational Bealth Service Corp
7. National Health Insurance 17. Patients' Rights _ . ' -
8. Hill-Burton 18. Indian Health
9. Rural Health 19. Neighborhood Health Centers
10. PSROs â– 20. Other: " "" " ' "â– â– ..:
,:' 21. Other:
LEGISLATIVE ADVOCACT
I would like to recleve copies of bills and other Infongation on Hashlngton
Developaents in the following areas (list all ntjabert that apply): •
>
I am willing to assist in legislative advocacy on behalf of eligible clients by
writing letters and making telephone calls to legislators on the following
issues (list all numbers that apply):
I am willing assist in legislative advocacy on behalf of eligible clients by
travelling to Washington to testify and/or lobby on the following Issues <llst
all numbers that apply): ^ ^
I an willing to disseminate information on Washington legislative developments
to other legal services workers and community organixatlons In my state on the
following issues (list all numbers that apply):
(over)
114
Troubled
Hospitals
^ sk Congress
For Aid
The nation's ci'des "sje losing the fjfiht* to pay for public
ho^iLzls— Oie'O^ospitsls of last .-esort" for anesiimsted 11 to 25
nillion Americajis u-ithout insurance coverage. Tliat's the
*ai7iiag g-iven by Carol Bellamy, city coupdl president of New
York Cil5'. to a House Ways and Means Health Eubcommittee on
Feb. 29. Chaired by Rep. Charles B. R^ngel, the subcommitlM is
holding a series of he^jiugs on fmanciaUy troubled hospitals.
Hearings in Washington and Kcw York v.-ill be followed by an
' April 2S hearing in Chicago, where Cook County General
Hospital is suffering severe financial problems.
For poor Blacks and Hlspanics, the pubbc hospital "^is not only
the prox-ider of last resort, but often the only provider," testified
Dorothy La::g of KHeLi* before the Raijgcl subcominitl*e.
Pri%ite hospitals often refuse those who sre too poor to pay. o*
even those who can pay with ^?edicaid. Many hospitals which
are obUgat«d to ser^'e the poor as a result of the federal HHi*
NSarton funds they received, still refuse to honor their
^jbligitions. Private hospitals are often too far from poor areas,
and often have some sort of racial or language hairier to equal
So that leaves pubhc hospitals with ^he responsibility of
caring for the poor. Lang said. The poor need public hospitals
not only for the inpatient facilities us'jally expected from a
hospital, but also as a substitute for the primary care
doctor— whose services are usuaUy nonexistent in poor
communities.
Bat public hospitals are beset by a multitude of problems
ranging from cursing shortages to inadequate rapplies to out-
dated physical plants. Finances are at the root of most of these
troubles. Highly dependent on dty or county revenues which
fluctuate with political moods, the public hospitals have had no
protection against the tidewaters of inflation in medical care
costs. And Medicaid has left man^ poor people uncovered for
basic medical needs, as well as failing to require coverage for ao-
called "optional" items. Inadequate Medicaid reimhursementt
furthermore, puts a heavy load on hospitals serving the poor.
Pri\*ate hospitals are partly to blame for the crisis in public
hospitals. By refusing poor people under a variety of schemes,
private hospitals have 'dumped' unprofitable poor patients on
the public facilities, while keeping the insured patients for
themselves. Also at fault are tiir reduction and spending limita-
tion meaj'ures whirii, by causing cuts in Medicaid beneiits, for
example, just increase the load of poor people oc the local public
hospital In this perverse kind of medical "deficit spending,' cuts
in mwiiraj benefits today only postpone illnessK, which are
always more expensive to beat tomorrow.
M^^t can be done? Short of a national health insurance plan,
ftOorothy Lang sayi, direct 'grants to fin anri ally distressed
hospitals would be helpful,' along with changes in Medicaid
*Timbursement which would allow public hospitals to figure
their free care costs into their formula for Medicaid reimburve*
ment Equally uMful. she adds, would be better Medicaid
reimbursement for outpatient services— which are practically
the only care of any kind available in poor areas. In add-tioa,
hospitals should get greater pressure from HTW to honor their
HiiJBurton promises of free care and equal access for the poor,
and priv^te hospit^Js w-ith charitable tax exemptions should be
rtquired lo provide fome ser\-ices for the poor.
, Whether these proposals are adopltd by an increasingly
bjdget<onscious Congress and Administration remains to be
H<n at this point. But the one ctrtainty is the urgency of
immediate action to save pubLc hospitals and the care they
proxnde to the poor.
Three Texas Clinics
Struggle Toward Birth
In Kingsville. Texas, you'd better not have a baby if you're
poor— it's a sixty-mile drive to find an emergency room that
Lakes Medicaid. In Uvalde, Texas, thirty people a week have to
travel 60^0 miles because local doctors wonH treat poor people.
In Del Kio, Texas, it's the same story, no access.
But things are changing in south Texas— thanks to communis
groups in all three to^iis which are working with Tesas Rural.
Legal Aid to get money to set up health clinics for the poor. One
group in Del Rio got approval for a $311,827 start-up grant
from KEW in late Febniaiy, and applicatjons have been com- '
plet«d for siiailar Rural Health Laitiative (REI) grants by
Kingsville and Uvalde community groups.
HEWs Rural Health Initiative combines money from the
various federal funding progrrims for dcvalopment of primary
health care in runJ areas. The RHI support comes in the form of
grants from the community and migrant hjalth centers (CHC &.
MHO) programs, as well as medical personnel from the National
Health Service Corps. Although HEW decides which appUcantB
get its limited funds, groups developing thedr rlinjrt must go
through a number of local hurdles in order to be s^ccassful.
It was a battle each time," says Legal Services lawyer Isabd
Garcia of the various hearings at which the predominantly.
Chicano group Buena Salud had to defend its proposal before
tha local Health Systems Agency (HSA). The dty and the local
hospital attacked the group for having consumers on its board oa
directors, and then when Buena Salud decided to add a provids
member to the board, the doctors in tcwn obiected to their
requirement that the new member he bi-lingual (Buena Salud
conducts its business in Spanish).
Garda says that the medical community was never mtical of
a recently-disoedited migrant health center whose funds were
finally cut off by HEW. The migrant center had no migrant
users on its board, she says, nor did it serve more than an
estimated 1% of the farm population.
In the face of intense opposition, Buena Salud's strongest
achievement, Garcia says, was 'not tu deal with all the paranoia
created by the HSA and the doctor^ but to keep on with our
work.. .The kc}' thing is to make it di^cult for them to deny
you." Their method? "^e just documented everything.'
A ^^TrHwr suggestion comes from Vmana Cavmda, a Legal Aid
lawyer working with Trabaiadores Unidos Health Inc. in
Kingsville. The Chiuano group used birth and death certificates,
mid-wife interviewt and surveys of doctors to document the
county's problems. As a result, it was officially designated as a
medifkl care problem area in several respecta — vhich maka
their application for an HEW clinic grant much stronger. As a
condition to receiving RHI support, federal law requires an area
115
i
Congress, Carter
â– Slash Health Budget
Budget cuts by President Caxier arid two CongressionfiJ
Budget CommitUrcS have succeeded in derailing— at )e«st
temporarily— spending limitation proponents who hed
advccflled even Iwcer cuts. But health programs sufftirf
htrious slAshes in the procefi, inducing cuts ranging frota
hc£Jth planning to conmunity hetJth centers to tJie National
Kfc&JUi Service Corps.
Spending limitation proponents w?j>t the federal budget tied
to a set limit, based on a fixed pcrceatsge of ihe Gtoss National^
Product (GNP). To head them off. Carter took the unusual step
of presenting a second tirimmed-do^'Q budget in March to
replace bis first budget, which came out in January. The
January budget bad a deficit of S15.6 billion, and in the ensuing
two months, the ravages of inflation bad put Carter's budget
another 513.5 billioD in the red. So the President had to make
cuts— «r raise revenues — by about $30 billion in order to balance
' the budget
As a result, the health budget only inched up from $60 billion
last year to $71.1 billion this year, and two-thirds of that ,
Budget Bout — Round One. .
increase was due to inflation. Budgets similar to the President'i
were approved by the House and Senate Budget Committees,
On the casualty list in Carter's latest budget were communis
health centers (cut $33 milHon). National Health Service Corps
(cut $47 million), health planning ($41 million), maternal and
child health (SlO million), family planning ($15 million), the
financing, compliance and conversion program ($10 million) and
emergency medical services (cut $5 million).
Xwo million low-income children and lOO.OOO pregnant
women will have to wait at least another year for medical help
due to deferral of the Child Health Assurance Program (CHAP),
whose delay will save $400 million. Expansion of home health
Dcrvices and other benefit improvements under Medicare and
Medicaid will also be pos^oed.
A ca&litios to lobby against the cuts is bn'ng led by AJFlrOO
PreadeitLane Kirkland. who derided the budget^balandng act
as economic 'nonsense* which 'runs counter to the geaeral
welfare of the American j>«)ple. especially the wt;Jc the poor. ,
minoriLifcs and the elderly of. our eociety." Joining in tSe
coalition are rr.ore than 140 organizations, including KHeLP.
the Amerjcans for Democrstic Action, the Urban Ltague. and*
the Aniericin Federaticn of State, Ounty and MunJcipal.-
Eir.ployees.
If Congress and the President are interested in bsUncing'the
budget, said NHtLP's Judy Wa^onan ia Washjo^ujo, iheyi
sho-jid consider cuts in the defense budget as well as methods to
L'.creise revenues, such as tax reform. Under prei^oit propowiisV,
the poor bear the load of an economic juggling net of dubious
value.— -^—' '
Sellers Tagged to Head
HCFA Beneficiary Services
Barney Sellers was recently appointed as the first Director of
HCFA's Office of Beneficiary Services. This newly-estabKsbed
office will represent the interests of Medicare and Medicaid
beneficiaries in the Health Care Financing Administation, the
HE\V egcncy that administers Medicare and Medicaid. >TKeLP
welcomes the appointment of Sellers, who was formerly Depu^
Director of the American Health Planning Assodation; before
that, he worked with the National Health Council. Tht new
Director can ^ reached at 6401 Security Boulevard, Baltimore,
Md. 21235. (301) 594-813L ^
Three Bow Out
of Congress
Three Representatives recently announced they wiB not seek
re-election to C^ngrest. Rep. Harley Staggers (D-W.V.),
CThairman of the House Committee on Interstate and Foreign
Commerce, wiH not make an election bid at the end of his
current term. Nor will Rep. David Satterfield (D-Va.). who was a
tremendous thorn in the side of consumer advocates during con-
sideration of the Health Plan:iing Amendments in 1979. The
third Representative to bow out is "Hm Lee Carter (R-Ky.). who
was a staunch defender of poor people during both the Health
Planning Amendment battles and the consideration of the Child
Health Assurance Program (CHAP).
FTC Gets Funding Injection
Tht Senate and House approved a joint resolution for con>
tinued funding for the beleaguered Federal Trade Commissioii,
Which had been operating without funds for nearly tp?o weeks.
The FTC has been under fire for moving toward regulation of
doctors and dentists, among others The March 26 resolution ia
being followed up ^ on-going conference committee worlc oa
legislation to reauthorize the FTC. Probably the key rtumblinf
block in that committee has been the House's i"'"g**"rf on t oo^
bouse legislative veto over FTC actions.
Local success? Local setback? Let the Heahh AdvocaU know
about it, and well share it with our readers.
116
Tackling the Crisis in
Public Hospitals (p. 5)
Q
t^eujsletter oj the National Health Law Program No. HI August I9S0
Supreme Court
Limits Abortions
On Jxmt 30, 1980, the VS. Supreae Court dealt a sharp
cw to poor women in a 5 to 4 dedaon upholding a Con-
-essional prohibition against use of federal funds for
}ortions. In Hcrris u. McEae, the Court upheld the con-
oversial Hyde Amendment, introduced by Heniy Hyde
'_ ILL.) and passed by Congress in 1976. The most recent
raon of the bill allows federal funding of abortion only
' save the life of a woman or in cases of immediately
ported rape or incest The decision reverses a January
continued on Page 4
wM^^i^iBlM^^M^^B^^^
Trainings Pay Off,
Bring Increased
Advocacy
Ann Swerlich used to get blank stares when she men-
iloaed Hill-Burton at local Miami hospitals. Not any
more— thanks in part to a Hill-Burton training session she
helped arrange. Similar trainings from Massachusetts to
Alabama have increased advocacy nationwide.
The sessions vary from two hours to a day and a half in
length, and involve ten to fifty people per session. Formats
vary: in Massachusetts, Barbara Ferrare used a slide show
showing hospitals, patients and administrators to pinpoint
the issues. Arizona's Joe Donovan plans to use role-playing
between 'adminstrators" and 'patients" to dramatize his
points; a 20-min. videotape will add to the presentation.
Barry Puett in Utah says she finds smaB groups are most
effective, and that it's best to minimirj' the technicalities.
Other organizers confirm this last point, saying an em-
phasis on practicalities is usually well-received.
One group which hax no qualms about thinking big is th*
Alabama Coalition Against Hunger, which along with
Legal Services of Alabama ran over a dozen workshops on
Hill-Burton around the state. '£ach workshop was preceded
by a local press conference; over 11.000 wallet cards were
distributed through the session::; and 560 people wer«
trained at the first seven workshops alone. "Our basic
goal," says Bill Edwards of the Coalition, 'was to make
Hill-Burton a household word." Andrea Leveie and Mike
Mirra also took their trainings statewide in Tennessee, and
found they both got more attendance and "gave people
more of an investment" through greater personal contact.
Often the trainings are part of a larger HiB-Burton
strategy. Teople came to the workshops, got upset, got
continued on Page 4
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117
Abortions
Continued from Page 1
I9S0 Federal District Court ruling made by Judge John F.
Dooling which declared the Hyde Amendment unconstitu-
tional, la Williams u. Zbaraz, the second case considered,
the Court upheld an Illinois law prohibiting use of funds
even for women needing medically necessary abortions.
The Supreme Court decision does allow for states to opt
to pay for abortions for indigent women.' The only route
open for legislative advocates is to encourage their state
legislatures to pick up the tab for abortions. ,
Meanwhile, since Medicaid continues to pay for stenliia-
tior\s, many women will be forced into permanently cut^
ting off their chlldbcaring option for fear that they would
not be able to have an abortion if they needed one.
Equally alarming is t>ie prospect that an as-yetunknown
number of poor women will suffer i]] health and even
death as a result of not being able to have a medically
necessary abortion; others will be forced to seek a less safe
abortion by an unskilled or inexperienced practitioner.
-FH
Victory for Hill-Burton
Regs on Appeal
Rejecting a challenge from the Americaji Hospita] Asso-
ciation, a federal appeals court in lUinois agreed with the
district court and upheld the denial of a preliminai? in-
junction against HEVVs new Hill-Burton regulations. By a
2-to-l dedsioa, the Seventh Circuit Court of Appeals
agreed that the AHA had not presented a strong enough
case to enjoin HEW (now HH§) from enforcing the tougher
rules on uncompensated and community services.
But the court's decision had some significant drawbacks.
Neither'the majority opinion nor the lengthy dissent pro-
vided much support for the regulations. The AHA had con-
tended, among other things, that HEW exceeded its
authohty by making the tough new regulations. The ma-
jority opinion, while upholding HEWs authority in gen-
eral, did concede that the dissenting opinion might be a
"helpful brief" when the merits of the case are heii And
the dissenting opinion itself is a sharp attack on the new
regs, calling them a case of "admixiistrative overkill'
(American Hospital Assoc t/. Harris et oL Civ. No.
79-2162. decided July 2, 1980).
Copies of the decision are available from Armin Friefeld
at NHeLP's L.A. office. The lower court's opinion is
reported at 477 F. Supp. 665 (N.D. IlL 1979.) -GB
Harris Appoints NHeLPer
Secretary Harris appointed NHeLP director Sylvia
Drew Ivie as Director of the Office for Civil Rights in
the Dept of Health and Human Services, effective
August 3rd. Ivie named Lucien Wnlsin. Jr. as acting
director at the National Health Law Program.
Hill-Burton
Continued from Page 1
Trainings .-
angry, and then we did the organizing," says Judy Rausch
in Indianapolis. In her case, organizing meant finding a
health law specialist and a lay advocate to cover each of
six'.ten "Hill-Burtcn regions" in Indiana. Rausch hopes
each of tliese regional teams w]U sponsor their own train-
ings ?.s well as do comprehensive surveys of local hospital
compliance. A training in Florida led to formation of a
"workgroup" which plans to use surveys and publicity to
press the community service obligation of Hill-Burton. In
Arizona, organizers hope their trainings will foster growth
of commurjty advocacy centers covering many issues.
So what have all these plans accomplished? Like the
trainings themselves, the results are varied. Utah ad-
vocates have generated newspaper articles all over the
state, helped a Salt Lake City TV station do a half-hour ex-
pose, and are demanding stiffer enforcement by the state.
In Florida, a training helped reinforce the advocacy of the
half-dozen lawyers around that state who've brought
lawsuits, generated newspaper publicity and surveyed
local hospitals. Bill Edward in Alabama says the number of
Hill-Burton applications lias tremendously increased*
since statewide workshops were held.
Advocates say they are mostly encouraged by the results
of the trainings, which were funded in part by training
grants from the Legal Services Corporation. Meanwhile,
the advocacy goes oil As Arizona's Joe Donovan says, "All
it's gonna take is some complaints and some publicity.^
Then the hospitals will have to respond— or they'll findK
themselves in court." — GB .
Alabama's failing Medicaid program got a shot in the
arm in May when the governor and legislature came up
with S20 million to keep the program going through at
least October 1. Though new state taxes and money
transfers have temporarily saved the program, nert year's
budget is still in questioii, say political observers,
Raquel and Isidro Aguinaga are suing Plains
Memorial Hospital in Dimmitt, Texas for one million
dollars after their eleven-month-old son Isidro died on Dec.
8, 1978— shortly after being refused admission to the
hospital Despite admisaon orders by the hospital's acting
chief of staff— who said the baby was very seriously
ill— the Aguinagas were told by hospital staff that a
S450.00 deposit was necessary before the child could be
admitted. 'The hospital had received 3728,000 in HiU-
Burton funds, and had chosen the open-door compliance
option in 1978 which required that no person be denied
admission on the grounds of inability to pay. Other alleged
violations in the complaint are based on Title VI of the
1964 Civil Rights Act, the Fourteenth .Amendment, andxj
Texas laws on emergency services. (Aguinaga et al u.%
Plains Memorial Hospiud, N. D. Texas »279-20S.)
118
New Ballgame in Congress (p. 2)
Consumer Action How-to^s (p»6)
Newsletter of the National Health. Law Program No. 115 December 1980
i Sfew CON- Regs
] 3£fer Hope. ,
' 'or Access -
I Kew avenues to increzse access to bea^tli caxe for the poor
id mioorities and to ctop public hospital closures are oow
j 'aiUlile through recently issue<? Certificate of Need (CON)
juJitions. Following several months of vigorous advocacy
' legal senices clients and workers, the Public Health Ser-
I ce in the Department of Health acd Human Services
i HSJ-issued its final CON regulations (45 Fed. Reg., 69740,
' Aafier 19, 1980; codified at 42 CFR §122.301 et seq.)
^le: new regs require Health Systems Agencies (HSAs)
y Sta±e Health Planning and Development Agencies
HPDAs) to adopt 21 criteria for CON reviews. The most
iportznt require health planners to examine whether and
nr well the proposed project meets the health need* of the
lor, haniScappied, minorities, women, the elderly and
her medically underserved populations. Specifically, the
sAs and SHPDAs must consider.
5) The extent to which medically underserved popula-
tions currently use the applicant's services in comparison
to the percentage of the population in the applicant's ser-
^..a boon to advocates fighting pub-
c hospital bed reductioas and service
sletions — " -'
1 vice area »^ch is medically underserved, and the extent
j to which medically underserved populations are expected
to use the proposed services if approved.
(55 "Tht performance of the applicant in meeting its obli-
gatioa,. if any, under any applicable Federal regulations
requiring provision of uncompensated care, commumty
service, or access by minorities and handicapped persons
t» programs receiving Federal finanrial nwin t a n n'
(iiij "Tie extent to which Medicare, Medicaid and medi-
Cont on Page 5
Poor Hit Hard
Abortion Cut-off
in Chicago
: On October 11, 1980, Chicago's Cook County Hospital'
abruptly dosed down its abortion service. The cutoff was
authorized by George Dunne, preadent of the Cook County
Boa.n3 of Commissioners who took over control of the public
hospital in December of 1979. County CommissioneT John
Stroger ex-plained to the Health Advocate that "the Board
of C^mmissioDers had been unaware that Cook County waa
providing abortioss until we were recently notified by mem-
bers of the hospital staff". Abortiens were stopped as soon
Cook County authorities f'laim they
were 'unaware* that 3500 abortions a â–
year were done there.
as the Board became aware that they were being done. This
contention is hard to believe since Cook Count? Hospital has
been performing apprramately 3500 abortions a year. -
The cutbacks in public hospital services, coupled with the
r^icent Federal, state and local election of many antj-ahor.
don politidans, come on the heels of the Hyde Amendment
restjictions. It signals another tremendouj setback in
reproductive rights for poor women.
The Board of Commissioners gave no advance notice of
the cntoff. (immunity people, including 120.180 women
with appointments schedule for abortions at the hospital,
only found out when they called or came to the hospital
and were told to contact Planned Parenthood for abortion
information.
Stroger mm'ntji'nc that since Cook County Hospital is in
such financially weak condition, they could not justify main-
taining an abortion eervice; a service he and other commis-
sionen do not feel is as needed as other eervicss. Thcot
fighting the abortion cuts point out that (3ook Cotrnty*!
Cont on Page S
ae National Health Law Program is a Legal Service* backup center funded by the Legal Services Corpoimtion, Washinjlon,
.C Tie Heath Advocate is distributed free to Legal Service* workers and dients and to health providers and consumer*
ho wish to learn about health-related problems of the poor. Please endose your old address label when moving.
119
..--• '- -^ -— I • -, I - . 1. . r. •^. -r,...i !■■I — - ■. ■- , ^ , .. » rfi j.h. - . ^ - ■■* -^ r ■— ■■⠖ -> r « .w i l l »■v ■— - a?-, ^ft --^^ i w=;#
Reconciliation'Power Grab Hurts Poor
Congress, intent on bslancing the federal budget, passed
the first budget resolution this Jpring, slashing human aid
programs. Not long sfter the budget resolution passed,
however, it becsme clear tliat incorrect estimates, inflation
and the recession had thrown the balanced budget way out
of line.
In an attempt to regain that balance, the Budget Com-
mittees in the House and the Senate ordered each substan-
tive committee chairman to propose changes in the pro-
grams under their jurisdiction that would result in finan-
cial savings to the federal government Political chaos
resulted as committee chairmen scrambled to propose cost-
saxnng changes (and other unrelated bills) in the legislation
under their jurisdiction. These proposals became part of
Ironically, many provisions... had no
cost-saving effect at all...
the Reconciliation Bill for each respective body (HR 7765
and S.2885).
While some chairmen made proposals that were part of
reform packages already under consideration or passed by
the committee, any program that cost money wis fair
game for the cost-cutters. Committee chairmen could lift
cost-srving measures from legislative reform packages
while ignoring progressive counter-proposals which may or
may not also have saved money. The mandate to save
money provided a convenient excuse for the committee
chairmen to forget their accountability to the beneficiaries
their actions were affecting.
Ironically, many provisions in the Reconciliation Bills
had no cost-saving effect at all. These bills became vehicles
for enacting statutory changes that might not pass if they
had to go through the usual, detailed review by a commit-
tee. Thus, tacked onto . the Reconciliation Bill, they
amounted to an end-run around the traditional safeguards
built into the committee review process.
Meanwhile, budget committee members gained enor-
mous power to determine Congress" course of action. It
was, aiter all, the budget committees in the House and
Senate which told the other committees how much money
they had to cut from their areas. And budget committee
members were fully-participating members in the House-
Senate conferences to iron out differences between the two
bodies; this is a power they did not possess before recon-
ciliation.
The House-Senate conference was unprecedented in
scope this year. Known as 'the circus" by Hill long-timers,
the conference consisted of 123 conferees in eleven dif-
ferent sub-conferences, each of which handled a different
subject. Participating in these meetings were not only the
members of the regular committees in charge of each
substantive area, but also the members of the budget com-
mittees.
Medicaid provided a good example of this process at
work. Dollar amounts of savings were assigned to the
House Commerce and Stnate Finance Committees; they
had to make cuts in their areas' programs. Among the pro-
posals was a provision to eliminate recipients' "freedom of -t
^hoice" of providers "^' a' right, currently protected, by.
"statute. Poor peoples' advocates argued that by restricting :^
'poor people to" certain providers, a dual-track",
discriminatory system would be' fostered. But the sub-
conference committee members were unconvinced by this ",
and other arguments. .
So the "freedom of choice" elimination provision became
part of the Budget Committee's Reconciliation Bills, and
went to the appropriate sub-conference committee (con-
sisting of members of the Commerce Committee, the Ways
Si Means Committee, the Finance Committee, and the
House and Senate Budget Committees). But this sub-
conference found itself faced with over eighty Medicaid
and Medicare provisions for its consideration.
Ultimately the sheer complexity of this process slowed it
down. By the time Congress adjourned in early October,
only three of the eleven subconferences had completed
their work. "The "T^edicaid" sub-conference got totally
bogged down and never did tackle many' of the more com-
plex provisions. The Senate version to eliminate
"freedom of choice' provision, along with a transfe
assets proposal, was never fully di'austed.
Many observers cow predict that reconciliation will
simply expire of its own dieer weight Since Congress will .
be holding a lame duck session, committee staff are con-
tinuing their reconciliation negotiations, anticipating that
Congress will want to complete this task upon its return.
But with so many incomplete bills awaiting its attention —
like the fiscal year *81 appropriations end a second budget
resolution — Congress is by no means certain to finish
reconciliation.
...budget committee members gained
enormous power to determine Con-
gress' course of action . . .
Nevertheless, reconciliation remains a process that can
be very detrimental to poor people, since it bypasses the
usual checks and balances under which committees
operate. Provisions can be passed that hurt legal services
clieots, while the committee has no pressure to add other
benefidal provisions to ease the impact of the cuts. Budget
committee members also assume greater power, these
members are not necessarily familiar with — nor favorable
to — the dilemmas of poor people. Lastly, the recondlia.
tion process provides a quick route for provisions to be
tackni onto the final bill, bypassing the usual commi^^^
actions. Such hasty lawmaking poses a threat to iSS
safeguards whidi help protect the interests of legsl
services clients.
120
?fmM^
Special Issue: Cutbacks,
Conflict in New York
Newsletter of the National Health Law Program No. 116 January 1981
r^ Wt^f u m M mf €<*!■■■fffcMi
ioldingOutinHarlem:
i Commumty Fights for its Hospitals
fayor Edward Koch had tome down to East Harlem last
ober with what he thought was good news. He had gotten
oaJ federal appro\-al for a five-year, S77-niiIBon grant to help
tropolitan Hospital pick up the workload anbdpated by the
ing of nearby Sydenham Hospital
•ut it wasn't as easy as he thought. As Koch spoke to about
patients and empkiyees. he was interrupted by a man who
yeDed, "What about Sydenham? You hive no emotion; you hive
no feeing for the people."
The mayor yeDed back. "We're not gomg to turn this into a
confrontatioa" *•
But the shouting persisted. "We're going tc have yon re-
moved,' Koch said. "No announcement is going to appease the
amtimud on pagi 3
^
Nationa] Health Law Program it a Legal Services backup center funded by the Legal Services Coryoration, Waihiagtoa,
. Tlie Health Advocalt is dirtributed free to Legal Services workers asd client* and to health provider* and consumen
I wish to learn about health-related problems of the poor. Please enclose your old address label when moving.
121
Pages
iii^i
• Victims of Cuts Face
^Uncertain Future ..
Every week Oclav-ia Jessie jets in her car and leaves Ikes
Fork, West \Mrpnia for a 60-mile drive over tortuous mountain
- roads, poiholed by the incessant traffic of coal trucks. Her
destination is the hospital where the 63-year-old widow re-
ceives weekly chemotherapy treatments for cancer of the liver,
and boweL
Her income of S4 17 a month — from Social Securitj' and black
lunj beneSts — must support both herself and her retarded son.
Medcaid paid for a 28-day hospital stay for cancer surgery in
January, 19S0, which cost S5,55S. Medicaid also pays for her
weekly treatments at $56.75 a visit Later on this year she win
need a three-day checkup in the hospital
But the medically needy part of the Me(£caid program —
which pa)-s for her care — may not be funded this year for
bospita£2£0ons Ske hers. Even if it is, she is only eEpble if she
spends S234 of her $417 monthly income on medical bills, to that
die only has S1S3 left (which is the state-defined medcally
needy "spend-down' level). Is adac'on, the state tacked on a
30-day Sinit on Memcaid-paid hospital stays, so if she's hos-
pitaEzed for surgery again it could uTeak havoc on her meager -
finances. <
Tliree thousand miles away, Daniel Lewis faces a omilar
(Bemma. A resident of Yakima, n'ashington, be suffers from
bemophiEa, pain from hemoarthrosis, and anlde and knee prcb-
lems. His income is S348 a month, from Social Security (fsabiBty
^ One Utah wom£m went without teeth
for a year because Medicaid wouldn't
pay for dentures.
and veterans benefits. Under the state's mtSaSy needy pr>
gram,', he's been getting three treatments a week for hit
bemophiEa. He had to make 28 in-patient visits to the hosptalin
1979, and 21 is 1S80.
On March 1, the state moved to cut out its medcaDy needy
program, under which Daniel's care was paid. Luckily a Legal
Services suit (Clark v. Gibbs) staved off the cut with a tempor-
ary injunction on Mardi 11, but as attorney Debbie MaranviDe
said of the suit, "It's all procedural stuff that they cas remedy."
So the cuts may be pushed through later m another form, to the
detriment of Daniel Lewis and many others.
Carolyn Arnold of Midvale, Utah, was a victim caught is the
irrational jaws of "cut fever. " She gets S389 a month from AFDC
to support herself and three chDdren. When aD of her teeth
deteriorated from a bone and gum ifisease brought on by her
former husband's beating, her dentist and as oral surgeon ad-
rised her to have all but two of her teeth extracted to the could
putin dentures. So her teeth were extracted in February, 1979.
A month later. Me<£caid told her it could not pay for the
dentures (S600) or the remaning costs of the turgery ($660).
For more thin a year, she was unable to eat meat or other soBd
'oods- Her nourishment dropped. She was refused employment
because of her appearance and manner of tpeech. She wis
kijcourajed from her former active involvement in church.
>«iil and school ictj\-itiet. Finally, after Legal Service* it-
isaticn in Cainpos t. Uiic)uU. Medcaid agreed to p»T 'or
S>c de=uar«. - CB
&
1 Vn"^"'^^-'-''^'^^*''"^ '^
MedieaidCiitsHeld^^'^'^^'
at Bay in Courts,
State Capitols
Legal Services woiiiers have stopped about twenty percent
d some 105 proposed state Med caid cutbacks in the coons
over the last year and a haU. And along with tbdr cSests. tbey
provided testimony to state lepslaturet and admimttixtors
which led to another thirty percent of those proposed cotbada '
being abandoned. The cutbacks — all of which would bare bmt
poor people's health — were opposed on a variety of grouads .
procedural at veil is substantive. And the advocates* success
hat won gnidgisg respect from Medciid admisisttatoR ia
many states.
Says Legal Services lawyer Kck McHu^ 'When we caD
diem up to say this or that might be Segal, tbe/re being macii
more responsive. " McHu^ says a recent suit on Kentucky
Medcaid transportation iFanl v. Stumio) was "our openiDg
salvo" to estabEsb cembility witb the state administntioXL
The court give McHu^'s cEents a temporary lesuiiuiug
order and preliminary injunction to stop cuts is the S2 miSaa
program which provides transportatios to medcal faciSties for
8,000 needy famiEes and indviduals each month. But the azt-""'
imposed Smit of 4 trips a roonfli per patient it upheld by the
court, sayt McHogh. patients who need regular ongoing treat-
ments Eke physical therapy for a broken hip o^ allergy shots viD .
behurt, "llie person who bat a minor cold will get (transpora-
tion). But people with targer, non-emergency prsblcaii wiD get
cut oa." worries McHugh.
Utah advocates scored a cleao sweep last year ever two. ,
separate rounds at euu which would ha^-e bduded shsUat
122
Painless "Ways to Cut Medicaid Costs (p. 2)
Uncei-tain Future for Cut Victims (p. 3)
Newsletter of the National Health Law Program
29 States Weigh
Medicaid Cutback
Proposals
Twenty-nine states have proposed reductions in their
etScaJd prosranis over the last eighteen months, but only
>dut half of the hundred-odd proposals are stiD joins forward.
}or people aided by Legal Sei-iices have gone to court and
apped a fuD twenty percent of the proposals (see p. 3).
-lOther thirty percent have expired at the executive or legisla-
te level But haif of the proposals are either penang or in effect
- almost zS d them to the detriment erf poor peoples' health
eep.3).
^^i state cuts are expeaed to worsen if Congress foDows
^^'s bidding and approves a $1 billion cut m federal
'edicaid expen£tures for next year. Even if this Medcaid 'c^'
'If they don't get these drugs, they're
going^io have to go into the hospital.'
not passed. Congress will be asked to broaden states' powers
cut back cEgibiHty and services.
Alteniative budget-cutting methods have come forth from
any sources — ranging from the National Governors' Assoda-
7R to the State of Michigan (see p. 2). But meanwhile many of
•e state cuts not only are hurtiDg the poor, but probably wiB
>st the states more in the long run.
A case in point is Mississippi, which was planning to drop
escription drugs until a supplemental appropriation baDed out
e state program. Said IvCssissippi Legal Services' Gloha
raves of the drugs' purpose: "It's not like they're extra — 5ke
>u can go to the store and get Buffeiin. If they don't get these
â– ugs, they're going to have to go into the hospital And some-
>e's going to have to pay for it." Limited cuts in drugs are
iderway in lEnois, Iowa, Pennsylvania, Tennessee, l-Cssouri
id Wsconsn.
One big reason for the cuts is soaring MecScaid budgets.
:nnessee's Medcaid budget wil rise from S420 millon this
ar to S500 miHon next year. Washington's was S545 miffion (or
condnued on p. 2
Three hundred people protested in Los Angeles as the
Board of Supervisors there cut back immigrant health
care. (p. S)
Opposition to Cuts
Takes Shape
Bolstered by polls showing broad support for close (^ngrei"
sional scrutiny of budget cuts, a new coaltion of about 80
organizations is considering a National Day of Action for May 9,
with coordinated activities at the local level Meanwhile several
sets of alternative cuts have been proposed by a variety d
groups.
Spearheaded by the National Anti-Hunger CoaEdon (800-
424-7292), the coalition ranges from the Steel Workers UnioD to
continued en p. 4
oeNataqna] Health Law Program is a Legal Services backup center funded by the Legal Services Corporatjon, Washington,
â– C The Health AdvocaU is distributed free to Le^al Services workers and clients and to health providers and consusier*
ho wish to learn about health-related problems of the poor. Please enclose your old address lai>cl when moving.
123
eveglasses and denljJ care, reducing doctor \-isils to hvo per
^omh. and cufJng hospitaj days to 25 per year. U.S. District
judje Bruce Jenkins overturned the cuts both oo procedural
jrounds — the state hadn't plainly informed the recipients of
what the cuts meant and of their right to appeal — and on
substantive grounds: the Cmit on doctors' visits, for example,
would unfairly hurt those with more serious (Sseases which
need more care. iCampos v. Milckcll, D. Utah, Cen. Div.
#C79-027S). WhQe dearly proud of the advocates' success,
attorney Lucy EilEngs of Legal Services worries about the
state's future. "I don't know if we're going to Bve up to our
name. There are going to be more cuts."
That uncertainty seems to be the theme in many states.
Ad\'ocates in Tennessee managed to get the courts to enjoin a
S4Zncllion cut last August, but stale Medcaid administrators
came hack in Febniarj' wth a S90 milBon cutback proposal West
Virginia cutbacks were stopped last year on procedural grounds,
but then the stale had the case continued while the technicalities
(consultation with tiie MecBcal Care Advisory Board) were ful-
filled.. And in March of 1981 the courts said the corrected cuts
could go forA'ard. . . j,., . ___<i:».^.
Poor people and their advocates have al so held back damaging
healtli cots at the legislative level. Mississppi was planning to
eSsonate outpatient dnigs from its Medicaid program until
cliaits began to voice their opposition to le^slators and at a
! Despife ups'and downs/jworpeople'll
Teltettended pubEc hearing in Jackson in December. Doaors
opposed the drug cuts along with cuts in doctor visits. Id Feb-
ruary, the legislature passed a S&4 millon supplemental appro-
priation which among other things stopped the drug cuts.
Said negal Services' Gloria Gftves, "1 "think it was because
clests really got out and called. It teas events caling up and
saying, TSve in Jamestown and I get Medcaid How am I going
to pay for drugs?" As a result, poor people in Mississippi
contiiiue to get heart piDs, insuEn, oral dabeles pills and other
necessary drugs.
Poor peoples' advocates in Washington State are working on
as administrative level to convince state officials to relent in
their plans to cut over 10% of the state's 14,000 chore service
hoatttnakers. Advocates are pointing out that the homemakers,
who do housework and shopping for eldery people Eving at
home, actually save the state money. The program causes an
estimated 20% inunedate drop in nursing home admissions,
since it allows the elderly to continue to Eve at home.
Advocates readily acknowledge that winning a lawsuit is not
always the clear victory it seems to be at first. "If we sue and
we're successful, they might do worse things," says Peter
Martin of Legal Services in Maryland "We're sort of plajing
Russian roulette," says Washington's Debbie MaranviDe.
Nevertheless, despite constantly shifting poUtical currents,
advocates generally agree they must use whatever tools they
have to protea their cEents" health.
While advocates search for altenutive budget cuts (see p. 2),
others seek to hold the Ene on health-threatening cutbacks —
whether by administrative, Etigative or lepslative work. Mean-
while, most of them are crossing their fingers and hoping for no
further cots. As Mississippi's Gloria Graves said, "Maybe they
won'c mess with us since we've got so Ettle." - GB
Opposition continued
the Urban Coalition to Rural America. The May 9 protest ove»2Jk
cuts in social services follows a week of activity which took placJe^
April 15-22, when individual constituents and community or-
gamations met with their Congresspeople who were back in
their districts for Easter recess.
. A Loi Angela Times poll conducted in March found that 63% '
of the pubEc wants Congress to lake its time in considering"
Rej;an's proposed budget cuts. Only 33% oppose such acareful
dcEberation. TK's sentiment could mean troi;ble for Reagan's
cut proposals, which have sailed through Ihe RepubUcan Senate
but which must now face the Democratic-controlled House o(*
Representatives. ' â– -.â– ..; 'Z-'^^'
. iitvi anununition for alternative budget cuts was provided by
the Children's Defense Fund, which targeted 18 areas in whicb'i
cuts totaEng S1S.4 bilEon could be made. Among the cuts
suggested by the Washington, D.C. -based group: eEminating a
loophole in the capital gains tax (savings: S5.4 bilEon), cutting
the special tax treatment for oil exploration costs and (d depre-
dation allowances (savings: S2.4 biKon), entfing the favorable
tax treatment ol the "dummy" Domestic International Sales
Corporations (savings: S1.8 bilEan).
Tlartj'-three organizations in February joined together to.
oppose the Meacaid cap, calEng the Medicaid program "an
essential component of our 'sodal safety net.'" Among the
signers of the statement were the International Assodatioa of
Machinists, the U.S. Conference of Mayors, the National As-
sodarion of Counties, the National Urban coaition and NHeLP.
The Congressional Black Caucus, refusing to compromise on
social programs.Tiot only called for retaining aH such programs,
but also proposed a S25 bilEon bcrease in social spenong to bi
financed by a S27 billon tax increase, much of it to be shoulderetT
by big buaness. Oo the defense budget the Black Caucnt
proposes to spend S5.1 bilEon less than the PresdenL
A budget drafted by House Democrats on the Congressional
Joint Economic Committee would repeal many tax preferences,
double federal taxes on Equor and dgarettes and raise federal
taxes on gasoline and (Sesel fuel to 14 cents a gallon from the
current 4 cents a gallon. ,
Another alternative Congressional budget, proposed by the
so-called "Gang of Four" (Leon Panetta and Norman Mineta of
CUEfomia, Timothy Wirth of Colorado and Richard Gephardt of
Missouri), would go along with up to $25 bilEon wordi of
Reagan's cuts, but would salvage some programs under attack
by offering other cuts. â–
The plan by the four Democrats on the House Budget com>
mittee would cancel Reagan's proposed aits in such itesu as
Medicaid, nutrition programs and some subsic&ced school
lunches. They place great emphasis on eEminating waste and
abuse m federal spenc£ng, and on more aggressive coQection
of tax revenues owed the federal goveramenL Such meat-
lU'es could bring in S&-10 bilEoD during the next fiscal year,
estimates say.
-CB
Photographers Wanted for Newsletter
The HeaWi Advocate needs free-lance photographers wbo^
can cover — and uncover — stories about the health needs o:
poor people. Contact Geoffrey Brown at the National Health
Law Program, 2S39 S. La Cenega BWd, Los Angeles, CaSfor-
nia 90034. (213) 204-6010.
124
"tt:
North Carolina continued
Ian, 'causes and threatens irreparsble harm to a large number
of black and poor people for the protection of whom, among
others, the certificate of need program was adopted."
Before its partiai closure, Charlotte Community Hospitai
provided acute nursing care, detoxification services and a spe-
. ciaj "stroke" unit for persons suffering from strokes. Located
"on the wrong side of the tracks," according to McMillan, the
hospital has never been developed into a fuD-service hospital.
By contrast, the three major general hospitals in Charlotte are
in estabSshed white neighborhoods about two miles east of the
formerly all-black (and still mostly black) hospitaL
The standing order of the District court is that the defendants
must seek a Certi£cate-of-Need before proceedng further, but
the defendants are appea&ng the merits of the case to the Fourth
Circuit. Patients iii the threatened hospital closure are rep-
resented by Julius Chambers and the NAACP Legal Defense
Fund. The National Health Law Program has prepared a friend-
of-the-court brief on behalf of the Baltimore Welfare Rights
Organization defending the health planning process and its help
for the poor. The brief says that the poor people of Baltimore,
â– which is also in the Fourth Circuit, have a vital interest in the
continuation of a strong health planning program recognizing the
needs of the iiuier-dty poor. (Heulh v. Charlotte-MultltnbtTt
Hospital Authority, W. DisL N.C., C-C-81-1S3, June22, 1981.)
-CB
Facing an unctrtam fittun-One of the younger
participants at recent Lousiana meeting on the effect
of budget cuts.
Forums on Cuts
Educate Louisianans
In a series of public forums in Louisiana, poor and middle-
dass people have been informed about the effect of federal
budget cuts. Audiences ranging from a dozen to a hundred have
heard talks by community and state representatives at forums
in Opelousas (photo), Lafayette, Franldjn and New Iberia. Ad-
dressing the gatherings were offidals from school cEstricts, the
welfare department, mental health centers, elderiy and blind
services. Community Action Program, and Legal Services.
The audiences' reaction? "They're really surprised," said
Gary Sells of Arcadana t.egal Services, which helped organize
the forums. "They just didn't know what's going on. The news-
papers around here are real bad." More forums are planned to
Ell the information gap on the budget cuts' effects.
-CB
' • --.:-' -if^a -^^-
Appeals Court Nixes
Poor's Entitlement to Care
In 1978, Newsom v. Vandcrbili Univmity. 453 F. Supp. 401
(.M.D. Tenn., 1978) held that poor persons had an enforceable
propeny right to uncompensated care which was protected by
due process. On appeal, the Sixth Crcuit reversed, holding that
there is no individual entitlement under the pre-1979 regula-
tions. Newsom v. Vanderbilt Umverriiy, F.2d (6th Cir.
dedded June 2, 1981). The court dd agree, however, that
plaintiffs had been correctly granted a trial de novo and that the
agency's administrative dedsion, which found Vanderbilt in sub-
stantial compSance. was not binding on the District Court. And
the court tSd not disturb the District Court's holding requiring
deSdt make-up, as far back as 1973, if Vanderbilt could not
demonstrate its compGance with the applicable requirements.
Critical to the Sixth Circuit's ruling of no entitlement was one
faa — Va-iderbOt had chosen the 10% compliance option, an
annual requirement that was far less than the total need for
uncompensated care in the hospital's area. Because not aD
eligible persons could legitimately expect uncompensated care,
the court repeatedly stressed, no member of that class bad any
right to free services. The S'lxth Crcuit reached this result by
maintaining that, at the time of the District Court's dedsioiya^
1978. Lhe hospital had sole dscretion to dedde which indE^di )
would benefit and receive uncompensated care, as long as tKc
hospital provided the required amount each year.
Unquestionably, the S'Kth Circuit's dedsion is a major setback
for low-income consumers. Better "fans" exist but it will be a
major undertaking for any subsequent case to develop the fac-
tual record as thoroughly as did the Newsom plaintiffs. Had
Vanderbilt been an "open-door" fadBty rather than a 10%, the .
entitlement issue might have been dedded (ifferently. ..
Between 1973 and 1979. roughly 70% of all HiL-Barton
facilities chose the open-door option, 42 CFR S3.1U(d) (2),
instead of the 3 or 10% formulas. The open-door hospital was
required to provide all eligible persons with uncompensated
care throughout the year. The open-door was prohibited from
imposing any Emitations on the types and kinds of services to be
provided, and could not restricrively allocate uncompensated
care. .A.nd. the open-door had an affirmative obligation to idenufy
every eligible patient, before services were rendered and re-
gardless of a request, and could not passively remain ignorant of
a person's inability to pay.
-Armin Fnifeld
Photographers Wanted
For Newsletter
The HtaWt idi-xate needs free-lance photographers to covji|;
people and events relating to poor people's health care neeK'
Contact Geoffrey Brown at the National Health Law Pr?
gram. 2639 S. La Cienega Blvd.. Los Angeles. CA 90034. Orcall
him at (213) 204-6010.
125
Wilmington Hospital
^Relocation Upheld .
The Third Circuit Court of Appeals en banc upheld a district
court ruling which allowed the Wilmington r^fedical Center to
shift many of its oiieralions to a to-be-constructed suburban
hofpita). leaving behind what poor peoples' groups contended
would be an inferior and racially idenliSable ir.ner-rity hospiUl.
Tlie Appeals Tribunal rejected arguments by the N.A.ACP and
others that tJie inner-dty minorities, elderly persons and the
handicapped would be discriminated against by the move.
The WlmJngton Medical Center, by virtue of the June 29
decision, will be able to proceed with its Plan Omega, under
which two of its three inner-dty hospitals would be closed and
•Jie third one would be renovated. This would reduce the
downtown bed count from 1,104 to 250, A new 780-bed facility
w1) be buflt in suburban Stanton, located 9% miles southwest of
the dov.-mown fadBty. Of the 33 inpstjent departments, 5 will be
housed exdusively at the remaining downtown hospital, whfle
15 wai operate exclusively out of the suburban location. Another
13 ^^â– ill be split beween the two.
• ■ThemaiorityjudgesreBedhea\'ilytjponanagTeementworlied
out between the medica) center mdHEW (now HHS) after that
feoeral agency- found discriminatorj' effeasin the plan. To satisfy
HEW. \\tlmington >iedical Center (WMC) agreed to pro\nde
shuitle bus service to the suburban site (since no pubSc trans-
portation is a\-ailab>e), to reno\'ate the do^^'ntown hospital, to
prevent radal identifiabOity of either location, and to operate
)the two fjciEties under the same administrative body. The
majorit\- judges found the remaining objections to the plan to
be insignificant.
Bm the dissenting judge (Gibbons) argued that WMC's abiSty
to any out its promises to HEW hLiged on the finandal feasibD-
ity of the whole project — about which, he feh, the plaintiffs
raised serious doubts. The probable result, he opined, was that
the suburban facility would be built, and then WMC would wring
its hands and find there was no longer enough money left for
either the downtown facjliry's renovation or for adequate shut-
Oe service to the suburban hospital
The plaintiifs challenging WMC had also charged that the
shuttle service, enfing each day at 7 p.m., would prevent
visitors from seeing their chDdren in,the evening, and that the
extra ride from the downtown hospital to the suburban one
would deter many from seeking care. The roajoriry judges <Sd
not agree, however, and Plan Omega after a five-year battle
was finally allowed to proceed.
The one redeeming feature of the majority opinion was that
the court upheld the validity of federal regulations prohibiting
pracJces which have the "effea" of cSscriminating against pro-
tected groups.
-CB
New Hampshire Rally
Missing from the Health AdvoeaLt's accounts of anti-cuts
I actriitj' was a May 7 rally in New Hampshire which attraaed
1.500 people — one of the lairgest turnouts on the issue. On
June 11, petitions v.ith 10,000 Bgnatures were presented to
stale leaders by the rally's orjaniiers, who have formed a coa-
lition entitled People Tirst to fight services cuts.
AFL-CIO Plans Huge'
Washington Rally'„" ::~-
For the first time indecades, the AFL-(^0 is urging its "
members to join a massive-scale demonstration. The labor fed-
eration announced plans for a September 19 rallj- in Washington,
D.C. to protest cuts in the federal budget.
Tl.e planned march marks a significant break with tTaditionV r
The .AFL-CIO refused to join in the 1963 March on Washington
sponsored by d\il rights organizations. The late -AFL-CIO Pres-
ident George Meany believed mass marches were loo r?dical.
But his successor, Lane.T. KirWand. said that 'chan^g times
call for changing tactics." The Sept. 19 Solidarity Day rally is
being sponsored by the central labor federation in c<^3peralion
with 180 other orgartizations because the Reagan programs
"hurt every worker in America," said Thomas Donahue, AFL-
CIO seaetary-treasurer. ' '
-CB
Atlanta Hospital Drops
"Cgsh-Up-Fronf Demand
Atlanta's Grady Memorial Hospital agreed m April to drop j
demands for pre-payment b)> low-income patients. The poicy^<^
shift came aftti tour years of Btigative maneuvers in Cloud i.
Reianstan, in which ten poor people ted by Inei C3oud fiad â– .
contended that the hospital was violating its HiD-Burton com-
munity' service obBgation and dvil rights laws by turrmg down 7
patients who didn't have the necessary cash in their pockets— f-
but would be able to pay their bills on a installment baas overi- ,
time, ka April U consent decree wrapped up the settlcmenL-;'- â–
Since Georgia lacks a medcaDy-needy Medcaid program. ~'
only the categoricaDy-needy get Medcaid — leaving mjny poor*;"
people out in the coli The hospital's pre-pajTnents ranged froin fi.
fifty cents to several hundred dollars, depending on ttie seTr^
\ices, and effectively prevented many poor people from getting zr
any care. Under the settlement, low-income people can set up ^\
pa>Tnem schedules for their hospital bills that can let them â–
carefully apportion their incomes to avoid getting sunk by one.
big bill all at once. •■•-•..â–
Robert Regenstein, head of the Fulton-DeKalb HosjntaJ Au-'
thority which runs Grady Hospital was the defendant in the .'
suit, which was handled by Deborah Ebel of Atlanta Legal Aid ' â–
and John Zimering of (jeorgia Legal Services. (Civil Acoon -;
#C77-599A.)
Patients could still be denied services, under the seOlement,
if their bill payments are overdue and they don't have the moiKy .
for a pre-payment. But even under those circumstances, a long-
procedural review is still necessary and attorney 2ineiiog feels ^.
the suit's outcoipe was quite favorable. -^'^-.•
Grady Hospital had contended all along that Aey bad aj-r^
"informaT poEcy of never denying services, but they dairoed to^-.
be reluctant to put it in wii-ing. The plaintiffs, while agreong
that the hospital was trying in many cases, nevertheless i^,-
ported instances of denials. In some cases, hospital perstow-j
demanded every last bit of a patient's change— mduiM.. ^â–
busfare— so that often patients had to walk home. Under tMr
recent settlement, such instances wiD be only a maoarj^^^y
â– .'â– J
29-379 O— 84-
126
Clinic Saved by Data Moles (p. 5)
Health Survives Budget Surgery (p. 2)
Newsletter of the National Health Law Program No. 124 September 1981
Several hundred members of the County Health Alliance
showed up at the Los Angeles County Board of Super-
visors' meeting on August 4 to hear state Assembl>-wo-
man Maxine Waters (right) call for lessening of the dras-
tir health care cuts approved in July by the board's con-
$75 Million in L. A
Health Cuts Ignite
Fends, Protests
Controversy and vitriolic exchanges have joined the smog in
L A. 's air since that County's conservative Board of Supervisors
made S75 milljon worth of health care cuts in early July. A
prominent black slate Assemblj-woman called the Supervisors
"conservative bastards." The bodget-chopping Supervisors
have tagged as "demagogues" the hundreds of protestors who
have anended recent Supervisors' ipeetings since the cuts. And
the protestors have hooted back that the conservatives are
"racists. " Even the well-heeled Los AngeUs Times suggested
Ihe Supervisors were "playing semantic games" by drcumvent-
Bg a state law requiring hearings before health cuts can be
mplfmrnted.
IgnitiDg the controversy were cuts that have closed eight
xunty health clinics, eEminated 400, 000 yearly walk-in visits at
32 other cDnics, and chopped the level o( service at three of the
aunty's major hospitals by Wx. AddtionaBy, l.S millJon pre-
scriptions a year wiL not be dispensed as a result of closure of
outpatient pharmacy services at hospitals and cirocs. Nearly all
•deal social workers and programs have been wiped out. inchid-
senative majority; including Supervisor Peter F.
Schabarum Cleft). But the board only restored SI million
of the S75 million it had cut, prompting continued pro-
test by a coalition of labor, church and comsnmity
groups.
ing the Child Abuse Referral Team, the Emergency Fanily Aid
Referral and the Sudden Infant Death Syndrome CousseSng.
Nutritionists, transportation and health education were also
eliminated or cut drastically.
Dental clinics, which provide the only source of care for many
poor people, including children who need orthodontia (v^iich is
not covered by Medi-Cal), were dosed. These c£nic dosuret
were part of the hospital cuts. .
Al county hospitals are affected, but the cuts fell partiailariy
hard on the two inner-dty hospitals, County-USC and King.
This galled state Assemblywoman Ma»ne Waters, in whose
district is Martin Luther King Hospital, and who had just fought
hard in the legislature for an extra $5 million for L.A. County.
After calling the Superwsors "conservative bastards." Waters
came to the Supervisors several weeks later with peace
offerings — a pledge to urge the county's legislative delegation
to fight for more state funds for the county's health needs. The
same day, in the spirit of conciliation, the Supervisors approved .
nearly SI million in newly-found county funds to help patch up
the damage of the earlier cuts.
"At least it's a start." said Eberal Supervisor KenneSi Hahn,
but conceded it alone will not be enough to "end the unrest."
Indeed protests have been large and frequent since the cuts
were announced. Up to 800 protestors have picketed outside
the Supervisors' building in' downtown Los Angeles, and in
mid-August a coalition of church, labor and community leaders
ctmiiruud on Pofc 3
%
?Se National Health Law Program it a UgaJ Services backup center funded by the legal Services Corporation,
Washington, D. C. The HtaUh Advocaie is distributed free to Legal Services workers and clienu and by subscription
o health providers and consumers interested in the health problems of the poor. Please enclose old address Ubel
I'hen moving.
127
c
Coalitions for the .
. Hard Times Ahead
Around lh€ country, advocacy groups arc banding logciher to
: sha^e resources, strategy, and morale-building in the face of
harder and harder times. People who've worked in health,
housing, welfare rights, food policy, and neighborhood protec-
tion and planning now regularly asli one another's help in pro-
moting legislation, defending programs, and confronting power-
, ful instjtuuons.' V^" •_ "
~-*In August, NHeLP convened eight'regional conferences,-,
bringing together about 450 ad\'0cates.' Because the world of
hesJth is itself so diverse, the ouneach was directed primarily
at health ad\'Ocates. Groups represented included: community
clinic administrators, the Gray Panthers and other advocacy
groups for the elderly, midwives associations, unions whose
members serve the poor. Legal Sen-ices paralegals, clients,
attorneys, nurse practitioners, patient advocates, health plan-
ners, welfare rights organizers, nursing iiome ombudsmen,
federal health adminisuators, legislative staffers, and such or-
ganizations as the Alabama Anti-Hunger Coalition, the South
West Texas Consumer Alliance, the Louisiana Black
Farmworker Association, Citizens for Tax Justice, the Ameri-
can Medical Students Association, the Economic Development
Law Center, and the National Senior Citizens Law Center.
Highlights of the conferences included an analysis by UCL.\
Public Health Professor William Shonicic of Health.
Reaganomicrra description of advor 3tes' efforts lo fight Prime
Minister Thatcher's health cutbacks in England, Denver advo-
cates' struggles to maintain primary care in their public hospi-
tal, Utah's success in maintaining a viable mental health system,
the saga of West Virginia's rescue of its medically needy pro-
gram, Kentucky adv'ocates' success in fighting Medicaid cut-
-.. =s-iV^3----.-
Kcagans
fjca(tf?€uts
NHeLP T-shirts are now available in the
two designs shown. HEALTH CUTS
MAKE ME SICK is green on a yellow
shirt; BACK TO THE MIDDLE AGES is
blacl< on a red shirt. Men's sizes S, M, L,
XL. Send $8.00 per shirt to NHeLP's Los
Angeles office. (Price includes postage.)
HEALTH CUTS MAKE ME SICK
DS Ql^ DL DXL
BACK TO THE MIDDLE AGES
DSDMDi-axL
Name .
Address
City
. Stata .
.Zp.
National Health Law Program
2639 S. La Cienega Blvd.
Los Angeles, CA 90034
u I
128
Special Double Issue
=?=r
Newsletter of the National Health Law Program No. 128-129 Jan.-Feb. 19S2
Is This Your LastNawsUUer? See R 7
Dear HeaMi Advocate Readen-
ThtHcalth Low f^'cwslctter indki ivcceiior tiie HealDi Advo-
cate have kept you informed about poverty law developments in
health (or eleven years. We started mlh a readership of 100 and
now reach nearly 5000.
It is difScuh, I know, to receive free educational materials
over time and then suddenly be asked to pay for them. Most of
yoa have not paid — not because you're indifferent to our pBjht
but because of the sheer inconvenience of it all and a human
reluciaace to change the vi-ay you've always gotten our newslet-
ter. We've understood that and to date have not cut anyone
off for nonpajToenL Unfortunately, we cannot continue this
arrangement.
Tou've read in our newsletter and in your own newspapers
about the ifficult times all programs funded by the Legal Ser-
vices Corporation (LSO now face. Local programs will be cut by
atreast 25%. Back-up centers, incIueSng NHeLP, wiD be cut that
-^ludi and Tiay be eHminated altogether by the new LSC Board,
^•lany programs are considering dropping their newsletters to
save monej". NHeLP is not. We know you consider commuiica-
lion with health advocates about recent legislative, judicial, and
regulatory developments in health to be one of our most impor-
tant responsibilities. In this newsletter you can receive and
impart information on a national and local baas. Knowledge is
power, and we therefore plan to continue our newsletter as long
as we exist as a program. We need your help to keep die vital
and undupBcated work of this newsletter a£ve.
\Vt regret to aiuiounce that this win be the last free issue of
the Health Adxiocalt for non-LSC subscribers. We ask LSC
workers to subscribe too, on a voluntary bass. All subsaiptioas
are tax-deductible, so mail your subscription check in today.
For those of you who can, we ask you to send more — $25,
S50, SIOO. Your contribution brings you the analysis you need to
f ght effectively for bealtlr care for &e poor.
~ Sirurefy,
Sybia Dma Ivit
• ' ■' Ezecuiwe Dirtdor
Health Care in the '8
What's Ahead for the Poor
As a new and very uncertain year begins, the staff of NHeLP
dedded to explore with you (£rect30ns and U'ends in poor
people's health care. We beSeve possibilities exist for effective
advocacy in a hostile cHmate. While the number and variety of
attacks on poor people's health care is disconcerting, we do not
bdjeve that government wiH allow complete destruction of the
programs that have evolved during the past decades. Changing
poHtica] and economic condtions, however, require us — advo-
cates, beneficiaries, and sympathizers — to rethink our objec-
tives and our strategies. As eoncStions change, much of the
hjgjdy specialized knowledge Legal Services has acquired will
become obsolete. However, much of what we have learned goes
beyoad the details of laws and regulations to include the needs
and problems of the poor, the nature of the health system, and
the poBcy implications of new proposals. This rethinking will be
an ertended, ongoing process, his our hope that this newsletter
can. sit off a dialogue within the Legal Services conununity on
the most effective ways to assist our clients in obtaining the
health care they need.
2> In assessing the state of poor people's health resources, two
^Jremises quickly emerge. First, the context in which health
advocates work has already changed dramatically and continues
to change very rapidly. Second, the present AdministraQon has
begun what wiD be a long and very draining war on the poor.
For most of this century, national sentiment Cat least as
reflected in the votes of elected ofScials) has supported in-
creased public involvement in provision of basic sernces. First
sanitation programs, iramuniution and other c£nics, and bospo-
tals were created in recognition of a general public need. As
those programs took bold, and as the largely-immigrant popula-
tions shifted cut of shnn housing and into the middle dass,
adotional programs were implemented both to support the
health care providers of the tniddle dass and (throu^ separate
programs) to take care of the poor. By the time of the War on
Poverty, organized special interest groups and an expan<£ng
economy provided the condioons necessary to mstitute Men-
care and Mecfcaid. As late as the Carter Administration, health
care advocates andmany pubEc offidals still thought in terms of a
slow but relentless move toward a national health insurance
program. (Tne United States is the last western nation without
one.) Public opinion poEs showed enormous support for national
health insurance, and health advocates debated the merits of
competing proposals.
Since then, of course, things have changed. Insteadofinchiag
toward National Health Insurance, we appear to be nmning fuD
tilt in die opposite cSrecaon. Privatization, by reducing the role
of govenunent in both fimmng and overseeing health care^ per-
vades Administiationprt»posals for change. This is reflected in a
129
^ VJ^' -->!.:-.-? ■-i-y,, ' w■sl ' ^ ^t rU^--v^V-X°'■^ ^ ^^ '^ ^^i ' :^ A-" ' .. '•'• ■•' ■:^- ' " ^ ' v^:-;* ^ "- r^ ^ v"' ^\ ^ ' k ■'■- ' ■' St-i " " ^
Congress Fails to Stop Adrmrdsiratlon JuggemauL..
Proceeding on a jsme plan ilready rejected by Conpess, ihe
Re2S2n Adminislretion has issued regulaiions weakening the
Medicaid law, ordeiedslEifing cuts, sndcunailed opportunities
for public input in social projrani spending. -
UTien Congress passed 'Jie Omnibus Reconciliation .Act,
which reconcMis differences between budget bills passed by the
Senate and those passed by Lhe House of Representatives,
some ficets of the .Administraiion's'scheme for cutting baclt
social programs did no: .make it into Ihe law. For instance, the
.Administration wanted to shift nearly all existing categorical
programs to Block Grant status, in which the states decide how
to spend the total pot of mon"!y without any federal strings
requiring certain amounts for certain programs. In an upset
defeat for the .Administration, Congress did shift some pro-
grams but rejected block grants for many of the categorical
it's KT-Aen>J& â–
â– TO <iET -pUSTTf
& I l= p.'
OC-LETSCLTT
LOCSETU*.r
LAST CAR.'
programs moil important for the poor. Congress also allowed,
for those programs that were shifted to block grants, a fuH fiscal
year for transition. States could either take over the programs
immediately or could gear up first and then take over.
The Administration is not taking Congress' rejection lying
down. Internal djreai^'es and communications to the states
mdicate that the Administration has decided to move ahead
as if its entire original proposal had in fan been enacted by
Congress. /
First, the ^^Tiite House has ordered the Department of
Health and Human Services (DHHS) ti behave as if all pro-
grams were shifted to block grants and the states had decided to
lake over all the block gram programs immediately. Thus
DHHS is to begin implementing "reduction in force" plans even
where the programs remain categorical and where states may
pick up the progrims but have not yet done so. This staff
reduciioa planiied for th» end of October, wili reduce personnel
in some programs to the point that program requirements
cannot be efleaively enforced.
Second, the brass at DHHS is leaning on the states to exer-
cise their block grant options immediately instead of waiting
until they are organized to handle the programs themsehies. At
a series of regional meetings, DHHS representatives have
been explaining to state officials that the block grant money is
just sitting there waiting for them to use in whatever way they
see fit. To allay any concern about federal officials reviewing
how the states spend the money, these same officials have
assured the states that nc evaluation is planned
Further encouragement to the states comes from DHHS
Secretary Schweiker, who recently wrote to all the governors
urging them to take the block grant funds immediately.
Schweiker's letter indicated that the states would have com-
plete unfettered control over use of the funds.
In general, communities and states must hold public hearings
to gather input on how block grant money should be used. Since
needs may differ from place to place, public input is a major .
source of practical information to help public officials under-
stand the needs of program beneficiaries in their communities.
In order to promote and streamline transfer of social programs
from the federal government to the states, Secretary
Schweiker has waived the public hearings requirement for this
year. Health advocates are currently reviewing the question of
whether Secretary Schweiker really has the authority to waive
the public hearing requirement, and litigation is under consid-
eratJoa
Other tactics have also surfaced, including subtle chies in '
newly issued regulations that the Administration wiD approve
lower levels of coverage than the Reconciliation Act seems to '
contemplate and .Administration pressure on Congress to re-
duce total funding even more
Until the passage of the Reconc3iation Act, the Medicaid law
required two k^nds of comparability between the categorir^^'
needy and the medically needy. (Categorically needy people^^
people eligible for welfare — and dius Medicaid — because their.
incomes are low enough and becatJse they meet certain categor-
ical criteria such as being a famDy with dependent chiidrea. '
Medically needy people are people who meet the same categori- '
cal criteria— are "categorically linked" — but have slightly J
higher incomes than the categorically needy.) Previously,
states were required to oSer the same package of services to-
medically needy as were offered to the categorically needy. â–
States were also required to use the same criteria (except for
income) tc determine eligibility. In this year's ReconcSiatioa
Act, Congress repealed comparability for services and selec-
tion of groups to be included in the medically needy program. It
also repealed the requirement of a basic pad^age of services for
the medically needy, so slates are no tenger required to offer a
particular package but may choose groups to be included in the /
medically needy program and also what they win get by being'
inchjded. States are supposed to exercise their nev latitude
"flexibly" and "appropriately to meet the needs of different:
population groups. " Although this is a great enough le^ back-
ward. Congress did emphasize in ths (^inference Committee
report that the comparability requirement of 42 U.S.C 51396
(a) (17) was not repealed: "Moreover, it is not the intent of the.
conferees to aher the requirements under section 1902 (a) (17)
of the Social Security Act relating to comparable treatment of â–
income and resources between tha categorically needy and*
medically needy programs." 1981 (^ngressional Record-
H-5813. H-5804. July 31, 1981 (Remarks of Reps. DinjeH^'
Waxman). Statements in the Report can be quite impo^^
because after looking at the language of the actual laws, courts
often look to "legislative intent" in interpreting the law.
Despite the statement in the Conference Committee's Re-
poru the newly issued regulations suggest that comparable
conSijsutd on p. 4
/
130
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/Area
POST-GAZETTE: Thurs., Aug. 12, 1982— 1 1
HUD: Demand isn't pressing
for apartments on Northside
By Barbara White Stack
Posl-Gazene Siatt Wnier
There is do pressing demand for
IQ federally owned Northside apart-
ments recently repaired under a
court order, according to the lawyer
representing the U.S. Department of
Housing and Urban Development.
Sharon Hall of Lable and Co.
Managment, which manages the
apartments. for HUD, testified in
U.S. District Court yesterday that
she had contacted 10 people on the
emergency waiting list for the
apartments.
Three families have moved in or
are about to. Two others expressed
interest, but have not called back,
two had found other apartments,
two DO longer qualify and one was
00 longer interested.
The bearing is on a request by
prospective tenants for a court or-
der to HUD to repair and rent the
100 vacant apartments in the North-
side project.
In a preliminary order. Judge
Alan N. Bloch told HUD to fix and
lease 10 of the vacant apartments.
The Neighborhood Legal Services
Association has maintained that all
the vacant units should be fixed and
rented because there is a pressing
demand for public bousing in Pitts-
burgh, and HUD has agreed that
there is a need for public housing.
Yesterday's testimony was aimed
at disputing that need.
HUD also submitted phoiograpns
of the Northside apartments show- 1
ing damaged bathrooms and kit-
chens stripped of fixtures.
HUD realty specialist Geurge Hu-
danik admitted, however, that the
company kired to manage the apart-
ments had removed some of the
fixtures in vacant apartments to
repair occupied units.
The pictures of the apartments
and earlier testimony about the con-
dition of vacant apartments were
produced by HUD to show that
tenants and prospective tenants
have no right to demand that vacant
apartments be repaired and rented.
In May and June of 1981, the
HUD units were inspected by code
enforcement agencies and 2,300 vio-
lations were found. The parts were
moved from the vacant apartments
to the occupied apartments to cor-
rect those violations,. Hudaoick said.
It also was dooe "because there
was DO indication that we would
[repair and rent] the vacant units
io Uie near future," be said.
Testifying further on her recent
efforts to rent the newly repaired
units. Hall said she also contacted
nine people on the non-emergency
waiting list.
One said she was interested but
has not filled out the requir^,
forms. Five said they no longer
want the HUD apartments. Hall said,
she wrote to three people whosi^J
phones were disconnect^, and re-
ceived DO respoDses. _ ,^
Some of.the applications are al
least two years old. Hall 4dmitt«^
under questioniDg. - ii '
Hall said she made do attempt to .
contact other agencies, such as th4!.
city Housing Authority, that have
waiting lists containing thousands oL
names of people interested in public
housing units. .\
+-
132
i¥oodland Hills Plan
Blasted By Milliones
By MARY STOLBERG
Jake Milliones J oday said a de-
sepegauon plan submitted by the
Woodland Hills School District
would institutionalize, rather than
alleviate racial problems.
"Really, it's one of the worst
plans Tve ever seen," said Milliones,
who is a member of the Pittsburgh
School Board and a psychology pro-
fessor at the University of
PitUburgh.
Milliones was called as ao expert
witness by Neighborhood Legal Ser-
vices to testify before VS. District
Judge Gerald Weber.
Last spring, Weber created the
district when he ordered the merger
of the mostly white schools in Edge-
wood, Churchill, Turtle Creek and
Swissvale with the mostly black
schools in General Braddock.
Weber ordered that the secondary
grades be desegregated by this year,
but gave Woodland Hills until next
year to complete its plans for ele-
mentary students.
The plan is currently the topic of
the bearings.
Milliones attacked the district's
proposal because he said it calls for
the closing of schools in the black
neighborhoods and the busing of
their students to primarily white
schools.
By placing most of the burden on
blacks, Milliones said the plan was
telling them they were inferior and
nothing good could happen in their
community.
MUliones said the Woodland Hills
plan for "the most part acconmio-
dates while youngsters and the
white community at the expense of
black youngsters and the black com-
munity" and that will cause prob-
lems for the mental health of both
groups.
He said that the black children
will get the message that they are
inferior and white children will keep
- 1 attitude that they're superior.
S - ^ ' A* -A *g^ —
»OlvO-H*^oti.Hool^ U.t(i.A^v« SE.5l.yiCtS
133
Ok
Attorney Disputes
HUD Housing Sale
By MARY STOLBERG
An attorney for low-income city
residents trying to get into housing
is expected to call a witness today
who will testify that despite its
claims, the U.S. Department of
Housing and Urban Development is
not ready to sell units it owns on the
North Side to a private developer.
Neighborhood Legal Services at'
tomey Donald Driscoll said he be-
lieves HUD has not taken all the
necessary steps to put the approxi-
mately 300 units scattered through-
out the North Side on the market.
HUD officials say the bid pack-
age which will go out to developers
is ready now. But they say they are
waiting to see what action U.S.
District Judge Alan Bloch will take.
Bloch has been presiding over the
case since it was filed by NLS last
year to protest HUD's alleged inac-
tion in keeping its units repaired and
rentable.
HUD bas said it doesn't want to
spend the 15 million it would cost to
repair the units because it plans to
turn them over to a private develop-
er who will have to make the re-
pairs.
During testimony yesterday,
HUD employee George Hudanick
discussed pictures he had taken re-
cently of some of the boarded-up
units. He said many are filled with
debris and lack needed plumbing
and electrical equipment.
Hudanick said some of the toilets
and other necessary items bad been
taken out of the vacant units and put
in apartments and town houses cur-
rently rented to bring them up to
county and city health and building
standards.
Another witness, Sharon Hall,
who manages the units, said she had
trouble finding tenants to rent 10
units that Bloch ordered HUD to
repair last month.
Miss Hall said many of the people
she contacted from an emergency
waiting list said they were no longer
interested in the units or else prom-
ised to move in with the necessary
welfare documents and then never
showed up.
7-^
'/^^
jui5iiee quesiions ,
squatter evictions
' A district justice in Homewood-Brushton said
I yesterday that he may allow two squatter fam-
ilies to re-occupy city-owned homes there unless
n the city can show it followed proper procedures
{ in evictions last week without notice to the
squatters.
District Justice Dennis Schatzman said he will
send a letter today, asking the city to respond
within 10 days. He said the city may be subject to
civil or criminal action if it did not act properly.
The city solicitor maintains that the squatters
were trespassing on city-owned property, but
Schatzman contends that proper notice of evic-
tion still must be given.
134
North Side Deal
Possible, HUD Says
By NIARY STOLBERG
An official of the U.S. Depart-
ment of Housing and Urban Devel-
opment thinks a developer can be
found to take over low-income hous-
ing units on the North Side for about
$5.2 million.
Marvin Hilman, director of prop-
erty disposition for HUD, made his
remarks yesterday as a hearing
continued in federal court on the
fate of the units, which are scat-
tered throughout the North Side.
Neighborhood Legal Services
wants U.S. District Judge Alan
Bloch to order HUD to repair about
100 of the 331 units which are
vacant because they are in bad
shape.
But HUD has said it doesn't want
to make major repairs because it
plans to turn the properties over to
a developer. HUD officials say it
would cost about $5.2 million to fix
up the units.
i Under HUD's plan, Hilman said, a
! developer would put $10,000 down
i and would have 30 days to show he
': has enough financial backing to
make the needed fixes.
He then would have to make
repairs and reopen the housing for
low-income residents. To make the
deal more enticing, HUD has of-
fered to pay rent subsidies on all the
units.
In earlier testimony Hilman said
HUD is losing so much money it
wants to get rid of all the properties
like the North Side sues it has
acquired through mortgage foreclo-
sures.
Although the sites haven't been
put on the market yet, Hilman said
he was optimistic "some reasonable
investor" will buy them. "Of course,
it's always just a guessing game,"
he added.
NLS attorney Donald DriscoU
tried to show by his cross-examina-
tion that Hilman's optimism is
somewhat unfounded. He pointed
out that HUD has not sold many
scattered site projects and investors
may find a more enticing tax shelter
in some other arena.
Driscoll also asked Hilman what
effect making the repairs would
have on HUD's current proposal to
sell the property. Hilman said if
HUD did put out money for repairs,
it might mean the whole package
would have to be reworked. That
could result in a postponement of
the sale, which is supposed to occur
soon.
The government also presented
evidence from Sharon Hall, who has
been hired to manage the proper-
ties. She said many of the units are
vacant because it would cost so
much to repair them.
She said many of the tenants, who
skipped out owing thousands of dol-
lars in back rent, tore out windows
and their frames, stole refrigera-
tors, and ripped but plumbing, kitch-
en cabinets and, in a few cases,
kitchen sinks.
Miss Hall said her maintenance
crew is so busy try-ing to repair
units that are open, it doesn't have
enough time to make even minor
repairs in the vacant units.
ONLY YOUR NEWSPAPER can
give you news with detail. Call 263-
1121 for coDvenieat home delivery.
135
A-4 Pittsburgh Press, Fri., Aug. 1 3, 1 982
Rental Cooperative
For N. Side Backed
< By MARY STOLBERG
A consultant has said the only
viable plan for federally owned low-
income housing units on the North
Side.'would be to convert them into a
tenant-owned cooperative.
Robert To-
taro, a housing
consultant from
suburban Phila-^
dei^ia, made
his remarks yes-
terday as a
hearing before
U.S* District
.Judge Alan
BIbch con-
cluded. >w
Now it is up
to Bloch to de-
cide whether to
BLOCH
order the U.S. Department of Hous-
ing and Urban Development to re-
pair the 333 units, scattered
throughout the North Side.
That's the solution requested by
Neighborhood Legal Services, which
brought suit against HUD last year
to protest the agency's failure to
keep the units repaired andrented.
NLS Attorney Donald Driscoll
said the latest available figures indi-
cate that about 100 of the units are
vacant, even though HUD admits
there is a dire need for low-income
housing in the city.
HUD claims it shouldn't be forced
to make the repairs, which it esti-
mates will cost more than $5 mil-
lion. Instead, the agency wants to
turn the housing over to a private
developer who will make the repairs
and then rent out the units.
Totaro, who was asked to testify
by Driscoll, said he didn't think a
private developer would be able to
1." ^-'' , . . -
overcome the problems wMch have
plagued the units since thev were^
opened in the early igjC^"^',. "^
. Some of those problems Imduded^
high vacancy, severer^ delinqueiir,
cy, damage and ransacking by tea*,
ants as they moved pot, and
vandalism' by oAers in the^ iielghbor-
hood. . : ^ -^v^, ; :
Totaro said if tena^^Kul an
economic interest in their units and
a voice in the way they were run
through a cooperative tenants coon*
cil, then some of those probl^ns
could be alleviated.
lie said he had discussed taking
over 180 of the units with interested
and prospective tenants and they
were enthusiastic. He also said for
the plan to work, HUD would have
to come up with some sort of rent
aid, help finance the needed repairs
and probably have to insure the
mortgage.
Totaro made no recommendaticm
as to what should happen with the
remaining 153 units. .
Totaro said he also based his
advocacy of tenant ownership on his
prediction HUD will not be able to
find any developers interested in
taking over the units.
HUD has put together a package
under which a developer would have
to put down $10,000 and come up
with a 55 million letter of credit
showing he can complete the repairs
within 16 months.
After the repairs are made^ the
developer would have to reopen the
units and rent them to low-income
tenants. In exchange, HUD would
pay rent subsidies, which include
extra money to help the developer
pay off the loan for repairs.
Bloch gave no indication when he
will hand down his ruling.
136
The Chairman. Our next two witnesses will be F. William
McCalpin and we will call Mr. Olson at the same time so that they
can both make up a panel. We will start with you, Mr. McCalpin. I
have to step out for a couple of minutes to say hello to Mr. Kenne-
dy, and I will be right back. Senator Eagleton will take testimony
until I get here.
Senator Eagleton. Mr. McCalpin, we welcome you, and you may
proceed.
STATEMENT OF F. WM. McCALPIN, ATTORNEY, ST. LOUIS, MO.
Mr. McCalpin. Thank you very much. It is my understanding
that in view of the lateness of the hour, the written statement
which I have will be incorporated in the record, and it seemed to
me that I might touch upon several matters of interest as relayed
to me in a letter which I received from Senator Hatch, dated April
29. So I will skip through my statement and touch particularly on
a few of those items.
Senator Eagleton. Very good. Your statement will appear in the
record in full at the conclusion of your testimony.
Would you please identify what your connection once was with
respect to the Legal Services Corporation?
Mr. McCalpin. Senator, for the record, my name is F. William
McCalpin. I am engaged in the private practice of law in St. Louis,
Mo., with the firm of Lewis, Rice, Tucker, Allen & Chubb. Since
1964, I have been involved with a number of entities and enter-
prises in the field of providing legal services to the poor. I was a
charter member of the Legal Services Advisory Committee of the
OEO program. Subsequently, I was Chairman of the Board of the
Legal Services Corporation.
I am not here today as a representative of any of the entities or
enterprises with which I have been associated in the past. I appear
at the invitation of this committee solely as a private citizen, an
interested lawyer, with some experience in the area which you are
considering in this legislation.
Senator Eagleton. For what period were you Chairman of the
Corporation?
Mr. McCalpin. I was Chairman of the Corporation from Septem-
ber 1980 until sometime in the afternoon of New Year's Eve 1981,
when I was advised that my successors were holding a meeting of
the Corporation.
Senator Eagleton. And prior to being Chairman, you were on
the Board?
Mr. McCalpin. That is correct, Senator. I was confirmed as a
member of the Board of the Corporation by the U.S. Senate in May
1979.
Senator Eagleton. Your full statement will appear in the record
as though read, and if you desire, you may proceed to the Hatch
letter.
Mr. McCalpin. Thank you. I would touch upon a few items only.
In my judgment, the most serious problem affecting legal services
for the poor and the Legal Services Corporation today is not one
which can readily be solved by legislation. That problem is that the
people with the greatest responsibility for providing legal services
137
to the poor at the national level, both within and without the Cor-
poration, appear not to support the program but, indeed, to oppose
it. What is needed now above all else is a national administration,
a board of directors, and a staff who passionately believe in equal
justice under law and who are firmly committed to the achieve-
ment of that objective through the Legal Services Corporation.
These times cry for people who believe in aggressive, imaginative
advocacy for indigent clients — lawyers, paralegals, and support per-
sonnel — who will approach the evident problems of poor people
with an open mind and who will bend their minds and hearts to
the resolution of those problems for the good of their clients, for
the administration of justice, and for the soul of this country.
We have been deeply gratified by the support which the Congress
has given to the principle of equal justice and the Legal Services
Corporation. To the extent that it has been called upon to do so,
the judicial branch of Government has likewise rendered unswerv-
ing support. I am sorry that I cannot say the same for the execu-
tive branch, at least in recent years.
I would touch upon several items relating to the Board. Let me
say first of all, I am familiar with section 2 of S. 1133, which has
been introduced by you and others. I would recommend to you that
you consider a specific requirement in section 2 of that act that a
minimum of two members of the Board be eligible clients. We have
gone through the semantics in the past of having an "s" on the end
of clients, and the debate as to whether that meant more than one
or not. I think it is time to put that at rest and make sure that
there are at least two clients on the Board. In addition, I would sug-
gest that you remove the first sentence of section 1004(d). That is
the one which has raised confusion as to whether the President
any longer has any right to appoint the Chairman of the Board. My
reading of the act is that the President had that right in the first
instance in 1974, but that he no longer has it, however the Presi-
dent has, in recent times, purported to exercise the authority to
name the Chairman.
It had seemed self-evident thfet the President should nominate
and the Senate confirm as Board members only those persons who
are committed to the principle of equal justice and who are sup-
portive of the Legal Services Corporation as a way to achieve that
goal. Recent experience suggests that this principle is not as self-
evident as had been believed. Therefore, I recommend it be incorpo-
rated in the act.
Again, in the people area, the single most important responsibili-
ty of the Board is to recruit and retain a competent staff. That
staff must also be composed of people who believe in equal justice,
who understand, will support, and can represent clients, irrespec-
tive of the forum or the nature of the problem.
One of the questions which Senator Hatch's letter raises is
whether the Legal Services Corporation is a manageable enterprise
and whether it can be operated in an apolitical manner. Those
questions deserve an answer. The answers are simply that the en-
terprise of which the Corporation is the apex can be and generally
has been operated in an efficient and effective manner, but that by
its very nature it probably always will be tinged by political contro-
versy.
138
Unquestionably, the Corporation has been well-managed in a fi-
nancial sense. To my knowledge, no other Government-funded pro-
gram runs on 4 percent of its appropriation and expends 96 percent
in providing service to the intended recipients. There have been no
scandals of a financial nature of any kind attached to this program
or to the 325 grantees in the field.
The Corporation also has been successful in enhancing and, in
some areas, initiating the rule of law in landlord tenant relations,
consumer practices, and welfare administration. No longer do poor
people in this country look upon the law as something that is done
to them instead of for them. For the past 18 years, the poor have
gained a foothold, a stake, in the justice system, something that
was neither apparent nor appreciated in the turbulent sixties and
early seventies. The country, too, has gained a closer approach to
the historic goal of establishing justice, which the Preamble to the
Constitution puts just ahead of domestic tranquillity.
There is one area in which we have not been as successful as we
would like. It is, perhaps, in not informing and educating the
public, and especially our critics, in what we have been about. We
have, I am afraid, been so busy perfecting the organization of this
entity which is not yet 8 years old and in spreading its services to
every county in the country that we have not taken time to reiter-
ate and explain the reason for a system of laws, the necessity and
meaning of justice, equal justice, and the role of lawyers, courts,
and legislative and administrative bodies in administering a system
of justice.
We assumed a better public understanding about these things
than apparently was warranted. In particular, on reflection, I be-
lieve that we did not listen carefully enough to the complaints of
well-intentioned critics, investigate their complaints fully and care-
fully enough, and patiently enough respond. Having said that, let
me also say that there was no way we could ever respond satisfac-
torily enough to the complaints of those with a vested interest in
denying or abrogating the rights of poor people, and there were
and are plenty of those.
The question of whether the Corporation and the movement it
represents is political is inextricably entwined with the fact that
poor peoples' problems lie not exclusively with or against other
poor people. As long as Legal Services are confined to disputes with
and between poor persons and families, no one gets exercised.
When poor persons seek to enforce their rights against landlords,
merchants, or other vested private interests, hackles begin to rise.
That part of the local establishment turns to the public figures who
appear to have made this assault possible or have suffered it to
happen. When poor people seek to enforce their rights against
public authorities directly, welfare departments, public housing au-
thorities, school districts, or hospitals, the attack is viewed as polit-
ical simply because the affected bodies are public.
The truth is that the poor historically have been denied basic
rights by more affluent or powerful segments of the community. As
a people, we responded in part through our elected representatives,
the Congress and State legislatures, who created or explicated peo-
ples' rights in legislation. Whether through opposition or inertia,
139
some people responsible for acknowledging or implementing those
rights failed to do so.
The basic function of the legal services movement is to enforce
those rights for poor persons. I believe that one of the great glories
of our system of government is that having created or recognized
those rights, we have provided a mechanism by which even the
least powerful among us can secure those rights, even against gov-
ernment itself. That is both the political problem and the political
promise of the legal services movement, and I think it will not go
away.
Much has been said about class actions. I can think of no better
illustration of the absolute, utter necessity for class actions than
the case of Thompson v. Walsh, brought by legal aid agencies of St.
Louis and Kansas City in the U.S. District Court in Kansas City.
Welfare agencies in the State of Missouri were taking Federal
funds but not processing claims within the 45 days required by
Federal regulations. Hundreds of claimants were left waiting for
longer periods of time while their claims dragged through the bu-
reaucratic process. Many came to legal aid. Protracted negotiations
with the welfare department availed nothing. A class action was
filed.
It was necessary to file a class action because as often as one
claimant filed suit, the welfare department conceded that suit and
did nothing about the hundreds of others. As a result of that
action, the Federal court in 1976 ordered the State of Missouri to
comply with the Federal regulations. That should have been the
end of the matter; it was not. More than 3 years later, the Missouri
Welfare Department was still not complying with the Federal regu-
lations or the court's order. Legal aid went back to court, moving
for a contempt citation.
The district court's subsequent order, directed to the Department
of HEW, was ultimately reversed on appeal. But it was not until
after nearly 6 years of litigation, that the Missouri welfare officials
finally bowed to the requirement that they provide welfare appli-
cants in Missouri the benefits of the Federal program for which
they accepted and used the funds. And bad as that is, it is even
worse because actually in 1971, the eighth circuit, in Light v.
Carter, 448 F.2d 798, had first reversed an order of the district
court denying certification as a class action and, second, indicated
that Missouri even then, 10 years before the final result, was out of
compliance with the Federal regulations.
It makes absolutely no sense at all to handle a matter like that
on anjrthing other than a class action basis against the governmen-
tal authorities involved. The fact is that much of the litigation ini-
tiated by legal services programs involves the attempt to make gov-
ernmental agencies responsible and accountable to poor people for
programs enacted by the Congress and the legislatures of the sever-
al States. It would be a mockery of justice if poor people were to be
given the hope afforded by these legislative programs only to have
that hope turned to despair through disregard and contempt by the
very agencies committed to the implementation of those programs
and the inability of poor persons, through their advocates, to
secure enforcement.
140
I recently saw a quote in our favorite newspaper, Senator, from
Senator Leahy made in an entirely different context but which I
think is peculiarly applicable to what I am talking about. Referring
to the oversight activities of the Senate Select Committee on Intel-
ligence, he said — and I think this applies to what we have been
about in legal services, too:
We may or may not agree with the law, but if it is on the books, it is the duty of
the Executive Branch to enforce it and it is the duty of Congress in its oversight
function to make sure that it is being enforced. If we determine that a law is not to
our liking, then it is also our privilege, perhaps, to change it.
That is exactly what the legal services movement has been doing.
It has been exercising the right of poor people, as beneficiaries of
legislation requiring equal justice. As long as those rights are on
the books, I submit that poor people have a right to enforce the
law, or our Government is a hollow mockery.
There is a tendency on the part of some to see such actions
against government or private interest, particlarly class actions, as
some sort of a preconceived social agenda. I would digress here a
moment to say, in partial response to some of the things Mr. Phil-
lips said a few moments ago, that he simply does not understand
who runs local legal services programs. If he thinks that the
agenda of those programs is entirely dictated and controlled by the
lawyers, then he has never been, as I have been, to the meetings of
the boards of those programs and the priority-setting sessions of
those boards when the poor people, articulate as they are, knowl-
edgeable as they are, and as feeling as they are about their own
interests, dictate and demand the kinds of actions which shall be
taken.
I have participated in some of those debates at the local level
and at the national level, and I can say to you that the decision to
take on an action against the Missouri Welfare Department does
not come from the lawyers in the program; it comes from the cli-
ents. These programs are accountable to the clients. These are not
social agendas decided by the lawyers in the programs.
Turning to the act, I commend to you section 5(c) of your legisla-
tion. Senator, S. 1133, in which you would repeal a portion of sec-
tion 1010(c) of the act, for the reasons I have stated in my remarks.
It seems to me incomprehensible in this day and age, when legal
services programs are being told to go out and raise their own
funds privately, that the Congress of the United States should at-
tempt to lay its hands on the use of those private funds raised lo-
cally for local purposes and dictate how they may or may not be
used.
It seems to me that if you are going to shift a significant part of
the funding obligation of these programs to the private sector, then
you must release the hand of Government from the utilization and
spending of those private sector funds.
Senator Eagleton. Let me break in there with a devil's advocate
question. Can it not be argued, somewhat persuasively, that if Con-
gress, intelligently or unintelligently, sets some outside perimeters
on what the Legal Services Corporation can do, debates the limits
and scope of what they can do, and makes a decision, and then pre-
sume that a President — more likely a future President — signs the
bill and it becomes law, and it says they can do A, B, C, and D, but
141
they cannot do X, Y, and Z with public money — cannot the argu-
ment be made that if Congress decided that is what it wanted the
legal services to do, and it sets them up, pays the rent on the build-
ing or the suite of offices, with typewriters and overhead, those
same constraints ought to apply to private moneys as well. They
should not have a wide open season to do any and everything
under the Sun. If Congress saw fit to limit the public moneys, why
shouldn't those limits apply to the private as well.
Mr. McCalpin. I think, Senator, the answer is almost self-evi-
dent, it seems to me. I have no doubt of the right of Congress, first
of all, to control the expenditure of public funds. They are collected
by taxes from citizens of this country and entrusted to the manage-
ment of Government, including the legislative branch. I have no
disagreement at all about the right of the Congress to determine
how the public funds shall be spent.
On the other hand, if private citizens in local communities be-
lieve that they, recognizing the needs and requirements of their
own local community, decide to raise funds for a purpose not con-
templated or not within those authorized by the Congress for the
Legal Services Corporation, why should not the local citizens have
the right to decide how those funds will be expended?
Senator Eagleton. They can decide how they want them to
spend it, in terms of funding private lawyers or non-legal-services
lawyers. Bear in mind, the legal services lawyers have lots of
things provided for them — office, typewriters, clerical staff, tele-
phone, Xerox machines, and so on. You state it almost as a truism
that one ought to be able to use one's personal funds the way he
wants; one can privately spend his funds as he sees fit. I spend
mine. But you are using legal services personnel, who are on a Fed-
eral payroll — paid indirectly through Federal funds — and then you
are broadening the scope of what they can do by the private funds.
I do not think it is quite as simple as you make it out to be.
Mr. McCalpin. It seems to me, for instance, there are some very
restrictive regulations that have come out recently about the use of
granted funds to pay dues and for training sessions and that sort of
thing. It seems to me that if a bar association in a local community
decides that it wants to afford the lawyers in the legal services pro-
gram the advantage of going to a particular training session which
they are not permitted to do with Federal funds, there is no reason
why they should not.
Senator Eagleton. Let us take a more difficult one. Take the
lobbying prohibition in the Federal law. So private funds are
raised, the legal services attorney then goes down to Jefferson City
and lobbies like crazy for a particular piece of legislation using the
private funds, when he is prohibited from doing so out of public
funds. Yet he is still a legal services attorney.
Mr. McCalpin. First of all, there is no flat all-out total prohibi-
tion against legislative advocacy. That is a common misconception
that has been floated around.
Senator Eagleton. But there is some constraint.
Mr. McCalpin. Certainly there are some constraints, and I find
that most of those constraints are legitimate. We implemented cer-
tain requirements in the form of instructions and grant conditions
to the various programs when I was the Chairman of the Board. I
29-379 O— 84 10
142
have no quarrel with those. But it seems to me that if a local com-
munity wants to raise the funds to provide a separate and inde-
pendent service, I guess they could always go hire somebody else
outside the program, and maybe we would get at it that way, but it
seems to me that if there is a person who is doing permitted lobby-
ing within the legal services program, and there are funds for him
to do something else, it is not a very economic system if you re-
quire the creation of a separate structure to do that additional
thing when privately raised funds are available to do it.
1 touched upon most of the items. We have just been talking
about legislative advocacy, which I have touched upon here. My
own firm belief is that, like class actions, it is an effective and eco-
nomic tool to handle a common problem that affects commonly a
vast number of people. As I have said in my paper, if 100 clients of
a grantee have complaints of peeling lead-base paint in 100 differ-
ent houses or apartments, the problems can be solved through 100
lawsuits or they may be solved through one ordinance or one ad-
ministrative regulation of a public housing authority.
I recognize and support the need to limit legislative advocacy to
specific client problems, with identifiable clients, but do not make
legal services grantees squander their scarce resources by resorting
to multiple, individual suits when legislative advocacy is a more ef-
ficient problem-resolving alternative.
A lot has been said about the private bar's involvement in the
provision of legal services. I have outlined in my paper the history,
beginning back in 1979 with a proposal by Steven Engelberg, then
a board-member lawyer in this city, which produced a half million-
dollar grant to begin to generate pro bono programs around the
country. The delivery system study, which we delivered to the Con-
gress in June 1980, clearly envisioned a larger role for the private
bar in the provision of legal services to the poor. We sponsored—
not the new Board but our Board sponsored—the 10-percent re-
quirement in December 1980. That was intended to and had the
effect of generating nearly $30 million for the involvement of the
private bar. Nobody thought that was necessarily a ceiling, but it
seemed to us to be a first step which could be used to initiate this
concept, get it underway, get some effective administration of it,
and then see where it took us in the years ahead.
While I support the involvement of the private bar and the re-
quirement that a substantial part, even a majority, of local boards
be lawyers, I believe that clients are entitled to a decisive say as to
how the lawyer services shall be provided to them. I am for free
choice of attorney by client, but I think that one of those choices
needs to be the staff lawyer concept. I am fortified in that conclu-
sion by the experience in the Province of Quebec, where with a full
range of opportunities available to them, 70 percent of clients
select a staff lawyer and 30 percent the lawyer in private practice.
More than enough already has been said and written in the staff
lawyer versus private-lawyer debate. My own experience in 35
years of active participation in the affairs or the organized bar tells
me that only a relatively small percentage of the bar, surely less
than half, is really interested in representing poor people, particu-
larly within a fee structure that would make judicare financially
possible. Thus, if judicare were mandated, I suspect we would
143
simply trade the biggest share of representing poor people from
one relatively small group of lawyers to another, or possibly even
the same lawyers ousted from their staff positions to private prac-
tice.
In the meantime, we would have dissipated the enormously effec-
tive and productive organization created in the last 18 years.
In conclusion, let me urge upon you a few simple principles as
you proceed with this legislation. First, state unequivocally your
commitment to the concept of equal justice for all, rich and poor
alike. Support the implementation of that principle through the
Legal Services Corporation. Require that the Board and staff of the
Corporation be experienced and committed to equal justice and the
corporation. Permit the Corporation and its grantees to render the
best possible legal service to the most possible poor persons in the
substantive areas of greatest need. Let the decisions about alloca-
tion of resources and systems for the delivery of legal services be
made at the local level, by local program boards, which create for
poor people the same kind of atmosphere in which lawyers and
paying clients operate.
Above all, trust the people, the poor people for whom this pro-
gram is primarily intended, and be willing to take the heat when a
few cries are raised. For in securing equal justice, a few bastions of
privilege inevitably will be assaulted. Have faith that in our
system, justice will be done and that with this program we come
closer to the ideal of equal justice for all. Thank you.
The Chairman. Thank you, Mr. McCalpin.
[The prepared statement of Mr. McCalpin follows:]
144
COhWITTEE ON LABOR AND HUMAN RESOURCES
UNITED STATES SENATE
Statement by F. Wm. McCalpin
May 4, 1983
Washington, D. C.
145
Mr. Chairman and Members of the Committee:
My name is F. Wm. McCalpin. I am engaged in the private
practice of law in St. Louis, Missouri, with the firm of Lewis,
Rice, Tucker, Allen and Chubb. Since 1964 I have been involved
with a number of entities and enterptises in the field of pro-
viding legal services to the poor. I am not here today as a
representative of any of those entities or enterprises. I appear
at the invitation of this Committee solely as a private citizen,
an interested lawyer with some experience in the area which you
are considering.
As a charter member of the National Advisory Committee to
the OEO Legal Services Program, I was deeply involved in the
legislative struggles which led to the enactment of the Legal
Services Corporation Act in 1974. I testified before this
committee or its predecessor during confirmation hearings for the
first Board of Directors of the Corporation in 1975. I played a
lesser role in connection with the 1977 amendments, but became
much more deeply involved following my own confirmation as a
member of the Board by the Senate in May, 1979. I recite this
history of personal involvement only so that you will understand
that I have some appreciation of the issues which you are now
addressing.
In my judgment the most serious problem affecting legal
services for the poor and the Legal Services Corporation today is
not one which can readily be solved by legislation. That problem
146
is that the people with the greatest responsibility for providing
legal services to the poor at the national level, both within and
without the Corporation, appear not to support the program, but
indeed to oppose it. What is needed now above all else is an
administration, a Board of Directors and a staff who passionately
believe in equal justice under law and who are firmly committed
to the achievement of that objective through the Legal Services
Corporation. These times cry for people who believe in aggres-
sive, imaginative advocacy for indigent clients — lawyers, para-
legals and support personnel who will approach the evident
problems of poor people with an open mind and who, having under-
stood them, will bend their minds and their hearts to the reso-
lution of those problems for the good of their clients, for the
administration of justice and for the soul of this country.
Just as the concept of equal justice is enshrined in the
Constitution, emblazoned on the facade of the Supreme Court
building and declared in the Pledge of Allegiance, so must the
support for equal justice begin at the highest levels of the
national government. We have been deeply gratified by the sup-
port which the Congress has given to the principle of equal jus-
tice and the Legal Services Corporation. To the extent that it
has been called upon to do so, the judicial branch of government
has likewise rendered unswerving support. I am sorry that I
cannot say the same for the executive branch.
147
Outside of government, the people most critical to the
enterprise are the members of the Board of Directors of the Cor-
poration. In Section 1004(a) of the Act, the Congress has man-
dated that a majority of the Board shall be members of the bar of
the highest court of some state, that the membership of the Board
shall include eligible clients and shall be generally representa-
tive of the organized bar, attorneys providing legal assistance
to eligible clients and the general public. I fully support and
commend that provision to you.
The inclusion of at least two client members on the Board of
Directors is absolutely necessary. In my experience, at both the
local and national levels, client Board members bring a perspec-
tive and an experience which are indispensable to a clear under-
standing of the problems faced by the Corporation, its staff and
its grantees. It is essential that there be more than one client
Board member for the mutual support that they can give each other
in the face of a majority of outspoken, articulate lawyers who
cannot possibly share the same experiences and backgrounds. This
principle was recognized in the case of State Advisory Councils
in Section 2 of H.R. 3480 in the last Congress.
Similarly, I believe that the Board should include at least
one individual experienced in the provision of legal services to
indigent clients. It is not sufficient that the majority simply
be lawyers, because, for example, an antitrust lawyer who spends
five years on a case involving AT&T simply does not understand
148
the problems of a legal aid lawyer who handles 500 files a year
in a dozen different substantive areas of the law.
It is in my judgment important that the Board represent, as
far as humanly possible, the breadth and diversity of this
country and its people. Our Board was composed of nine lawyers,
four women, two blacks, two Hispanics and one Native American.
The eleven Board members came from nine different states and the
District of Columbia, including two states on the East Coast, two
in the far West and five in the Middle West. That Board brought
to our deliberations significantly different points of view which
frequently resulted in divided votes, but never in bitterness or
disharmony.
It had seemed self evident that the President should
nominate and the Senate confirm as Board members only those
persons who are committed to the principle of equal justice and
who are supportive of the Legal Services Corporation as a way to
achieve that goal. Recent experience suggests that this
principle is not as self evident as believed; so it should be
incorporated in Section 1004 of the Act.
Again in the people area, the single most important respon-
sibility of the Board is to recruit and retain a competent
staff. That staff must also be composed of people who believe in
equal justice, people who understand, will support and can repre-
sent clients, irrespective of the forum or nature of the problem.
149
In my judgment, and this is the managerial principle which
we followed, the responsibility of the Board is to define the
operational parameters of the Corporation, select the best pos-
sible chief executive officer, make him responsible for the staff
and then leave the day-to-day operations of the Corporation to
that staff. The proper function of the Board is to make the
ultimate policy decisions to be implemented by the staff on a
day-to-day basis. It would, I think, be a mistake for the Con-
gress or for the Board unduly to concern itself with specific
actions implementing policies formulated within the framework of
the statutory authorization by a Board nominated and confirmed as
required by Section 1004(a).
Questions have been asked as to whether the Legal Services
Corportion is a manageable enterprise and whether it can be
operated in an apolitical manner. Those questions deserve an
answer. The answers are that the enterprise of which the Corpo-
ration is the apex can be, and generally has been, operated in an
efficient and effective manner but that by its very nature it
will probably always be tinged by political controversy.
Unquestionably the Corporation has been well managed in a
financial sense. To my knowledge no other government funded
program runs on 4% of its appropriation and expends 96% in pro-
viding service to the intended recipients. There have been no
headlined financial scandals in the Corporation or in the 325
grantees across the country.
150
The Corporation has also been successful in enhancing - and
in some areas initiating - the rule of law in landlord-tenant
relations, consumer practices and welfare administration. No
longer do poor people in this country look upon the law as some-
thing that is done to them instead of for them. In the past
eighteen (18) years the poor have gained a foothold, a stake in
the justice system - something that was neither apparent nor
appreciated in the turbulent 60 's and early 70 's. The country
has gained too in a closer approach to the historic goal of
establishing justice which the Preamble to the Constitution puts
just ahead of domestic tranquility.
If there is one area in which the Corporation has not been
as successful it is in not informing and educating the public -
and especially its critics - in what it was about. We have, I am
afraid, been so busy perfecting the organization of this entity,
which is not yet eight years old, and in spreading its services
to every county in the country that we have not taken time to
reiterate and explain the reason for a system of laws, the
necessity and meaning of justice, equal justice and the role of
lawyers, courts and legislative and administrative bodies in
administering a system of justice. We assumed a better public
understanding than was apparently warranted. In particular upon
reflection I believe that we did not listen carefully enough to
the complaints of well-intentioned critics, investigate those
complaints fully and carefully enough and patiently enough
151
respond. Having said that let me also say that there was no way
we could ever respond satisfactorily enough to the complaints of
those with a vested interest in denying or abrogating the rights
of poor persons and there were and are plenty of those.
The question whether the Corporation and the movement it
represents is political is inextricably entwined with the fact
that poor peoples' problems lie not exclusively with or against
other poor people. As long as legal services are confined to
disputes with and between poor persons and families no one gets
exercised. When poor persons seek to enforce their rights
against landlords, merchants or other vested private interests
hackles begin to rise and that part of the local establishment
turns to the public figures who appear to have made this assault
possible or have suffered it to happen. When poor persons seek
to enforce their rights against public authorities directly -
welfare departments, public housing authorities, school districts
or hospitals - the attack is viewed as political simply because
the affected bodies are public.
The truth is that the poor have historically been denied
basic rights by more affluent, more powerful, segments of the
community. As a people we responded in part through our elected
representatives - the Congress and state legislatures - who
created or explicated poor peoples' rights in legislation.
Whether through opposition or inertia some persons responsible
for acknowledging or implementing those rights fail to do so.
152
The basic function of the legal services movement is to enforce
those rights for poor persons. I believe that one of the great
glories of our system of government is that having created or
recognized those rights we have provided a mechanism by which
even the least pov?erful among us can secure those rights, even
against government itself. That is both the political problem
and the political promise of the legal services movement.
I have not, up to this point, given this Committee any spe-
cific suggestion or assistance in drafting or redrafting a Legal
Services Corporation Act. The point I want to make is that a
perfect legislative product can be rendered ineffective and
unworkable by people who don't believe in it and support its
objectives. A less than perfect statute can be made workable by
a Board and staff committed to its objectives.
There may, however, be ways in which legislation can assist
the achievement of the ultimate objectives. I think you might
well consider making Section 1004(a) more explicit along the
lines I have suggested. I believe that the last sentence of that
section should be amended to provide specifically that no fewer
than two members of the Board shall be eligible clients and that
at least one member shall be a person experienced in providing
legal services to the poor. Finally, in view of the apparent
misunderstanding as evidenced by recent presidential announce-
ments purporting to name the Chairman of the Board, I would
recommend that you delete the first sentence in Section 1004(d),
153
One of the burning issues in the legal services movement has
been the use of federal funds to subsidize suits against govern-
ment, particularly class actions. Suits against governmental
agencies by Corporation grantees on behalf of clients are not
only necessary, but in many instances are appropriate for
utilization of the class action procedure. The truth is that
many, perhaps most, of the problems of poor people involve
government agencies at the local, state and national levels.
Among the most important needs of the poor are food, housing,
medical care, education and jobs. The source of these neces-
sities is government through welfare programs, housing authori-
ties, public hospitals and schools, and as a direct or indirect
employer. We all know of the administrative lapses, the indif-
ference and sometimes the downright hostility of agency employees
to applicants for such assistance. If Legal Services grantees
are not permitted to represent indigent persons in redressing
their grievances against providers of these necessities of life,
the poor will be denied assistance in the areas where they need
it most.
I can think of no better illustration of this point than the
case of Thompson v. Walsh , 481 F.Supp. 1170 (1979) brought by the
Legal Aid agencies of St. Louis and Kansas City in the U. S.
District Court in Kansas City. Welfare agencies in the State of
Missouri were taking federal funds but not processing claims
within 45 days as required by federal regulations. Hundreds of
154
claimants were left waiting for longer periods of time while
their claims dragged through the bureaucratic process. Many came
to Legal Aid. Protracted negotiations with the Welfare Depart-
ments availed nothing. Suit, a class action, was filed. It was
necessary to file a class action because as often as one claimant
filed suit, the Welfare Department would quickly process that
claim without moving expeditiously on the other hundreds of
pending delayed claims. As a result of that action, the federal
court in 1976 ordered the State of Missouri to comply with the
federal regulations.
That should have been the end of the matter. It wasn't.
More than three years later, the Missouri Welfare Department was
still not complying with the federal regulations or the court's
order. Legal Aid went back to court moving for a contempt cita-
tion. The district court's subsequent order directed to the
Department of Health, Education and Welfare was ultimately
reversed on appeal, but it was not until after nearly six years
of litigation that the Missouri welfare officials finally bowed
to the requirement that they provide to welfare applicants in
Missouri the benefits of the federal program for which they
accepted and used federal funds.
Six weeks ago legal aid lawyers in Missouri won a consent
decree from the Division of Family Services providing basic
protection for children placed in foster care. Two weeks before
that a student in the Harvard Law School Legal Aid Bureau won a
155
class action suit against the Social Security Administration on
behalf of persons initially denied disability benefits. There
are countless other examples of successful class actions against
government agencies to secure poor peoples' rights. For those
who may be interested in learning more about the current anti-
pathy to class actions and indeed to suits against government I
recommend reading the decision of the Supreme Court of California
in Morris v. Williams , 433 P. 2d 697 (1967).
The fact is that much of the litigation initiated by legal
services programs involves the attempt to make government agen-
cies responsible and accountable to poor people for programs
enacted by the Congress and the legislatures of the several
states. It would be a mockery of government and of justice if
poor people were to be given the hope afforded by these legisla-
tive programs, only to have that hope turned to despair through
disregard and contempt by the very agencies committed to the
implementation of those programs and the inability of the poor
through their advocates to secure enforcement.
There is a tendency on the part of some to see such actions
against government or private interests, particularly class
actions, as some sort of a pre-conceived social agenda. The fact
is that the overwhelming caseload of legal services agencies
consists of the representation of individual poor persons against
other persons, companies or agencies. When massive, headline
grabbing class actions are filed they come, just as in Thompson
156
V. Walsh, out of the experience of hundreds or thousands of poor
persons and usually out of the intransigence of the opiosing
party. They are filed to achieve a common objective for a class
of people with a perceived common problem. It is the scarcity of
resources, both legal services and judicial, which dictates the
class action approach. So called reform actions by legal
services grantees have their genesis in perceived and articulated
problems of scores of individual poor persons not in the precon-
ceived notions of legal aid lawyers. They are in fact client
oriented in their origin.
Another area to which I would direct the Committee's atten-
tion is Section 1010(c) of the Act. That section in part pro-
vides that non-federal funds received by any Legal Services Cor-
poration grantee cannot be used for any purpose for which federal
funds may not be used. I submit that in this day, when federal
funds are declining and legal services grantees are being told to
look to the private sector, that provision inhibits access to
non-federal, private funds. Private citizens or groups in com-
munities across this country are reluctant to provide the needed
funds unless they are able to control the purposes for which
those funds will be expended. Federal control of private funds
in this manner is directly contrary to the concepts of local
control and private funding which are and should be significant,
if not fundamental, principles in the operation of legal service
agencies around the country.
157
I would strongly urge you not to repeal Section 1011. The
lives and hopes which people have invested in 325 grantees around
the country should not be subjected to annihiliation through
arbitrary, sununary defunding. New, inexperienced, idealogically
motivated administrators should not be permitted to sweep away by
fiat the painstakingly developed, tried and successful programs
in the field. Events of the last fifteen months give no assur-
ance than an effective, economically run program will be replaced
by something better.
We have frequently heard the argument that federal funding
for legal services ought to be provided in the form of block
grants to the states, which may then decide whether such funds
will be used to provide legal services or some other social or
economic benefit. Our experience under Title XX of the Social
Security Act teaches that this is simply a not so subtle way of
saying that no federal funds shall be used to support legal ser-
vices for the poor. Only a handful of states ever used Title XX
funds to provide legal services, and few, if any, do so now. For
the reasons I indicated above, the problems of poor people with
state and local agencies make virtually certain that, given the
opportunity, states will not allocate funds to subsidize com-
plaints and proceedings against state and local agencies.
". . .to. . .establish justice. . . ." was recognized by the
framers as a fundamental reason for adoption of the Constitu-
tion. The federal government cannot escape that responsibility
29-379 O— 84 11
158
by passing it off to the states who are virtually certain to
ignore it.
Our Board and its predecessor in 1976 embarked upon a pro-
gram of providing "minimum access" to the institutions of jus-
tice. That program was undertaken with the approbation and sup-
port of the Congress in light of the fact that access to legal
services was sketchy to non-existent in many parts of the coun-
try. By 1981, we had brought legal services within the reach of
poor persons in every county in every state in the United
States. We had clearly not met all the needs, but at least for
those most desperately in need of it, access to justice was a
possibility.
The budget cuts of the past two years have necessitated a
retreat from the minimum access concept. I would hope that this
Committee would, in restating the philosophy and the underlying
principles of the legal services movement, push the program back
in the direction of minimum access.
The emotionally charged issue of legislative advocacy can be
looked upon as lobbying with its pejorative connotations or, like
class actions, as an economic use of resources to solve prob-
lems. One of the most prevalent problems of the poor is the
condition of housing available to them. If 100 clients of a
grantee have complaints of peeling lead base paint in 100
different houses or apartments the problems can be resolved
through 100 lawsuits or by one administrative regulation or one
159
duly enacted statute or ordinance. The economies bf the latter
course are self-evident. I recognize and support the need to
limit legislative advocacy to specific client problems, but don't
make Legal Services grantees squander scarce resources by
resorting to multiple, individual suits when legislative advocacy
is a more efficient problem resolving alternative.
Finally, it appears that this Committee will hear much about
the involvement of the private bar in the provision of legal
services to poor clients. I think that the Committee needs to
put this whole issue in perspective.
It may be true that a significant portion of the represen-
tation of poor clients was provided by the private bar without
compensation in the years before 1965. My clear recollection is
that with the advent of the OEO Legal Services Program, the bar
breathed a collective sigh of relief in the expectation that this
obligation could henceforth be transferred to the federally
funded legal aid offices. It is clear that as the availability
of legal services for poor people grew and expanded in the years
after 1965, a smaller and smaller portion of that responsibility
was shouldered by the private bar. In the ten years between 1965
and 1975, applications to the OEO to fund Judicare type programs
involving rendition of service by private lawyers could be
counted on the fingers of both hands. The bar as individuals was
simply not very interested in providing the service.
160
Commencing with the advent of the Legal Services Corpora-
tion, individual lawyers began to express a renewed interest in
providing legal services to poor persons. It is debatable
whether this new interest arose from a sense of professional
responsibility, or from an appreciation of the increasing level
of appropriations available for that purpose, or as an ideo-
logical reaction to some of the successes of Legal Services law-
yers. Whatever the reason, there should be no doubt that the
private bar has an important role to play in the provision of
legal services to poor persons, but that that role must be
examined and even carefully controlled.
At least as long ago as 1979, the Corporation recognized the
need to involve the private bar more fully in what it was
doing. There was an initial allocation of $500,000 to entice and
encourage experimental programs for the rendition of pro bono
services by members of the private bar. The Delivery Systems
Study delivered to the Congress in June, 1980 clearly recognized
and contemplated an increasing role of the private bar. In
December, 1980, the Corporation adopted the principle that 10% of
funds going to grantees be used to involve the private bar in
providing legal services for poor persons. That 10% amounted to
an allocation of almost $30,000,000 for that purpose. Recogniz-
ing the variation in need in different parts of the country and
the varying attitudes of the bar, the 10% requirement contem-
plated a variety of models and vehicles for involvement of the
161
private bar not necessarily requiring, but not prohibiting, that
the 10% be paid in the form of fees for services rendered under a
Judicare model. The grantees and the bar responded with a vari-
ety of ways to involve the private bar.
In imposing the 10% grant restriction, we deliberately chan-
neled the requirement through existing grantees. We understood
that this would necessitate a coming together of the local pro-
grams and the local bars to work out the precise approaches which
would be used to involve the private bar. We were reluctant, and
I think for good reason, to turn these funds over to the private
bar directly to be used in ways that it saw fit. Our particular
concern was that the private bar would impose on the indigent
clientele delivery systems which were unresponsive to the needs
and aspirations of that clientele.
The bar in some parts of the country has dictated a private
lawyer Judicare arrangement against the wishes and over the oppo-
sition of the client community. I firmly believe that the par-
ticular delivery system to be used in a given locality is a
matter to be worked out in consultation and negotiation between
the service provider and the clients. In too many instances
where the interests, especially the economics, of the bar have
been concerned, the decisions made by the bar have not reflected
the objectivity which lawyers display in representing their cli-
ents. In some instances, the requirement of Section 1007(c) of
the Act that 60% of the board of the grantee be lawyers has
162
worked against the interests of clients. I am particularly
concerned by the provisions which have appeared in H.R. 3480 and
in the continuing resolution authorizing bar associations repre-
senting the majority of lawyers in the service area to designate
the lawyer majority of local boards. This may effectively bar
women's, black, Chicano and other minority bars from having a
voice in the process. In an integrated bar state it excludes the
local bar which is closest to the situation. As an alternative I
would recommend that the majority bar association name one-half
the lawyer majority and that the rest be selected in other ways.
While I support the involvement of the private bar and the
requirement that a substantial part, even a majority, of the
local boards be lawyers, I believe that clients are entitled to a
decisive say as to how the services of lawyers shall be provided
to them. I am for free choice by clients, but I think one of
those choices needs to be the staff lawyer concept. I am forti-
fied in that conclusion by the experience in the Province of
Quebec where, with the full range of opportunities available to
them, 70% of the clients select the staff lawyer and 30% the
lawyer in private practice.
More than enough has already been said and written in the
staff lawyer versus private lawyer debate. My experience in 35
years of active participation in the affairs of the organized bar
tells me that only a relatively small percentage of the bar -
surely less than half - is really interested in representating
163
poor people particularly within a fee structure that would make
Judicare financially possible. Thus if Judicare were mandated we
would simply trade the biggest share of representing poor people
from one relatively small group of lawyers to another - or
possibly even the same lawyers ousted from their staff positions
to private practice. In the meantime we would have dissipated
the enormously effective and productive organization created in
the past eighteen (18) years.
I do not believe that tax incentive proposals such as have
been suggested would change this result. Few lawyers will change
their current practices simply to take 1% or 2% of legal practice
income as a deduction for representing poor people. The record
keeping and administration, to say nothing of the potential for
IRS intrusion upon the lawyer-client relationship, make this
scheme impractical. The clamor for similar treatment for other
professionals, if an administratively sound scheme could be
devised, would make the whole idea fiscally impossible.
Let me urge upon you a few simple principles as you proceed
with this legislation. State unequivocally your commitment to
the concept of equal justice for all - rich and poor alike.
Support the implementation of that principle through the Legal
Services Corporation. Require that the Board and staff of the
Corporation be experienced and committed to equal justice and the
Corporation. Permit the Corporation and its grantees to render
the best possible legal service to the most possible poor persons
164
in the substantive areas of greatest need. Let the decisions
about allocation of resources and systems for delivery of legal
services be made at the local level by local program boards which
create for poor people the same kind of atmosphere in which
lawyers and paying clients operate. Above all trust the people,
the poor people for whom this program is primarily intended, and
be willing to take the heat when a few cries are raised for in
securing equal justice a few bastions of privilege will be
assaulted. Have faith that in our system justice will be done
and that with this program we came closer to the ideal of equal
justice for all.
Thank You.
The Chairman. Let us turn to Mr. Olson at this point. We will
take your statement, and then we will have some questions for
both of you.
STATEMENT OF WILLIAM J. OLSON, ATTORNEY, WASHINGTON,
D.C.
Mr. Olson. I am pleased to be able to speak to you today con-
cerning the Legal Services Corporation and certain reauthorization
legislation before you. I served as a member of the Board from De-
cember 1981 to December 1982, and I was Chairman of the Board
for 3 months during that year. I had the opportunity to observe the
Corporation during that period and learn something about its ac-
tivities. I would like the opportunity, since I prepared my com-
ments on very short notice, to expand them with the committee's
permission.
The Chairman. Surely.
Mr. Olson. Last December, the Board of Directors on which I
served came under attack by some, particularly certain Members of
the House, for having charged what were called excessive fees for
service as directors. These charges were investigated by the Office
of Management and Budget and found to be invalid, both from a
legal and an audit perspective, and these charges are also the sub-
ject of an investigation by the GAO, which issued a legal opinion
finding that the charges of violating a Federal statute were invalid.
The GAO currently is finishing an audit report, which I under-
stand will be completed in the near future. I understand that these
hearings do not involve these accusations but rather the possible
reauthorization legislation. Nevertheless, if these charges become
the subject of questioning, I would ask that the 0MB report and
the GAO legal opinion, both of which show the invalidity of these
charges, be made part of the record of this hearing.
The Chairman. I do not think that is part of the hearing, unless
one of our Senators wants to make it such.
Senator Eagleton. I have no intention of doing that.
165
Mr. Olson. The committee may want to have copies of them
anyway, since this is within the jurisdiction of the committee.
Service on the Board of Directors has been one of the most frus-
trating experiences which I have ever had. From the very begin-
ning, I had the view that the Corporation must be reformed, could
be reformed, and the status quo had to be changed. The use of Fed-
eral funds for law reform and impact litigation, in my opinion, was
and is wrong. It is bad public policy, and I believe most Americans
would oppose it. The Federal Government should not fund any side
of what are essentially political disputes. Payments of funds to na-
tional State support centers, which operate largely as liberal public
interest law firms, is simply wrong. Payment of funds to lobby,
either directly or at the grassroots level, is wrong.
Unfortunately, these and many of the other problems which we
on the Board perceived, we were unable to do very much about and
I am sorry that I cannot do much to assure you that taxpayer
funds are no longer going to advance a particular philosophy of
Government.
We had a great deal of problems on the Board in doing our job,
and I would like to submit that many of these problems are endem-
ic in the structure of the Legal Services Corporation and, therefore,
deserving of attention by your committee as you consider reauthor-
ization. We had many occasions where the staff of the Corporation
was completely committed to the status quo, was unwilling to pro-
vide Board members with information which was necessary in
order to work to reform the Corporation, and a lot of the material
which came to the Board was of little help to the Board in reform-
ing the Corporation.
The Corporation's Board has a responsibility of oversight. This
committee and the other committees of the House and Senate with
jurisdiction have a responsibility in the oversight. However, we
were unable to do our job to a large extent because there are cer-
tain established practices of Legal Services which appear very diffi-
cult to change. Staff papers, on the National Clients Council for ex-
ample, are routinely reviewed by the National Clients Council
before the Board ever sees them. Presumably, this is done in the
interest of accuracy, but that simply is not an adequate rationale. I
have much more about this in my perpared testimony.
I would say, and this is of particular importance to you at this
time, in the area of the congressionally mandated restrictions on
the Corporation, that I must report that whether we speak about
the Mazzoli amendment with respect to abortion, the Moorhead
amendment with respect to grassroots lobbying, the alien represen-
tation restriction or others, there is substantial noncompliance by
grantees and contractors with regard to the restrictions you have
placed on the programs. We attempted to strengthen regulations
and improve the regulations that you have directed us to adopt,
but we have had very little success.
We repeatedly found out that Corporation funds were being used
for newsletters to stimulate grassroots lobbying. We had hearings
in Jackson, Miss., on this subject, where most national support cen-
ters testified and most admitted that they were engaged in these
kinds of activities, although they do not characterize them as lob-
bying. They characterize them as information dissemination and
166
other euphemisms for grassroots lobbying. They are engaged in
networking among liberal groups, particularly in opposition to
President Reagan's proposals with respect to block grants and
other matters. There are many congressional restrictions that have
been repeatedly and flagrantly violated by the Corporation, based
in part on opinions of General Counsel of the Legal Services Corpo-
ration interpreting those restrictions in a way so as to give them
no meaning whatsoever.
I, for one, have never understood why the Congress has not been
literally up in arms about the noncompliance of this program with
the restrictions that you impose on the Corporation. But this non-
compliance is absolutely disregarded up here, and the restrictions
are disregarded at the Corporation. I hope that this is now a new
chapter in congressional oversight.
In my opinion, the Corporation is badly in need of reform, but
for our Board, reform proved almost impossible. It is true that we
exposed that there are $41 million in fund balances which were
being maintained in the bank accounts of local programs, while
these same programs were pleading poverty in the face of a 25-per-
cent budget cut which went into effect last year. We did force the
return of some of those funds to the national Corporation for reas-
signment. We did force some of those funds to be used properly to
meet the needs of the poor, but I cannot guarantee you that we had
the perfect success along those lines.
We also created an Office of Inspector General, but it is too soon
to know what is going to happen with respect to increased compli-
ance by the Corporation. I would say that, regardless of the good
intentions of the Board members and no matter how hard they
work to obtain reform, and even if there was a cooperative staff
helping the Board to reform the Corporation, reform is now legisla-
tively prohibited. Senator Weicker's amendment, adopted by the
Congress last year, mandates continued funding for all local grant-
ees and contractors, whether they deserve it or not, whether they
are found to be in massive violation of Federal law or not, and
whether they have requested it or not — which is one of the more
interesting aspects of the restriction, and I do not know how that is
being handled. It is an extension of the unprecedented provision in
the Legal Services Corporation Act which says that once an organi-
zation is funded by the Legal Services Corporation, it has a pre-
sumptive right to refunding. Now that presumptive right is made a
conclusive presumption; it is unrebuttable; the Board of Directors
is powerless to deal with noncompliance by local programs.
I would submit that this robs the Board of Directors and the Cor-
poration the ability to reform the Legal Services Corporation. This
is an intolerable result. I would urge that when reforms are being
considered by this committee, you realize how little compliance has
been given to prior reforms that have been written into law, and I
would urge you to explore alternatives to the current structure
which would allow greater accountability for taxpayer dollars
being spent in this area. Thank you.
The Chairman. Thank you, Mr. Olson.
[The prepared statement of Mr. Olson follows:]
167
STATEMENT OF WILLIAM J. OLSCN
REGARDIN3 THE LEGAL SERVICES CORPORATION
HEARING OF THE SENATE lABOR AND
HUMAN RESOURCES CCWMITTEE
MAY 4, 1983
Mr. Chairman and monbers of the Conmittee. I am pleased to be
able to speak to you today during your review of the Legal Services
Corporation and certain reauthorization legislation.
I served as a nenter of the Board of Directors from December
1981 through December 1982 and as Chairman of the Board for a three
nonth period. In that capacity I had an qpportunity to learn
something about the activities of the Coirporaticxi and I wisl-i to
share with you some of my thoughts. 'Biese aimiments were prepared
on very short notice, and I would appreciate the opportunity to
expand c« them for the record, with your permission.
Last December the Board of Directoirs cxi which I served came
under attack by some, particularly certain members of the House,
for having charged what were called excessive fees for service as
Directors. Ihese charges were investigated by the Office of
Management and Bixlget and found to be invalid both from a legal and
an audit perspective. Hiese charges are also the subject of an
investigation by the General Accounting Office, which issued a
legal opinion finding that the charges of violation of federal
statute were invalid as a matter of law. The GAD is currently
finishing an audit report vhich I understand will be completed
within the near future. I understand that these hearings do not
involve these accusations but rather involve possible
reauthorization legislation. Nevertheless, if these charges become
the subject of questioning I wDuld ask that the 0MB report and the
GAO legal, opinion both of which show the invalidity of these
charges be made part of the record of this hearing.
Service as a member of the Board of Directors of the Legal
Services Corporation was among the most frustrating experiences
vrfiich I have had. From the outset I stated my belief that the
Corporation nust be reformed and that the status quo was
unacceptable. The use of federal funds for law reform arri impact
litigation was and is wrong. It is bad public policy ar.d I believe
it would be opposed by most Americans if they knew what was going
on at the Legal Services Corporation. The federal government
should not fund any side in what is an essentially political
debate. Payment of funds to national and state support centers
which operate largely as liberal public- interest law firms is
wrong. Payment of funds to support centers or local programs to
lobby either directly or at the grass-roots level is wrong. These
and many other problems at the Corporation were the subject of
investigation by our Board, but I regret to inform you that we
accCTiplished little in insuring that taxpayer funds do not go to
promote the advancement of a j*iiloso0iy — a liberal f^iilosophy.
168
Ttie problems one faces as a Board manber trying to do a good
job are enornous. In the past staff assistance has been reserved
for members of the Board who would work with the staff to insure
the preservation of the status quo. I made several requests for
informaticxi which went unanswered for six months or more, despite
follow-up requests. As of the day I left the Board when the Senate
adjourned in December I still had not been provided with the status
of fund balances of national support centers despite numerous
requests.
The material which oomes to the Board from the staff is of
little value in buildirq a case for reform. The staff papers on
grantees aixl contractors are routinely provided to the objects of
the report for review and editing. Tliis is truly incredible. Let
me illustrate this. VJhen the staff prepared a paper en the
National Clients Council last November, it was given in draft form
to the National Clients Council for dianges, before it went to the
Board. When Clarence McKee, our Board Vice-Chairman, and I
coitplained about this we were asked: you want the reports to be
accurate, don't you — and who could better insure accuracy than
the object of the report. If the staff cannot insure accuracy
without this procedure, we have real problems with the staff. TUnis
clearance procedure results in the Board being given only v*iat
those who are funded want the Board to have. This is just one of
many ways in which the status quo is preserved against attack by
reform-minded Board monbers.
In the area of Congressionally mandated restrictions, the news
is just as bad. The Congress has imposed the Mazzoli amendment,
the Nfcorehead amendment, the alien representation restriction, and
others, but let ms say that it is my view that the grantees and
contractors are in substantial nonconpliance. We found
uncontroverted evidence that Corporaticxi funds were being used for
newsletters which stimulated grass-roots lobbying on issues of
public policy, evidence that Corporation funds were used to
stimulate "networking" among liberal groups, particularly those
opposed to President Reagan's domestic spending reforms; and used
to represent aliens in accordance with legal opinions issued by the
Corporation which show little desire to comply with Congressional
restrictions. I have never understood vAiy the Congress has not
been literally up in arms about nonccmpliance with these
restrictions, but they are disregarded without criticism.
The Legal Services Corporation is a program badly in need of
reform, and yet for our Board, reform proved to be virtually
iitpossible. It is true that we exposed that $40 million in fund
balances were maintained in bank accounts by local programs while
those same programs pleaded poverty in the face of the 25 percent
cutback in funding for 1982. We forced the return of some of those
funds by some programs, and forced some other local programs to
spend those funds to meet the needs of their clients. It is true
that we created an office of Inspector-General for the first time,
but it is hard to know how effective that will be.
169
Regardless of the gocd intentions of Board members to seek
reform, and ev.'en with a cxxjperative staff, reform is row
legislatively prohibited. Last year the Congress adopted the
amendment proposed by Senator Weicker which freezes funding for all
grantees and contractors until a Board is confirmed. Aside from
being thoroughly unconstitutional, in my view, this provision
guarantees that funding will continue for groups regardless of
whether they deserve continued funding. It is an extension of the
unprecedented provision in the Legal Services Corporatioi Act that
groups, once funded, have a presumptive right to refunding in
perpetuity. This makes the presumption unrebuttable and renders
the Board of Directors a powerless force within the program. It
makes the Board have the illusion of independent control with
little reality. As I said, it legislatively prohibits reform of
the Legal Services Corporation, and that is intolerable.
I appreciate the og^rtunity to be with you today.
The Chairman. Let me first turn to Mr. McCalpin, and then I
will come to you with some questions, Mr. Olson.
Mr. McCalpin, recently the Supreme Court in Lasser v. Depart-
ment of Social Services held that there was no constitutional right
to counsel where an indigent is not in jeopardy of being deprived of
his or her physical liberty — that is, in most civil actions. Do you
agree with the court in that area?
Mr. McCalpin. Senator, it is clear that we do not have on the
civil side of the law the counterpart of the sixth amendment to the
Constitution on the criminal side. What I recommended to the
other body last month is that it seems to me that it is past time for
somebody — and I think the Congress is the appropriate place — to
consider whether, to what extent, in what circumstances there
ought to be enunciated a right to counsel in civil cases, such as is
contained in the statute law of Quebec, the Constitution of India,
and other places.
My own feeling is that we would be better off to have that
thrashed out in the legislative arena than to have the courts
impose it upon us piecemeal, from time to time, particularly in con-
stitutional terms which will be very difficult to handle. I believe
that the Congress ought to address that issue in a way that, so far
as I know, it has not in any comprehensive fashion.
The Chairman. Do you have any idea what the cost would be if
the Congress instigated such a right?
Mr. McCalpin. For one thing. Senator, it seems to me that the
Congress could decide that there is a right to counsel in some types
of civil actions but not others. The Congress could structure the
right in such a way as to control the cost and the expenditure, or
affirmatively to say that there is no right. I can tell you that I
know of a case which says that an alien about to be deported has a
right to counsel but that a citizen who is going to lose parental
rights over a child has no such right. We have a hodge-podge of
cases around the country which make no sense at all in this area.
The Chairman. Mr. McCalpin, there seems to be a little confu-
sion in these hearings concerning the funds available under title 20
of the Social Security Act. On April 7, 1983, before the House Judi-
170
ciary Committee, you stated that only a handful of States ever used
title 20 to fund legal services, and few, if any, do so now. The Con-
gressional Research Service found that in 1981, legal services pro-
grams received almost $15 million in funds under title 20, and the
Legal Services Corporation is estimating this year that it will re-
ceive $12 million under this program.
Given these figures, what is the basis on which you make your
claim that few, if any, funds were available under this program?
Mr. McCalpin. Few, if any, funds were made available, and $12
or $15 million is not a few funds. But my own examination into
this subject disclosed that at the high water mark of the use of title
20 funds for legal services in the middle to late seventies, there
were 12 to 15 States — Pennsylvania was the State which most used
those funds; I believe about $6 million in that one State in 1 year —
but there was a retreat and a withdrawal, and at another point
there were only 6 States using it. I must say that as of this
moment, I do not know the number of States using title 20 funds
for legal services, but in my judgment they are not more than a
handful.
The Chairman. During your tenure as a Board member, there
were at least two suits brought by local grantees, attempting to
force State governments to fund sex change operations. John Bar-
rett, the executive director of the Legal Services Corporation in
Iowa, estimated that during 1980, the year in which his agency
brought the Iowa suit, he was forced to turn away 16,000 people
who needed legal help.
Do you believe that these suits were an appropriate expenditure
of legal services funds?
Mr. McCalpin. I am glad you asked that question. Senator, be-
cause I took occasion 2 years ago, when I was in Connecticut to
make a speech, to look into the circumstances of that case, which I
can discuss with you. It turns out that the individual, first of all,
was a totally eligible client. Second, the individual had suffered the
natural misfortune of having been born with ambiguous physical
equipment, had been raised as a male, had attempted to enter the
work force as a male, had suffered extreme psychological injury as
a result of trying to perform in a role for which it was not psycho-
logically suited, went to a physician who recommended and pre-
scribed that the sex change operation would permit that individual
to become a useful, working self-supporting member of society and
be removed from the welfare rolls where that individual had been.
It was on that basis that the legal services program in Connecti-
cut undertook the suit on behalf of that individual to try to obtain
that medical result which would rehabilitate the individual and
make it a functioning and supporting member of society. In the
course of the trial, the medical testimony was conflicting, and the
ultimate result was that on the basis of the conflicting medical tes-
timony, it could not be determined with the requisite degree of cer-
tainty that the operation would indeed achieve the result that was
intended, and the result was a defendant's verdict.
I suggest to you that it is really no different than a medical /legal
type of problem which we deal with all the time in personal injury
actions. It turns out that the case was lost, but there was an eligi-
bile client and a justifiable reason for bringing the action.
171
The Chairman. You felt it was justified?
Mr. McCalpin. I think that one was justified. I do not know the
circumstances of the Iowa suit to which you refer.
The Chairman. When you were Chairman of the Corporation,
Mr. McCalpin, what steps did you take to determine the amount of
real estate being purchased by the Corporation, the amount of fees
which grantees were earning, the size of carry-over balances, and
the amount of money grantees were holding in bank accounts?
Were you able to take any actions with regard to that? One thing I
am finding is that the Corporation does not seem to have any of
these kinds of records on the national level.
Mr. McCalpin. I am not sure what there is in the way of records.
I can tell you what I recollect from conversations with people at
the time. One, I am aware that there were some programs where
the local boards felt, in view of the rents and other overhead pay-
ments that were being made, that it was a wise and economical ex-
penditure of the funds to avoid the rental payments and purchase
real estate. I cannot tell you how many there were, but I certainly
heard discussions of such matters at that time.
Second, I can say to you that without being able to put numbers
on it, I am reasonably satisfied that the very significant size of
hold-over funds at the end of 1981 was largely attributable to the
uncertainty generated by the letter which I received from the Di-
rector of the Office of Management and Budget, under date of
March 6, 1981, saying that the President would not recommend
any further funding for the Corporation and would seek its termi-
nation.
I think that sent a shiver and a chill throughout the entire en-
terprise, and people began to worry about how to smooth out their
activities for the future. I believe that caused the stockpiling of
funds.
The Chairman. One of the concerns that I had was, now, this
stockpiling might have taken place after your tenure, but let me
give you example of the kinds of things I'm talking about.
As I recall it, the Birmingham Legal Services Corporation was a
$1 million per year grantee under legal services, but they spent
$500,000 on a building. Now, whether that is justified or not, I do
not know. I just wondered what kind of procedures or what kind of
approaches were taken to monitor this type of activity.
Mr. McCalpin. Let me say, Senator, that I believe that any such
expenditure as that showed up in the grant application process and
was known to the staff of the Corporation at the time the grant
application was acted upon. If it appeared to be a wise and effective
use of the funds against the expenditure of rents and that sort of
thing, it was probably true. I can say to you, as I am sure you
know, that a program which had an 81 percent carryover of funds,
was the program which was managed by the present director of the
Office of Field Services of the Corporation, the one in southwest
Missouri, at Springfield. Much of that was because of the cases in
the pipeline and the fact that it was a startup program. That is an-
other factor. Many of the programs that had carryover funds were
new programs just getting started. They had a whole year's grant,
but they were not able to spend it at the full rate from the very
beginning.
172
The Chairman. One of the problems I am having is that it seems
to me that the Board of Directors of the Legal Services Corporation
really has very little idea of what is happening in this field. You
heard Mr. Bogard testify that they do not make out timesheets,
they do not keep track of business. I know I had to do that when I
practiced law, and I am sure you do it in your firm. I am sure you
keep timesheets; you know what you are doing, you know what you
have done, you know what you can bill. They were, frankly, the
only effective means we had of monitoring our own time as well as
that of our associates or partners. Such a requirement seems to me
to be one of the most basic management tools that one would im-
plement if he were to trying to run a good office.
Mr. McCalpin. Senator, let me suggest to you that there are still
very successful law offices in this country who do not charge on
time basis, who do not keep time records, and who function very
well. We do in ours, just as
The Chairman. They have to be the exception, and they would
have to be very exceptional.
Mr. McCalpin. I think you will find that most of the personal
injury lawyers do not keep time records.
The Chairman. I think you will find that they keep very exten-
sive and very complete records. I think many of them do keep time
records, especially those in antitrust cases. Frankly, I do not equate
legal services lawyers with personal injury lawyers. They can be,
on occasion.
Senator Eagleton. It is an indictable offense for a personal
injury lawyer to keep a timesheet.
The Chairman. Let me just ask you one more thing. I have
others, but I think I will submit them to you in writing.
Mr. McCalpin. I would be delighted. And incidentally, Senator,
if I may interject at this point, at such time as you get any charges,
accusations, or complaints about these various programs, I do not
have a $241 million grant either, but I would be glad to try to do
my level best to get any facts that may assist this committee in in-
vestigating those. I believe that Mr. Freivogel is essentially right in
his article.
The Chairman. I cannot comment on that, other than I appreci-
ate your comments, and also that you are willing to assist the com-
mittee in any way you can.
You see, one of the things that bothers me is that I want legal
services for the poor, but I want them to be handled expeditiously,
without politics, and without political advocacy. It is always said
that 96 percent of legal services money are really going directly for
services to the poor, the so-called mundane legal services that all
the poor need just like you and I may need them from time to
time. Yet, how can anyone determine that, since no one knows
what they are doing. There is no management system to keep track
of what is really going on.
I might just mention, that when one of the local grantees tried to
impose timesheets, the staff attorneys went out on strike. So they
basically abandoned the concept. I think that is utter arrogance. I
think the public deserves to have some sort of accountability, even
from legal services lawyers and legal services grantees. I do not
173
know how to institute that, but it seems to me that is something
Tom and I can resolve as we try and work on these problems.
Mr. McCalpin. I certainly do not disagree with your objections,
Senator. I agree with you completely that we ought to have the
most effective, economical services for poor people in the areas
where they need them the most. I am not sure that is always a
one-on-one representation.
The Chairman. I am not sure that is so either. Now, let me just
say this. I have here a copy of a publication put out by the corpora-
tion in December 1981. This was during your tenure, as I under-
stand it. It is entitled, "Getting the Greatest Benefit From Your
Legislator, a Guide for Trainers Training Responsible Persons, a
Training Program for Legal Services Advocates." It was put out by
the Office of Program Support, Legal Services Corporation here in
Washington, D.C.
I just question, is this not a direct violation of section 107(b)(6) of
the Legal Services Corporation Act, which prohibits the use of LSC
funds to encourage political activity? I will read that to you. That
section says, "No funds shall be made available or may be used"
and (6) says:
To support or conduct training programs for the purpose of advocating particular
public policy or encouraging political activities, labor or antilabor activities, boy-
cotts, picketing, strikes and demonstration, as distinguished from the dissemination
of information about such policies or activities, except that this provision shall not
be construed to prohibit the training of attorneys or paralegal personnel necessary
to prepare them to provide adequate legal assistance to eligible clients.
Mr. McCalpin. First of all, let me say. Senator, I am not familiar
with the document which you have raised there. I do not know
whether I ever saw it or not.
The Chairman. Without objection, we will put it in the record
for whatever benefit that may be to either point of view on this
subject.
[Material supplied for the record follows:]
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175
Mr. McCalpin. Furthermore, I do not know whether it was in-
tended for the training of attorneys or paralegal personnel to pre-
pare them to provide adequate legal assistance to eligible clients,
which would have been permitted under the act.
The Chairman. We will put it in the record. We will all look at
it and see what we think about it, but it appears to me that it is in
violation of that section.
I understand that being a manager does not mean you know
every detail and every jot and title that goes on in the department
that you manage. I am not trying to put you on the spot. I am just
trying to point out that these are some of the criticisms that have
been made, and I might add, by Mr. Phillips as well. I think factual
and constructive criticism is good, and if we are ever going to have
a program that everybody supports, then it seems to me that we
have to resolve some of these problems.
Mr. McCalpin. I think we should have paid more attention to
some of the well-intentioned criticism.
The Chairman. I do not even care if it is well-intentioned, as
long as it is constructive and accurate. If Mr. Phillips is inaccurate
in some of the accusations he has made, if Freivogel's article is ac-
curate, maybe that is a very valid criticism here. Maybe we should
look into it, but I think his point here is well taken. This commit-
tee has an obligation to oversee this area, and we should get into it.
There has been enough controversy and enough heat on this issue
that I think we should get into it. I would be interested, and our
colleagues would strongly support it, as I know my good friend,
Senator Eagleton, does for the best of reasons. If we can cooperate
together, maybe we can get into this and clear up some of these
problems that some of the ardent critics of legal services have iden-
tified. Perhaps because we have not done much oversight, I tend to
find lots of criticism, but, there is enough there to make me upset,
even though it may not be to the extent or depth that some of the
critics have claimed. I will pledge this committee to doing a better
job of oversight of legal services and see what we can do. In the
end, we will do everybody a favor if we do it fairly and honestly,
and that is all I think you can ask of us.
Mr. McCalpin. I agree with you, and I am willing to lend any
assistance I can to the committee.
The Chairman. That means a lot to me, and I personally appre-
ciate it. I appreciate your testimony and your answers to these
questions here todav.
Mr. Olson, why do you believe that the Legal Services Board of
Directors, prior to 1982, was ineffective in managing the Corpora-
tion?
Mr. Olson. There have been many problems with the degree of
supervision over this program by the Board and by the Congress.
Prior to the time we came on the Board in December 1981, the
Board gave really perfunctory review to many of the problems of
the Corporation. I have used this example before, and it concerns a
statement by Bill, and I am sure he will not mind me making it
here. I remember reading in the minutes of the December 1981
Board meeting, at which time they approved the consolidated oper-
ating budget for the ensuing calendar year. Bill made a comment
such as, "I am sorry that some of you on the Board have not had
176
more than an hour to review the budget, but we are going to go
ahead and vote on it anyway."
That was the degree of oversight that some members exhibited at
some times. The Board had a committee structure, and in prior
years, whatever the committees recommended was approved very
much automatically. Indeed, whatever the staff recommended to
the committees very often was largely approved. We broke tradi-
tion on that and took some heat for it.
I am sure Bill also would not mind my saying that we have all
had problems in trying to get cooperation from the staff. As chair-
men, we each had many letters written to us with specific com-
plaints from the local programs. I found the exact same thing Bill
did, when Bill and I met to try to avoid the litigation in which his
board sued our board. He mentioned that many times — and I found
the same thing — you would send a complaint over to the corpora-
tion, and they would write back and say, "We have investigated it.
There is nothing to it. Don't worry about a thing We've checked
out the facts. There are no facts to support it, there is no law to
support it, and everything is fine. We appreciate your interest."
That is the degree of true self-scrutiny that has existed over the
years. I think that this has to end. The problem now is the Weicker
amendment has stripped from the Board the power to do anything
about what it finds the program is doing wrong.
The Chairman. Last year during your confirmation hearing
before this committee, you asked the Congress to give you and the
other Board members an opportunity to reform the Corporation.
Based upon your experience, do you believe that the Corporation
can be reformed by the Board or by Congress and still keep its
basic structure intact?
Mr. Olson. You are right, I did. I came before this committee
and was asked questions along those lines as to what we wanted to
do. I said that I believed we should have the chance to try to
reform this Corporation. I was the object of some criticism by many
conservative colleagues and friends of mine who had come to an-
other conclusion. All I can say is that we achieved very little, after
much hard work, in terms of substantive reform, of meeting these
essential problems of the Corporation.
I find, with the Weicker amendment particularly, no evidence
that adequate reforms will be implemented to insure that the Cor-
poration funds be used to provide services to meet the needs of in-
dividual poor persons as opposed to advancing political philosophy.
All I can say is, with the Weicker amendment there is no hope of
reform. With a committed Board and a committed staff, there is a
possibility, but my service on the Board evidences no real hope that
fundamental reform can occur within a structure where we have
325 local nonprofit corporations that are autonomous, that have
their own boards of directors that are solely responsible for their
own priority setting, that are really not responsible to the Corpora-
tion. Some of them have refused to allow our investigators and
auditors on their premises. They have literally barred them at the
door. We have had tremendous problems in obtaining cooperation
at the local level.
I think the time has come to analyze the structure to find out
whether another structure would better serve the purpose of meet-
177
ing the needs of individual poor persons than the current struc-
ture.
The Chairman. Let me ask one other question. It is a kind of
dangerous one for me to ask, but I want your candid answer. How
would you judge the quality of congressional oversight of the Legal
Services Corporation?
Mr. Olson. I began to get into this in my statement. I would just
say that I am very disappointed that over the last several years, for
some reason, the congressionally imposed restrictions have not
been monitored by the committees with jurisdiction. If you would
ask me to speculate as to what is happening, I think part of it is
politics. Part of it is that the persons who serve on those commit-
tees in certain leadership roles in the past were not sympathetic to
the restriction to begin with. Indeed, you find less support for re-
strictions, typically let us say, on the House authorizing committee
than you do in the House as a whole. The House as a whole voted
to ban class actions, but the authorizing subcommittee has very
little support for that position on it, if any.
By and large, what happens is that the people who do not share
the view of those who wrote the restrictions are charged with in-
suring compliant. At least that has been true up to the last couple
of years. And I think now that, whether these persons responsible
for oversight are sympathetic or not, they must insure that these
congressional restrictions are enforced.
The Chairman. Thank you.
Mr. McCalpin. Senator, I wonder if I may correct the record and
supplement it in one respect. Today and on a number of prior occa-
sions, Mr. Olson has made reference to a statement which appar-
ently I made and was incorporated in the minutes at the time the
budget of the Corporation was adopted. It may very well be true
that we had spent an hour discussing and analyzing the budget on
that occasion, but I think the record also should show that the
Audit and Appropriations Committee of the Board first met on that
budget in August of that year. At that time, there were five mem-
bers of the Board present. Certain aspects of that budget were also
considered at the full Board meeting in September of that year.
The Committee on Audit and Appropriations considered the budget
again at some length in November of that year, when more than a
majority of the board was present.
It may be that there was only an hour given at the full Board
meeting in December upon the adoption of that budget, but that
budget had been considered by the committee on two prior occa-
sions and, in part, by the Board on another occasion. It simply is
not true that only an hour's consideration was given by the Board
to the adoption of a $250 million or $300 million budget.
The Chairman. Mr. Olson, do you have a comment?
Mr. Olson. Mr. Chairman, I simply would say that this rebuts a
point that I did not make. Mr. McCalpin's earlier statement was
that certain members of the board did not have more than an hour
to review it. That is unrebutted. I did say that the Appropriations
and Audit Committee did spend some time but many Board mem-
bers did not. It is indicative of the way in which the Board man-
aged the program prior to our Board.
178
If we are clarifying the record, I want to say that one of the most
misleading statistics that is used by persons who wish to protect
the Corporation from congressional scrutiny is a statistic that my
friend, Mr. McCalpin, used. It is that only 4 percent or 3 percent or
whatever of corporation funds are used for administrative costs.
That is simply untrue. We have a lot of creative budget writing in
the Legal Services Corporation. I served on the Appropriations and
Audit Committee during most of the tim.e that I was a member of
the Board. I was engaged in some reform efforts to try to tell the
truth with respect to what the money was going for, but there is a
great deal of obfuscation in the consolidated operating budget
which the Congress gets from the corporation, in terms of what ex-
penses are for the direct provision of legal services, what are for
the support functions, what are for administrative costs.
I can give you two examples. Support centers, which by any defi-
nition at all are a support function, as opposed to a direct delivery
function, are classified under the direct provision of legal services
to the poor and not support. It is absolutely ridiculous, but that is
the way it has been done for years. Second, all the administrative
costs of local programs — and again we have 325 local programs
around the country, plus many others like the Clients Council and
others — that each have their own administrative costs that are
very substantial.
To say that every dollar that goes into the hands of a local pro-
gram has a zero administrative component to it is incorrect. It is
one of those fallacies that this program has carried with it. People
have come up here and blithely told this Congress that the admin-
istrative costs are only 4 percent of the budget, and that is just
untrue. What they are talking about are the administrative costs of
the national office and the regional offices. The way this program
is decentralized, where all the responsibility is basically at the
local level with respect to priority setting, with respect to the deliv-
ery of legal services, you simply cannot make that statement.
Mr. Chairman, I would just say very quickly, that there are
many other things we discovered during the time we were on that
board. We discovered that the Project Advisory Group, which is a
group which is funded through payments by each local program
that chooses to join it with a percentage of their dues, took $40,000
and gave it to the Coalition for Legal Services. The Project Adviso-
ry Group is a foundation, and the Coalition for Legal Services is a
lobbying group. The Coalition for Legal Services used that money,
presumably, to advance the work that it did in lobbying against the
Reagan proposals in this area, lobbying against the confirmation of
Reagan Board members, lobbying in support of the status quo, lob-
bying in support of the Weicker amendment.
I think it is intolerable, when we have a circumstance like this.
This is only one example, and I wish I had time to go into more,
but there is much laundering of Legal Services funds. The money is
paid to the local programs. The local programs, through dues and
registration fees and other fees, pay the money into the hands of
third-party organizations that this Congress never would fund di-
rectly, and that money is used for purposes that are impermissible
under the act.
179
The Chairman. I would like for you to submit that information
in the Corporation's hearings.
Mr. Olson. I absolutely will. It is a matter of record.
The Chairman. I will keep the record open, and I would like that
submitted because that seems to me to be highly improper.
You would agree on that point, would you not, Mr. McCalpin?
Mr. McCalpin. You know, it is a case of painting with a broad
brush again. I submit that the facts simply will not support the
broad statements that Mr. Olson has just made.
The Chairman. We have a vote, and I have three more witnesses
to go. I would like to keep the record open for either of you to
submit information. We can have members of the committee make
sure both of you get the others' comments, because we sure have a
wide disparity in viewpoints here. I think both of you are doing the
committee a service in bringing your best points forward.
I have taken most of the time, and I apologize to Senator Eagle-
ton. I will run over and vote, and if you can take care of the ques-
tions, I will tell them you are coming over.
[Information supplied for the record follows:]
180
93
(Octol?er 16, 1982)
' I that i^ the position thc^t we take,
2 . MR. OLSON: What — what legislative —
3 it's hard to — if I say lobbying, it's not going to be
4 broad enough.
5 What kind of legislative activities are
6 yoii folks involved in?
.7 MR. DORSEY: We are involved in some grass-
8 roots lobbying. There are occasions when our newsletters,
9 to programs, advocate that they get in touch with their
10 legislators.
11 â– We engage in that way. We do have some
12 contacts from The Hill, which we utilize. There are times
13 when we are asked to come to D.C. to testify.
14 I usually -- well, during the times that
15 I have been Chairperson, I have bid for the Senate and
16 the House, both on authorization, and appropriations.
17 MR, OLSON: Is that the role Ahn Tu plays,
18 primarily, with respect to being in D.C?
19 MR. DORSEY: Ahn is the person who does,
20 on an on-going basis, our work m D.C.
21 .MR. OLSON: Do you want to add anything
22 to your role with respect to lobbying?
23 MS. TU: No, except to say that very little
24 amount of my time is spent on lobbying.
-T MR. OLSO>i: I had a feeling.
181
:35
CLaughter .)
MS, TU: I do h^ve to file my lobbying rer
port, and it is a matter of public record. And I have,
you know — it is a matter .of public record.
MR, OLSON: Okay, I think that's all I
have.
MR. OLSON: Oh — I'll ask you this, too.
Have you folks made a contribution to the Coalition for
Legal Services?
Or, do you provide in-kind assistance, or
both?
MR. DORSEY: We have contracted with the
Coalition, to perfonr. certain functions for the Project
Advisory Group .
MR, OLSON: Who per — they perform the
services, or you perform the services?
MR. DORSEY: They perform the services on
behalf of our organization.
MR. OLSON: And, you pay them?
MR. DORSEY: Yes. By way of contract.
MR. OLSON: What are the services?
MR. DORSEY: In depth analysis of some of
the issues, some legal research, concerning issues which [
I
currently face Legal Services programs, which we anticipate,
I.
will face Legal Services programs. |
182
236
95 1 MR, OLSQN; And, wh^t kind of ccmpensation
2 do you provide to them?
3 Wh^t type of corr.pensation. for the work that
4 they do .
5 MR. DORSEY: You mean, how much?
^ MR. OLSON: How much are you paying? Yes.
•7 MR. DORSEY: I believe in the current year,
8 we are paying them $40,000.
9 MR, OLSON: If -•- since you're also in-
10 volved in the Coalition, let me just ask if that's not
11 a possible contradiction with what Berry had said.
12 Didn't Berry say that 98 percent of all
13 their money came from individuals, and that only 2 percent
14 came from non-individual contributions .
15 And, unless their budget were some several
16 -millions of dollars, which may be — I doubt it — but,
17 that would ~ where would the $4 0,000. fit in, do you
18 know?
19 MR. DORSEY: Bill, I do not recall what !
20 Berry said. I am not in the position to state what the
21 budget of the Coalition is, because I do not serve on that
22 Board.
23 I MR. OLSON: Well, I — yeah.
24 MR. DORSEY: So, that is a question whose
2.'; answer I don ' t have .
183
:. /
96
1
2
3
4
5
â– 6
7
8
9
10
"11
12
13
14
15
16
17
18
19
20
21
22
23
24
237
MR, OLSON: That may well be. she said
98 percent of all funding came from individuals. And,
if they get $40,000. from PAG alone, then one would won-
der if she might have been speaking of contributions as
opposed to fee for service, or whatever, I don't know.
But, I think we may explore that further.
But, she doesn't have to answer, of course. It's a free
country .
Again, the only inquiry that I have, is
not what the Coalition's doing — that's their business;
but, what they're doing with funds that are provided by
The Congress — and, we do raise — we do get into this
second level problem, since we give the money to the
grantees, they give it to you, and then you do something
with it.
I don't know if that's second or third
level, but it's certainly not direct. And, I'm not sure
the extent to which the statute applies, but I think
these are — these again, are issues that are going to
be raised over the near future .
I appreciate your candor and help.
MR. McKEE: It seems to me that PAG of
all of the Coalitions and groups, is probably more —
other than the Client's Council, is more representative
of the Legal Services Community.
184
i
97 I For examiple, when you Mve one director
2 from a large oroject, each of nine regions -- one from
3 a large project, and one from a small project, staff
4 attorney, para-legal, client; then you have a requirement
5 that one iias to be a minority, and one has to be female?
6 MR. DORSEY: That's correct.
7 MR. McKEE: Okay. And, that includes
3 migrant and native American programs?
9 Now, it seems to me that the whole discus-
10 sion that we had on the Coalition, when I asked everybody
11 what can the Coalition do, that any individual group
12 couldn't do; and it seems to me that as you look at all
13 of the organizations, that PAG seems to be a bit more in
14 â– touch with the "grassroots of an individual program,
15 or in regions, or in various supports" than some of the
16 others might be, because that's — you're a project dir-
17 ector yourself, and you're working with project directors j
18 and staff attorneys and para-legals, which to me seems
19 a bit more representative of the census and the feelings
20 of actual Legal Services groups.
21 And, that was the point I was making ear-
22 lier, that everything you do, seems to be more — seems
23 to be more to me, that kind of an effort of a coalition,
24 or a group., you see,
23 j I would like to have you give us, within
185
3
4
5
-~6.
7
'- 8
9
10
11
12
13
14
15
16
17
18
19
20
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(October 16, 1982)
The Corporation, I was of the opinion that had the Project
A,dvisory Group not existed, it would have to have been
invented by The Corporation, for the proper conduct of
business.
We attempt to be a direct link between
the field, and this Board. And, in the past, we have had
significant communication with this Board,
We look, forward to the possibility of that
continuing in the future .
We would like to appear before you regularly
We would like to work with your staff in developing po-
sitions, we would like to be heard.
Perhaps what I'd better do at this point
is to stop, and perhaps respond to any questions that you
might have.
MR, McKEE: Harold?
MR. DeMOSS: Always start on the left, huh?
(Laughter.)
MR. McKEE: I'm leftward leaning.
MR. DeMOSS: My — you know what my first
questions are going to be — what have you got in the
past, and what do you want next year?
MR. DORSEY: We do not receive anything
directly from the Legal Services Corporation. Our dues
is based on the allocacicr. of Legal Services to field
186
87 I
2
3
4
5
6
7
8
9
10
16
17
18
19
20
21
22
23
24
;{ .
•pjro grams.
We- would like to see an increase in that
allocation to field programs, which would increase our —
the base of our dues.
MR. DeMOSS: What is that formula, or that
math involved there, that you're talking about?
MR, DORSEY: The formula is $115. per
$100,000. of Legal Services Corporation funds. This
generates about $180,000. a year in our dues.
MR. DeMOSS: And, is that purely volun-
tary on the part of those participating programs?
MR. DORSEY: It's completely voluntary.
As a matter of fact, those programs who refuse to pay
dues still get our newsletter, and we respond to them
in any way that we can.
MR. DeMOSS: Is it — I guess I had it in
my mind, that the Project Advisory Group had some anal-
ogies, and that's all I'm going to say, to sort of a
union representative .
Do you subscribe to that? I mean, is —
do you vision your most important function, to be the
representation of the field personnel with this Board,
and the National office?
MR. DORSEY: No, we don't Mr. DeMoss . We
see ourselves, rather as a Concress of Legal Services
187
X
1
2
3
4
5
6
7
. 8
9
10
11
12
13
14 â–
15
16
i7
18
19
20
21
22
23
24
25 I
people. And, we attempt to articula,te, and focus the
issues that arise' in Legal Services, give people an op-
portunity to discuss those, and hopefully come up with
some field consensus on the issues that appear in Legal
Services .
Most recently, I guess the steering
committee attempted to deal with fund balance problem,
cind we did come up with a recommendation to this Board,
suggested by Dennison Ray, as to how fund balances should
be dealt with.
So, we do not attempt to be a union of
Legal Services people, except in the broadest sense of
the term union.
But, we do see ourselves as a Congress
of Legal Services people.
MR. DeMOSS: And, what are — just as easy
as you can knock them off the top of your head — what
axe the types of issues that you speak in behalf of all
of the members of your organization on?
MR. DORSEY: Well, in the past, we have
been vocal on funding issues, on regulations, on legis-
lation, training, on para-legal issues.
Those, I would think, are the major issues.
It was interesting hearing the discussion
about the standards study, which took place this morning •
188
Tmo. -? Gt; ma«.^-VMeeKwv.Aa.^dp«J October K*, IH^-Z. ^.
89 1 As we sea xt, it began when ggjue issueaw, }
2 were raised around evaluations at a steering conmittee
3 meeting, a couple of members of the steering conunittee
4 decided that they would like to do some research on that,
5 We ceune to the Corporation, and said look,
~~~" 6 this is something that really should he done. A number
. 7 of people in the field became involved, and a very good
8 process took place, which resulted in the articulation
9 of standards, which I would urge members of the Board to
10 take a look at.
11 -I think that that resulted in something
12 that will be beneficial not only to Legal Services lawyers
13 but to lawyers anywhere, in terms of looking at the
14 standards, in the civil area.
15 MR. DeMOSS: On the issues that you take
16 a position on, how do you determine the sense, or feeling
17 of the members on those issues?
18 I mean, is that — take place at the
19 three general meetings that you described?
20 MR. DORSEY: That's correct. The three
2! meetings of the steering committee.
22 And, they are people congregate — we
1
23 attempt to meet in different portions of the country, so
24 that people from those areas would be able to come in,
25 and attend the meetincs .
189
Senator Eagleton. I have a few questions, and I think I can get
them in before it is time to go.
The Chairman. Then if you will recess until I get back, we will
finish the last three witnesses, and I hope those last three wit-
nesses can keep their comments to 5 minutes each.
Senator Eagleton. Thank you, Mr. Chairman.
Mr. Olson, I have a few brief, nonacrimonious questions for you.
I hope we can get them in, in the time we have left, before the five
bells go off.
You will remember over a year ago, or whenever it was, that you
and other individuals were before this committee for confirmation.
I asked each of the nominees, yourself included, if each of you be-
lieved in the Legal Services Corporation and believed in its con-
tinuance and that it served an important role. I think I asked each
nominee to hold up his hand, and all did, if I recall. Do you still
believe in the continuance of the Legal Services Corporation?
Mr. Olson. I believe that was Senator Pell who asked us to hold
up our hands. But you are right, the question was asked; and yes, I
did. The question was: Do you support the proposal of the President
to block grant this program. All of you who oppose it, please hold
up your hand. At that time, I did. And at that time, I was commit-
ted to a program of reform. I believed that our Board, if we had a
chance to do what we thought had to be done, could turn it around.
Senator, the fact of the matter is that I have had a change of
opinion on this. I am not sure how far I have gone on it, but I can
say that at a minimum, we have been unsuccessful in bringing
about the reforms that I thought were essential. The Weicker
amendment now precludes those reforms, as a matter of Federal
statute. I have been more frustrated by the inability to effect
reform and do what I thought was necessary in this than in any
project I have ever undertaken.
All I can say now is that I would hope that this committee, in
considering alternatives and reviewing authorization matters,
would examine the alternatives that are less intrusive, less likely
to abuse, less oriented toward the staff attorney program. For ex-
ample, the Sachs report said we needed the staff attorney program
in order to insure that law reform objectives are met. And that if
we have to subordinate the individual needs of individual poor per-
sons in order to effect law reform, then so be it.
I absolutely disagree with that philosophy. That was the philos-
ophy Mr. McCalpin's Board adopted. All I can say is, I hope you
study the alternative structures because I no longer believe this
structure is sacrosanct. Tax credits, tax deductions, and block
grants should all be under active consideration.
Senator Eagleton. So you have had at least a partial change of
heart since the time of that hearing, based on the experience
during your tenure on the Board?
Mr. Olson. Yes, sir.
Senator Eagleton. Point two. You concentrated in your testimo-
ny on decentralization. In fact, the last answer that you gave to
Chairman Hatch about this 4 percent and 96 percent of the budget
of the central office vis-a-vis the local office. Is not decentralization
a fundamental tenet of conservative Republicanism? Is that not
what New Federalism is all about?
29-379 0—84 13
190
Mr. Olson. If we could take this program and take the funds
that were available, and make them available to State agencies
along the lines of a block grant proposal, I think we would go a
long way in that direction. What we have now. Senator
Senator Eagleton. That form of decentralization you like?
Mr. Olson. What now we have is a mix, where we have no ac-
countability. One of the major advantages of decentralization is to
have accountability at a local level, where you can get a hold of
people and say, do your job. Represent these people's interest.
Make sure that the statutory objectives are met. What we have
now is a circumstance where the national office purports to keep in
line the local programs without the power to be able to do that. It
has administrative costs on the national level. It has evaluative re-
ports, for example, investigators going to the local programs and
writing them up if they are not doing enough impact work. If they
are spending too much of their time representing the individual
needs of individual poor persons in divorces and other garden vari-
ety cases, I have seen reports where they have been written up in
an adverse way. It boggles the mind.
We have the worst of both systems. We have funding at the na-
tional level, the appearance of accountability, no accountability
and control at the local level. I would hope we would do it one way
or the other, but accountability to the taxpayer is the key.
Senator Eagleton. You, time and again, have referred to the
evils of class action suits and lobbying. Let me pose to you the two
examples that Mr. McCalpin used in his prepared testimony. He
talked about the Thompson v. Walsh case in Missouri, my State,
where the Department of Social Services, as we now call it, had
been for years out of compliance with Federal statutes insofar as
the payment of welfare benefits is concerned. In fact, we have even
had Governors brag about that.
They had a raft of individual suits, with each litigant saying he
will take his or her case up the ladder. And another case would go
up the ladder. Is there any other way of coping with a matter like
that, other than with a class-action suit, whether brought by a
legal services attorney or, if we had some kind of a voucher systern
as Mr. Phillips suggests, a private attorney? If you took that condi-
tion to a private attorney, or if it were brought to you, what would
your judgment be? What is the best way to resolve this matter: my
filing 1,000 individual lawsuits or my filing a class-action suit?
Mr. Olson. First, I have to say that the facts of the Missouri case
are outside my competence.
Senator Eagleton. Take as a given my brief statement of Mis-
souri's sordid history with respect to this matter. I can be an
expert on that.
Mr. Olson. What I cannot understand, frankly, in those kinds of
hypotheticals is if a single case is won against the Department of
Health and Human Services, why the combined forces of the execu-
tive and the legislative branches do not work together to insure
that whatever change there is ordered will be implemented. If
there has to be a judicial solution, there are many vehicles availa-
ble. There are public-interest law firms
Senator Eagleton. Is not a class action a legitimate legal
remedy that private lawyers frequently utilize in private litigation,
191
totally out of the context of legal services? There is nothing shady
about bringing a class action suit, is there?
Mr. Olson. The fundamental problems that I have articulated
with class actions, and consistently articulated with class actions,
are simply these. The fact is that very often class actions are filed
prior to the time the grantee lawyers take what I would consider
adequate steps to attempt to resolve the dispute by other means. I
think that is a responsibility that is on lawyers generally. I think
that is a responsibility that should be on local legal services attor-
neys.
Second, I have had the objection that they result in a penchant
for law-reform-impact litigation. It is a vehicle that too often is
used in that area. Class actions, per se, are almost value neutral,
and I, for one, understand the point that you are making technical-
ly. But I say that what we have to deal with
Senator Eagleton. It is not just a technical point. It is a very
substantive point. It may be technical in how a case is styled,
whether as so and so versus so and so.
Mr. Olson. If I had to list my 10 most grievous, serious objec-
tions with legal services programs, class actions certainly would
not be in the top 5, 6, or 7. I believe that the funding of liberal
political action or any type of political action — I do not care if they
were funding conservative political action —
Senator Eagleton. Stick with this Missouri situation. This is a
case against the State of Missouri for its unwillingness to comply
with Federal regulations relating to the distribution of welfare
benefits. I do not know if you want to call it liberal, conservative,
strict constructionist, Hugo Black, William O. Douglas, Mrs. O'Con-
nor — call it anjrthing, but it is a very real case of welfare recipients
not getting that which the Federal law says they are entitled to
and which they are getting in 49 other States.
If you file, machinegun style, 1,000 cases and that does not finish
the matter, do you file one class-action suit? I think the evidence
and logic would say that the way to handle it is by class actions.
Class-action suits are not dirty. I never was taught that in law
school; I do not think you were either.
We will stand in recess. Senator Hatch will be back, and we will
take up with other witnesses. If Mr. Olson would standby, I just
have two more questions for him.
[Recess taken.]
The Chairman. Senator Eagleton?
Senator Eagleton. Let us move on to lobbying. I have one ques-
tion. I think there are various kinds of lobbying. Let us use the
Missouri context again. Assume a nuclear-freeze resolution is
before the St. Louis Board of Aldermen. Assume that somebody at
the legal services office there says: "By God, I'm strong for the nu-
clear freeze." So he uses the office to produce a lot of letters and
make a lot of phone calls to the St. Louis Board of Aldermen in
favor of the nuclear freeze. To me, that is clearly wrong; if there is
any doubt that it is wrong, in terms of how the present Federal law
is worded, it ought to be made abundantly clear that it is so extra-
curricular as not to be considered, by the remotest stretch of the
imagination, to be considered within the purview of the duties of
the legal services office in St. Louis.
192
But let us use another McCalpin example of lead-based paint.
Suppose there are 100 cases in the office, with infants or adults af-
fected by lead-based paint. The city ordinance is inadequate with
respect thereto. The St. Louis Building Inspectors' Office is inad-
equate with respect to the problem. So the legal services staff gets
together and says: "Better than filing a series of individual cases,
we ought to see if we can get this remedied down at the Board of
Aldermen." Now, I see lobbying in that context clearly related to
specific clients in the office to be a legitimate function.
That is my view. What is your view with respect thereto.
Mr. Olson. I am sure you have heard this before, but my view is
Thomas Jefferson's view, that to compel a man to furnish funds for
the propagation of ideas in which he disbelieves is sinful and tyran-
nical. There are many views as to what the best interest of the
poor is in any issue. For example, rent control — that is a lobbying
issue. Should legal services lawyers be allowed to lobby in support
of rent control. I know many people, economists particularly, who
have written up very good studies on the subject that rent control
is not in the best interest of the poor to get adequate housing.
Senator Eagleton. This will bore you; I am opposed to rent con-
trol.
Mr. Olson. You and I agree on several things, abortion and rent
control being two.
Senator Eagleton. Let's keep it quiet, or it will be mutually
ruinous.
Mr. Olson. I will try not to let anyone know. I would say that we
have a very fundamental, moral, philosophical problem when we
cross over into the lobbying arena. I would draw a very clear line.
In the area of class actions, I think you can make a persuasive
case. Senator, but with respect to lobbying, I believe that one
cannot make a persuasive case. The case is not at the level of what
is in someone's best interest, or how they can accomplish some-
thing more efficiently. It is a simple principle, and it is a funda-
mental principle of constitutional democracy that we should not be
funding advocates in the political arena on any side of a controver-
sial public issue.
I would hope that would be the position of the Congress. Even
when you in the Congress have adopted restrictions and we on the
Board have adopted regulations, they have been ignored. I now
have found an example of some California legislators who have
written their fellow legislators saying: The new legal services regu-
lations require authorizations from legislators seeking assistance
from local programs, so will you fill out, in blank, the following au-
thorization forms for any issues that pertain to the interests of the
poor. You, a State legislator in California, can with this form now
authorize the local programs in California to lobby you, provide
you with all the information you need, with respect to all the
issues that affect the poor people they represent.
Those kinds of things are going on all the time. That is a sham.
It is an attempt to circumvent the restrictions the Congress passed
and the regulations we passed. I would submit that the record of
the corporation on this issue is very poor. I would hope on the prin-
ciple underlying lobbying that if we disagree, my side would win.
193
Senator Eagleton. Finally, fund balances, which were discussed
by Chairman Hatch with Mr. McCalpin and, I think, with you, Mr.
Olson. When Chairman Harvey was on the Board, he had a good
deal to say about it and the $41 million figure and so on. When it
turned out that some of the biggest fund balances were in the judi-
care programs, he became somewhat less irate. Interestingly
enough — and you were here all day today, as were these other wit-
nesses; they have all been very patient, and we are grateful to
them for that — when Mr. Bogard was here, he had five or so people
with him. Mr. Gregg Hartley was the end man at the table. He
now has one of the highest ranking jobs in the agency, in the Office
of Field Services.
When he was in Springfield, Mo., as Director of Legal Aid, a judi-
care program, he had a fund balance of 81 percent, one of the high-
est in the Nation. Now, if fund balances are, per se, sinful, and
Chairman Harvey can get all excited about them and everybody
gets all excited about them, why would they promote — I ask rhe-
torically, and you need not answer this because it was not your de-
cision — one of the highest fund balances in the country, from
Springfield, Mo., to Washington, D.C.?
I do not know how sinful these fund balances are, but if they are
as sinful as some allege, they then should not be the basis upon
which someone is promoted. But I ask it and excuse you from an-
swering it because that is not your dilemma.
Mr. Olson. I appreciate that. It is, perhaps, the only one that is
not my dilemma. I would like to offer some very quick observations
on that. No. 1, perhaps one of the motivating factors is that Mr.
Hartley's program, immediately after we on the Board discovered
the problem, returned to the Corporation something in excess of
$200,000 to be made available to help poor persons in other parts of
the country where needed. Second, the judicare projects are the
projects that have the best case to be made for maintaining fund
balances. The reason is simply the manner of payment. If you have
a staff program, you pay every week, or every other week, or twice
a month. If you have a judicare program, largely payment is at the
time of case closing, so you have to maintain a larger reserve.
In that case, there is a greater rationale, but even there I would
not tolerate the rationale. I certainly would not accept Mr. McCal-
pin's comments before, where he said that the reason the fund bal-
ances were being maintained was because of uncertainty with re-
spect to what OMB and the administration was going to do. We
were told by persons on the staff that some of these fund balances
date back years, and years, and years, and they were maintained
because the Corporation unwisely gave excessive funding when it
originated a program. It would give it a full year's funding, and the
program could not possibly know what to do with it because on a
startup basis they simply did not need the money. They would keep
it bankrolled and continue to use the interest.
By the way, one of the interesting legal theories is that this in-
terest is not given to them by the Corporation, and they can use it
for otherwise impermissible purposes. There are many such prob-
lems, and I appreciate the opportunity to answer your questions.
Senator Eagleton. Thank you, Mr. Chairman.
194
The Chairman. Thank you, Senator Eagleton, and thank you,
Mr. Olson for the time you have given to us today.
Our next witnesses will be a panel consisting of Mr. Jonathan
Weiss, Ms. Nelwynne HoUie, and Mr. Robert D. Raven. We will
begin with you, Mr. Weiss.
STATEMENT OF JONATHAN A. WEISS, ESQ., DIRECTOR, LEGAL
SERVICES FOR THE ELDERLY POOR, NEW YORK, N.Y.
Mr. Weiss. I have no prepared statement, but I would be glad to
state one direct concern I have. I am a neighborhood lawyer, and
one thing that seems to be lacking from this whole discussion is
that simple proposition, the essential idea everbody agrees on,
which is that there are certain problems poor people confront
which can only be resolved in the courts and in administrative
agencies by proper advocacy.
The consequences of this concept are that when you provide legal
services to poor people, what you have is a new class of client rep-
resented at least in a traditional way. What the consequences of
this are, socially and politically, sometimes cause debate. But that
essential point remained clear.
When we talk about evaluating legal services lawyers, it should
be made clear that we are talking about lawyers, not about a cor-
poration, not about an agency, in main or perhaps even in princi-
ple. What we ask is that any scrutiny be about how we practice
law as lawyers. We have cases, we have clients. Our job is to do our
best under the canons of ethics to represent our clients properly.
So questions such as the pursuit of class actions involve our duties
not only to our clients but to the courts. Questions as to what the
consequences are politically should be irrelevant, once we in fact
have properly established the attorney/client relationship. What is
done with the money provided us is that it should be provided in
order to allow us to properly practice as attorneys.
I would suggest that when this committee looks into how the cor-
poration in turn looks into the way Legal Services operates, it
always should keep that idea foremost— that is, that we are attor-
neys, representing individuals. We wish to be judged by those
standards, and we hope that when we do things that are wrong, we
are held accountable the same way other attorneys are. This would
mean that all the agencies which look at attorneys are involved:
the courts, the ethics committees of bar associations, and other at-
torneys, and of course, ultimately our clients.
In that context, I believe there is a functioning means of an ac-
countability and procedure. That principle, I think, should always
be kept as the operating principle in any scrutiny. In terms of that,
we then can evaluate how a corporation should be structured to in
fact fund, evaluate, reprimand, criticize, or suggest local programs
who should function to provide a conduit, a context in which cli-
ents can establish the appropriate connection with the appropriate
attorneys. I would just like to make sure that is in focus.
The Chairman. Thank you so much, Mr. Weiss.
195
STATEMENT OF NELWYNNE HOLLIE, DIRECTOR, CENTRAL
MINNESOTA LEGAL SERVICES CORPORATION, MINNESOTA
Ms. HoLLiE. Thank you, Mr. Chairman. My name is Nelwynne
HoUie. I am a board member from the Central Minnesota Legal
Services program. I also have been a client of that program on oc-
casions over the last several years.
I have some particular concerns to bring to this committee about
the Legal Services Corporation, but first I would like to tell you a
little something about my program in Minneapolis.
In my program, we received our 25 percent cut as did other Cor-
poration grantees. Our project director and managing attorneys
spent some time looking at what other funds were available in our
city. Our executive director brought to our board plans to try to
raise funds to offset the loss. With the help of the Minnesota State
Bar Association, the Hennepin County Bar Association and other
interested people, the State supreme court was persuaded to enact
a surcharge on filing fees program. These funds will be available
for legal services programs in the State, to try to offset some of the
cuts. However, those funds will run out in 1985.
In addition to that, our State legislature recently passed an
lOLTA bill. We do not know at this time how much money this is
going to generate.
In addition, about V-k years ago, the executive director, working
with some of the larger law firms in our city, was able to set up a
foundation. We just had our second annual foundation dinner to
raise money for the Legal Aid in Minneapolis. But again, this is
peanuts compared to the money we lost. In 2 years, in actual dol-
lars that we have been able to draw down from that fund, have
been less than $100,000.
We have suffered a heavy loss in staff. We lost, throughout the
central Minnesota program area 25 percent of the attorneys. We
are down to 41 attorneys, and we have a clientele of about 80,000
people. So I am particularly concerned that the Congress appropri-
ate some additional dollars for legal services in our community.
I received a copy of the bill, S. 1133, that has been introduced into
the Senate. One of the things that I would like to make a recom-
mendation on concerns the governance of, the Legal Services Cor-
poration. S. 1133 contains new requirements that persons nomi-
nated to that body be changes supportive of the act and be support-
ive of the continued funding of access to the legal system for poor
people. We ask you also to consider, insuring that the eligible cli-
ents on that board, be persons who have actually lived in poverty
and experienced it so that they can bring to that board the perspec-
tives of people like themselves. It is very difficult to bring into a
debate something that you may have read about rather than expe-
rienced, and we think the value of having clients on the Corpora-
tion Board is immeasurable.
At the local level, clients are constantly concerned that their
legal services programs are not able to do enough. So it is interest-
ing for me to sit and listen to complaints that Legal Services do too
much. We spend considerable time with our attorneys asking them
to do more, so I do not understand where the problems are coming
from. There are just so many problems out there and so many poor
196
people that it seems if we ever really want to have justice, we have
to go for it. That is, fight to have the current restrictions removed.
I am not sure that people who want to restrict the programs from
going to the State legislatures to ask for a change in a law under-
stand that sometimes legislative advocacy is the only way to re-
solve the many, many problems. _^ -r"'^
We are deeply concerned in my local area about-thiTrestriction.
A case in point. A group of citizens, low-income people, were trying
to get a bill through the State legislature this year to prevent the
need for utilities shutoff. At one point, someone from the State
CAP Association offered an amendment that residents of public
housing should not be eligible for any assistance. This person
should have been aware that every year our State legislature has
to appropriate additional utility money for people who are living in
subsidized housing because the Federal money no longer covers it.
So even in our State agencies that are there to assist the poor
they sometimes do not really understanding or are not going far
enough to fmd out what the real problems are. At that point we
had no lawyers with us because our legal services program could
not go with us. So we had to spend a lot of time trying to get infor-
mation to give to the committee in order to dispute the exorbitant
amount of money that the CAP claimed it would cost if people in
subsidized housing were included. Also, to bring to the attention of
the legislature that in most cases public housing authorities do not
set allowances that begin to cover the actual utility cost.
The Chairman. Ms. Hollie, could I interrupt you for just 1
second, and I apologize to you, Mr. Raven, but I need to take one
call in here. I will be right back.
[Recess taken.]
The Chairman. Ms. Hollie, could you finish in about another
minute?
Ms. Hollie. OK. In fact, I would prefer to respond to your ques-
tions, but there were a couple of other things from my prepared
statement that I wanted to highlight. One of those is to ask this
committee to take a look at the recent memo that was sent out to
field programs from the director of field services, Mr. Gregg Hart-
ley. In the past, the Corporation's regulations have allowed clients
in the community to select attorney members for the local board of
directors. A lot of programs have provided for that in their bylaws,
maybe one attorney or two attorneys. Now the Corporation, based
they say on the continuing resolution, has changed its policy. Mr.
Hartley has specifically directed that clients may no longer partici-
pate in selecting attorneys to serve on local legal services program
boards. We would like for the committee to help us clarify that. We
think that is really important.
The Chairman. Thank you. I appreciate that.
[The prepared statement of Ms. Hollie follows:]
197
STATEMEISTT OF
NELWYNNE HOLUE
BEFORE THE
COMMITTEE ON LABOR
AND HUMAN RESOURCES
UNITED STATES SENATE
May 4, 1983
198
Mr. Chairman, members of the Committee.
My name is Nelwynne Hollie. I am an eligible client and a member of the
Board of Directors of the Central Minnesota Legal Services Program. I very
much appreciate your invitation to testify on the reauthorization of the Legal
Services Corporation (LSC).
The ability of low income people to have access to our system of justice is
an integral part of our national values. Such access is made possible only
through the continuation of a viable, strong and independent Legal Services
Corporation. This Committee is a vital ingredient in the bi-partisan effort to
make this need a reality.
I would like to take just a moment to provide you with some information
about me. I am the parent of three teenage children and one who has reached
adulthood. I am active in local organizations concerned with issues relevant to
low income people such as subsidized housing, energy conservation, utilities and
administrative benefits for the elderly. I have, in the recent past, been served by
the Central Minnesota program. I also serve on the governing body of the
National Employment Law Project, one of the LSC funded support centers. I am
currently the President of the National Clients Council, whose members are
persons concerned with the delivery of civil legal services to low-income people.
Thus, my testimony reflects my experience as a consumer of services
provided under this Act; my exposure to the needs, concerns and aspirations of
others in my community; and, the problems facing those who set policy - both at
the national and local levels - and allocate the limited resources available to
service providers.
I will try to provide you with information about the current situation in,
and needs of, the legal service community, from the perspective of an informed
client. I also will take the opportunity provided by your invitation to comment
upon what appear to me to be what the client community feels are the most
critical issues - governance of the Corporation and local programs; restrictions
on the scope of and forums for representation; delivery systems; and, of course,
funding.
199
Ths positions I take and the issues I highlight are certainly not presented to
you as the unanimous voice of the client community. However, I have been
fortunate enough to have had the opportunity to talk with the clients from many
areas of the country and I do think my testimony will reflect the feelings of a
great many low income people involved with legal services at the national, state
and local levels.
THE LOCAL ENVIRONMENT
I am one of the more fortunate client board members. Central Minnesota
Legal Services is a good program. We have a dedicated staff, experienced
managers and a hard working board of directors. Yet, the last two years have
been devastating.
It is not an exaggeration to say that a prime activity of the board and our
Executive Director during this period has been to find resources. Minneapolis is a
city with a concerned bar, large companies with a history of corporate giving,
and a number of private philanthropic agencies. By "running hard", the program
has almost been able to make up for the dual realities of reduced resources from
the Legal Services Corporation and increased demand for services by our
traditional clients and the so called "new poor".
We are deeply concerned about the funds we have raised since they are of
distinctly short term duration. The State Bar Association has helped us secure
filing fee surcharge legislation - but this bill contains a sunset clause and will
terminate in FY '85. We have entered into a $175,000 contract for services with
the county government for the years 1982 and 1983. There is no certainty that
the County will be able to find the funds to continue this contract beyond that
time. We will share in a state-wide grant program initiated by a consortium of
foundations. Again, we are not sure that this money will be available after this
year. Thanks to the efforts of the Hennepin County Bar Association, private
attorneys have instituted a multi-year fund raising effort with a goal of $150,000
but we do not know how successful this will be or how long it will last.
200
There are some activities which have the possibility of longer range
duration. Over 500 private attorneys are doing intake in our offices and
accepting referrals on a pro-bono basis. Further, we anticipate Supreme Court
approval of an lOLTA (Interest on Lawyer Trust Accounts) program in the near
future.
Yet, all of these efforts have not been sufficient to allow us to keep pace
with the demand or retain our staff. I would like to give you a few examples of
the current situation.
The Advocacy Unit of the Hennepin County Welfare Department attempts
to resolve disputes between the agency and client. Where that proves not to be
possible, referral is made to our'legal services program and, under the terms of
our contract with the County, we provide representation. Referrals from this
source alone were up 60% in 1982 as compared to 1981. A significant portion of
these cases are instances in which the elderly are seeking medical assistance
benefits. Sometimes the matter is as seemingly simple as a denial of funds for a-
wheel chair or an air conditioner (where the clients medical condition requires a
controlled environment). Yet, were we unable to accept these cases, the only
alternative for many of these persons would be admission to a nursing home. You
are aware of the higher fiscal cost to the community and psychological impact to
the individual which are consequences of such action.
So great is the increased demand on our Family Law unit that we have. been
forced to limit intake to one day a week. The calls start to come in long before
the 8:30 a.m. starting time for staff. People just call, let the phone ring and wait
for someone to answer. Usually, by 8:45 staff is forced to tell callers that no
further appointments can be given until the next week.
Disturbingly, much of the demand reflects a sharp increase in spouse and
child abuse. While we can not scientifically validate it, we believe that the
pressures of the economy are a major causative factor. Again because of the
increased case demand, the only domestic cases our rural offices are accepting
are abuse cases. In our Minneapolis office, for other family law matters, the
waiting list is a minimum of 6 months.
201
Prior to the cutback in funds, our housing unit spent a significant portion of
its time on the enforcement of housing codes and seeking remedies for tenants in
substandard housing. In 1982, over 80% of the staff time was spent defending
against evictions and foreclosures. We were forced to try to protect the
residency of even those in substandard hosuing since all of the City's emergency
shelters were full.
The program's work in consumer matters is now limited to representation
of defendants. Clients with affirmative claims regarding illegal sales practices
or truth in lending violations
can no longer be served. All
of our efforts are going into
providing representation to
those faced with problems
such as garnishments,
repossessions or utility shut
offs. One instance which was
brought to my attention was
a case in which a collection
agent had managed to seize
the funds of a Social Security
recipient. Before turning to
our program, she had tried to
get the collection agent to
release at least some of the
money so that she could
purchase food for herself and
her children. She was told to,
"go sell some blood."
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This woman is not the
only person in Minneapolis to
get such advice. I enclose an
advertisement from Insight , a
local newspaper distributed free from door to door in low and moderate income
neighborhoods in Minneapolis. This ad urges a reader who may be short on the
202
rent money to make up to $95 per month by selling blood twice a week. As you
can see, there is even the extra added attraction of a $2 bonus for the first time
donor.
There is every indication that our staff, confronted by the many instances
where they must deny assistance to those in need and faced with uncertainty as
to their own future, burn out much more rapidly and stay for shorter periods of
time. We have lost the equivelant of 45 years of attorney experience in our
central office and the equivelent of 64 years experience in the program as a
whole.
Despite all of this, I still say I am one of the lucky client board members,
and I am. I say this because the situation is so much worse for those programs
where there are fewer resources to be called upon or where the spirit of
cooperation is less well established. This is true in other areas of my state and
clearly the case in many parts of this country.
I have listened to clients whose programs have had to close all of their
neighborhood offices and where intake has been curtailed for months at a time. I
have seen experienced project directors totally removed from other managerial
functions in order to deal with the retrenchment process and the need to raise
funds. All projects, mine included, have been forced to risk planning for the
future based upon the expectation that the LSC funding level will significantly
improve or that funds from other sources will continue at current levels. This is
not the way to plan, manage or to supervise. This is not the way to insure the
quality of representation clients have a right to expect and you, the Congress, a
right to require.
The local programs are certainly being negatively impacted by the realities
in their communities and the diminution of resources. They are, however, also
impacted by what has happened at the national level.
203
GOVERNANCE
Previous testimony presented to the Congress by members of the client
community has, in part, focused on the exemplary operation of the Corporation's
governing body. Although we did not alvi/ays agree with their actions, we did feel
that they were acting, within the letter and the spirit of the enabling legislation,
to maintain a program of high standards. We were pleased by the heterogeneous
makeup of that body - it was diverse in political philosophies, ethnicity,
economic levels, sexual composition and geography. As the Corporation
matured, its Board increasingly became a cross section of our total society.
These past board members had strong ties to the client community, the
organized bar, minority and women's groups. They had increasing credibility with
the Congress and had established good working relations with local programs.
Under their guidance, LSC was not always a step from disaster. In brief, they
were moving the Corporation ahead to a point where acceptability and
cooperation, rather than controversy, were the hallmarks. Congressional and'
public support for the Corporation was at an all time high level.
Then came a series of events which started on December 31, 1981. It was
almost as though a master strategist had formulated a Machiavellian plot
designed to thwart the will of the Congress and, once and for all, eliminate
government funding for civil legal services. Clients watched as moves were
made which circumvented the normal appointment process. We saw the
harmonious functioning of the Board destroyed by actions of a few of its
members. Reports were heard of intrusions into day-to-day operations which
appeared to be deliberate attempts to alienate the Board from its staff.
Communications were sent which undermined the staff's authority over program
recipients. Efforts were made to have the National Clients Council and its
affiliates be the "judas goat" to give truth to the myths about abuses by local
programs - and when that attempt failed we saw individual board members try to
pit client against client. Through the media, the public was provided with
constant images of an agency in apparent total disarray.
It appeared that this was all designed to cause the Congress, out of despair
and desperation, to throw the whole problem into the lap of State governments.
204
There, the bones of this most valuable tool for the protection of low income
people, could be picked clean in 50 separate processes. In the eyes of the client
community, it matters little if there was such a plot - if LSC is allowed to
continue as it has in the last year - the end result may well be the same.
Clients are pleased that the bill before this Committee, S. 1133, takes
steps to insure that we do not ever, by accident or design, have the same
experience again.
We particularly appreciate the action taken to insure that future directors
are persons who are demonstrably supportive of the Act - people who have a
reasonable history of involvement in activities which are relevant to the struggle
to achieve the stated purpose of this law. Such criteria for membership on the
LSC Board, has, up to now, only been part of legislative history. Similarly, we
are most supportive of the limitations imposed upon the capacity of an
unconfirmed board to take action.
There is one additional step which clients feel should be taken in this
regard. The criteria set forth in S. 1133 deals well with the attorney members of
the Corporation Board. We would suggest, however, that there needs to be
greater assurance that the client members are persons who have been involved in
their community. Only those low income persons who have been part of a joint
effort can truly bring to the Board's deliberation a perspective broader than
their own individual life experience.
We would also ask that you use your oversight capacity to insure that the
present and future directors of the Corporation employ a staff which is
committed to the purposes of this Act and qualified to provide the needed day-
to-day leadership and management. Within the last several months, the
Corporation has undergone a turnover of staff which is not only unprecedented in
its own history but also unusual for any entity. Most of the key personnel have
resigned, been relieved of positions of authority or been terminated. In some
instances, the persons involved were given only hours to clear their desks and
depart. In addition, job descriptions have been rewritten and public posting
procedures have been altered.
205
The Corporation is not an executive branch agency and, therefore, is free
of the usual external review of its personnel policies and practices. The Act, for
the nnost part, is silent on standards to be used by the agency with regard to the
qualifications to hold individual positions and the employment of minorities and
women. Compliance by the Corporation is a strictly internal matter.
We would, therefore, most urgently request that the Committee inquire, in
depth, as to LSC's adherence to its previously established posting, interviewing
and hiring policies; its compliance with its affirmative action goals; the staffing
of its office of Equal Employment Opportunity; and, whether, in direct
contravention of the Act, political tests are being used when applicants are
screened to fill vacancies.
LOCAL GOVERNING BODIES
Just as the composition and commitment of the LSC Board are essential
elements of an effective national program, so to is the make-up of local-
governing bodies. Congress has wisely required that LSC grantees be
independent non-profit entities governed by local boards of directors. These
boards have the demanding task of running an efficient and effective legal
practice or, if you will, a "law firm". This "firm" is a specialized one which
must be knowledgeable about, and responsive to, the needs of a particular
segment of society - low income people.
There are many local boards which contain a mix of dedicated attorneys
and informed clients who have acted to insure that their programs are
accountable and have an effective delivery system tailored to local reality. Such
programs have appropriate quality control mechanisms and provide the full range
of representation allowed by law.
Some members of the Congress are concerned about who shall have the
authority to appoint the members of these local boards. We do not take serious
exception to the provisions of P.L. 97-377 which require that the majority of the
board members be appointed by bar associations. We believe that, in some
instances, this may provide a vehicle for an increase in the number of attorneys
providing pro - bono services and strengthen support by the bar for the
29-379 0—84 14
206
continuation of this vital program. We do feel, however, that there is a need to
insure that minority and women's bar associations are participants in this
process.
If the Committee is going to consider the changes in appointing authority
mandated under P.L. 97-377, then the Corporation's regulations provide language
which you might wish to consider incorporating into the statute. The regulations,
at Part 1607.3, state:
(b) At least sixty (60) percent of a governing body
shall be attorneys admitted to practice in a state in which
a recipient is to provide legal assistance, who are
supportive of the purposes of the Act and have interest in,
and knowledge of, the delivery of quality legal services to
the poor . [Emphasis added]
Until amended in January, 1983 in order to meet the requirements of P.L.
97-377, the regulations at Part 1607.3 also stated:
(c) The attorneys shall be selected from, or
designated by, appropriate Bar Associations and other
groups, including, but not limited to, law schools, civil
rights or anti-poverty organizations, and organizations of
eligible clients . [Emphasis added]
We believe that the continued ability to have attorney members of iocal
boards be appointed by those who the program was designed to serve is not only
appropriate but highly desirable. We know of no reason why LSC did not include
this language in its amended regulation or why it chose, in a follow-up
memorandum, to rule out such client appointment. W6 would appreciate action
on your part to clarify the fact that such a decision at the local level would not
be contrary to Congressional intent.
DELIVERY SYSTEMS
The client community is struck by the continued debate over the most
appropriate and effective delivery system. Advocates of major change in the
207
delivery model argue against the currently predominant staff attorney model on
highly suspect grounds. These critics would have us forget that the choice of
delivery systems is made at the local level by boards dominated by persons who
are in the private practice of the law, who know local law and custom, who are
aware of the delivery options which are available, who examine the local
programs' allocation of resources and by clients who are in a position to offer
informed expressions of what their local communities desire.
JUDICARE
Clients find it interesting that the oldest and largest judicare programs
have found it necessary to add staff components. We find it equally instructive
that staff programs - even before there was a national policy - had, where
circumstances dictated, used compensated private attorneys. Experience has
amply demonstrated that the great diversity of this country requires flexible
planning - at the local level - if effective delivery is to be achieved.
The client community is often outraged by the arguments of patronizing
judicare advocates who assert that, left to our own devices, we would choose
delivery models solely dependent upon services from private practitioners. Such
advocates assume that the clients who sit on the boards of local programs are
either uninformed or ineffective. Clients may lack wealth and may live lives
filled with constant crisis - but, providing we have access to accurate
information, we are fully capable of determining what is in our best interest. If
the staff attorney model or other locally determined combination of systems did
not work for us we would have long since pressed for change in hundreds of
communities across this country.
My experience has been that clients served by judicare programs are kept
apart from their peers. Seldom are they given the opportunity by their programs
to learn from, or exchange information with, other clients. Rarely are they
participants in training sessions or meetings of Client Councils and similar
organizations of low-income people. In fact, at most client sponsored activities,
there are no representatives from judicare programs.
208
When I have been able tc meet with clients from judicare programs, I have
found them generally uninformed about the activities of the local program, the
requirement that there be local priority-setting, the basis for their program's
allocation of resources or aware of the full spectrum of substantive area
representation which legal service programs can undertake.
There is one other experience in the lives of poor people which makes us
wary of judicare - that is medicaid/medicare. Begun as a noble effort to make
health care available to all, these programs have now become enmeshed in
constant controversy over the spiraling fees paid to the medical profession. No
poor person ever was enriched by such fees - yet through co-payment
requirements and other cost control mechanisms - we have become the victims.
We do not need this same experience in legal services.
SLIDING FEE SCALES
On this issue, I can be brief. As a client I can tell you that no one who is-
trying to live in 1983 on benefits which were calculated on less than 100% of the
cost of living, as determined a year or more ago, is ever going to recommend
that clients be required to pay a fee for services. The same is true for those on
fixed incomes who have watched their meager savings and/or retirement benefits
eroded by inflation. Faced with the need to purchase food and shelter, low-
income people would simply be forced to forego the "luxury" of securing legal
help in even the most dire circumstances.
PRO-BONO REPRESENTATION
The past several years have seen an appreciable and most welcome
increase in pro-bono activities directed toward the client community. As I
indicated previously, in my area more than 500 attorneys are involved in our pro-
bono program. As significant as this figure is, we must examine it a bit more
closely. It is anticipated that more than 90% of the persons served by the pro-
bono panelist will be in the, "advice only" category. Further, experience has
shown that contested matrimonial matters are cases which private attorneys will
not readily accept on a pro-bono basis. Similarly, private attorneys will not
handle appeals of welfare and SSI cases or undertake matters relating to public
housing.
209
Even, as is the case in my program, where there is a good pro-bono effort
underway, clients feel there is some need for Committee inquiry. To date,
questions concerning quality control, accountability to the client community and
the scope of representation have not been adequately addressed.
Further, we are concerned about a trend whereby local legal service
programs limit the matters referred to private attorneys to those which the
program has traditionally undertaken. The involvement of private attorneys
should mean both an increased ability to meet crisis needs, and the potential to
bring to bear new efforts to improve poor people's lives. We would hope that the
Committee would encourage the relationship between local programs and pro-
bono panels to be one of true cross-fertilization. A relationship where both
groups of attorneys learn from each other thereby enhancing both short and long
term delivery resources for the poor.
We were particularly interested in testimony presented to your
counterparts in the House of Representatives on April 14, 1983 by Mr. Robert L.
Hill of the American Corporate Counsel Association. In his testimony, Mr. Hill
cited an example of an insurance firms involvement with a community self-help
group in New York's South Bronx. Through that firm's corporate counsel major
assistance was given in taxes, real estate appraisal, mortgage financing and
other issues critical to the groups efforts to rehabilitate existing buildings in an
area with a critical shortage of standard housing units.
We think that pro-bono participation will be enhanced if private attorneys
are encouraged to use the expertise applied in their every day practice rather
than always being expected to take on a new set of skills. We know that the
client community would benefit if this were done.
I would like to make a final comment regarding delivery systems. The
Corporation submitted to the Congress, in June, 1980, the results of a multi-year
study of a variety of delivery systems. S. 1133 incorporates the results of that
study in this reauthorization. Clearly, such guidance to the Corporation and local
governing bodies is helpful as they make resource allocation decisions.
210
RESTRICTIONS
Restrictions on who may be represented, the substantive areas for which
representation may be provided or the fora that may be used to achieve the
clients' goals are part of a vicious cycle which should be brought to an end. Each
time client recourse to the courts has led to what a more powerful segment of
society sees as an adverse effect, there is an attempt, by some, to restrict our
access in the future. The very achievement of the purposes of the Act results in
attempts by some to insure against future success.
Clients now, as in the past, ask the Committee to remove all constraints on
the representation of eligible clients by legal service attorneys. We recognize
that this goal will most probably not be achieved and that past restrictions in
this Act will remain.
We do, however, ask that no further restrictions be imposed. To do so
would only intrude more deeply into the client/attorney relationship, interfere
with the independent professional judgement of attorneys and put a chilling
effect on zealous advocacy. New restrictions would only further undermine the
ability of programs to protect our rights and property and diminish client
confidence in our justice system as a viable way to resolve disputes between
parties.
CLASS ACTIONS
Although S. 1133 would still permit programs to use class action remedies
where appropriate, the additional requirement that, ". . . reasonable efforts to
resolve the adverse effects of the policy or practice without litigation have not
been successful . . . .", does cause us some concern. The language carries with it
the implication that programs do not already take such steps where it is
appropriate to do so. The current statute and regulation require that local boards
of directors establish policies governing the bringing of such cases. Our
experience has been that there is acute recognition of the additional resources
bringing a class action would require. However, whenever our program has used
this form of remedy, it has been because the economical and efficient delivery
of services has demanded it.
211
In Minnesota, some 13,000 persons were innpacted by the refusal of the
Veterans Administration to obey a court order which had been in place for over 6
years. Our program brought a single class action which resulted in state-wide
compliance.
It is always difficult to find suitable foster home placements for minority
and exceptional children. The Minneapolis Department of Welfare, at one time,
made a practice of cutting off foster care benefits, without prior notification .
This was making it almost impossible to find willing foster parents. Again, a
class action suit was brought which greatly relieved the problem.
REPRESENTATION OF ALIENS
We are pleased that S. 1133 does not include the prohibitions against the
representation of aliens which were included in P.L. 97-377. Clients find it
particularly repugnant that there is an effort to preclude representation of all
but a small portion of those who seek refuge in a country which was built with'
the sweat of immigrants from around the world. It is difficult to explain to a
person fleeing from a brutal and repressive government known for its violations
of human rights, the inconsistencies of the State Department process by which
one becomes a protected non-citizen. I hope no Haitian ever asks me why she can
not be granted asylum while a Chinese tennis star can.
There is an old passage which comes to mind - I am sorry that I can not
recall the author.
In Nazi Germany they first came for the Communist and
the Jehovah's Witness, But I was not a Communist or
Jehovah's Witness so I did not speak up. They came for the
Jews and I did not speak up because I was not a Jew. They
came for the Trade Unionist and I did not speak up
because I wasn't a Trade Unionist. They came for the
Catholics and I did not speak up because I was a
Protestant. Then they came for me and by that time no
one was left to speak up.
212
Citizenship should not be a criteria when a person is going to be evicted, is
being deprived of property or is being cheated out of justly earned wages.
Programs should not have to risk injury to the client/attorney relationship by
asking every applicant to establish his/her citizenship status. Further, such
inquiry has the potential to be an administrative nightmare - demanding special
training for intake workers, new and extensive record keeping systems, and
inquiries which may lead to ethical conflicts of considerable magnitude.
LEGISLATIVE ADVOCACY
Access to justice in this country today requires more than access to the
courts. Increasingly, the legislative process has become the vehicle used to avoid
disputes and delineate relationships within the society. An example of this can be
found in the efforts to alter the federal/state relationship with regard to the
administration of many programs developed over the past several decades.
The Omnibus Reconciliation Act of 1981, P. L. 97-35, repealed more than
90 previously enacted statutes and untold number of regulations. It required the
enactment of considerable new legislation at the state and local levels, and, the
promulgation of new regulations at every level. Clients needed assistance in
analyzing the Reconciliation Act and the proposed laws and regulations. Such
analysis could only be done by those trained to do so. We needed the capacity to
have advocates, acting in our behalf, as an on-going resource to the legislator
during all aspects of the process. State legislators (many of whom are engaged
in other professions) have, in the main, fewer staff members than do their
counterparts in the Congress. The response of legislators and administrators to
the Corporation's proposed 1982 amendments to the regulations on legislative
and administrative advocacy provides ample evidence of their strong reliance on
legal services programs .
Those opposed to legislative advocacy by legal services programs often
argue that taxpayers money should not be used for such purposes. Clients
suspect that this is simply a smoke screen to cloud the real issue. We know that
the Justice Department, using taxpayer's money, each year submits, in behalf of
its client, the executive branch of government, hundreds of recommendations for
legislation. We know that the same is true for Attorneys General for each State.
213
We know that the same process takes place at the county and local levels.
Clients also know that most state and local governments, at taxpayers expense,
maintain staffed Washington offices for lobbying purposes.
The suggestion is sometimes made that legislative advocacy (and class
actions) can be undertaken by, "other advocacy groups". This, of course is true -
other groups can, and sometimes do, take up causes which are important to low
income people. But, these "other groups" tend to be national in scope, with
national agendas set to achieve some national purpose. The "other groups" are
not poor peoples' groups. Decisions are made by their directors in accordance
with the priorities they see. It is only through local legal services programs that
clients can determine what legislative priorities should be pursued and determine
what final goal will be most beneficial in our community.
Prior to the inception of legal services programs, low-income people had
few, if any, effective vehicles to present counter-arguments or take affirmative-
positions before legislative bodies. Rent control, zoning changes, inadequate
services in our communities might well have gone unaddressed from our
perspective without legal representation at the local legislative level. Opponents
of this form of advocacy on behalf of poor people may only wish the Congress to
restore the imbalance of the past.
Each legislature establishes, and enforces, its own rules for those who
lobby. The present Act goes further and is very specific in setting forth the
circumstances under which legislative activity can be undertaken. Even greater
specificity is contained in S. 1133. The Corporation has, through changes in its
regulations, increased its capacity to monitor such advocacy and insure
compliance by recipient programs.
We ask that you resist all efforts to make the restriction on Legislative
Advocacy contained in P.L. 97-377 a part of this Act. It is essential that legal
service programs continue to be able to use the legislative process in behalf of
eligible clients , where appropriate. S. 1133 provides an adequate response to
those who feel further Congressional action is warranted.
214
CORPORATION FUNDING PRACTICES
There is an area where an ideological litmus test appears to have been
used. That is in decisions regarding the funding of certain programs for the
calendar year 1983. The LSC Board granted, albeit with conditions which seem to
be contrary to the prohibitions established in P.L. 97-377, full year funding (at
the 1982 level) for local programs. However, action was taken against entities
which have long been the special targets of political idealogues. These targets
were the support centers (at the rfational and state levels), the Reginald Heber
Smith Fellowship Program; the Project Advisory Group; NLADA; and, the
National Clients Council.
The Committee may be stymied in any effort to gain clarity about the
Corporation's intentions as to the future funding of these programs. In almost
every instance, a "study" has been ordered with Board action to come some time
in the future. The Committee could, however, make clear its awareness of these
studies and require - before funding decisions are made - that the results be-
made available to the Committee. We think that this would insure that
appropriate criteria for the studies are establsihed and adhered to.
FUNDING
At its inception, LSC articulated the modest goal of seeking to provide,
"minimum access." This was defined as two attorneys for each ten thousand
eligible persons. The level of appropriations and the impact of inflation never
allowed that goal to be realized. The best that could be accomplished was to
insure that every eligible client lived in some program's service area. That was
never a guarantee that service could be obtained. Hard choices were made
during priority-setting sessions and service providers made commendable efforts
to serve every-one they could. Special methods were found to enhance the
possibility for service.
Then we experienced the impact of a 25% cut back in funding levels. While
we clearly fared better than any number of social service programs, the resulting
retrenchment was hard on everyone - client, service provider, program
management and those, like you, who had guarded against such cuts in the past.
215
I am restrained by reality from attempts to advocate the full restoration of
programs to the funding level which would have been reached had there been no
reduction and increases, at least sufficient to offset inflation, been granted.
Clients feel that the bill before you is prudent in its figure of $296 millions for
fiscal year 1984 and we are pleased that it preserves future year options by
authorizing such sums as may be necessary for fiscal years 1985 and 1986.
Thank you.
The Chairman. Mr. Raven, I apologize for keeping you this long.
We are used to seeing you in the Judiciary Committee, but we are
very happy to have you here. I just have to apologize to all of you,
but it has been a very horrendous day. We are in the middle of this
budget resolution, and it is a big fight on the floor. I was leading
the fight until about 2 o'clock today.
STATEMENT OF ROBERT D. RAVEN, ESQ., CHAIRMAN, STANDING
COMMITTEE ON LEGAL AID, AMERICAN BAR ASSOCIATION,
SAN FRANCISCO, CALIF.
Mr. Raven. I understand. I appreciate the opportunity to appear,
and I will try to be very brief
First, the ABA does support reauthorization. It supports S. 1133.
No one contends, at least in public any more, that the poor
should not have equal legal services. But what we hear is a sugges-
tion of block grants, and I dealt with that in my written testimony.
I will not go into that further.
The Chairman. Are you against block grants, or would you be
against the State bar handling these programs?
Mr. Raven. I think I would, and I will tell you why in a minute.
The Chairman. Let me tell you what I am concerned about. I
was a supporter of Legal Services, but I have heard so many com-
plaints through the years, I have to admit that now, as chairman
of this committee, I think it is my responsibility to get into the
oversight and find out what the extent of those complaints is. I be-
lieve some of them are justified.
I have often thought that if we could get the State bars to handle
these funds and to determine who the grantees are, and let them
do it the way they want to do it, I could support more funding. I
think we could defuse an awful lot of the politicization that has
gone on in this area, but in any event I am interested in what you
have to say.
Mr. Raven. I think there is another way of doing it, Senator.
You know, the State bars are under attack. There is a bill in Sacra-
mento at this time to do away with the State Bar of California. No
one is happy in this world we are living in. It is certainly true, as
Ella Fitzgerald tells us every day, "No One Is Perfect."
But I think by and large the Senate and the House are being
conned if they go for all of these charges. I went through this in
1970 and 1971, when I was president-elect and president of the San
Francisco Bar. Mr. Phillips came out there and got Lew Uhler and
a good friend of mine who was working with the Governor then to
216
go for a lot of this stuff. They brought forward 120 charges. A hear-
ing was held. They brought out three very conservative, very fine,
retired Republican chief justices — from Maine, Colorado, and Wis-
consin. They had 150 witnesses, they had 400 pages of findings, and
they found every one of those claims was totally irresponsible and
without foundation.
Yet, I heard those same claims in the spring of 1981, when I
came back here to talk to people on the Hill.
I have been talking to people on my committee, and I am going
to go to the leadership of the ABA and see if I cannot get their OK
to come to you and say, "We will help get to the bottom of this."
The Chairman. You would help with the oversight?
Mr. Raven. I am going to recommend that we would set up hear-
ing committees around the country and get into this and get to the
bottom of it.
The Chairman. That is not a bad idea. They have to be nonparti-
san committees, and they have to look into it from a purely accura-
cy standpoint.
Mr. Raven. I understand.
The Chairman. Some of these charges are true. We have been
checking into them, and they are true.
Mr. Raven. Sure.
The Chairman. This is a big corporation. There are not many
business corporations that run $241 million a year though that do
not have some problems. What we have to do is to determine the
extent to which those charges are true and find some v/ay or some
set of recommendations of how best to defuse this political issue
and get it so that we are providing legal services for the poor. I
would really be interested if you could get the bar association to
assist us in that regard.
Mr. Raven. I am going to try, Senator, and I will report back.
The Chairman. For us to defuse it, however, we would have to
come up
Mr. Raven. It has to be a credible operation.
The Chairman. It has to be credible. It has to be something that
is depoliticized. I would like to get it out of politics. Frankly, I be-
lieve that one of the most serious charges against the Legal Serv-
ices Corporation and its grantees are that they are engaging in po-
litical advocacy. I know that is true. Now, maybe it is not as great
an extent that I think it is, and maybe it is not to the extent that
we should even be concerned, but I think we ought to find out, and
if that is so, we ought to change it.
Mr. Raven. I would agree, and I think you will find it is not so,
other than as I say nobody is perfect and we are going to find some
mistakes.
I would like to talk about just one other matter. The fight has
shifted a lot from the old fight that the poor were not entitled to
this service, to know you should not sue the government — local,
State, or Federal.
Now, we all, I think, can agree that most public officials and em-
ployees are law-abiding citizens just like the rest of us. But we also
know that is not true of all. There is a certain amount of ignorance
as we all perform our jobs. I know this because I represent power-
217
ful corporations who have to go to court themselves against the
government, at all levels, to right wrongs.
Frankfurter told us long ago that the Government must turn
square corners with the people in this country. And Brandeis said
that if the Government becomes a lawbreaker then we have anar-
chy. And I heard it best stated by a superior court judge, Judge
Hogenboom, in Los Angeles in the spring of 1981 when there was a
great urging to do away with the Corporation. He was a fine gen-
tleman, appointed by President Reagan when he was Governor, one
of the many fine judges he appointed. And he made this statement
which I thought cut right to the heart of it. They asked him in a
press conference. How can it be that you, a judge, would support
the Legal Services Corporation? He said, for this reason. How
ironic it is that right at this time, in this Nation, when most people
are standing on their feet — and rightly so — applauding the action
of Polish Solidarity to bring to heel an abusive government in
Poland we would even think of taking away from the poor people
in this country their only right to get redress against the Govern-
ment.
I think that is so true and so important. You know, we scoff in
this country — and rightly so — at banana republics and the Soviet
Union and the Eastern Bloc countries that have elaborate written
constitutions, protecting the rights of individuals against govern-
ment. We scoff because we know that is a facade, a sham. Yet, if
we are not careful in this country, we are going to come to the
same thing.
My committee is also interested in legal representation on the
criminal side. That is becoming a sham. We are not furnishing
legal counsel.
The Chairman. Let me say this on that point. I do not know
many Members of Congress, at least not in the Senate, who make
that particular argument. What they are concerned about is the
excessive amount of lawsuits brought, sometimes frivolously,
against governments and what some think are the excessive use of
class actions. I am not sure that is so. That is why what you are
suggesting may be the answer to finding out. If we are using sec-
tions 1983 and 1984 abusively or excessively, when there are $6 bil-
lion of lawsuits against municipalities in this country right now,
we ought to change the law, and Congress ought to have the guts
to do it.
On the other hand, what I find to be the major criticism, is that
it is costing municipalities severely because of what some think are
frivolous lawsuits. There are millions and millions of dollars in at-
torneys' fees every year, regardless of how frivolous the suits may
be. Now that is something we just need to get into and check out.
Mr. Raven. That is right. The people in Legal Services point out
they win most of those cases, and I am told that by judges, too.
This has been my experience too.
The Chairman. That may be, and even that might not be the
answer because some criticize the advocacy of the judiciary in this
country. I have to admit, I am one of them; I think they are too
judicially active. You and I both worked in the Judiciary Commit-
tee to try and get a better judiciary in this country. We both know
218
that there are some very extreme judicial activists on the Federal
bench in this country.
Mr. Raven. You will recall we finally won one of those fights, I
think the first time in 37 years, the last one I appeared on.
The Chairman. I was the one who, along with Senator Leahy,
led that fight. I appreciated your being willing to stand up. That
was a hard thing to do.
Mr. Raven. I will look into what we can do, because I am sin-
cerely convinced that although we will find, as you will in any pro-
gram, a few problems, I think we will find this Corporation has
done an excellent job. I would like to help put the evidence togeth-
er and prove it. If we are wrong, we ought to know it, but I am
sure we will not be wrong. But we ought to lay this to rest, and we
should not let Congress be blackjacked into putting on a lot of re-
strictions because of false charges.
I just want to take 1 minute to talk about one of these charges.
When I was president of the State bar in April 1981, when ABA
and the local and State bars came back here to the Hill, I was very
disturbed. I got a letter about the California Rural Legal Assist-
ance and an action they handled. It painted a terrible picture. So I
sent it right away to the California Rural Legal Assistance. I said,
"I want to know what this is all about?" When I got into it, I was
amazed. If I had been a judje and anyone had submitted an3^hing
to me like that, so false in its innuendos, I would have put them in
jail.
I found out that, first, this commission in 1971 had found the
charges totally without foundation. I found that the Supreme Court
of California had found that the suit was rightly filed. And then I
found the county that was involved had paid a good deal of money
to settle it. It was an atrocious matter.
I think most of the charges will fall into that area, and we ought
to dig them out. We should not go by innuendo in this country. Too
much of what goes on in this country is in the press. So we stand
ready to help.
The Chairman. I agree. Let me just say this, I appreciate the
three of you appearing here today. And Mr. Weiss, I am going to
submit some written questions to you, and we will keep the record
open, Ms. Hollie, to submit questions to you if we can.
Mr. Raven, I am somewhat excited about your advocacy with the
bar association to look into this. Now, some would say — and I think
you need to be prepared for this accusation — that the bar associ-
ation has a hidden motive in wanting Legal Services to continue be-
cause it does save an awful lot of voluntary legal time for indigent
clients. So whatever you do, it would have to be very credible, and I
personally believe it would be. But something like that needs to be
done. I do not know that this committee, with its unlimited over-
sight capability but limited staff to use on a whole range of very
important oversight, can do it all.
I might add, we are investigating business union corruption and
racketeering and all these other things that I find very important
in this country. I do not kr ow that we can get into it and do the
job that needs to be done. So to the extent that you can carry that
with the bar association, you will have a lot of support from me. To
be frank with you, I would like to get it resolved because I person-
219
ally believe the poor ought to have legal assistance. But, I also be-
lieve the Corporation ought to be giving help in mundane areas
that presently they do not have enough funds or enough capability
of doing. They ought to do that before they start getting into the
more exotic areas of law. There ought to be some step-by-step ap-
proach before they start filing class action suits. They ought to first
make sure all the divorces and domestic relations problems and
rental problems and some of the other problems are resolved, be-
cause a lot of those are going unresolved while some of these attor-
neys have a tremendous time with advocacy suits.
I am not saying they should not be able to bring the others if
they are legitimate suits, but rather, that we ought to have some
priorities.
Mr. Raven. Can I make one other point, and this is something
the Senate and the House can do. Mr. Olson said, "Why don't they
bring an action for the individual person and let that be the end of
it?" For years, the IRS has had this nonacquiescence policy, and
that is so much a part of our fabric it is like the Constitution, so I
do not suggest you ought to take that on. But these other agencies,
such as the social security agency, have a nonacquiescence policy
now. In fact, the second circuit really took them on with this. That
is why people have to bring class actions, because the agencies will
tick off cases one by one, and they will put out a nonacquiescence.
The second circuit found out about that and said. What do you
mean? Every other person in this country, including the U.S. Gov-
ernment, comes before us. The Department of Justice cannot tell
us that they are not going to abide by our rules until it goes to the
Supreme Court.
I think that Congress should look into the agencies in the United
States that think they have a special place before the courts of this
country and can take a nonacquiescence position. A corporation
could not do that. Poor people cannot do it, and I do not think an
agency of the U.S. Government ought to be able to do it. They
ought to turn "square corners," as Frankfurter said.
[The prepared statement of Mr. Raven follows:]
220
jj^^l American Bar; Association
GOVERNMENTAt AFFAtfB GflOUP . 1800 M STREET, N.W. • WASHINSTON j)£, 20036 » '(20i> SSI-SiMi
STATEMENT OF
ROBERT D. RAVEN
on behalf of the
AMERICAN BAR ASSOCIATION
before the
COMMITTEE ON
LABOR AND HUMAN RESOURCES
of the
UNITED STATES SENATE
on the subject of
LEGAL SERVICES CORPORATION
May 4, 1983
221
Mr. Chairman and Members of the Committee:
I am Robert D. Raven, a practicing attorney from San
Francisco, California, and Chairman of the American Bar Asso-
ciation's Standing Committee on Legal Aid and Indigent Defendants.
I appear before you today at the request of our President, Morris
Harrell, to express our strong support for the Legal Services
Corporation and for its reauthorization.
It is, in our view, essential that there be an effective,
efficient, independent national program to ensure that our
poorest citizens will have meaningful access to the legal pro-
cesses of this country. The most obvious beneficiaries of this
program are the millions of poor persons in this country who
would otherwise have no meaningful access to legal services.
But in a very real sense, it is our entire citizenry who bene-
fit from this program. As George Washington stated to Edmijnd
Randolph in appointing him as the first Attorney General:
"Impressed with =i conviction that the due administra-
tion of justice is the firmest pillar of good govern-
ment, I have considered the first arrangement of the
judicial department as essential to the happiness of
our country and to the stability of its political sys-
tem."
The administration of justice depends upon all parties having
effective legal representation. To deny such representation to
those who are already disadvantaged is to work a disservice to
our justice system and to our nation.
Critics of the Corporation contend that the issue ia not
.that of assuring equal access to justice for the nation's poor
29-379 O— 84 15
222
but that of the manner in which the services are to be provided.
This is an appropriate issue. We have examined the various sug-
gestions of alternative systems and have found them all wanting.
We believe the Corporation has done a commendable job and deserves
the ongoing support of this nation.
There have been two principal alternatives advanced. The
first is that the program be converted into a block-grant program
to the states. The present Administration had advanced this idea
on a number of occasions, but neither house of Congress has seen
fit to endorse this approach. A number of very real considera-
tions lay behind this action.
First, as recommended by the Administration each of the
last three years, no funding would have been provided for this
activity. Rather, the states would have been permitted to
utilize general block grant funds for this purpose if they chose
to do so. The block grants, as proposed, would have been put
together with funds transferred from existing federal programs
in other areas. The clear signal to the states would be that
this would be the lowest-of-the-low in terms of priority for
state allocation, since it would be the only one of the programs
under the block grant which would have been placed in the block
grant program with no transferred funds.
Second, even if Legal Services funds were transferred into
the block grant program (the defeated 1981 amendment would have
223
transferred $100 million) , there would be no assurance that the
states would use these f-unds for legal services as opposed to the
many other programs which would be competing for these funds. As
a practical matter, virtually every other program recommended for
block grant funding is one in which the federal government was
providing a financial supplement to an existing state program.
Thus, there is an office in the executive branch of most state
governments with an entrenched interest in ensuring that their
programs will receive a fair share of such funds. There is no
such office for legal services.
Third, even if there were a proposal to earmark funds
specifically for legal services, we would greatly fear that such
a move would be the first step toward the phasing out of meaning-
ful legal services in most states. State governments have not
demonstrated a strong interest in funding legal services for the
noor . The state contribution nationally to civil legal services
programs has amounted to less than 1% of total funding. Most
states find themselves financially strapped, and it is unrealistic
to assume that they will fight to preserve federal funds for a
program they have not traditionally supported when other federal
assistance programs are imperiled.
One of the major reasons for this has been and is that state
governments are frequently sued by clients of legal services pro-
grams. The poor are dependent upon a wide variety of state pro-
grams for their health and welfare; indeed, the poor are one of
224
the most regulated and bureaucratized groups in our country.
Not j.nfrequently , such programs will fail to apply federal or
state laws appropriately and equitably, and legal recourse
becomes necessary to assure the client's rights. The states
cannot be expected to view with enthusiasm the funding of pro-
grams which, by enforcing client rights against the states,
would force the states to spend money defending their actions
and restoring the client's benefits. And yet, absent such
legal representation, most clients would have no legal redress.
Our House of Delegates, in 1969, adopted a resolution on
this subject which stated:
"... the legal services program should operate with
full assurance of independence of lawyers within its
program not only to render services to individual
clients but also in cases which might involve action
against governmental agencies seeking significant
institutional change..."
In the long run, it appears inevitable that turning the
program over to the states would result in some level of repre-
sentation being provided in some states and little or no repre-
sentation being provided in other states. Our system of justice
and our national values make it mandatory that this result not
follow.
A .second proposal is that the private bar supply all legal
services to the poor. We believe such an approach is unworkable
and unsound. Assuring that the justice system works for all our
citizens is a public responsibility, not the private province of
one profession. The lawyers of this country have a proud history
225
of supplying free services to the poor -- one which we believe
is a worthy model for all professions. I will describe shortly
some of the efforts which the private bar is making in this
regard. But it is inappropriate to expect the legal profession
on its own to meet this responsibility.
Part of the consideration is a very practical one. Histori-
cally, the private bar has never been able to meet the legal needs
of all the nation's poor. Part of the problem is sheer numbers;
there are approximately 30 million poor people in this co\mtry
and only about 1/2 million persons with law degrees. Many of
these law school graduates do not practice law. There is an
uneven geographical distribution of lawyers. And many practicing
lawyers have no expertise in the specialized areas of the law
which affect the poor: agency and administrative practice, bene-
fit claims, even landlord-tenant problems.
This situation is not a new one. In 1920, the Association's
legal aid committee, which I now chair, was founded. Charles
Evans Hughes, later Chief Justice of the United States, became
its first chairman. He spoke at the 1920 ABA meeting at which
the committee was formed and made this statement:
"The necessity for organization to give this assis-
tance should not be attributed to any general lack
of desire on the part of members of the Bar to help
the poor, but springs from the conditions which
exist in our great cities. We are glad to recognize
it as a part of professional duty to assist the
helpless and oppressed, and you may find lawyers in
every jurisdiction who give a large amount of their
time in advising those who cannot pay . . . The con-
gestion of population affords opportunity and cover
for myriad wrongs against the poor, and the high-minded
226
practitioner moves in a world to which those most in
need are utter strangers; the poor are victimized on
every hand and they know not to whom to turn, while
those who would prey upon them and make their misfor-
tune a source of illicit gain are always on the watch
for opportunity. The members of the Bar who are most
likely to recognize professional obligation to the
poor are rarely so circumstanced that they can give
aid without a waste of effort which suitable organiza-
tion would render unnecessary; and, while their
sporadic efforts would furnish relief here and there,
as chance might offer, a multitude would continue to
suffer without redress. It is safe to say that the
34,000 applicants whose cases were considered last
year by the Legal Aid Society of New York would, for
the most part, have gone without the advice to which
they were justly entitled had it not been for organized
legal aid. Moreover, the wrongs of the poor fall into
well-defined classes, and the attorneys for the legal
aid societies acquire a wide knowledge and an effi-
ciency in dealing with these cases which enable them
to give a service at the offices of the organizations
which could not be duplicated by the best law firms in
the city. The lawyer in a great city best discharges
his obligation to the poor, not by attempting to deal
with matters to which his experience is foreign, but
by supporting the legal aid association."
Our Association has worked diligently since 1920 to foster
the growth of legal aid societies. By 1965, 248 such programs
had been established. But in 1965, it had become clear that
such voluntary programs could meet only a very small portion of
the legal needs of the poor. That year, of course, marked the
beginning of the federal commitment in this area.
Let me describe some of the efforts which the private bar is
now making to help meet the need. These efforts have been ongoing
throughout the period of federal activity, although there has been
a considerable redoubling of our efforts in recent years. The
227
record will show, I believe, a remarkable effort by one profession
to meet the needs of the poor. But it will also show that the
bar, despite its best efforts, cannot meet the very real needs
of the poor.
Despite any past differences which may have existed between
the private bar and legal services, the two groups are now working
together closely, in partnership, towards involving private attor-
neys through organized programs, in the delivery of legal services
to the poor. This partnership has been developing rapidly during
the past two years, as legal services offices have been faced with
greater demand for fewer available services. Most private attorneys
have long ago discovered that the poor have substantial problems
only lawyers are able to handle, and it is only with public sup-
port that legal services for the poor could be maintained at a
decent level. In Mississippi, for instance, where the history
between private attorneys and legal services attorneys may be most
accurately described as vitriolic, the fate of the Corporation in
1981 brought the two feuding groups together; many Mississippi
attorneys realized that, without each other, legal services would
be woefully inadequate.
This partnership has brought to fruition programs involving
the private bar in the direct delivery of service in virtually
every part of this country. In Mississippi, a statewide pro bono
program has been established, providing direct assistance to the
poor. Never before had there been an organized pro bono program.
228
either locally or statewide. In Michigan, the bar added financial
support to a long list of ways to increase their contributions to
legal services for the poor -- the state bar provided $50,000 in
grant money for developing private bar involvement programs arotind
the state. In Florida, a statewide activation project was created
to stimulate and assist local bar and legal services efforts to
involve private attorneys. This past February, the ABA, the
Florida Bar and the Florida legal services programs conducted a
training workshop for directors of private bar involvement pro-
grams from throughout the state.
In New Hampshire, a state-wide pro bono program -- considered
a "model" program for other state-wide projects -- has a lawyer
participation of about 65%, one of the nation's highest. In
neighboring Vermont, a state-wide pro bono program was recently
implemented by the Young Lawyers Division of the state bar asso-
ciation (in part with a grant from the ABA's Private Bar Involve-
ment Project) as a complement to the existing staff attorney pro-
gram and a state-wide judicare program in existence since 1978.
Another Young Lawyers Division, that of the Utah State Bar Asso-
ciation, is expanding its successful program in Salt Lake City
throughout the state.
These are but a few of the over 250 new private bar involve-
ment projects begim in the last two years, in large part with the
assistance of required expenditures by legal services programs to
involve the private bar in its delivery of services. During this
229
period dormant pro bono committees have sprung back to life,
frustrated private bar involvement plans from the past have been
successfully retried, and, in general, the hoped for partnership
and the programs that would develop have been realized. The ABA's
Private Bar Involvement Project, which has been providing a wide
range of assistance to state and local bar association projects,
reports that, of those bar associations with over 300 members,
all but a handful are involved in some way with a private bar
involvement program. Pro bono is also growing among corporate
counsel, a fertile area of legal talent. In short, the private
bar involvement field has grown radically in the last two years,
and has brought in a large segment of lawyers never before involved
with an organized program to provide services to the poor.
This marked rise in the volunteer efforts of attorneys around
the country is encouraging. Yet, what we are seeing is that these
volunteer efforts are only able to meet a very small percentage of
the existing need. This positive trend does not prove, despite
what this Administration would like, that the private bar could
replace the Legal Services Corporation. According to a study by
the American Civil Liberties Union, in Eastern Michigan, 21 attor-
neys agreed to take two cases each, representing only one percent
of the cases tuimed away by the local legal services program; in
Middle Tennessee, the pro bono project accepted 260 cases in 1982,
while the local legal services program was turning away 100 cases
per week. Nationally, the Corporation has estimated that private
230
attorneys are now picking up almost 10% of the legal services
caseload. This is encouraging. But it also underscores the
fact that volunteerism is but one component of an overall delivery
system for the poor. Despite all good intentions, private attor-
neys cannot come close to filling the gap caused by a 25 percent
cut in the Legal Services Corporation's budget, let alone the
total dismantling of the Corporation.
Moreover, the Legal Services Corporation is the backbone of
private bar involvement: most programs rely on the local legal
services program and national and state support centers for
training in poverty law areas ; many legal services offices per-
form intake and screening roles for the pro bono project, among
other services.
The bar has also been active in developing and promoting pro-
grams to provide funds to legal services programs to supplement
federal dollars. The most common of these have been the Interest
on Lawyer Trust Account programs, now adopted in eleven states and
under consideration in over 30 others. lOLTA, as it is generally
known, is a relatively simple concept. It generates interest for
law-related public interest activities by pooling client funds in
a lawyer's possession that are nominal in amount or held for a
short period. These have traditionally been placed in non-interest
bearing trust accounts.
lOLTA is a very important and promising means of providing
additional monies. It is not, however, as some may believe, a
panacea for the funding of legal services .
231
Estimates for the potential of lOLTA programs vary greatly,
ranging from $30 million to $150 million a year nationally. Yet,
inflation aside, legal services programs have suffered a reduction
of more than $80 million since 1981. In my own state of California,
legal services funding has been cut by approximately 8.5 million
dollars. However, our lOLTA plan, which requires the participa-
tion of all the state's more than 80,000 practicing lawyers, is
expected to raise only from six to ten million dollars annually.
It is also presently the subject of a lawsuit challenging its
validity.
Let me turn now to the nature of any reauthorization legisla-
tion. First, as the preceding discussion has indicated, legal
services to the poor have been significantly eroded since 1981
despite the increased pro bono activity. We believe that for next
year the funding level should be increased at least to a level
which would adjust the current $241 million level by an appropriate
inflationary factor for the three years since the 25% funding cut-
back was made. The $296 million figure suggested both in S.1133
and in the House-passed First Concurrent Budget Resolution is,
we understand, based on such an assumption.
Second, we believe that the principle of equal access to
justice requires that the poor not be treated as second-class
citizens in our judicial systems. Our policy-making bodies have
spoken frequently to this issue. In 19 71, for example, the Board
of Governors adopted the first Association resolution calling for
the creation of an independent legal services corporation which
232
"will tend to further the Insistence of the American Bar Associa-
tion on the independence and professional integrity of the Legal
Services Program" and which would "be used to fund programs which
will provide a broad range of legal services to persons unable to
afford the services of an attorney, the charter of which shall
contain assurances that the independence of lawyers involved in
the Legal Services Program to represent clients in a manner con-
sistent with the professional mandates shall be maintained...."
The House of Delegates the following year adopted a resolution
which stated that the program should be designed "to insure that
legal services remain independent from political pressures in
the cause of representing clients" and to "... maintain full and
adequate legal services for the poor...." Thus, we have long
opposed restrictions which would seek to deny to the poor legal
remedies, such as class-action suits, or representation in sub-
stantive areas which are available to those who can afford counsel.
Decisions about the legal rights of clients should be made by the
court system, not by cutting off access to the courts. Similarly,
access to the legislative and administrative processes should not
be denied.
I would note here that historical charges of abuses by pro-
grams are really no longer an issue which Congress should seek to
address by statutory restrictions. In the last year. Congress
has mandated control of local legal services program boards by
the organizied bar associations in each area. Further, an office
of Inspector General has been established at the Corporation to
233
investigate and curb abuses. These and other measures have obviated
the need for the Procrustean approach of cutting off all representa-
tion in particular areas or denying particular legal remedies on a
wholesale basis.
We also believe that the national and state support centers
and the National Clients Council have greatly assisted the provi-
sion of effective and economical legal services to the poor and
should be maintained.
We are pleased to see that S.1133 includes in Section 4 a
provision designed to ensure an appropriate partnership between
the private bar and the legal services programs. Section 4 wou.ld
require the Corporation to:
"make available, in each fiscal year to the extent
feasible and consistent with clause (4) , substantial
funds to provide the opportunity for legal assistance
to be furnished to eligible clients by private
attorneys . . . . "
Similar langxoage was included in both H.R.3480, the House reautho-
rization bill, and 5.1533, the Senate reauthorization bill, of the
last Congress.
Another provision of S.1133 that we are glad is included is
the repeal of Section 1010(c) of the Act. While there may be
reason for Congress to be concerned about how scarce federal dollars
are allocated, we do not believe that it is appropriate for Congress
to impose these decisions on the use of non-federal funds by
Corporation grantees. Such restrictions have, we have seen, a
particular impact on cooperative bar and legal services pro bono
programs that are receiving some Corporation funds as a part of
234
their funding. Also, in this period of declining federal funding,
when legal services programs are reaching out for support to the
private sector, this section of the Act inhibits the willingness
of the private community to contribute funds.
In conclusion, we urge you to approve legislation to reautho-
rize the Corporation at a significantly increased ftmding level
and to avoid the imposition of unnecessary restrictions on the
program's activities.
The Chairman. That is an interesting point. I would like to have
you write to me more about that. Would you? I might be able to do
more on the Judiciary Committee than I can here.
We surely appreciate your time, and I do apologize for this hear-
ing taking so long. Thank you so much, and with that we will
recess until further notice. I want to make sure that my closing
statement will be put in the record at this point.
[Closing statement of Senator Hatch follows:]
Closing Statement of Senator Hatch
The Chairman. The testimony that we have received today has
done little to answer my concerns about the Corporation. We have
heard numerous observations from both sides that are really just
general in nature. There seems to be a disconcerting absence of
hard data as to how much the grantees actually have, how much
money they need, and just what they are spending their existing
funds on. There seems to be no way the Corporation has for deter-
mining how widespead are grantee violations of congressional pro-
hibitions, nor is there effective means for keeping track of attorney
staff time. Moreover several allegations have been made about the
Corporation that need to be responded to. In sum, we do not have
the basic information about what I consider to be basic facts con-
cerning the Corporation's operation.
As a result, I would like to postpone any consideration of reau-
thorization bills until such time as the committee can hold thor-
ough oversight hearings on the Legal Services Corporation.
This would pose no real threat to the continuation of the pro-
gram, the grantees are all funded through the end of fiscal year
1983. I think it would be in the best interests of this committee
that we not blindly rush forward, but take the necessary steps to
insure that our consideration of the appropriate provision of Feder-
al funds for legal services is based upon fact, not assumption.
The Chairman. The hearing is now adjourned.
[Whereupon, at 6:40 p.m., the committee recessed to reconvene at
the call of the Chair.]
APPENDIXES
1. Letter from Senator Hatch to Donald P. Bogard, President,
Legal Services Corporation, April 26, I983
2. Report by the Office of Field Services, Legal Services Corpo-
ration, July 23, 1983
3. Additional Statement from Diann R. Jenkins
it. Responses from F. William McCalpin to Questions Submitted by
Senator Hatch, May 19, 1983
5. Responses from F. William McCalpin to Questions Submitted by
Senator Denton
6. Comptroller General Advisory Opinion in the Matter of the Personnel
Practices Within the Legal Services Corporation, April 5, 1983
7. Responses from Nelwynne Hollie to Questions Submitted by Senator
Hatch, May 26, I983
8. Responses from Jonathan Weiss to Questions Submitted by Senator
Hatch, May 13, 1983
9. Additional Statement by Robert D. Raven, Chairman, Standing Com-
mittee on Legal Services for the Elderly, New York, N.Y.,
May 19, 1983
10. Statement by Alliance for Legal Rights, Inc., May h, I983
11. Letter to Senator Hatch from Jimmy Davis, County District Attorney,
Castro County, Texas, May 2, I983
12. Letter to Senator Hatch from John C. Barrett, Legal Services
Corporation of Iowa, May 6, 1983
13. Letter and Accompanying Documents from Wesley J. Fastiff, May IT,
1983
II4. Statement by Maxwell A. Miller, Senior Attorney, Mountain States
Legal Foiindation, May h, I983
15. Letter to Senator Hatch from Anh Tu, Staff Coordinator, Project
Advisory Group, May 9, 1983
16. Letter and Accompanying Documents from W. E. Weeks, Executive
Vice President, Texas Citrus and Vegetable Growers and
Shippers, April 27, 1983
(235)
236
OMIN G HATCH. t/TAH, CMAlflMAN
PtOBERT T STAfFOIW. VT
DAN OUATiX INO
DON NiCiOfS. OKLA.
GOROOM J HUMPMRFY. N H
JEREMIAH â– >eMTOM AU.
lOVSrCLL ^ WEtCKER. JK. CONN
CKAftUS L GRASSLEV. IOWA
JOHN P EAST. N.C
PAUL* HAWKINS. FLA
EDWARD M KENNEDY. MASS.
JENNINGS RANDOtPH. W VA
CLAIBORNE Pf U_ R.I
mOMAS F EAGLETON. MO
DONALD W RPECLE. JR. MtCH
HOWARD M METZENBAUM. OHtO
SPARK M MATSUNAGA HAWAII
CHRISTOnfER J DODO. CONN
APPENDIX 1
Bnittil States Senate
COMMITTEE ON U^BOR AND
HUMAN RESOURCES
WASHINGTON. D.C. 20510
April 26, 1983
Mr. Donald P. Bogard
President
Legal Services Corporation
733 15th Street, N.W.
Washington, D.C. 20005
Dear Mr. Bogard:
On May 4, 1983, the Committee on Labor and Human
Resources is scheduled to hold an authorization hearing on
the Legal Services Corporation. We would like for you and
Mr. Robert E. McCarthy, Esq., to testify on behalf of the
Corporation. The hearing should begin at approximately
10:00 a.m. Please feel free to have any member of your staff
accompany you as well.
In order to prepare fully for the hearing, we would
appreciate your providing me with the information requested
below prior to the hearing. While I realize that this is an
extensive request, I feel that it is imperative that we have
this information in advance of the hearing so that our review
can be objective, thorough and fair.
With regards to the national office, please provide the
following:
1 . Audits :
A. For FY 80, 81 and 82:
(i) The number of audits of recipients performed
by LSC.
(ii) The number of audits of recipients that
were not able to be performed because of poor,
improper or nonexistent record keeping by recipients.
(iii] The number of audits that were not performed
because of non-cooperation by recipients.
(iv) The number of audits provided to LSC by
recipients .
237
(v) The name and address of any recipient who
had its funding reduced, terminated or refunding denied
as a result of audit findings.
(vi) The name and address of any recipient who
had its funding reduced, terminated or refunding denied
because of the recipient's failure to cooperate with
the audit process.
B. For FY 1980, 1981 and 1982, identify:
(i) Each recipient who was found to be in
violation of or was found to have employees acting
in violation of the Legal Services Corporation Act
or LSC regulations as a result of the audit process.
(ii) The disciplinary measures taken against
any recipient or employee of any recipient found to be
in violation of the Legal Services Corporation Act or
LSC regulations as a result of the audit process.
C. For FY 1980, 1981 and 1982:
(i) The number of violations of the Legal
Services Corporation Act or its implementing regula-
tions uncovered as a result of the audit process.
(ii) A breakdown by category of the types of
violations found by the audit process [e.g., repre-
sentation of ineligible clients, lobbying, instigation
of impermissioie class actions, etc.).
(iii) The number of hours found to have been
expended by recipients or employees of recipients
representing ineligible clients or engaging in activities
not permitted by the Legal Services Corporation Act
or its implementing regulations.
(iv) The amount of money found to have been
expended by recipients as a result of representation
of ineligible clients or engaging in activities not
permitted by the Legal Services Corporation Act or its
implementing regulations.
2. State Advisory Councils
A. Are there any states which do not have state advisory
councils? If so, which ones? If so, why has the LSC not
acted to appoint one for that state?
29-379 0—84 16
238
B. For each of the last five years, please provide:
(i) The number of complaints received by the
Corporation from the State Advisory Councils.
(ii) The investigative action taken by the Legal
Services Corporation in response to these complaints.
(iii) The number of complaints found to be valid.
(iv) The number of recipients who had disciplinary
action taken against them as a result of complaints
lodged by the State Advisory Councils.
(v) The name and address of each recipient
against whom disciplinary action was taken as a result
of complaints lodged by the State Advisory Councils
and the nature of the discipline.
3. Citizen Complaints
For each of the last five years, please provide:
(i) The number of complaints against recipients
received by the Legal Services Corporation from private
parties.
(ii) The investigative action taken by the
Corporation in response to these complaints.
(iii) The number of complaints determined to be
valid.
(iv) The number of recipients who had disciplinary
action taken against them as a result of complaints
lodged by private parties.
(v) The name and address of any recipients
who had disciplinary action taken against them as a
result of complaints by private parties and the nature
of the discipline.
4. Nature of Complaints
Please provide a breakdown by category of the types of
complaints received by the Legal Services Corporation for
FY 1980, 1981 and 1982 (e.g., client solicitation, malicious
prosecution, lobbying, representation of ineligible clients,
etc.).
239
5 . Referrals for Prosecution
How many matters have been referred to the Justice
Department or any other agency, over the past five years,
for the purpose of seeking prosecution, fines, penalties
or reimbursement of the Treasury or the LSC on account
of complaints, audits, or investigations which indicated
a probable violation of the Legal Services Corporation
Act or LSC regulations by recipients or employees of reci-
pients?
6. Grantees and Subgrantees
For each grantee and subgrantee, please provide the
following information:
A. Name, address and phone number of the grantee or
subgrantee.
B. List of the Board of Directors of the grantee.
C. Dollar amount of federal grant or subgrant from
Legal Services Corporation in FY 1980, 1981 and 1982, by year.
D. List of any additional federal funds received in
FY 1980, 1981 and 1982, by year and total amount by year.
E. Dollar amount of any direct state appropriation or
other funding in FY 1980, 1981 and 1982, by year.
F. List any additional state or local funding in FY
1980, 1981 and 1982, by year and total amount by year.
G. Number of employees by category (i.e. attorneys,
paralegals, and clerical) in FY 1980, 1981 and 1982, by year.
H. Total number of work hours by attorneys and by
paralegals in FY 1980, FY 1981 and FY 1982, by year, by
category.
I. Total number of cases for FY 1980, FY 1981 and
FY 1982, by year.
J. Total amount of legal fee awards received in FY
1980, FY 1981 and FY 1982, by year.
K. Please list each fee recovery in excess
of $1,000, annotated by a brief description of the case and
total work hours.
240
L. List name of each class action initiated or pending
during FY 1980, FY 1981 and FY 1982, annotated with the
number of hours spent on each suit, what percentage that
number 'of hours represents of the total work hours performed
by the grantee or subgrantee, and the amount of any legal
fees awarded.
M. The carry-over balance for FY 1980-1981, FY 1981-
1982, and FY 1982-1983, by year.
N. List total amount of interest, dividend, rental or
royalty income for FY 1980, FY 1981, and FY 1982, by year.
0. A list of all real property owned, including
property once owned, but conveyed to another owner. For
each property, list a) date of acquisition and initial cost,
b) cost paid and source of funds for renovation or remodeling,
and c) either the sale price or current market value, and an
aggregative figure of the value of real property owned by
local legal service organizations.
P. A list of all other property owned with an initial
purchase price of $1,000 or more.
Q. A list of the amount paid of FY 80, 81 and 82 on
behalf of the program or any of its employees for professional
or union dues and an aggregate figure. List separately
amounts paid to a) National Legal Aid and Defenders
Association, b) Project Action Groups, c) American Bar
Association, d) union dues (provide name of union), e)
C.O.P.E. or other political action group and an aggregate
figure for each of these.
R. List of any lawsuits against the grantee or subgrantee
initiated or pending in FY 1980, FY 1981, and 1982, annotated
by a brief description of the case and, where appropriate,
the nature of its resolution.
Thank you for your cooperation in this matter. Please
call Kevin McGuiness on my staff (202) 224-6770 once you have
had time to review this letter and can provide an estimation
of the time it will take you to comply with this request.
..Siacerely ,
Orrin G. Hatch
Chairman
OGH:kmh
241
APPENDIX 2
REPORT
BY THE
OFFICE OF FIELD SERVICES
TO THE
PRESIDENT OF THE
LEGAL SERVICES CORPORATION
JULY 13, 1983
242
TABLE OF CONTENTS
1. QUESTION 1(B) and (C) p. 1
2. QUESTION 2(A) P- 5
3. QUESTION 2(B) P H
4 . QUESTION 5 P-12
5. QUESTION 6(A) p. 12
6. QUESTION 6(B) P-12
7 . QUESTION 6(H) P . 12
8. QUESTION 6( J) P.13
9. QUESTION 6(K) p. 13
10. QUESTION 6(L) , p. 13
11. QUESTION 6(0) and (P) p. 14
12. QUESTION 6(Q) P.15
13. QUESTION 6(R) p. 15
14 APPENDIX
PROGRAMS NOT RESPONDING A
APRIL 26 LETTER FROM SENATOR HATCH TO DONALD BOGARD B
MAY 4 LETTER FROM GREGG HARTLEY TO PROGRAM DIRECTORS C
MAY 4 MEMORANDUM FROM GREGG HARTLEY TO REGIONAL DIRECTORS.. D
JUNE 29 MEMORANDUM FROM TLM BAKER TO GREGG HARTLEY E
JUNE 29 MEMORANDUM FROM GREGG HAJJTLEY TO DONALD BOGARD F
243
The Office of Field Services was requested to provide responses to a
number of questions posed In Senator Hatch's letter of April 26, A
summary of those questions and the OFS responses are set forth below. A
copy of all data gathered has been forwarded to the Committee.
QUESTION 1
(B) For FY 1980, 1981 and 1982, Identify :
(i) Each recipient who was found to be in violation of or was found
to have employees acting in violation of the Legal Services
Corporation Act or LSC regulations as a result of the audit process .
(11) The disciplinary measures taken against any recipient or
employee of any recipient found to be in violation of the Legal
Services Corporation Act or LSC regulations as a result of the audit
process .
(C) For FY 1980, 1981 and 1982 :
(I) The number of violations of the Legal Services Corporation Act
or its implementing regulations uncovered as a result of the audit
process.
(II) A breakdown by category of the types of violations found by the
audit process (e.g., representation of ineligible clients, lobbying,
instigation of Impermissible class actions, etc.).
(III) the number of hours found to have been expended by recipients
or employees of recipients representing ineligible clients or
engaging in activities not permitted by the Legal Services
Corporation Act or its implementing regulations.
(iv) The amount of money found to have been expended by recipients'
as a result of representation of ineligible clients or engaging In
activities not permitted by the Legal Services Corporation Act or its
implementing regulations.
RESPONSE :
Because of past LSC practices, information needed to answer questions
l(B)i, 11; l(C)i, 11, was located in the nine LSC Regional Offices
throughout the country. LSC Regional Offices were requested to
respond to the Senator's questions and to provide OFS with the
answers. Upon receipt of the regional office responses they were
forwarded to the Committee. The following is a summary of the
information contained therein.
-1-
244
Prior to commencing with our summary, several Items should be noted.
The regional offices were instructed to strictly read the language
contained in Senator Hatch's letter. Consequently, such language as
"as a result of the audit process" narrowed the scope of the regional
office responses to include only those violations discovered by means
of the audit process. The audit process, which is conducted by
independent auditors, is not likely to discover violations of the
nature described in the questions above.
In addition, several regional offices read the phrase, "in violation
of the Legal Services Corporation Act or its implementing
regulations", to include violations of the LSC Audit Guide standards
rather than violations of the broader regulations pursuant to which
the Audit Guide Is written.
Furthermore, in response to Question l(C)iii, it should be noted that
it has never been the policy of the Legal Services Corporation to
require grantees to keep records concerning attorney hours. Although
there are some programs that have such a practice, the great majority
do not. Therefore, the information is simply not available. As a
further consequence of having no information on attorney hours it Is
impossible to provide an answer to Question 1(C) iv, which requests
the amount of money expended on impermissible activities. Because
our recipients provide services, the only appropriate measure of the
amount of federal funds spent on impermissible activities would
depend upon a determination of the amount of compensation for time
expended for such activities.
The following regional offices found no violations of the Act or
regulations within their regions over the past three years.
o Boston Regional Office
o New York Regional Office
o Seattle Regional Office
o Chicago Regional Office
The Denver Regional Office reports that four programs were cited for
failing to comply with regulations concerning local board composition
and quarterly meeting requirements. In addition, four other programs
were cited for failing to follow the Audit Guide procedures and for
other fiscal irregularities. All but one of the audit problems have
been resolved; and measures have been taken to resolve problems
relating to local board activities.
The Atlanta Regional Office has reported that six programs were found
to have violated the Audit Guide which resulted in those costs being
disallowed as a proper charge to LSC.
-2-
245
The San Francisco Regional Office reports that two programs were
found to be in noncompliance with the Private Attorney Instruction in
1982. Both of these programs had underspent the required amount of
funds. In addition, five programs were found to have violated the
Audit Guide . One program was defunded and no disciplinary action was
taken with regard to the others.
The Philadelphia Regional Office reports that one program had
violated the Audit Guide . The problem was resolved.
The Northern Virginia Regional Office reports that there were two
violations in that region during the past three years. One program
served an ineligible client. However, the regional office indicates
that it was a relatively inconsequential and Isolated instance so it
took no action. The other violation involved providing assistance to
an individual in a criminal matter. The program was reimbursed for
expenses .
It should be further noted that violations of the Act and other
irregularities should be discovered through such processes as the
monitoring and evaluation system. That system requires the on-site
inspection of each program by a monitoring and evaluation team every
18 months. Written reports are subsequently submitted by those
teams. This office will provide, at the Committee's request, a
review and summary of violations or irregularities found in that
process.
In addition, because annual audits are typically prepared by local
independent accounting firms, audits are often Inadequate in the area
of regulatory compliance issues. The Office of Field Services
recommends that such audits be supplemented by an audit process
similar to those conducted by GAO.
â– 3-
246
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QUESTION 2
State Advisory Councils
A) Are there any states which do not have State Advisory Councils? If
so, which ones ?
RESPONSE ;
As of February 1, 1983, there were only six (6) active State Advisory
Councils (SAC). They are as follows:
1. Connecticut - Council members were appointed on March 17, 1982, by
Governor William A. O'Neill. Members' terms of office expired on
March 17, 1983.
2. California - Council members were appointed on April 9, 1982, by
Governor Edmund G. Brown, Jr. Members' terms of office expired on
April 9, 1983.
3. Texas - Council members were appointed on April 13, 1982, by
Governor William P. Clements, Jr. Members' terms of office
expired on April 13, 1983.
4. North Dakota - Council members were appointed on June 16, 1982, by
Governor Allen I. Olsen. Members' terms of office expired on June
16, 1983.
5. Colorado -Council members were appointed by Governor Richard D.
Lamm on August 20, 1982.
6. Virginia - The file indicates that the Virgina SAC is currently
active as is verified by a letter contained therein from
J. Farrell Egge, Esquire, Chairman.
The remaining SACs, at least from our files, appear to be inactive.
The breakdown by LSC Regions is as follows:
BOSTON
1. Connecticut - Currently active, and mentioned above.
2. Maine - Governor was requested by LSC to make appointments but
according to the file, no appointments were ever made.
3. Massachusetts - No recorded activity since 1978.
4. New Hampshire - No recorded activity since 1976.
5. Rhode Island - No recorded activity since 1978.
6. Vermont - No recorded activity since 1976.
248
NEW YORK
1. New York - LSC made a request of the Governor but the file contains
no record of any appointment ever being made.
2. Puerto Rico - No recorded activity since 1976.
PHILADELPHIA
1. Delaware - No recorded activity since 1976.
2 District of Columbia - No recorded activity since 1977. The file
contains a telephone message of a call from Mayor Barry's office on
May 12, 1979 regarding its SAC,
3. Maryland - Last recorded activity was in November, 1980. The SAC
submitted an annual report.
A. New Jersey - No recorded activity since 1979.
5. Pennsylvania - No recorded activity since 1979.
NORTHERN VIRGINIA
1. Michigan - No recorded activity since 1977.
2. Ohio - No recorded activity since 1981, at which time the SAC
submitted an annual report.
3. Virginia - Currently active.-
A. West Virginia - No recorded activity since 1976.
CHICAGO
1. Illinois - No recorded activity since 1977, at which time an annual
report was submitted.
2. Indiana - No recorded activity since 1979, at which time an annual
report was submitted.
3. Iowa - No recorded activity since 1980, at which time the annual
report was submitted.
A. Kansas - No recorded activity since 1979, at which time the annual
report was submitted.
-6-
249
5. Minnesota - No recorded activity since 1977, at which time the annual
report was submitted.
6. Missouri - No recorded activity since 1978.
7. Nebraska - No recorded activity since 1980.
8. North Dakota - Currently active.
9. South Dakota - No recorded activity since 1978 at which time the
annual report was submitted.
10. Wisconsin - No recorded activity since 1980.
ATLANTA
1. Alabama - No recorded activity since 1976.
2. Arkansas - Last recorded acitvity was in 1981
3. Florida - No recorded activity since 1976.
4. Georgia - No recorded activity since 1976.
5. Kentucky - No recorded activity since 1976.
6. Louisiana - No recorded acitvity since 1979.
7. Mississippi - No recorded activity since 1979.
8. North Carolina - No recorded activity since 1978.
9. South Carolina - No recorded activity since 1976.
10. Tennessee - No recorded activity since 1976.
DENVER
1. Arizona - No recorded activity since 1976.
2. Colorado - Currently active.
3. New Mexico - No recorded activity since 1976.
4. Oklahoma - No recorded activity since 1976.
5. Texas - Currently active.
6. Utah - No recorded activity since 1976.
-7-
250
SAN FRANCISCO
California - Currently active.
Nevada - The file contains a letter from Governor Mike O'Callaghan,
dated May 24, 1978, In which he makes clear his Intention not to make
reappointments to the SAC.
SEATTLE
1. Alaska - No recorded activity since 1976.
2. Hawaii - No recorded activity since 1977.
3. Idaho - No recorded activity since 1976.
4. Micronesia - No recorded activity since 1976.
5. Montana - No recorded acltvity since 1979.
6. Oregon - No recorded activity since 1977.
7. Wyoming - No recorded activity since 1976.
8. Washington - No recorded activity since 1976.
QUESTION 2 (cont'd) (A) ;
A) If so, why has the LSC not acted to appoint one for that State .
RESPONSE :
Related provisions of the Legal Services Corporation Act, as amended
1977, Public Law 93-355, Public Law 95-922, (hereinafter referred to
as the Act), Section 1004(f) provide for the appointment of a nine
member advisory council for each state by the Governors of each
state. ". . . the Board shall request (emphasis added) the Governor
of each state to appoint a nine member advisory council for such
state. . ." While the Act itself doesn't specifically address the
question of territories or independent jurisdictions which are not
states, but where Corporation programs are located, the regulations
clearly do. 45 CFR 1603.2(1). Section 1004(f) provides further that
a majority of the members appointed to the council shall be attorneys
admitted to practice in the particular state. The attorney members
are to be appointed only after consultation with and receipt of
recommendations by the Governor from the state Bar Association.
1004(f) charges the State Advisory Councils with the duty to notify
the Corporation of any apparent violations of the Act and applicable
rules, regulations and guidelines. The Act grants to SACs no
additional responsibilities or duties.
-8-
251
While the language of the 1004(f) is clearly mandatory with respect
to the duty of the Corporation's Board of Directors to request the
Governor of each state (and by implication the highest executive
official of each affected jurisdiction) to appoint SACs, it arguably
Imposed that duty only upon the Corporation's first Board. "Within
six months after the first meeting of the Board, the Board
shall. . ." Such a reading of this language, however, results in
anomalous situation LSC finds itself in at present, i.e., with no
clear Congressionally mandated direction with respect to the
obligation of succeeding Boards in this matter. The question is
should lOOA(f) be read in such a way as to make it not only d
mandatory but also a continuing obligation that the present Board and
all succeeding ones (or the Corporation itself after a proper
delegation of authority) be required to take the necessary steps to
insure that the Governor of each state is kept aware of his/her
responsibility in this area, i.e., by making such a request "within
six months of the first meeting of the Board."
Leaving aside for a moment, if that is possible, the political and
historical realities which necesarily attend this and any review of
SACs, it would seem that, in keeping with the well established
principal that, where unclear, statutory language should be read and
interpreted in a way that makes common and practical sense, lOOA(f)
does impose such a mandatory and continuing obligation upon the
Corporation with regard to SACs. The language, "Within six months
after the first meeting of the Board the Board shall request the
Governor of each State to appoint a nine-member advisory council for
such state," is itself, of course, not self explanatory. For
example, if we read the language as Imposing a continuing obligation
upon successive Boards, several questions arise:
1. What constitutes a new Board such that the words "first meeting"
make any sense? Would the replacement of one member, two members,
five members, etc. of the entire Board be required in order to
trigger the "first meeting" requirement?
2. Should "first meeting" be read as referring to only the first
Board?
3. Does every change in Board composition mean that the next meeting
following such a change constitutes a "first meeting"?
A common sense resolution of these seeming problems would be the
realization that any or every change in Board composition would not
necessarily trigger the need to make a request of each Governor to
appoint a SAC. I am referring herein only to situations, such as the
one we have now, where in the great majority of states no SAC
currently exists and/or functions.
-9-
252
100A(f ) also provides that "If ninety (90) days have elapsed without
such an advisory council appointed by the Governor, the Board is
authorized femphasls added, the language reads, not required, but
authorized ] to appoint such a council." The files of the SAC's
suggest that this has never been done by the Corporation. Again,
with respect to the above discussed provision. It Is unreasonable to
read this provision as applying to only the first Board of the
Corporation and not to succeeding ones. It is important to note here
that nowhere in the Act does it say or in the legislative history has
it ever been suggested that the existence of the SACs is mandated.
The only mandatory language specifically addressed to the Corporation
speaks to the Corporation's obligation to make a request of each
state Governor. The additional mandatory language contained in
1004(f) applies to either the Governor of each state or to the
councils themselves.
1004(f) provides that the membership of the SACs "shall be subject to
annual reappointment." Hence one year terms of office are specified
for council members. The argument for reading 1004(f) as Imposing
both a mandatory and continuing obligation upon the Corporation to
request the appointment of SAC members is further strengthened by
this provision relating to term of office. 1004(f) goes on to make
any meeting of the SACs subject to the requirements of the "Sunshine
Act."
The legislative history of 1004(f), as compared to that of the other
sections of the Act, is sparse and generally not very helpful in
resolving the issues raised thus far. Although there are a few clues
with respect to some of said Issues, the question becomes one of the
interpretation of this history. For example, with respect to both
the Senate and House bills which resulted in the Act, while the House
bill required the Board to appoint a SAC within ninety (90) days if
the Governor failed to do so, the Senate version, on the other hand,
simply authorized the Board to make such appointments. It is the
Senate version which prevailed on this point and thus appears in the
Act. Conference Report, H.R. 7824, p. 18. H.R. 3480 would require
the Board to make appointments. Clearly then, the expressed
intention of Congress was to give to the Corporation the option to
appoint SACs In those Instances in which the state Governors failed
to do so in a timely manner. It can be strongly argued that it Is
logical to infer from this bit of legislative history that Congress
did not Intend to mandate the creation of SAC but merely an option to
do so. The problem still remains, however, with respect to the
mandatory language "the Board shall femphasls added] request the
Governor of each state to appoint..." While the creation of SACs is
clearly not mandated, the obligation to request that they be created
is, just as clearly, mandated. At the outset, the Corporation did
request each state's Governor to appoint a SAC.
•10-
253
QUESTION 2 (B) '. .
For each of the last five years please provide :
(I) The number of complaints received by the Corporation from the
State Advisory Councils .
RESPONSE ;
The Corporation has received only one complaint.*
QUESTION 2 (B)
(II) The Investigative action taken by the Legal Services
Corporation In response to these complaints .
RESPONSE:
Records Indicate that no action was taken.
QUESTION 2 (B)
(ill) The number of complaints found to be valid .
RESPONSE ;
No complaints were found to be valid.
QUESTION 2 (B)
(iv) The number of recipients who had disciplinary action taken
against them as a result of complaints lodged by the State
Advisory Councils .
RESPONSE:
No disciplinary action has been taken.
QUESTION 2 (B)
(v) The name and address of each recipient against whom
disciplinary action was taken as a result of complaints lodged
by the State Advisory Councils and the nature of the discipline .
RESPONSE :
Since there were no violations, a response is unnecessary.
*Files indicate that Mississippi State Advisory Council originally
submitted a complaint In Spring, 1978. The complaint was resubmitted
January 29, 1979, after receiving no response from LSC. The complaint
was filed by the City of Tupelo against North Mississippi Rural Legal
Services. The file indicates that no action was taken.
-11-
29-379 O— 84 17
254
QUESTION 5
Referrals for Prosecution
How many matters have been referred to the Justice Department or any
other agency, over the past five years, for the purposes of seeking
prosecution, fines, penalties or reimbursement of the Treasury or the
LSC on account of complaints, audits, or investigations which
indicated a probable violation of the Legal Services Corporation Act
or LSC regulations by recipients or employees of recipients ?
RESPONSE :
Northern Virginia, Denver, Atlanta, Boston, New York, Chicago and
Seattle Regional Offices report no referrals for prosecution.
San Francisco reports that the Legal Aid Society of Monterey program
referred a cause of action against a former director for taking and
not returning unsecured salary advances to the Monterey County
District Attorney's Office. No action was taken by the district
attorney; the program is seeking civil remedies.
The Philadelphia Regional Office reports that in 1977, Neighborhood
Legal Services, Washington, D.C, discovered an embezzlement of
$37,992 and reported it to the appropriate authorities. The
accountant responsible for the embezzlement pleaded guilty; and the
program succeeded in recouping all its losses.
QUESTION 6
A) Name, address and phone number of the grantee or subgrantee .
RESPONSE ;
The answer to this question can be found in Attachment A.
QUESTION 6
B) List of the Board of Directors of the grantee .
RESPONSE :
A list of Board of Directors has been provided to the Committee. No
further action Is required.
QUESTION 6
H, Total number of work hours by attorneys and by paralegals in FY
1980. FY 1981 and FY 1982, by year, by category .
•12-
255
RESPONSE:
As has been stated in our answer to Question 1(C) (iii), it has never
been the policy of the Legal Services Corporation to require grantees
to keep records concerning attorney hours. Although there are some
programs that have such a practice, the great majority do not.
Consequently, the information is simply not available.
QUESTION 6
J) Total amount of legal fee awards received in FY 1980, FY 1981
and FY 1982, by year.
RESPONSE:
The total amount of legal fee awards received in FY 1980, 1981 and
1982 with 297 programs out of 326 reporting was $11,432,445. Tlie
following is a breakdown of that total by regions:
DENVER $1,145,817
SAN FRANCISCO $2,095,730
ATLANTA $1,158,274
PHILADELPHIA $ 166,983
CHICAGO $2,325,833
BOSTON
SEATTLE
NORTHERN VA.
NEW YORK
$1,374,525
$ 868,221
$ 881,975
$1,415,087
TOTAL
QUESTION 6
$11,432,445
K) Please list each fee recovery in excess of $1,000, annotated by
a brief description of the case and total work hours.
RESPONSE:
A brief description of each case where a fee lecovery in excess of
$1,000 was submitted by a majority of the programs to OFS. A copy of
those submissions was forwarded to the Committee. It is not feasible
for OFS to summarize all such cases because of time constraints;
however, all attorney fees have been totaled. See our response to
Question (6)-J above.
QUESTION 6
L)
List name of each class action initiated or pending during FY
1980, FY 1981 and FY 1982, annotated with the number of hours
spent on each suit, what percentage that number of hours
represents of the total work hours performed by the grantee or
subgrantee, and the amount of any legal fees awarded.
-13-
256
RESPONSE ;
OFS has summarized the regional office responses. See Attachment (B).
QUESTION 6
0) A list of all real property owned, including property once owned
but conveyed to another owner. For each property, list (a) date of
acquisition and initial cost; (b) cost paid and source of funds for
renovation or remodeling, and (c) either the sale price or current market
value, a nd an aggregate figure of the value of real property owned by
local legal service organizations .
p) A list of all other property owned with an initial purchase
price of $1,000 or more^
RESPONSE ;
Due to time considerations OFS, was unable to summarize information
gathered pertaining to question 6(0) as well as question 6(P).
However, a copy of that information has already been forwarded to the
Committee. 294 out of 326 programs responded to question 6(0)(c).
The total amount expended on real property was $15,454,196.
269 out of the 326 programs responded to question 6(P). The total of
other property (equipment) owned with an initial purchase price of
$1,000 or more is $17,791,238. The following is a breakdown of
responses by region:
REGION REAL PROPERTY EQUIPMENT
DENVER
$1,326,077 $2,800,234
SAN FRANCISCO $4,275,621 $1,026,992
SEATTLE
BOSTON
NEW YORK
PHILADELPHIA
NORTHERN VIRGINIA
CHICAGO
ATLANTA
i 210,500 i 505,043
i 343,323 i 849,709
$1,388,287 i 857,761
$ 961,179 il, 496, 770
i 789,772 $1,355,960
$ 110,000 i2, 218, 045
$6,049,437 $6,680,724
TOTAL $15,454,196 $17,791,238
•%1.4c^
257
QUESTION 6
Q) A list of the amount paid in FY 80, 81 and 82 on behalf of the
progr am or any of Its employees for professional or union dues and an
aggregate figure. List separately amounts paid to (a) National Legal Aid
and Defenders Association; (b) Project Action Groups; (c) American Bar
Asociation; (d) union dues (provide name of union); (e) C.O.P.E. or other
political action group and an aggregate figure for each of these .
RESPONSE :
Due to time considerations OFS is unable to provide totals of each
separate category. However, the Committee has already been provided
with the raw data collected in this area. OFS has assembled the
total aggregate amount of dues paid for FY 1980, 1981, and 1982 for
the 295 out of 326 programs reporting which is $2,257,475. The
following is a breakdown by region:
DENVER
SAN FRANCISCO
SEATTLE
BOSTON
NEW YORK
$288,856
$132,676
$116,644
$ 84,252
$441,881
PHILADELPHIA
NORTHERN VA.
CHICAGO
ATLANTA
$150,493
$219,654
$230,661
$592,358
TOTALS
$2,257,475
QUESTION 6
R) List of any lawsuits against the grantee or subgrantee initiated
or pending in FY 1980, FY 1981, and 1982, annotated by a brief
description of the case and, where appropriate, the nature of its
resolution .
RESPONSE :
A majority of LSC programs provided OFS with a list and description
of lawsuits against them which we forwarded to the Committee. At the
Committee's request, OFS can provide a summary at a later date.
-15-
258
LSC
REGIONAL
OFFICE
(1)
ATTORNEY FEES
(2)
DUES
(3)
REAL PROPERTY
(4)
EQUIPMENT
DENVER
Missing
il, 145,817
t
288,856
1
$1,326,077
$2,800,234
6
SAN FRANCISCO
Missing
2,095,730
6
132,676
6
4,275,621
7
1,026,992
6
SEATTLE
Missing
868,221
116,644
210,500
505,043
4
BOSTON
Missing
1,374,525
84,252
343,232
849,709
NEW YORK
Missing
1,415,087
441,881
2
1,388,287
2
857,761
2
PHILADELPHIA
Missing
166,983
3
150,493
2
961,179
1
1,496,770
6
NORTHERN
VIRGINIA
Missing
881,975
219,654
789,772
1
1,355,960
7
CHICAGO
Missing
2,325,833
1
230,661
1
110,000
2
2,218,045
2
ATLANTA
Missing
1,158,274
592,358
6,049,437
6,680,724
6
TOTAL
$11,432,445
i2
,257,475
$15,454,196
$17,791,238
TOTAL MISSING(5)
10
12
13
39
PROGRAMS DENVER
SAN FRAN.
SEAT,
BOSTON N
.Y.
, PHILA. N.
VA.
CHIC. ATLANTA
NOT
RESPONDING
BY REGION;
TOTAL:
6
307
3
LSC Programs Re;
1 4 2
sponded out of
1
326
1 2
Footnotes
(1) QUESTION 6(J) Total amount of legal fee awards received in fiscal
years 1980, 1981 and 1982.
(2) QUESTION - 6(Q) A list of the amount paid in fiscal years 1980, 1981 and
1982 on behalf of the program or any of its employees
for professional or union dues...
-16-
259
(3) QUESTION -6(0) (C) An aggregate figure of the value of all real property
owned by the program.
(4) QUESTION -6(P) A list of all other property owned with an initial
purchase price of $1,000 or more...
(5) Did not provide us with the requested information in that category.
-17-
260
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A.
OftltIN C HATCH. UTAH. CHAJRMAM
l»0«(l»T T STAfFOXO VT
OAN OUATLE ind
DON NICKUS OKLA
GORDON J HUMPHHEY MH
JtnmAH DENTON ALA.
LOWfu ^ WEiCKEI JR. CONN
CHARLES E. GRASSLTr iQWa
JOHN P EAST N C
PAULA HAWKINS FLA
EDWARD M KENNEDY MASS
JENNINGS RANDOLPH w VK
CLAIBORNE PELL R )
THOMAS f EACLETON MO
DONALD W RIEGLE jr. MICH
HOWAJtD M. METZENBAUU OHIO
SPARK W MATSUNAGA HAWAJI
CHRISTOPHER J DOOO. CONN
RQNAU) f DOCKSAI. STAFF DmECTOR
tATXtlYN OL HIGCINS. MINORITY STAFF DIRECTOR
Bnited States ^oiate
COMMITTEE ON bABOR AND
HUMAN RESOURCES
WASHINGTON, DC. 20510
April 26, 1983
Mr. Donald P. Bogard
President
Legal Services Corporation
733 15th Street, N.W.
Washington, D.C. 20005
Dear Mr. Bogard:
On May 4, 1983, the Committee on Labor and Human
Resources is scheduled to hold an authorization hearing on
the Legal Services Corporation. We would like for you and
Mr. Robert E. McCarthy, Esq., to testify on behalf of the
Corporation. The hearing should begin at approximately
10:00 a.m. Please feel free to have any member of your staff
accompany you as well.
In order to prepare fully for the hearing, we would
appreciate your providing me with the information requested
below prior to the hearing. While I realize that this is an
extensive request, I feel that it is imperative that we have
this information in advance of the hearing so that our review
can be objective, thorough and fair.
With regards to the national office, please provide the
following :
1. Audits :
A. For FY 80, 81 and 82:
(i) The number of audits of recipients performed
by LSC.
(ii) The number of audits of recipients that
were not able to be performed because of poor,
improper or nonexistent record keeping by recipients.
(iii) The number of audits that were not performed
because of non-cooperation by recipients.
(iv) The number of audits provided to LSC by
recipients .
267
(v) The name and address of any recipient who
had its funding reduced, terminated or refunding denied
as a result of audit findings.
(vi) The name and address of any recipient who
had its funding reduced, terminated or refunding denied
because of the recipient's failure to cooperate with
the audit process.
B. For FY 1980, 1981 and 1982, identify:
(i) Each recipient who was found to be in
violation of or was found to have employees acting
in violation of the Legal Services Corporation Act
or LSC regulations as a result of the audit process.
(ii) The disciplinary measures taken against
any recipient or employee of any recipient found to be
in violation of the Legal Services Corporation Act or
LSC regulations as a result of the audit process.
C. For FY 1980, 1981 and 1982:
(i) The number of violations of the Legal
Services Corporation Act or its implementing regula-
tions uncovered as a result of the audit process.
(ii) A breakdown by category of the types of
violations found by the audit process (e.g., repre-
sentation of ineligible clients, lobbying, instigation
of impermissible class actions, etc.).
(iii) The number of hours found to have been
expended by recipients or employees of recipients
representing ineligible clients or engaging in activities
not permitted by the Legal Services Corporation Act
or its implementing regulations.
(iv) The am.ount of money found to have been
expended by recipients as a result of representation
of ineligible clients or engaging in activities not
permitted by the Legal Services Corporation Act or its
implementing regulations.
2 . State Advisory Councils
A. Are there any states which do not have state advisory
councils? If so, which ones? If so, why has the LSC not
acted to appoint one for that state?
268
B. For each of the last five years, please provide:
(i) The number of complaints received by the
Corporation from the State Advisory Councils.
(ii) The investigative action taken by the Legal
Services Corporation in response to these complaints.
(iii) The number of complaints found to be valid.
(iv) The number of recipients who had disciplinary
action taken against them as a result of complaints
lodged by the State Advisory Councils.
(v) The name and address of each recipient
against whom disciplinary action was taken as a result
of complaints lodged by the State Advisory Councils
and the nature of the discipline.
3. Citizen Complaints
For each of the last five years, please provide:
(i) The number of complaints against recipients
received by the Legal Services Corporation from private
parties .
(ii) The investigative action taken by the
Corporation in response to these complaints.
(iii) The number of complaints determined to be
valid .
(iv) The number of recipients who had disciplinary
action taken against them as a result of complaints
lodged by private parties.
(v) The name and address of any recipients
who had disciplinary action taken against them as a
result of complaints by private parties and the nature
of the discipline.
4 . Nature of Complaints
Please provide a breakdown by category of the types of
complaints received by the Legal Services Corporation for
FY 1980, 1981 and 1982 (e.g., client solicitation, malicious
prosecution, lobbying, representation of ineligible clients,
etc.) .
269
5. Referrals for Prosecution
How many matters have been referred to the Justice
Department or any other agency, over the past five years,
for the purpose of seeking prosecution, fines, penalties
or reimbursement of the Treasury or the LSC on account
of complaints, audits, or investigations which indicated
a probable violation of the Legal Services Corporation
Act or LSC regulations by recipients or employees of reci-
pients?
6 . Grantees and Subgrantees
For each grantee and subgrantee, please provide the
following information:
A. Name, address and phone number of the grantee or
subgrantee .
B. List of the Board of Directors of the grantee.
C. Dollar amount of federal grant or subgrant from
Legal Services Corporation in FY 1980, 1981 and 1982, by year.
D. List of any additional federal funds received in
FY 1980, 1981 and 1982, by year and total amount by year.
E. Dollar amount of any direct state appropriation or
other funding in FY 1980, 1981 and 1982, by year.
F. List any additional state or local funding in FY
1980, 1981 and 1982, by year and total amount by year.
G. Number of employees by category (i.e. attorneys,
paralegals, and clerical) in FY 1980, 1981 and 1982, by year.
H. Total number of work hours by attorneys and by
paralegals in FY 1980, FY 1981 and FY 1982, by year, by
category.
I. Total number of cases for FY 1980, FY 1981 and
FY 1982, by year.
J. Total amount of legal fee awards received in FY
1980, FY 1981 and FY 1982, by year.
K. Please list each fee recovery in excess
of $1,000, annotated by a brief description of the case and
total work hours.
29-379 0—84 18
270
L. List name of each class action initiated or pending
during FY 1980, FY 1981 and FY 1982, annotated with the
number of hours spent on each suit, what percentage that
number of hours represents of the total work hours performed
by the grantee or subgrantee, and the amount of any legal
fees awarded.
M. The carry-over balance for FY 1980-1981, FY 1981-
1982, and FY 1982-1983, by year.
N. List total amount of interest, dividend, rental or
royalty income for FY 1980, FY 1981, and FY 1982, by year.
0. A list of all real property owned, including
property once owned, but conveyed to another owner. For
each property, list a) date of acquisition and initial cost,
b) cost paid and source of funds for renovation or remodeling,
and c) either the sale price or current market value, and an
aggregative figure of the value of real property owned by
local legal service organizations.
P. A list of all other property owned with an initial
purchase price of $1,000 or more.
Q. A list of the amount paid of FY 80, 81 and 82 on
behalf of the program or any of its employees for professional
or union dues and an aggregate figure. List separately
amounts paid to a) National Legal Aid and Defenders
Association, b) Project Action Groups, c) American Bar
Association, d) union dues (provide name of union) , e)
C.O.P.E. or other political action group and an aggregate
figure for each of these.
R. List of any lawsuits against the grantee or subgrantee
initiated or pending in FY 1980, FY 1981, and 1982, annotated
by a brief description of the case and, where appropriate,
the nature of its resolution.
Thank you for your cooperation in this matter. Please
call Kevin McGuiness on my staff (202) 224-6770 once you have
had time to review this letter and can provide an estimation
of the time it will take you to comply with this request.
C'-^
Orrin G. Hatch
Chairman
OGH : kmh
271
-C-
iS LEGAL SERVICES CORPORATION oonaid p^BogaM
733 Fifteenth Street, N.W., Washington, D.C. 20005
Writer's Direct Telephone
(202) 272-A080
May 4, 1983
Dear Project Director:
It Is with great reluctance that I author this letter to each of you. I
am fully aware that during the past several months the Legal Services
Corporation or the Regional Offices of the Corporation have had to make
substantial and numerous Inquiries of your programs. I realize that each of
these Inquiries cost your program substantial staff time and Inconvenience.
Most of the inquiries which we have posed to you are as a result of
Congressional inquiries of the Corporation.
I am also fully aware that many programs and project directors are
concerned about the nature of the questions and may feel dubious about the
purposes for which the Information is being collected. Please let me reassure
you and your staff that the information is being collected so that we may
evaluate the status of all LSC funded programs, the status of the delivery of
legal services to poor people, and so that we may adequately respond to those
organizations and persons which have oversight on our activities. I
appreciate your cooperation and concern.
In a letter dated April 26 of this year. Senator Orrln G. Hatch, Chairman
of the Committee on Labor and Human Resources, requested answers to a number
of questions, some of which require your cooperation to appropriately answer.
Senator Hatch chairs the Senate Committee which has responsibility for LSC
authorization and oversight. The committee's first hearing on reauthorization
is May 4 and will be followed by others which are not yet scheduled. I cannot
stress enough the Importance that your answers to these questions be detailed,
accurate, and complete. If you are unable to answer any questions, please
give the reasons for your response. Your answers must be received by LSC no
later than May 30.
Please respond directly to Washington headquarters to the attention of Tim
Baker, Staff Assistant.
In addition to the areas of Inquiry which I provide for your response in
this letter, the regional offices will be making additional inquiries to
follow up on expanded inquiries in areas previously explored.
To fulfill the Congressional inquiries, it is necessary that our grantees .
provide responses to the following areas of inquiry:
1. (a) Total amount of legal fee awards received in fiscal years 1980,
1981 and 1982, by year;
(b) Please list each fee recovery in excess of $1,000 annotated by a
description of the case and total work hours;
272
2. A list of all real property owned, Including property once owned but
conveyed to another owner. For each property, list:
(a) date of acquisition and Initial cost;
(b) cost paid and source of funds for renovation or remodeling, and;
(c) either the sale price or current market value and,
(d) an aggregate figure of the value of all real property
owned by the program.
3. A list of all other property owned and initial purchase price of
$1,000 or more (e.g., typewriters, computers, word processors,
furniture, etc.).
A. A list of the amount paid in fiscal year 1980, 1981 and 1982 on behalf
of the program or any of its employees for professional or union dues
in an aggregate figure for each year. List separately amounts paid to:
(a) The National Legal Aid and Defenders Association;
(b) Project Directors group;
(c) American Bar Association;
(d) Union dues (provide name of each union),
(e) COPE or other political action groups.
5. Please provide a list of any lawsuits against your program which were
initiated or pending in fiscal years 1980, 1981 and 1982, annotated by
a brief description of the case, and where closed, the nature of its
resolution.
We will appreciate your timely response to these inquiries. We realize
how burdensome this request is, but simply remind each program that in receipt
of grant funds from the Corporation each program assures that it will, upon
request, cooperate with all data collection and evaluation activities
undertaken by the Corporation. Please respond to the areas of inquiry in the
order presented and as appropriate, in as concise a manner as possible.
Gifegg-'L. Hartley
Director
Office of Field Services
cc: Tim Baker
Regional Directors
GH/eje
273
-D-
LEGAL SERVICES CORPORATION " ;';,'„„;i:^
733 Fifteenth Street, S'.W., Washingtuii. D.C. 20005
^^^i[l.â– r^ IJirc-ct TeitfplMinc
Co:)
MEMORANDUM No. 83-29
DATE: May 4, 1983
TO: Regional Directors
FROM: Gregg
SUBJECT: Collection of Information
lai Directors
Hartley, Director, OFS|d^
Before you throw up your hands in pure despair, let me tell you that
I appreciate your response to memorandum No. 83-21 dated March 21 of this
year from Dennis Daugherty pertaining to Congressional information
requests. However, there is bad news and good news. The bad news is
that we have had additional Congressional information requests which we
must respond to in short order. The good news is that some of the
information which you have already collected or that the programs have
collected can be used in part to satisfy the new requests.
In an April 26 letter, Senator Orrin G. Hatch, Chairman of the
Committee on Labor and Human Resources requested answers to a number of
questions, many of which will require your cooperaton and the cooperation
of our recipients to answer. Senator Hatch chairs the Senate committee
which has responsibility for LSC reauthorization and oversight. The
committee's first hearing on reauthorization is May 4 which will be
followed by others which are not yet scheduled. In this memorandum I
have listed several questions to which the regional offices should
prepare the information for the response. I cannot stress enough the
importance that the answers to these questions must be detailed, accurate
and complete. If your office is unable to answer any question, please
give the reasons for that response. In addition, you will receive a copy
of a letter from myself to project directors requesting their assistance
in responding to a number of questions. All of the answers must be
received by OPS no later than May 30.
274
If the information requested is in an area to which your office has
already coordinated responses from our programs, please simply fill in
the gaps and indicate which information has alijeady been sent to OFS
headquarters.
Please prepare your responses in a concise document responding in the
order of the questions as presented. The areas of concern are as follows:
1. For fiscal years 1980, 1981 and 1982, identify:
(a) each recipient who was found to be in violation of or
was found to have employees acting in violation of the
Legal Services Corporation Act or LSC Regulations as a
result of the audit process.
(b) the disciplinary measures taken against any recipient
or employee of any recipient found to be in violation of
the Legal Services Corporation Act or LSC Regulations as a
result of the audit process.
2. For fiscal years 1980, 1981 and 1982:
(a) the number of violations of the Legal Services
Corporation Act or its implementing regulations uncovered
as a result of the audit process.
(b) a breakdown by category of the types of violations
found by the audit process (e.g., representation of
ineligible clients, lobbying, instigation of impermissible
class actions, etc.).
(c) the number of hours found to have been expended by the
recipients or employes of recipients representing
ineligible clients or engaging in activities not permitted
by the Legal Services Corporation Act or its implementing
regulations .
(d) the amount of money found to have been expended by
recipients as a result of representation of ineligible
clients or engaging in activities not permitted by the
Legal Services Corporation Act or its implementing
regulations .
3. The following question is being reviewed by the General Counsel
but if regional offices have information which would be of
assistance to headquarters in responding to Senator Hatch, it
would be appreciated if you would take the time to carefully
respond.
How many matters have been referred to the Justice Department or
275
any other agency, over the past five years, for the purpose of
seeking prosecution, fines, penalties or reimbursement of the
treasury or LSC on account on complaints, audits, or
investigations which indicated a probable violation of the Legal
Services Corporation Act or LSC regulations by recipients or
employees of recipients?
4 List the name of each class action initiated or pending during
fiscal years 1980, fiscal year 19S1, and fiscal year 1982,
annotated with the following information: whether or not .he
case has been closed, the number of hours spent on each^^^^^'
what percentage that number of hours represents of the total
work hours performed by the grantee or subgrantee, and the
amount of any legal fees awarded.
Once again, I can only ask for your cooperation and timely response
so that we may fully respond to the requests of the Congress.
cc: Jim Streeter
Tim Baker
Joshua Brooks
Dennis Daugherty
GH/eje
276
MEMORANDUM
TO: Gregg Hartley^
FROM: Tim Bake
DATE: June 29, fl983
RE: Update On OFS Activity Pertaining To The Senate Heeirings
In preparing the OFS response to Senator Hatch's request it became
apparent that several copies of a list of our grantees and "subgrantees"
would be needed for the following reasons :
1 . In order to tabulate program responses to the inquiries
concerning attorney fees, fees and dues, cmd capital expenditures
a list of LSC grantees woujJbe necessary.
2. liSC never provided a response to Question 6(A) of Senator
Hatch ' s letter which requested the name , address and phone
number of each LSC grantee and subgrantee . An immediate response
is necessary.
3. In responding to several questions from Senator Hatch's staff,
it has -become apparent that the list of our grantees arnd "subgrantees"
is not accurate and it is inconsistent. As we previoBly discussed,
our regional offices will need to update the listj^to include address
and name changes, and to list each program's "subgrantees".
Yesterday, I made the request to Gail Francis. Today, I was informed
that I would have a worksheet containing a list of our grantees by Thursday
morning so that work on Number 1 could begin. Lists for Niombers 2 and 3 will
be ready by Friday July 1 .
/
277
'F-
LEGAL SERVICES CORPORATION
733 Fifteenth Street, N.W., Washington, D.C. 20005
Donald P Bnpird
PrrMtirrtl
Writer's Direct Telephone
(202)
MEMORANDUM
May 29, 1983
TO: Donald Bogard, Dennis Daugherty, and James Streeter
FROM: Gregg Hart ley â– â– â– ^"H-
RE: OFS Response to Senator Hatch's Letter
In preparation for the July 12 and 15 Senate Labor Committee
Hearings, the Office of Field Services will provide the following
response to Senator Hatch's April 26 letter in report form.
QUESTION
(B) For FY 1980, 1981 and 1982, identify:
(i) Each recipient who was found to be in violation of or was
found to have employees acting in violation of the Legal Services
Corporation Act or LSC regulations as a result of the audit process.
(ii) The disciplinary measures taken against any recipient or
employee of any recipient found to be in violation of the Legal
Services Corporation Act or LSC regulations as a result of the audir
process.
OFS will summarize the responses it received from the Regional Office
QUESTION
(C) For FY 1980, 1981 and 1982:
(i) The number of violations of the Legal Services Corporation
Act or its implementing regulations uncovered as a result of the
audit process.
RESPONSE
OFS will summarize the responses it received from the Regional Offices
278
QUESTION
(ii) A breakdown by category of the types of violations found by
the audit process (e.g., representation of ineligible clients,
lobbying, instigation of impermissible class actions, etc.).
RESPONSE
OFS will summarize the responses it received from the Regional Offices
QUESTION
(iii) The number of hours found to have been expended by
recipients or employees of recipients representing ineligible clients
or engaging in activities not permitted by the Legal Services
Corporation Act or its implementing regulations.
RESPONSE
The response from OFS is the following: It has never been the policy of
the Legal Services Corporation to require grantees to keep records
concerning attorney hours. Although there are some programs that have
such a practice, the great majority do not. Consequently, the
information is simply not available.
QUESTION
(iv) The amount of money found to have been e.xpended by
recipients as a result of representation of ineligible clients or
engaging in activities not permitted by the Legal Services
Corporation Act or its implementing regulations.
RESPONSE
OFS will summarize the responses it received from the Regional Offices
QUESTION
STATE ADVISORY COUNCILS
A. Are there any states which do not have state advisory councils?
If so, which ones? If so, why has the LSC not acted to appoint one for
that state?
B. For each of the last five years, please provide:
(i) The number of complaints received by the Corporation from
the State Advisory Councils.
279
(ii) The investigative action taken by the Legal Services
Corporation in response to these complaints.
(ip.i) The number of complaints found to be valid.
(iv) The number of recipients who had disciplinary action tken
against them as a result of complaints lodged by the State Advisory
Councils. -
(v) The name and address of each recipient against whom
disciplinary action was taken as a result of complaints lodged by the
State Advisory Councils and the natrue of the discipline.
RESPO.N'SE
OFS has already supplied answers in summary form. Copies of those
answers are attached for your review.
QUESTION
REFERRALS FOR PROSECUTLON
How many matters have been referred to the Justice Department or any
other agency, over the past five years for the purpose of seeking
prosecution, fines, penalties or reimbursement of the Treasury or the LSC
on account of complaints, audits, or investigat ins which indicated a
probable violation of the Legal Services Corporation Act or LSC
regulations by recipients or employees of recipients?
RESPONSE
OFS will summarize the responses it received from the Regional Offices
QUESTION
A. Name, address and phone number of the grantee or subgrantee.
RESPONSE
OFS, its Regional Offices and OIM will provide an updated version of its
grantees and subgrantees for 1983.
QUESTION
B. List of the Board of Directors of the grantee.
RESPONSE
OFS has provided Senator Hatch with this information. No further action
is required.
280
QUESTION
H. Topal number of work hours by attorneys and by paralegals in FY
1980, FY 1981 and FY 1982, by year, by category.
RESPONSE
It has never been the policy of the Legal Services Corporation to require
grantees to keep records concerning attorney hours. Although there are
some programs that have such a practice, the great majority do not.
Consequently, the information is simply not available.
QUESTION
J. Total amount of legal fee awards received in FY 1980, FY 1981
and FY 1982, by year.
RESPONSE
OFS will total the attorney fee responses to the Hatch letter.
QUESTION
K. Please list each fee recovery in excess of 51,000, annotated by
a brief description of the case and total work hours.
RESPONSE
OFS will not provide a summary of those cases in which attorney fees in
excess of $1,000 were recovered.
QUESTION
L. List name of each class action initiated or pending during FY
1980, FY 1961 and FY 1982, annotated with the number of hours spent on
each suit, what percentage that number of hours represents of the total
work hours performed by the grantee or subgrantee, and the amount of any
legal fees awarded.
RESPONSE
OFS will list the names, dates, status, staff time to-date and/or to
completion, cause numbers and programs initiating class action lawsuits
over the past 3 years where possible.
QUESTION
0. A list of all real property owned, including property once
owned, but conveyed to another owner. For each property, list (a) date
of acquisition and initial cost; (b) cost paid and source of funds for
281
renovation or remodeling, and (c) either the sale price or current market
value, ar.d an aggregative figure of the value of real property owned by
local legal service organizations.
P. A list of all other property owned with an initial purchase
price of $1,000 or more.
RESPONSE
OFS will total the amount by region of the real property and personal
â– property acquired over the past three years with a purchase price of over
$1,000.
QUESTION
Q. A list of the amount paid of FY 80, 61 and 82 on behalf of the
program or any of its employees for professional or union dues and an
aggregate figure. List separately amounts paid to (a) National Legal Aid
and Defenders Association; (b) Project Action Groups; (c) American Bar
Association; (d) union dues (provide name of union); (e) C.O.P.E. or
other political action group and an aggregate figure for each of these.
RESPONSE
OFS will total by region the aggregate amount of fees and dues paid by
LSC grantees .
QUESTION
R. List of any lawsuits against the grantee or subgrantee initiated
or pending in FY 1980, FY 1961 and 1982, annotated by a brief description
of the case and, where appropriate, the nature of its resolution.
RESPONSE
OFS will not summarize the lawsuits filed against LSC grantees
282
APPENDIX 3
€•©*€
THE WINNERS(?)
THE LOSERS ARE THE TAXPAYERS
THE VICTIMS ARE THE POOR
A REPORT ON LEGAL SERVICES CORPORATION
AND
THEIR ABUSES OF THE PEOPLE OF THE
COMMONWEALTH OF PENNSYLVANIA
Prepared and Compiled by:
Diann R. Jenkins
Co- Chairperson
Swissvale Comnictec for
Quality EducaLion
1622 S. Braddock Avenue
Swissvale, Pittsburgh, PA 15211
283
c-og-c
March, 1982
"AMONG OPPONENTS OF THE COURT -ORDERED MERGER THAT CREATED THE WOODLAND
HILLS SCHOOL DISTRICT, NEIGHBORHOOD LEGAL SERVICES IS MENTIONED IN
TONES USUALLY RESERVED FOR THE FORCES OF EVIL. BUT NLSA OFFICIALS
INSIST THEY'RE NOT IN THE BUSINESS OF BRINGING ABOUT SOCIAL REFORM - THE
AGENCY SIMPLY REPRESENTS THE POOR IN ANY CASE "
And so reads the opening lines In an article dated 2-4-82 in the Pittsburg:
Press .
According to Howard Thorkelson, Exec. Dir. of PA Legal Services Center,
there is a difference between the kinds of cases taken on by Legal Service
attorneys and those taken on by public interest legal groups. It's
acceptable for public interest groups to herald a cause, however,
"that's not true in Legal Service." THAT STATEMENT IS COMPLETELY
UNTRUE -
ON NOVEMBER 2, 1981, A PRESS RELEASE FROM THE OFFICE
RICHARD THORNBURGH "EXPRESSED HIS GRATITUDE AT THE SA
THE REMAINING HOSTAGES AT GRATERFORD PRISON". HE WEN
"THE RINGLEADER IN THE ATTEMPTED ESCAPE AND HOSTAGE-T
TIME CONVICTED MURDERER. HE MURDERED A POLICE OFFICE
PRISON, MURDERED A WARDEN AND DEPUTY WARDEN. NEVERTH
LEGAL SERVICES OF PHILADELPHIA INSISTED UPON PUSHING
IN 1975 REQUIRING THAT THIS CONVICT BE RETURNED TO TH
POPULATION AT GRATERFORD. THUS, ONE LESSON THAT M
TAKEN FROM THIS SITUATION IS THAT NEVER AGAIN SHOULD
"CAUSE" GROUPS , OR EVEN THE COURTS, TO PLACE THE PURP
VICIOUS CRIMINALS ABOVE THE SAFETY OF LAW ENFORCEMENT
OFFICERS WITHOUT THE .STBONGEST POSS IBLE OPPOSITION . "
OF PA. GOVERNOR
FE RELEASE OF
T ON TO SAY -
AKING IS A THREE-
R AND WHILE IN
ELESS, COMMUNITY
FOR A COURT ORDER
E GENERAL PRISON
UST CERTAINLY BE
GOVERNMENT PERMIT
ORTED RIGHTS OF
AND CORRECTION
THE FACT REMAINS THAT LEGAL SERVICES WAS A CAUSE GROUP IN 1975 AND AS
OF 1982 HAS SHOWN THAT THAT HAS NOT CHANGED - IN REALITY, IT HAS BECOME
A HOTBED OF CAUSE RELATED ATTORNEYS WORKING FOR SOCIAL CHANGES THAT
DON'T NECESSARILY BENEFIT THE GENERAL PUBLIC AND IS ESPECIALLY HARD ON
THE POOR.
MUCH NEEDED TAX DOLLARS ARE BEING FUNNELED TO LEGAL SERVICES ON BOTH
A STATE AND NATIONAL LEVEL. THAT MONEY IS BEING SIPHONED AWAY FROM
NEEDY PROGRAMS TO HELP THE POOR AND THERE IS NO JUSTIFICATION FOR THAT
KIND OF FISCAL WASTE. IT MUST BE CONSIDERED AS APPROACHING THE POINT
OF FISCAL IRRESPONSIBILITY BY THE LEGISLATORS IN THE COMMONWEALTH OF
PENNSYLVANIA AS WELL AS IN THE FEDERAL CONGRESS..
SWISSVALE COMMITTEE FOR QUALITY EDUCATIOK * 1622 BRADDOCK AVE., PGH.,PA 15218
284
Assuming the possibility and the distinct probability that the vast
majority of Legislators in Harrisburg have not the slightest inkling
of what Legal Services has accomplished in their abuses of the taxpayers
of this Commonwealth, not to mention the Nation as a whole, this report
may be helpful.
The Legal Services Corporation Act of 1974, as amended carries certain
restrictions. LSC is a private, non-profit corporation which distributes
funding to some 323 LSC programs across the United States. In the
Commonwealth of PA, there are 20 operating programs operating. Aside
from the various Legal Services offices, there are numerous back-up and
support programs established by LSC to augment the local offices. There
is also the Clearinghouse Review, a publication by and for LSC centers.
This publication feeds information to the LSC centers and back-up programs
and they feed information back into the publication. All of this is
funded by tax money.
Each year, at budget time, newspapers and other media begin to have
items and programs to beg support. This is done by the method now
recognized as the "heart of the poor" headlines. Any legislator worth
his salt will be touched by the suffering of others and will almost
automatically want to help alleviate that suffering. But the legislators
in this State and in Washington have been duped by one of the best and
most completely organized private corporations ever to exist.
We now find Legal Services
in spite of restrictions p
program LSC offices) is no
under their National Chart
swing in Allegheny County,
litigation have reached al
"guestimate" is an overall
payers in 12 municipalit ie
by the other municipalit ie
who were defendants in the
cost to the taxpayers in t
Legal Services is funded b
operating complete
laced on the'^by Con
t permitted to enga
er . And yet , we se
The costs so far
most unheard-of pro
$10,000,000. All
s for their local s
s contained in at 1
case until April 2
he State and Nation
y tax dol lars .
ly unchecked and uncontrolled
gress. LSC (and its local
ge in desegregation cases
e the "Hoots" case in full
on the almost 11 years of
portions . The best
expenses borne by the tax-
chool districts as well as
east 3 more school districts
8, 1981. There is also the
ally because Neighborhood
The costs of the ACORN vs Port Authority of Allegheny County were
estimated to be in excess of $500,000 in August, 1981, and the case
had been in litigation for under a year. To quote Judge Stephen A.
Zappala of Commonwealth Court, "The actual losers in this case are the
ones that are footing the bill - namely the taxpayers. NLSA attorneys,
PAT lawyers and court personnel are all paid with government money."
The Whitman Park case in Philadelphia would appear to be a good example
of abuses of tax money. In that case. Community Legal Services filed
suit in March, 1981, for reimbursement of legal fees of $4,505,255.63!
All coming from the City of Philadelphia.
Tax money paid the salaries and court costs of all CLS attorneys, the
operation of their offices, the salaries of the judges, court personnel
and all others involved in that case. The CLS appropriation ( grant ) from
LSC in Washington was $2,277,972 in fiscal year 1980 and they the;y filed
for the taxpayers again Co pay them almost twice their annual grant.
If class action cases represent so little of their legal work, as they
claim, how then can those figures be explained?
285
In August, 1981, I and three others filed a suit against Neighborhood
Legal Services, Pittsburgh, regarding their turning-away of clients in
need of legal help. We had found that many people were calling the NLSA
offices seeking that help to which they were supposedly entitled and were
being told that no clients were being taken. We attempted to determine
who the directors of the NLSA program were and found that information not
available at any turn. Letters, phone calls, contacts with LSC offices
all were to no avail.
As a non-profit corporation, chartered in Pennsylvania, that information
was supposed to be public record and yet it was not. As a result, we
filed interrogatories, requesting that information and some further.
It is a matter of State law (PA Supreme Court, 1974), that "expert"
witnesses and research costs by those "experts" must be borne by the
client in the action. In the "Hoots" case, NLSA had contracted with
HGH Associates of Spring , Texas , to provide a plan of consolidation of
many school districts. The costs of that plan were in excess of $50,000
and a retainer of $17,500 was paid by NLSA along with expenses for a
few days of testimony in April, 1981. Again, in the ACORN vs. PAT case,
an engineering student was paid $6000 by NLSA to come up with a whole
new fare system and route system for the transit authority.
Though suit was filed in Allegheny County Court of Common Pleas, NLSA
immediately took the case to Judge Gerald Weber of the U.S. District
Court. They claimed interference with their continuing litigation on
the "Hoots" case and specifically ignored the Port Authority action.
Upon our request for a motion to Remand the case back to the local
court, NLSA then requested a dismissal from Judge Weber, citing them-
selves as Federal officers and not answerable to the public. Judge
Weber, instead of remanding the case, dismissed it, stating that the
case was not properly in the jurisdiction of the Federal Court and was
properly answerable in State Court.
We have appealed his ruling to the 3rd U.S. Circuit Court of Appeals
and requested oral arguments. However, though we are the taxpayers
footing the bill for NLSA and the Courts, we must retain a private
attorney to handle our suit. We have raised the money by going from
door-to-door and asking for donations. The people in our area are
paying from their own pockets for this suit, hoping to get some answers.
Now, we have the National Legal Aid and Defenders Association filing
an Amicus brief on behalf of NLSA in the 3rd Circuit. NLADA is one of
the back-up centers of Legal Services and is again supported by tax
money from the public coffers.
As private citizens, we have been attempting to get some answers to
questions that are important to people in this area particularly and
should be important to everyone.
In Iowa, there is a suit in the Federal Courts against Iowa Legal
Services due to lobbying activities of the LSC offices there. That
suit was brought by five U.S. Senators, two U.S. Congressmen and a
State Senator from Iowa. In that suit. Legal Services states that
since they operate under State Charter of the laws of Iowa, they must
be sued in State Court and the case should not be handled in Federal
Court. Yet here, Legal Services states that they cannot be sued in
State Court but that all questions must be handled by Federal Court.
29-379 0—84 19
286
It Is "Budget" time again, and the "heart of the poor" articles and
programming Is appear Ing ... again .
We will be lambasted with the statements again of NLSA In Pittsburgh
handling 20,000 clients last year. Nationally the statements seem to
be hitting the area of 1,000,000. Yet nobody seems to challenge those
figures. Nobody asks for an accounting of the client case-load. No
proof is offered by Legal Services and none is ever demanded by our
Legislators. No justification is ever requested or required of the
Legal Services Corporation. As long as they are fully funded, they
are self-perpetuating and will just eat-up the money. They will
continue class action suits to the detriment of the poor. They will
siphon their money into the Impact litigation and Ignore the real
needs of the poor.
We find Neighborhood Legal Services in Pittsburgh now involved very
heavily in a national group calling itself the Fair Budget Coalition.
That group recently began a campaign calling for the impeachment of
the President of the United States and is actively involved in working
at organizing groups of political activists, social reform groups,
voting registration activities and leading the way using the legal
system. We are finding that Legal Services Corp. is involved nationally
and through its back-up centers is effecting many social changes thru
the courts rather than at the ballot box where the majority of people
think those changes should be occurring.
Legal Services Corp. is not permitted, by its charter, to be involved
in any politically active groups, is not permitted to be involved in
the types of impact litigation that is affecting everyone in this
Country. Yet they are Involved and they defy you to do anything about
it. They have forgotten what they were chartered to do and have gone
about the business of creating laws by manipulating sympathetic judges
and Ignoring the legislature both here in Pennsylvania and across the
nation. There are alternatives to Legal Services Corp. and those
alternatives must be pursued to give the legal help to those in need
without the abuses to which we have become so accustomed.
Pennsylvania is one of the very few States to fund Legal Services from
the Tax Coffers. Hopefully, that will end. 1 invite you to thoroughly
read the appendices attached to learn fully just a few of the misuses
and abuses of the money that this State has given to Legal Services.
As a final note : Citizens are under no legal compulsion to take any
interest or share in the government, or to Insure that the political
setup in city. State or Nation shall be efficient, progressive or even
honest. But the absence of legal compulsion cannot absolve them of
moral responsibility. Those who fail to make use of their political
liberty can hardly be called good citizens, and on them falls the
penalty for their negligence - they will get a government just as bad
as they deserve. If the citizens fail too long and too fully to exercise
their political liberties, they may even lose them. As O.K. Chesterton
said, "A despotism may almost be defined as a tired democracy. As
fatigue falls on a community the citizens are less inclined for that
eternal vigilance which has truly been called the price of liberty, and
they prefer to arm only one single individual to watch the city while
they sleep. "
287
I prefer tc remain awake and attentive but to watch closely what
the elected legislators of this Commonwealth may do- with the money
that I have worked so hard to earn.
I prefer to be optimistic about the future, but find it a very
difficult task when I see the rights of people being treated lightly
or ignored completely so that a "Cause" oriented lawyer being paid
with my hard earned money can make changes creating an atmosphere
of anarchy.
It is time for the Legal Services Corporation to be eliminated and
replaced with people truly concerned for the welfare of the poor.
We can make a start in Pennsylvania and become a national leader
in removing a very serious and dangerous national blight.
***********************
288
LEGAL SERVICES CORPORATION / NEIGHBORHOOD LEGAL SERVICES (amons others)
INFORMATIONAL DATA SHEET
Legal Services Corn, distributes grants to some 322 Legal Services programs in approximately K50
neighborhood offices in the 50 States, the District of Columbia, Puerto Rico, Virgin Islands ano
m crones la. In their February, 19B1 news release, they listed approximately 6200 lawyers and 2830
paralegals on their payroll.
The Pennsylvania Legal Services Corp. operates 2£ different legal services centers - Neighborhood
Legal Services Assn. (NLSA) is but one. NLSA covers a < County area - Allegheny, Beaver, Butler and
Lawrence Counties - and has 72 paid attorneys on its staff. In a recent news interview, the director
of NLSA stated that locally tHev have represented 19,000 clients in 1981? Kith 72 attorneys, that
represents 263.868 clients each;. Estimating a 5 oay work -week , 52 weeks % year, no time-off for
holidays, vacation, illness or personal reasons, there are 260 work-days m a year. That means t.-.at
each of the 72 attorneys had to have handled more than 1 case each day without a break of any kino -
unless they were estimating "classes" in their client totals.
There is sufficient reason to question the existence of Legal Services Corp. both nationally and on
a local/State level. Followinc are some of the reasons for curtailment or abolishment of this private
corporation funded by Federal and State tax dollars: LSC lawyers have sued to:
1. remove South Boston High School from jurisdiction of elected school committee and placed i.i
receivership.
2. force Ann Arbor (Michigan) School District to recognize "SlacK English" as a foreign la.-r-,.age.
3. Prevent the Florida Dept. of Education from requiring a passing grade or. a "funetiona- literacy"
test as a pre-condition to receiving a high school diploma.
4. uphold quotas through filing of an amicus brief on behalf of the board of Regents of Ur.iv. c:
California iii the Sas-ke case.
5. stop the same Board of Regents from pursuing research and invention of more productive farm,
machinery.
6. Reouire expulsions from a Newburg,MY Jr. Hi School on a quota basis (i.e., proportional to the
numbers of white and black students in the school population) without regard to the facts i.-.
each expulsion case.
7. force an out of court settlement, requiring Alaska to spend S40.6 million to provide a high
school in every Alaskan village requesting one.
e. overturn a school board election in Hereford, Texas.
9. forced two-way busing of kindergarten children in the Albert Gallatin School District in
Uniontown,PA in apparent violation of the supposed prohibition against LSC lawyers beinc
involved in desegregatory suits.
10. overturn th» Santa ina , c» unified school district Board's decision to terminate a school
breakfast program.
11. represented Iranian students at Texas Tech to overturn a local denial of permit to march ? = st;
the heme of Reza Pahlevi, sone of the late Shah of Iran.
12. sue to force the U.S. Dept. of Health, Education and Welfare to pay for the sterilization of
a teenage girl in Utah.
13. sued to force the Social Security Administration to pay disability benefits to a man wnile
going thru a sex change operation.
14. sued to have the Iowa Dept. of Social Services pay for a patient's sex-change operation.
15. sued to stop Massachusettes Governor Edward King's efforts to reduce welfare fraud.
16. representing ACORN, sued to halt fare increases proposed by SEPTA (Southeastern PA Transpor-
tation Authority) in Philadelphia.
17. representing ACORN, sued to roll-back and restructure fares, rldmg zones and to elir.inate all
passes and student fares in the Port Authority of Allegheny County, regardless of mcreasec costs
and inflation.
16. represented five Western PA students seeking to avoid prosecution for defaulting on student loans
received from PHEA.^.
*Note- NLSA has indicated a client count of 19,000 in some instances and
20,000 in others. There is no real way to tell just how many they
have actually represented - as few as 100 or as many as they say(?)
289
-2-
THE FOLLOWING IS A LIST OF SOME OF THE CLASS-ACTION CASES FILED BY THE
VARIOUS LEGAL SERVICES RECIPIENT OFFICES IN PENNSYLVANIA. BEAR IN MIND
THAT THESE ITEMS DEAL ONLY WITH ACTIONS FILED IN THIS COMMONWEALTH AND
NOT OTHERS ACROSS THE COUNTRY. NOTICE THE NUMEROUS CASES IN THE FEDERAL
COURTS AND A PATTERN BEGINS TO APPEAR. WHENEVER A FEDERAL COURT IS ACTED
UPON, IT BECOMES PRECEDENT ACROSS THE ENTIRE UNITED STATES. A CASE
DECIDED IN THE FEDERAL COURT FOR THE MIDDLE DISTRICT OF PA WILL HAVE
REPERCUSSIONS IN UTAH, VERMONT, GEORGIA. A CASE DECIDED IN THE FEDERAL
COURT IN CALIFORNIA OR OREGON WILL HAVE REPERCUSSIONS IN PENNSYLVANIA.
PROOF SOURCES AND BaCK-UP MATERIALS ARE SUBMITTED AS APPENDICES TO THIS
REPORT.
***************
Dec, 1979 - Pope vs. Crawford Co. School Dist - (PA Ct . )
Class Action case being handled by the Center for Law & Educa-
tion, Camb ridge , Mass . - challenging classifications of
exceptional children.
Jan., 1980 - Lawson vs. Coon ( Federal Ct.)^-^
Class Action case - Neighborhood Legal Services Assn., Pgh., PA
representing plaintiffs and intervenors - being handled by
3 NLSA attorneys - in a landlord- tenan t eviction case.
May, 1980 - lyoob vs. Blakeley Borough - (Federal Ct.) ''^^
Class Action case being handled by Northern PA Legal Services,
Scranton, PA - against PA Electric Utility for termination of
services due to non-payment of delinquent bills (in spite of
set guidelines and regulations set forth by the PA FUC)
Oct., 1980 - Chester Upland School Dist. vs. Chester Upland Educa t ion '^â– ^"
Assn. - PA Ct.)
Class Action intervention being handled by Delaware Co. Legal
Assistance Assn., Chester, PA - in a legal strike.
1980 - PA PUC in re Limerick Investigation ''^^
Class Action - Three (3) Philadelphia citizens groups rep-
resented by Community Legal Services, Philadelphia, PA, propos-
ing a massive conservation program be undertaken by Phila.
Electric Co. instead of the completion of the Limeticlf power
plant already under construction.
Jan., 1981 - Miller vs. Kurtz (Federal Ct.) ^1
Northern PA Legal Services, Scranton, PA, representing the
plaintiff challenging the constitutionality of the seizure of
plaintiff's money at the time of his arrest on drug-related
charges and the relinquishment of those funds to the IRS for
back taxes .
Feb., 1981 - Fisher vs. PA Dept. of Public Welfare (Commonwealth Ct.)^^"
Womens ' Law Project, Philadelphia, PA â– it<i&
Class Action case challenging the State's law regarding
abortion payments under its medicaid funding.
290
March, 1981 - In re Phi
Community Leg
protest consu
allowing Phil
adjustment In
the PUC to wi
Apr., 1981 - Orraiston
Northern PA L
who stated sh
that It would
benefits .
'UO '
la. Electric Co. (PA PI
al Services, Philadelph is, PA - representing
mer group filing exceptions to a decision
a. Electric Co. to refund overcharges by an
its next year's energy cost rate and asked
thhold acceptance of the decision.
7*'/o
March, 1981 - Boarding
Class Action
Disabled Advo
charging the
provide conti
s. PA Unemp. Compensation Bd. of Review (PA Ct.)
egal Services, Scranton, PA - representing a client
a would pursue a job only If she could be sure
not interfere with her continued receipt of
Home Advocacy Team vs. O'Bannon (Federal Ct.)
case being represented by Development ally
cacy Project and Community Legal Services, Phila., 1
City of Phila. and State of PA have a duty to
nuing services to de-institutionalized residents.
Apr., 1981 - Burns vs. Schweiker - (Federal Ct.)^'**
Neighborhood Legal Services, Pittsburgh, PA representing client
in re SSI benefits reduction.
May, 1981 - Coughlin vs. PA Dept. of Public
Community Legal Services, Phila.,
seeking recovery of SSI benefits
assistance benefits after having
bankruptcy .
1981 - Williams vs. Lackawanna County Pris
Class Action case with Northern P
representing inmates of Lackawann
conditions, practices and procedu
seeking preliminary Injunction to
from "continuing to violate plain
further inflicting cruel and unus
Welfare - (Federal Ct.)*''''^
PA - representing plaintiff
and recouping his public
the debt discharged in a
on - (Federal Ct.)'^^'^
A Legal Services, Scranton, PA
a County Prison challenging
res of the prison. Plaintiffs
enjoin the County Prison
tiff.'s due process rights, from
ual punishment upon them."
Dec, 1979 - Vecchione vs. Wohlgemuth - (Federal Ct.) f^/^
a private attorney and a Legal Services office received
approximately $200,000 in attorneys fees for their efforts on
behalf of the plaintiff.
May, 1979 - Doe vs. Jennings - (Federal Ct.)'*^'''-
Neighborhood Legal Services, Pittsburgh, .PA - forced a Pgh,
to transport an inmate to a hospital for an abortion.
jail
Jun^,1981 - ACORN vs. SEPTA (State Ct.)"'''?
Class Action suit being handled by Community Legal Services,
Phila., PA representing a "group" to halt fare Increases.
1979 - Neighborhood Legal Services, Pgh., representing inmates of
the Allegheny County Jail in a class action suit which led
to the creation of a mental health unit in the jail and
could ultimately lead to a court order to build a whole new
facility.
^/S
291
Jan.
198
2-1
Clas
nre ;
s ac
Pe
t ion
Jan .
198
Phil
but
Comm
Mast
coll
2 - S
Nort
seek
for
Fede
. of
er ' s
ec te
uit
hern
ing
awar
PA.
ral
PA
Off
d to
agai
PA
a te
ding
nnhur
suit
Case
Dist .
and a
ice .
pay
ns t L
Legal
mpora
a CO
June, 1981 - C
repr
suit
Trea
welf
Trea
Righ
lass Action s
esen
aga
sure
are
sury
ts o
ted
ins t
r Dw
chec
- P
rgan
by Ne
the
y er a
k del
laint
iza t i
8 1 Horn
being
still
Judge
ccumul
Fine
Specia
ackawa
Servi
ry res
nt rac t
uit f i
ighbor
Comm .
nd Sec
ays ca
if f s w
ons .
ca
han
in
imp
at ed
lift
1 Ma
nna
ces ,
tr ai
to
led
hood
of P
ty.
used
ere
se -
died
appe
osed
$1,
ed 1
s ter
Coun
Scr
ning
a pr
in (
Leg
A, G
of W
by
PA W
Comm. of PA Defendants (Fed. Ct.
by Community Legal Services,
als process in Third Circuit Ct.
a $10,000 per day fine on the
200,000 to pay for Special
-10-82 as enough money was
ty Commissioners brought by
anton, PA - in Federal Court
order against the commissioners
ivate law firm.
PA -
Federal Ct.) - plaintiffs
al Services, Pittsburgh,
overner Thornburg, State
elfare O'Bannon - regarding
lack of money in the State
elfare Rights and W.PA Welfare
Sept .
19
81 - (Q
"Becau
the ad
she is
The ca
PA Dep
past ^
The wo
woman
lenien
promot
pros t i
uo 1 1
se s
vice
ent
se h
t . o
yea
man
to r
t 3
ing
tuti
ng f
he q
of
itle
as b
f La
rs a
s at
esig
n t en
con
on."
rom Pi
uit he
her at
d to u
een qu
bor &
nd is
torney
n from
ce" in
spir in
198
2 - U.S. Supreme Cour
LEGAL SERVICES, Pitt
five W.PA students s
on their student loa
Agency (PHEAA) .
ttsburgh Press of Sept. 6, 1981) -rr>^
r job in a Harrisburg massage parlor on
torney — an out of work bookkeeper claims
nemployment benefits.
ietly shuttled back and forth between the
Industry and Commonwealth Court for the
now in the State Supreme Court,
from Central PA Legal Services urged the
her job to "improve her prospects for a
a case in which she was found guilty. of
g to promote and conspiring to commit
t rejected an appeal filed by NEIGHBORHOOD
sburgh, PA (Class Action) on behalf of
eeking to avoid prosecution for defaulting
ns from the PA Higher Education Assistance
Nov .
198
1 - Comm
two Wei
in Fede
law in
Judge r
In Dec .
Circuit
legally
In Jan.
the Dis
mandate
unity Legal S
fare Rights o
ral Court att
the FEDERAL L
uled in favor
, 1931, a sta
Court of App
responding t
, 1982, the p
trict Court j
d cutbacks .
ervices, Philadelphia, PA representing ^
rganizations in class action suit brought
empting to overrule legislation voted into
EGISLATURE governing welfare. U.S. Dist.
of CLS establishing a national precedent,
y on the decision was granted by 3rd U.S.
eals because the State Legislature was
o Federal Policy.
anel of 3 judges on the 3rd Circuit overrule
udge's decision and allowed the Federally
292
Jan., 1982 - Smith vs. Welfare Sec ty . . ' Bannon ; Allegheny Co. Commissioner:
Hunt, Wecht and Foerstor; Allegh. Co. Common Pleas Court judges
Wettick, Johnson and Novak; Dir. of Children 6, Youth Services
Thomas Carros
Class Action suit filed in Federal Dist. Court requiring that
plaintiff be provided with services of an attorney in a child
dependency hearing. Suit charges violation of civil rights
under the lAth Amendment . (Neighborhood Legal Services, Pgh.)
June, 1971 - Hoots vs. Commonwealth of PA (Federal Court)
Neighborhood Legal Services, Pittsburgh, PA - representing
plaintiffs charging violation of civil rights - racial discrimi-
nation in formation of a school district in eastern Allegheny
County. Case still in appeals process.
Aug.
^^
1981 - in re: Hoots vs. Coram, of PA
Neighborhood Legal Services, Pittsburgh, PA -
filed formal challenge when former Edgewood High School Band
planned to march in a Community Day parade; objected to the
usage of any musical instruments or sheet music which might
have been used in the former high school.
Sept.
1981 - in re: Hoots vs. Coram, of PA
Neighborhood Legal Services, Pittsburgh, PA -
filed challenge to voting regions established in the 12
municipalities comprising the new school district
â– tt-^lL
Dec, 1981 - in re: Hoots vs. Coram, of PA
Neighborhood Legal Services, Pittsburgh, PA - ^P7
filed motion in Fed. Court for discovery - demanding all
information on students in new school district and for the
past 3 yrs. in the five former districts requiring disclosure
on: names, address, race of all students involved in any
extracurriculur and/or sports activities, school clubs,
honor societies, social functions, special ed classes, etc.
Oct., 1980 - ACORN vs. Port Authority of Allegheny County - (State Ct.)
Class Action suit with Neighborhood Legal Services, Pittsburgh
representing the plaintiffs challenging fare increases in the
transit Authority. (still in appeals at this time).
As of August, 1981, the costs of this case were astronomical!
293
FOR IMMSDIATS RELEASE .^. u i.,iji GOVtR>JOR ' S PRESS OEFICS
COKMCNWEALTH OF PENNSYLVANIA
CONTACT: Paul Critchlow
Press Secretary
(717) 783-1116
HARRIS3DRG (Sov. 2) — Gov. Dick Thorinburgh today expressed his
S-i~i-'-ida at the safa release of the rsmainlng hostages at Gratarford
State Prison. • " '
"I am sure that all Permsylvanians joined me ia oux prayers on
behalf of these hostages and their families," the coverncr said.
"While we.fiave achieved the most iacortant result of obcaijiijjg
the safe release of the hostages, there are lessens for the future ta
â– l' '
be learned frcm this situation which should not be ignored," he s.ddad.
The governor said he believed there were at least fcur such iamediata
lessons.
"Tha ringleader ia the attamptad escape and hostage-taJciag is a
thrae— tiae ccnvictsd anirderer, " he said. "He aurderad a police office^
and, while in prison, murderad a warden and decu-y warden. Neverthe-
less, "' Connnunity Legal Services of Philadelphia insisted upon pushing for
a court order la 1973 re<Tuiriag that this convict be returned to tha
general priscn population at Gratarford. Mere di3â– curbi.^g, the Shape
administration agreed to have this order en;:ered over the strong
objections of its own professional correction officials.
'Thus, one lesson that aiust certainly be taken from this situazion
is chat: never again should government pemit 'cause' groups, or even
tha cojirts, to place the purported rights of vicious criminals above
the safety of law anforcsment and correction officers without the
strongest possibla cpposition. #/
294
Student Seeks Damages for Alleged Inappropriate ^
Placement in Special Education Classes
29,903. Pope t. Cra>*-ford CentraJ School District (Pa) C.P..
Cr'aNvford Count)-, filed Dec. 10. 1979). For further in-
formation contact Robert Pressman. Center for L aw_and
Education. GutmanLibrary, 6 Appian Way. Cambridge. MA
02138. (6T7) 495^66. (Here reponed: 29.903 A Complaint
(iSpp.).l
Plaintiffs, a former special education student and nis
mother, complain that the student was tested and placed in a
special education program in 1%9 without notice to or the
consent of the student or his mother. It was not until 1977, af-
ter the student graduated from high school, that plaintiffs
learned that he had been classified as an exceptional child.
Plaintiffs seek damages for alleged violations of Pennsylvania
education law, the Education for All Handicapped Children
Act. and the founeenth amendment.
OCTOBER 1980
CLEARINGHOUSE REVIEW
295
LANDLORD/TENANT
Judicial Determination of Voluntariness of
Confession of Judgment Clause In Lease Is
Required Before Ejectment
29,650. Lawson t. Coon (WJDL_Pa^ Jan. 29. 1980). Plfs-
Intervenors represented by Timothy O'Brien, Tames Beck,
Thomas Reed, Ne ighborhood LggaJ^Senices. 535 Sih Ave..
Pittsburgh. PA 15219. (412) 255-6700. [Here reported:
29.650A Brief in Support of Preiim. Relief (15pp.); 29,650B
Supp. Brief (25pp.); 29,650C Transcript of Oral Opinion
(8pp.); 29,650D Order (2pp.); 29.650EOrder(lp.).)
A district court has permanently enjoined county of-
ficials from entering or executing confessed judgments in
ejectment until there has been a judicial determination
that the tenant knowingly and inteiligentlvagreed to the con-
fession of judgment clause in the lease. In an oral opinion, the
court reasoned that although a confessed judgment is not
prima facie unconstitutional, there is a great disparity in
bargaining power in the landlord/tenant relationship. Citing
Overmeyerv. Frick, 405 U.S. 174 (1972). the court found that
a tenant's right under a lease is a property right protected by
the fourteenth amendment which can only be waived
knowingly and intelligently.
The court's order requires that the tenant be given
notice of the landlord's intent to confess judgment in eject-
ment, a reasonable opportunity to contest the voluntariness
of the confessed judgment clause, and upon entry of the
judgment, the tenant must be notified that he has a right to
collaterally attack the judgment under state law.
OCTOBER 1980
CLEARINGHOUSE REVIEW
296
PUBUC UTILITIES
Suit Charges Utility Termination Procedures
Violate Due Process
29,913. Ijoob T. Blakely Borough (M.D. Pa., filed May 2.
1980). Plaintiffs represented by Randolph Bragg. Irj L Gold-
berg, r^rLheru-P£ims>l¥ania I^^aJjSenTces, 507 Linden St.
Scramon. PA 18503. (717) 342-0184. JHere reponed: 29,913A
Complaint (6pp.); 29.913B Brief in Support of Plf s Motion
for TRO (5pp.): 29,913C Brief in Support of Motion to Waive
Security Required for Inj. (Ip.).]
A section 1983 class action suit has been filed against a
Pennsylvania electric utility. Plaintiffs charge that electric
service to customers in arrears on their bills is terminated
without notice or an oppominity for a hearing in violation of
the due process rights guaranteed by the fourteenth amend-
ment. The case arose when defendants terminated the electric
service of the named plaintiff. Plaintiff has five children, two
of whom have medical conditions affected by the lack of elec-
tricitv.
CLEARINGHOUSE REVIEW 0CT0BEni98
297
%
.>eN/ ) ^ UJ>
v.^StirfkInsT6fichGrs Ordered to Rstum tb^orfc and
tal^Sntfmic.gcrgdn{ng ^^
3^,6€3L Cb«ste» UplsatS^ Sc&ool DIrtrict ▼. Cfeestw UpbusA
E<? -Tt^v^ Asa's (Pa- C.P.^ Ddawsxc County^ Oct. 20,
19S0)l Petitioners rcprcscntect by Ana Torrc^ossav Mary
Soiinarky^ Thomas Hamilton, Delaware Go\mi5» LegHl
tancsrAssroi, 4iaWcish= St^ Ouster^ PA 1901 J^ (215) S74-S421L
[EcTC rcportedr SO^SSJA Gomplainr (20pp'.); 3a,6S3B Ordeir
(rir.)i 3a,6S3C Sdpulanott (5pp-.);: 3a,6S3D Order (2pp-.);.
30,6S3E Order with Memo (3pp.); 30,6S3F Pcdtion: to Inter-
vme (4pxr.); 30;683G Order (2pp.).l
Thcojuit ordered striians-tcacfacrs back to work under
the terms and conditioTis of the prior ycjor's contract. Fuithcr-
i mortti, the court required that a majority of the school board
•' continue on a daily basis to negotiate with the teachers union;.
A group of parents and- students siught to intervene and have
the teachers- unioa and the school board cit ed for contempt _
for •violation of prevknis crden -mmvWins^ xetnns to -woric
and" payment of «dary increments pending^ «n arbitration
xledsion. The 4X)urt Tti'tmir'^^ the ^group's motion without
■prejudice, bat it granted them amicus curiae «atnsibr any
further procesdings.
298
AUGUST/SEPTEMBER 1981
;itfzens' Groups Seek to Substitute
^Conservation Program for Completion of
Nuclear Plant
31,158. In re Limerick Investigation (Pa,JBJJX. 19801
Complainant represented by Steven HersheyT^rnmunit
Legal Services, _ SyIvania House, Juniper and Locust Sts.A
Thiladelphia, PA 19107, (215) 893-5300. [Here reported:!
31,158A Testimony (4^pp.); 31,158B Testimony (14pp.);
31,158C Testimony (5pp.); 31,158D Testimony (6pp.). J
Three Philadelphia citizens' groups are proposing that
a massive conservation program be undertaken by Philadelphia
Electric Company (PECO), instead of its completion of the
Limerick nuclear power plant. Their gpert witnesses testify
that conservation (1) would be more beneficial to PECO*s
customers and stockholders than completion of the nuclear
plant, (2) is a more effective way of producing the needed
power, (3) would result in many more jobs than the nuclear
plant would provide, and (4) would make PECO (which is
allegedly in poor financial condition) more attractive to
investors. Th e citizens' expertse mphasize the effectiveness of
^conservation in bringing about fast results as compared to
luclear construction.
299
Polica May Seize an Arrasteo's Ri^onay and • -
RoHnquIsh It to iRS Without Notica or Hearing
27,177. Mfflarr. Kurtz (M.D. Pa.. Jan. 28, 1981). Plaintiff
represented by Randolph Bragg, Northero Pennsylvania Legal
Services. 507 Linden St., Scranton, PA 18503, (717) 342-0184.
[Here reported: 27,177F Judgment & Order (8pp.). E>rcviously
reported at 13 Clearinghouse Rev. 445 (Oct. 1979).]
This suit challenged the cnn5^mtiori nfffY ^^^^^ yj??'."*
of plaintifrs monev ^r the t?mr of his arrest on a drug-related
''.^'^rgr iinfi 'V"* r-,.:;nqiT;ch-^P^f r»f thf'^? fyTT^- ^ to the [^
v »"ithout vvn'nen nof^Vg c\r h^arint^ ^9 plaintiff. The court held
tBat it has long been held that due process does not entitle an
individual to a hearing prior to an arrest based upon probable-
cause nor docs it require a hearing to a person whose property
has become evidence of a crime. As to plaintiffs argument that
he was denied due process because the notice of levy was
mailed to his home even though defendants knew he was in
prison, the court noted that plaintiff admitted that he was
aware of the levy against the property and he did not allege
that he suffered any prejudice because the notice was sent to
his home. The court stated that if plaintiff felt that the Inter-
nal Revenue Code has been violated* he has a right to bring
suit under section 7422 claiming that the tax has been "erro-
neously or illegally assessed or ojllccted." Citing Phillips y.
Commissioner, 283 U.S. 589 (1930),. the court upheld the
summary seizure of the money allegedly owed as taxes since
plaintiffhadjcCTigv CT two yea rs inwhi ch to challeng e the
assessment or collection of the vax, __^
300
c\
>!r
%
.OJ I
evO
ictent tlothars Chailengo ^w Restricting
Stata Fund&d Abortions
31,090. Jlsdwr â–¼. Pennsylvania J>ep't of Public Wetfare (Pa.
Ccnnmw. CL, filed 5rcb. 12, 1981). For further infonnaticm
sxjmftrt y^fhryn Kolber u Wamgn's Law "Project^ 112 S, 16th
SW Phikddphia, PA 191G2, (215) 564-6280. [HercTcportcd:
3I,090A-P«tition (29pp.)J
Plaintiffs iiave filcda^ clas pcfion isrrlnng -declaratory
andinjunctJveTdief^pm-epforcgmrnt of a Pennsylvania law
wfaichprohihits e3q>siditureof state fundsiorabortians except
where^ ^doctor has certified that the -mother's life ^orould
-otherwise "be endangered or^whereA-r^je-or incest victim has
proinptlyTeported the inddent to law «ziforcement<n' -health
ofnrials. FlaintiEfs include pregnant women with serious
medical jHtjblems. Their doctors have-dctennined-that abor-
tionssre medicaOy necessary 4}i]t they cannot certify that the
.abortion is ngcessaryrtosavetheir patients* Irves^-AlsoTiamed
as .plaintiffs are .doctors, health organizations, and xhurcfa
headers. Plaintiff sallege that Ihciaw Ariolates-thcir <qual "pro-
tection ri^its, iiee exercise of Tciigion-and conscience and
^givacy Tights ^mdrr -the gtate^constitntion.
301
HARRISBURG (UPI) - Com-
monwealth Court has scheduled a
second round of oral arguments for
March 2 in a lawsuit challenging the
legality of a 1980 law that would
block the use of public funds for
most Medicaid abortions in the
state.
The judges did not give a reason
for seeiang. the reargument, which
will be heard in Philadelphia. Origi*
nal arguments were beard by the
court four months ago.
The suit, filed by the Women's
Law Project of Philadelphia, seeks
to overturn a law passed by the
legislature and signed by Gov. Dick
Thomburgh that would stop most
women with low incomes from get-
ting Medicaid assistance to pay for
• abortions.
The law would prohibit the spend-
ing of state Medicaid funds for
abortions except in cases of rape,
incest or when the abortion is need-
ed to save the pregnant woman's
life.
Commonwealth Judge John A.
MacPhail blocked implementation
of the law Aug. 9, seven days before
it was to go into effect, pending the
outcome of the suit.
Susan Cary Nicholas, managing
attorney of the Women's Law Pro-
ject, said the court's request for
further arguments is not "highly
unusual" t>ecause the case involves
interpreting the state's constitution.
However, Rep. Stephen F. FYeind.
R-Delaware, a sponsor of the Medic-
aid funding cut-off for abortions,
said the court's request was "very
irritating" because the law was
passed in 1980, but women have
Deen getting Medicaid funding for
abortions for another year.
In 1980, the state Department of
Public Welfare paid out more than
53 million to 12,467 women who
qualified for Medicaid-funded
abortions.
29-379 O— 84-
-20
302
Consumer Group Chalienges^SS foilllon Electric
lltUity Overcharges
31,130. In Tc Phfladdphia Electric Co. (Pa. P.U.C.. filed
Mar. 31, 1981). Protestor represented by MarkSsgal, Com-
munity Legal Services, Syivania House, Juniper & Locust
Sts.. Philadelphia, PA 19107. (215) 893-5300.' [Hoe reported:
3143OA JExccptions of Protestant Consumer Educ. & Pro-
tective Ass'n Intemat'l, Inc. (5ppo).]
Aconstmiersroup hasiHed exceptions toanadminis-
irativc law judge's (AU) decision allowing Philadelphia
HaaricCompsnyto **rcfund" S35 Million ra overcharges by
an«adjustment to its next year's Energy Cost Rate. The con-
sumer group-argus^that this method of **reftmding'* in ef&ct
grants the utility a loan at much less than market interest
rates. (Although the adjustment would indude\an amount
for interest, it would not be at market rates.) Consumers also
argue that -persons who are no longer customers of the utility
would not receive^ refund in any form. The consumers are
seeking to havethestaxe's utility commission withholdaccep>
tance of the ALJ^s decisioa.
303
The Pittsburgh Press
A Scripps-Howard Newspaper
Etts^IiiSed June 23, 1884— h;blished Dally and Sluiday
JOHN TROAN WILLIAM A. HOLCOMBE
Eiitor Gtttfsi Mt=i{er
RALPH BREM, Mtsijm: Editor
Ofr»c«t. 34 EeutMKd of tH« Aliiei. PitttbHrch. Pt. Milt
P.O. Box 566-TeWfl»n« (412) 263-1100
Page B-2
Give Light and the People Will Find Their Own Way
Tuesday, February 16, 1982
*i'
O"
Watchdoo's Bi^-e
• »
• • Talk about dialing a wrong num-
'ber!
• ^ A_co^uinere^_gjoug_in_Philadel:
. phia-has laiiDchedalight against a
', $42&-millioD rate increase asked by
; Bell Telephone Co. of Pennsylvania.
'Now, it wants others — including
.Bell — to help pick up the tab.
* Specifically, the Consumers E du-
catiQD_ and Pro tective AssociaUoa
has asked the PublTcTTti'bty Com-
â– mission to require Bell to add a Jl
charge to each of its customers'
; bills,
«
I \ The funds thus collected would be
'. turned over to the association to use
in opposing Bell's bid for higher
â– riates.
' 1 Bell customers would have the
'option of refusing to pay that %l
i charge, according to the associ-
• ation's proposal But how many
• would overlook any fine-print advi-
jsory and pay without realizing it?
• • •
' In any event, the plan is presump-
tuous.
So is the claim that the associ-
ation speaks for and deserves the
unquestioning support of most other
Pennsylvanians. That assessment
has nothing to do with the merits of
the Bell case.
The idea that any self-proclaimed '
do-good group deserves to have its
bills paid by somebody else — with
the complicity of a government
agency and with the forced compli-
ance of its targeted victim — bor-
ders on the incredible.
• • •
What m?y be even more incredi-
ble is this:
The PUC was formed in 1937, in
part, to protect the consumers from
the utilities. Almost 40 years later,
the state Office of Consumer Advo-
cate was established to protect the
consumers from the PUC.
Now comes a group of Philadel-
phians to say, in effect, that neither
the PUC nor the consumer advo-
cate's office — both supported by
taxpayer funds — can be counted on
to protect the consumers in the Bell
case.
If this is so, the remedy is in the
overhaul of the PUC and the con-
sumer advocate's office. Not in the
forced public funding of every ad
hoc group wiiich claims to speak for
others but cannot marshal their
direct support
304
Appeals Council Reverses ALJ Denial of
Disability Benefits
31,190. In re Pierce (Soc. Sec. Adm'n Office of Heirirgs &
App., Apr. 9, 1981). Qaimant represented by Bill Zoske
Managing Legal \%^rker. Southeast .Mississippi Legal Services,
P.O. Drawer 17;a, Hattiesburg. MS 39401, (601) 545-2950.
[Here reported: 31,190A Claimant's Brief (8pp.); 31,190B
Decision of App. Council (2pp.).l
The appeals council reversed the decision of the admin-
istrative law judge (ALJ) and awarded claimant supplemental
security income based on disability. The ALJ had determined
that claimant failed to establish that his impairments were
severe enough to entitle him lo benefiu. Oaimant suffers from
i-isuai and auditory hallucinations, has an IQ of 71, a social
age of 15 years, cannot read or write, and is not capable of
handling his own funds. Qaimant became unable to work
because of back pain, nerves, no right eye, a mild problem with
his left eye, weakness and a slight speech impediment. On
appeal, claimant argued thai the .ALJ erred in (1) going out-
side the record and giving his lay opinion regarding claimant's
maladies, (2) concluding that claimant's allegations of pain
were not credible, (3) failing to properly consider the medical
evidence, and (4) failing to consider the cumulative effect of
all claimant's problems on his ability to work.
UNEMPLOYMENT COMPENSATION
Supreme Court Awards Benefits to Jehovah's
Witness Who Voluntarily Quit Weapons
Manufacturing Job
25,702. Thomas v. Indiana Employment Security Division
Review Board (U.S. Sup. Ct. Apr. 6, 1981). Petitioner
represented by Seymour Moskowitz, Indiana Civil Liberties
Union, Valparaiso Law School, Valparaiso, IN 46383, (219)
464-5012; Elanca de la Torre. [Here reported; 25,702-1 Opin-
ion (23pp.). Previously reported a^ '4 Cleaiunghousi Rev
394 (July 1980).]
The United States Supreme Court held that denial of
unemployment compensation benefits to petitioner, a
Jehovah's Witness who voluntarily qtjit after being transfened
to his employer's weapons division, violated his first amend-
ment right to free exercise of religion under Sherben v.
Vemer, 374 U.S. 398 (1963). RejeCTing the Indiana Supreme
Court's analysis of petitioner's religious beliefs, the court
noted that the guarantee of religious freedom is nut condi-
tioned on the abiliry to articulate precisely one's beliefs or the
sharing of such beliefs by all members of the religious sect.
Furihermore. absent a compelling state interest, the court ruled,
a person may not be compielled lo choose between the exercise
of a first amendment right and participation in an otherwise
available public program. The court held that the state's
interest in avoiding problems resulting if people were permit-
ted to leave jobs for personal reasons and in avoiding a
detailed probing by employers into job applicants' religious
beliefs are not sufficiently compelling to justify the burden
JULY 1981 Cl^iUa'A/jVlUMM. 'RtVlt*.' (l^C rroj^
on petitioner's religious liberty. Finally, the court held that
payment of benefits to petitioner would not involve the state
in fostering a religious faith in violation of the establishment
clause. Justice Rehnquist was the lone dissenter.
Claimant's Conduct Discouraging Job Referral
Held to Support Benefits Denial
29,017. Ormislon v. Pennsylvania Unemployment Compen -
sati on Bd. of Review (Pa. Comm w. Cl. Apr. 3, 1981). Peti-
tioner represented by Randolph Bragg, Northern Pennsylvania
Legal Ser.ices, 507 Linden St.. Scranton, P.*^ 18503, (717)
342-0184. [Here reported: 29,0170 Opinion & Order (6pp.).
Previously reported at 14 Cii\Ri.NCHOusE Rev 396 (July
1980).)
The court held that claimant's responses to the job
service interviewer's referral offer were inconsistent with a
genuine desire to work and be self-supporting, thus requiring
a denial of benefits. The court found that claimant's state-
ments to the interviewer that she had no car, when public
transportation was available; that she had cataracts which
might preclude inspection work, when she failed to explore
the possibility of eliminating inspection duties from the offered
job; and that she would pursue the job only if she could be
sure that it would not interfere with her continued receipt of
benefits were evidence that her main concern was with the
uninterrupted flow of benefits rather than with obtaining a
job.
Employee Who Was Suspended and Whose
Reinstatement Is Conditional Upon Availability
of Work Is Considered Totally Unemployed
31,210. Kisamore v. Rutledge (W. Va. Sup. Ct. .\pT. 3,
1981). Petitioner represented by Allan Karlin, Legal .Aid
Society, 155 Walnut St., Morgantown, WV 26505, (304) 296-
0001. [Here reported: 31,210A Brief of Appellant (2Ipp.);
3I,210B Brief of Respondent (21pp.); 3I,210C Reply Brief of
Appellant (Upp.); 31,210D Opitpon (I4pp.).)
Reversing the trial court, the West Virginia Supreme
Court held thai when an employee is suspended .rrom his
employment for disciplinary reasons and his reinstatement is
conditioned upon the availability of work and the taking of a
physical examination, and during the siispension period the
employee performs no services and no wages are payable to
him from the employer, then such employee is "otherwise"
separated from employment within the meaning of the itaie
statute. As such, the court held, the employee is totally
unemployed and thus eligible to receive unemployment com-
pensation benefits.
/
r.A
305
Deinstitutionalized Mental Patients Allege That
They Have Not Received Adequate Aftercare
Services
31,128. Boarding Home Advocacy Team, Inc. v. O'Bannon
/ (E.QXJ^ ffled Mar- 31, 1981). Plaintiffs represenied by
Edmond Tiryalc, Andrew Erba, Paul George, Developmentally
Disabled Advocacy Project, Community Legal Services, 3156
Kensington Ave., Philadelphia, PA 19134, (215) 427-4885.
[Here reported: 31,128A Complaint (13pp.).]
Plaintiffs, former residents of state mental hospitals,
bring this action for declaratory and injunctive relief alleging
that the state of Pennsylvania has deinstitutionalized approx-
imately 10,CXX) residents from state mental hospitals into unfit
and unsafe boarding homes and other facilities without pro-
viding them with appropriate aftercare services. Plaintiffs
maintain that long periods of institutionalization and the
administration of psychotropic drugs have made the residents
less able to c are for themselves when released into the com-
mimity. They contend that the dty ofPhiladelphia and the
state of Pennsylvania have a duty to provide continuing ser-
vices to the deinstitutionalized residents.
Ml V /f 5(
CLEARINGHOUSE REVIEW
306
--..«cj-ttMBfeH 1381
CLEARINGHOUSE RSVIEW
Magistrate Recommends Dismissal of Suit
Challenging SSI In-Kind Reductions
27,218. Burns v. Schwciker (W Jl Pa. Apr. 22, 1981). Plain-
tiff represented by Sandra SmaJes, Neighborhood Legal Ser-
vices, 1312 E. Carson St., Pittsburgh, PA 15203, (412)
431-7255. [Here reported: 27,218-1 Magistrate's Report,
Recommendation & Order (14pp.). Previously reported at 13
Clearinghouse Rev. 636 (Dec. 1979).]
The magistrate has recommended that the defendant
Secretary's motion for simmiary judgment be granted and
his decisions to reduce plaintiffs' SSI benefits be affirmed.
Plaintiffs had challenged the denial, reduction or termina-
tion of SSI benefits as a result of a determination by HHS
that they have received in-kind income in the form of support
and maintenance because they pay less than the fair market
value for the residential premises they occupy. The magistrate
found that the Secretary's determination to reduce SSI benefits
by an amount determined from the reasonable fair market
value of in-kind benefits received is vidthin the ambit and pur-
poses of the SSI program. Plaintiffs have filed ciccptions to
the magistrate's opinion.
307
AUGUSTTSEPTEMBEa 1981
CLEARINGHOUSE REVIEW
Action Challenges Recoupment from
SSI Benefits of interim Public Assistance
Debt DIscfiarged in Bankruptcy
31,257. Coughliii v. Pennsylvania Dep't of Public Welfare
(E.D. Pa,, filed May 4, 1981). Plaintiff represented by Henry
Sommer, Community Legal Services, 3156 Kensington Ave.,
Philadelphia, PA 19134, (215) 427^50. [Here reported:
31,257A Complaint (3pp.).]
Plaintiff debtor alleges that defendant welfare depart-
ment violated the injunction provisions of 11 U.S.C. §524<a)
by recouping his interim public assistance benefits, the debt
for which was discharged in bankruptcy, from retroactive
SSI benefits. Alleging that the debt was never reaffirmed
under the provisions of 11 U.S.C. §524(c), plaintiff seeks
recovery of the full amount of SSI benefits.
308
Inmates Challenge Conditions of County Prison
31,169. Williams v. Lackawanna County Prison (M.D(Pa.y
filed 1981). Plaintiffs represented by Randolph Bragg,
xNonhem Pennsylvania Legal Services, 507 Linden St.,
Scrtmion, PA 18503, (717) 342-0184. [Here reported: 31.169A
Plfs' Brief in Support of Motion for Prelim. Inj. (26pp.);
31,169B Brief of Defs in Suppon o'f Motion to Dismiss
{25pp.).J
P laintiffs in this cl ass action are inmates of the
LackawannaCosjnty Prison. They are challenging the condi-
tions, practices and procedures of the prison, including: failiur
to follow disciplinary procedures, cold and drafty ceils, failure
to provide daily eLTcrcise, inadequat* plumbing, lack of medical
attention, refusal of telephone con tact b etween inmates and
their attorneys, inadequacy^f law bopjcs in the library and
inhumane conditions in the behavioral adjustment unit. Plain-
tiffs seek a preliminary injunction to enjoin the defendants
from continuing to violate plaintiffs' due process rights,
from denying them access to the courts and from further
inflicting cruel and unusual punishment upon them.
CLEARINGHOUSE REVIEW
JULY 1981
! .
!
fi'X
309
legal righis of persons in the Staie who are mentally ill or
otherwise mentally handicapped and describe any measure
which needs to be taken to protect such rights." Legal
sei^iccs attorneys can use the bill of rights provisions as a
benchmark in challenging inadequate state plans and
rubber-stamp approvals by the Secretary of Health and
Human Services.
The new mental health advocacy program (section 502)
is a hybrid of the developmental disabilities protection and
advocacy (P&A) model and the competitive-grant model
recommended by the Senate committee. The P&A model
provides a formula allocation to each state. The Mental
Health Systems Act adopts a discretionary-grant approach,
eliminating the requirement of advocacy as a prerequisite for
other funding. The Secretary of Health and Human Services
is given authority to make grants for advocacy services,
similar to the authority to make grants for mental health
senices. A smaller number of more adequate grants and a
^ider range of advocacy models can be expected.
There are rwo basic eligibility criteria: The advocacy-
grant recipient must have not only the "authority" (as under
the DD Act) but also the "ability" to pursue legal, ad-
ministrative and other appropriate remedies and must be
"independent" of any "entity" providing treatment or serv-
ices. Nothing in the Systems Aa implies that only a single en-
tity is to be funded in a state; more than one advocacy
provider could be designated, recommended and/or funded.
During the first year (fiscal year 1982). public or nonprofit
private agencies vvishing to apply for Funds must be
"designated" (if a state government entity) or "recom-
mended" (if any other public agency or a nonprofit private
organization) by the governor. But after the first year, any
public or private nonprofit entity can apply; the governor
must simply be informed of applications by entities he has
not designated or recommended. The governor and "other in-
terested persons" have a right to a hearing on such ap-
plications.
Obviously legal services and other community and state
advocacy programs will be very interested in the im-
plementation of the advocacy provisions because they
represent an important new funding source. The Mental
Health Law Project will try to keep the field informed of
developments in the implementation of the act and to help
local advocacy agencies make known their views about the
grantmaking mechanism.
Key issues in implementation will be:
• defining what it takes to meet the "ability"
criterion;
• detertnining how far removed from the direct treat-
ment level a state-government entity must be to be
"independent" and thus eligible for advocacy funds;
• the size and distribution of grants;
• the review hearing processes: and
• defining the procedures and criteria for changing,
terminating or adding grantees in a state after the
initial grant or grants.
2. The Civil Rights of Institutionalized Persons Act
On May 23. 1980. President Carter signed Pub. L. No.
96-247. giving authority to the Justice Department to initiate
or intervene in "lawsuits to enforce the constitutional and
other federal rights of persons in institutions. The new law.
known as the Justice Depanment Standing Bill (S.!0 and
H.R. 10) during the extended effort to enact it. empowers the
United States Attorney General to file a lawsuit against a
state after determining the existence of a partem or practice
of denving residents of institutions their rights. Before the
suit may be filed, the Attorney General must notify ap-
propriate state officials of the specific problems under in-
vestigation and determine that all voluntary effons at
compliance have failed. Private institutions which receive
federal funds or are licensed by the state are not covered by
this law.
MHLP had testified several times at the request of the
relevant congressional committees on the need for Justice
Depanment protection of the rights of institutionalized men-
tally and developmentally disabled people. We worked closely
with the coalition of organizations leading the fight for
passage, including the American Civil Liberties Union, the
national Mental Health .Association, the National .Associa-
tion for Retarded Citizens and the Children's Defense Fund.
This legislation is especially imponant because the Special
Litigation Office of the Justice Depanment is one of the few
agencies with the resources to conduct class action litigation
addressing the systemic problems of institutions and state
service-delivery systems.
F. Attorneys' Fees
This was a big year for the recovery of artomeys' fees
in mental disability law cases. Legal services attorneys and
other advocates for the mentally disabled should be aware
Xhat there is now a realistic possibility of receiving reason-
able attorneys' fees for work on behalf of mentally dis-
abled clients. The basis for the awards, of course, has been
the Civil Rights Artomeys Fees Award Aa of 19''5. 42
U.S.C. §1988. On March 19. 1980. the United States District
Coun for the .Middle Distria of Florida ordered that the at-
torneys for plaintiff Kenneth Donaldson receive ap-
proximately S273.000 for their effons on his behalf in
Donaldson v. O'Connor. TCA 1693 IN.D. Fla.) (lawyers in-
cluded the ACLU and the Mental Health Law Project) . In
Vecchione v. Wohlgemuth. No. 73-162 (E.D. Pa.. _DeoJJ. ^
1 979). 4 M.D.L.R. 23 (1980), a priv ate iaam cylndi leg al
services of fice received approximately S200.000jtuuioEneys'
fees for th eir efforts on behalf of the"piaj ntiff_A^-pafT of the
senlement in Wuori v. Zitnay. Gv. No. 7S-80SD (D. Me..
Apr. 9. 1979). the Ment^HealthLaw Pr^ect, Pine Tree
L egal Serv ices and a private atiom ey fo nnerly at PineTree.
were awarded a total of SI 10.000 for representation of plain-
tiffs. And in June 1980. attorneys at the National Center for
Youth Law were awarded $355,000 in fees for their represen-
tation of plaintiffs in Morales v. Turman. No. 1948 (E.D.
Tex.). The Supreme Coun's recent decision in \faine v.
Thibouioi. _ U.S. 100 S. Ct. 2502 (1980). Gearinghouse
No. 18.409. has increased the likelihood of recovenng
attorneys' fees in mental disability cases by clarifjing that
JANUARY 1981
C)^^..'tn^hc",s^ ^
â– i V;-t W
909
310
6. DonaJd Lambro. Fai Ciiy: Ho^ " asnin°ion ii'asies Yuur icxes. (Souir Serid. In-
diana; Rign;r>-. Catt^«■a\. !980). p. 532.
". Li'^ai Services Corporation 1980 Annual Rcpori. p. 15.
S. I'lLiona Posada v. Lonnie Bell. Ca-:-'9-!;i. liied Juiy I". I9"9 Dism:ssea Jans.
1980.
9. Lawrcnct ^^'al5h. "Suit Cnarges Lrcal Services ^Vasie." The Piitsbur^li Press.
.August 19. I98I.
10. Simer v. Olivarez. No. 79C 3960. LSDC. .NDl.. (iTied Septemoer li. 19"9l.
11. .Among the ia.xpayer-subsidizsd sourcrs oi" t'undin; for NCLC ar; S6"5.63I from
the Lical Se.-^iccs Corporation (Legal Servicss Corporation .\nn'.:ai Ripor:. p. 19)
and 527. -yX) trom the Depanmem of Energy (Depi. oi Enerzy Ot'nce of Consumer
.Affairs I.
12. .MeizEcr. supra n. -I, p. 13.
13. H. Peter Meizger and Richard WestfaO, "The Great Ecology S\*incle.~ Policy
Review vol. 15 (Winter. 1981). p. 72.
l-l. -According to Legal SerMces Corporation's .Assistant General Counsel Linda Pcrle.
If. Annua] Report, supra n. 7. p. 21.
16. Steven Haberi"ieid. "Economic Developmcni." C.'dari/i^"Oh:,e .Re\.e^* "-ol. I-i. no.
10 (January 1981). p. 911.
IT. The Contra Costa Legal SerMces Foundation received i-7i.!f5 from the Legal
Services Corporation in Fiscal Year 1980. Legal Services Corporation 1V8C Annual
Repon. p. 16.
18. In re Evans. (Soaal Secunty .Administration. Bureau of Hearings and .Appeals.
September IT. 1979K
19., .Annual Report, supru n. ~. p. 21.
20. I(L. p. 16.
21. "Two Complaints." The Sew Republic. (Februarv 3. 19"9). p. 5.
22. Id.
23. Stevenson v. Sieverson. So. 79-C.A-153S-MR (Kentucky Court of Appeals. No-
vember T, 1979).
24,. .Annual Report, supra n. 7. p. 18.
r 23Z Di>e y.JcTtrtmgs. No. '9-681-D (W.i). Pa^ May 23, J979). #
26. Annual Repon. supra n. 7. p. 2-i.
IT. Neighborhood Legal ScrMces. Inc. received 538-i.)05 irom tne Legal Se."-ice5 Cor-
poration in F^' 1980. Annual Repon. suora n. ". p. I".
2S. Government .Accounting Ofi'icc Report ?2021!6. May 1. 1981.
29. Margaret E. Wagner, ed.. "Information Direciorv on National Suppon Pro.iecis."
p. i.
30. Id., p. .U.
31. Memweatherw Sher^ooa. L'SDC SONY. "3 Civ. 612S (ADS).
32- .Annual Report, supra n. ~. p. 22.
33. Testimony of James G. S>*eency. County Attorney. Orange Countv. Ne-v \orls be-
fore the L.S. House of Representatives Suocommitiee on Courts, Civil L;cer:ies.
and the .Administration of Justice.
34. Fred D. Baidvun. "Rising Above Principle: The Conservative Public Interest La«
Firm." The American Spectator. .August 1981.
35. "The Watt Offensive." The ^Vall Street Journal. August 23. 1981. p. 20.
36. .Memorandum prepared by the Ofilce of Management and Budget, undatea. p. 9.
3". Id., p. 10.
38. .Act J35 of the 1981 session o\ the Louisia.Ta legislature amended and reenac.ed
Louisiana Revisea Statutes 3~:2I2(C). The iec:siation provides t.-at a person ^•ouia
hire or designate a non-iaw ycr to represent nim in a jase mv olv ing a ciai.m of 5 i .200
311
./L 'JirX /d-^^r-r>
v///
Ancf novK, Philadelphia _ -.
A conununity group has filed suit
j-eeting an injiiDction to slop SEIPTA
from raising transit fares as of
tomorrow. The suit was filed in
Common Pleas Court by the A ss^-
ation of Com munity j>£agizatjons_
IorReforEn~Now. ACOflN^ the same
group that fought higher traasit
fares in Allegheny County, contends
the increases approved by the
SEPTA board last month are inequi-
table. The Sontheastem Pennsylva-
nia Transportation Authority plans
to hiie adult fares and transfers by
a nickel, and student fares by 20
cents. All special fares also are due
to rise. The suit asts that the in-
creases be delayed until the court
can determine if the current fare
structure places an unfair burden on
the poor.
L."- '^ a - - •
312
313
42 U.S.C. §1983 cacompssses claims based on purely siaru-
lon' vir'arions of federal law. Accordmgly. prevailing panics
shoulc be able lo recover fees in cases brought under such
federal srarutes as the Education for All Handicapped Oiil-
dren A", the Rehabilitarion Aa. the Doelopracntai D-^abil-
iries Asiistance and Bill of Rights Aa and concurrentlv under
42 U.S C. §1983. Advocates for the menially disabled should
also nc-:e that in Dizon v. Harris. 504 F. Supp. 973 (D. D.C
1975). -Jie federal defendants consented to a judgment of
S2S0.0O3. payable over a f^ve-ycar period to defray plamnfEs'
costs i- monnoring a consent decree, which would otherwise
have b=en borne by plaintiffs as litigation expenses.
Conchjsion
■« With regani xo tesi-case litigatioa. especially of a con-
stitutio:;al nature.- the upcommg decision in .PennAufsr-i
should provide a basis for reassessing our strategics and tac-
tics. Unril thai derision is handed do»Ti and until the Rennie
and Rogers cases are decided by the Third and First OrcuiB]
the aatchword should probably be "proceed ii-ith caution."
Hovkever. much liricarion of a non-iest-case nature can be
brought safely and ii promises great benefits for our clients.
One of the most friiitfu] areas for litigation is the Education
for All Handicapped Children Aa. 20 L'.S.C. §§1401 e: seq..
which specifics individually appropriate public education for
all handicapped children. The Rehabilitation Aa and the
DD Aa. as well as a growing number of progressive state
statutes, offer nonconstirutional bases for litigation. On the
administrative and legislative fronts, the most fruitful
avenues for w-ork in the coming year wqll probablv be iiti-
plementation of the Mental Health Sys-.ems Act. especially its
provision for a national advocacy svstem for the mentally ill.
and the reauthorization of the DD Aa. which funds prelec-
tion and advocacy agencies for developmentally disabled per-
sons. Without doubt, persons who are or are alleged to be
mentally disabled will keep coming to lawyers with their
problems and there will be more than enough work for all
concerned.
//^/
• <tSf
314
udge Ends
. $ 1 0,OOO» A»Oay
Fine â– On Sfaie '
PHILADELPHIA (UPI) - A federal judge has
ended a 510,000-a-day fine against the Depart-
ment of Public Welfare, but says the. court will
retain the Sl.^ million t he department already
has paid for its refusal to fund the Special
Master's Office in the Pennhurst home case.
The fine was imposed on Public Welfare
Secretary Helen O'Bannon for contempt of court
after the General Assembly — at Mrs. O'Ban-
non's urging — refused last spring to allocate
$900,000 to fund the office for fiscal 1982.
The office was estabUsbed in 1978 to monitor
the court-ordered transfer to commanity homes
of retarded residents at the Pennbarst Center in
Spring City, Chester County.
U.S. District Judge Raymond J. Broderick
ruled Friday that the court would retain the fines
to pay for future operations of the Special
Master's Office and to pay bills that the office
was unable to pay between July and October.
"The commonwealth defendants," Broderick
wrote, "although they have failed to comply with
the orders of this court, will nevertheless be
purged of the contempt in view of the fact that
they have paid fines in an amount sufficient to
comply with this court's (order)."
Mrs. O'Bannon had argued that the Special
Master's Office was unnecessary.
The state appealed Broderick's contempt rul-
ing last fall and the Court of Appeals is expected
to rule soon on whether it was a valid order. In its
appeal, the state requested that all the contempt
money be returned.
315
;AN2 9ig82
#^
^Vicious, Petty' Charges Hurled
Commissioners Rapped
In Legal Group's Suit
Branding the' actions of
the Lackawanna Count y
c ommissioners as "vicious
and petty" and practicing
''thejiQliUcsofpillage,'' five
members or~tfie Nor-
the astern Penw sylvania
L egal Services ( NPLST.
Inc.. are seeking a restrain-
ing order in federal court to
halt Lackawanna County
from terminating an NPLS
contract with the county's
Area Agency on Aging.
One of the fly e lawyer s
representing NPLS and who
wished to remain
anonymous Thursday ac-
cused the commissioners of
"tinkering with federal
monies for the elderly" as if
the sums were "their own
private pin money."
The .NPLS suit filed in
federal court earlier this
week accuses the county
commissioners of transferr-
ing as of Feb. 1 the Elderly
Legal services contract to
"Attorneys Frank Bolock
and Howard Spizer."
â– The amended complaint
states that neither Bolock
nor Spizer have ever sub-
mitted proposals for the pro-
vision of legal services to
the elderly, and that neither
lawyer sought the contract
if it required their full-tune
services. .
Both lawyers have private
practices in the Scranton
Electric Building besides
other offices. Bolock in West
Side and Spizer in Tunkhan-
nock. The Tribune learned.
The county's award to
Bolock and Spizer is illegal
because it was not done ac-
cording to proper bidding,
ment. or with prior ap-
proval of the Pennsylvania
Department of .^ging, ac-
cording to the complaint.
The five plaintiffs, Attys.
0. Randolph Bragg. Ira
Mark Goldberg. Sylvia
Hahn. J. Palmer Lockward
and Ben Josielevski, seek a
temporary restraining
order, (TRO) and a
preliminary and permanent
injunction from Chief
Federal Judge William J.
.Nealon to halt the county
(Please Turn to Page 5)
316
iNPLG Blasts
1
Commissioners
(Continued From Page 3)
commissioners from ter-
minating NPLS*s contract
with the Area Agency on Ag-
ing. Nealon, on vacation this
week, is scheduled to act
next week.
The group of legal ser-
vices lawyers accused their
director. Atty. Eugene
Smith, of "capitulating" to
county administrator An-
drew Wallace when Wallace
summoned Smith to his of-
fice E>ec. 28, 1981.
The com.plaint revealed
Uiat Wallace told Smith that
.NPLS would receive the
Juvenile and Dependency
Contract at the prior year's
funding level but that NPLS
would have to relinquish the -
Elderly Legal Services Con-
tract in return.
"Defendant Wallace then
threatened Smith by in-
dicating that if NPLS fought
for the Elderly Services con-
tract it would receive
neither contract," the com-
plaint states.
Smith, without consulting
the plaintiffs, capitulated to
Wallace's threat and on
Dec. 31 notified Goldberg
and Jezerski that their posi-
tions, funded by the Elderly
Legal Services contract,
would terminate Jan. 29. it
is further charged.
The suit claims t.hat the
county commissioners' ac-
tions violates plaintiffs'
rights to "equal protection
and due process," and the
First Amendment's right of
free speech.
The fi ve leg al services'
lawyers also filed last week_
a cornplaint with the Penn-
sylvania Department oL^^
in^, Jiarrisburg, requesting^
on an" emerjgency basis to
redesignate the Area Agen-
cy on Aging and remove it
from auspices of the county
commissioners. — .
317
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318
POST-CAZETTE: Tucs., Jan. 26, 1982—3
Supreme Court \
reaffirms ban T
on school prayer
J WASHINGTON (AP) — The Supreme Court, - •
reaffirming its ban on organized prayer in public
schools, yesterday ruled unconstitutional a Lon-
isiana law permitting voluntary prayer sessions.
The court, without written opinion, upfieW a
ruling that the state law passed last year violates '., .,
the constitutionally^ mandated' separation of:'.'
church and sUte. >'-"^::'rr. ■:./.•
. The Louisiana law provided that local school
boards could allow each classroom teacher to ask
whether any student wished to offer a prayer,
and if no student volunteered, could permit the
teacher to pray.
The prayer did not have to be specifically
religious in nature, and was to take place before
classes began.
The law did not force either the student or the
teacher to pray, and provided that students who
did not wish to take part could, at their parents' ,
written request or their own verbal request,
leave the classroom or simply not participate.
Lxx:al regulations drawn up by the Jefferson
Parish School Board to implement the law also i
provided that any student wishing to take part in i
the one-minute prayer session had to have his or. ]
her parents' written consent and make a verbal
request to be included. . • '
Last August, the 5th U.S. Circuit Court ;^f
Appeals struck down the law and the Jefferspn
Parish guidelines and theSupreme-Couctj^ta'-
day ratified _tbt-.dectsTOfir' ^^*^\I:
"tfi'olher matters yesterday, the court v • . i
• Rejected an appeal filed by Pittsburgh ; .
KelgHborhood Legal Services on t>ebalf of five .
" Western Pennsylvania students seeking to avoid
prosecution tor defaulting on student loans. The ;
- students, all of them from counties adiacent to '
\ Allegheny County, had argued that the Penn syli^
\ vania Higher Education Assistance Agency had
prevented them from defending themselvesbjrT
requirin g them to answer the suits id Harr"Isbu rg/_
instead of in a local court. - ^ ^
^ ' • Ruled by a 6-3 vote that Indian tribes have a
V legaLright to -Lax non-IndianSTor'natural re-
sources taken from reservation lands.
319
Parents sue judges on custody
By Lynn Ehrenberger
Posl-Ga2elie Statl Wnler
A Northside mother whose 1-
year-old daughter was taken from
tier before Christmas and placed in
a foster home went to federal court
yesterday charging that she was not
given legal representation as man-
dated by Jaw.
■In 'a class action suit filed by •
Neig hbornooa Legal Services tn her
'TiHalf, Caror Smith, 21, of 90r
Chestnut St., asked the U.S. District
Court to order that an attorney be
appointed to represent her.
Named in the suit are Juvenile
Court Judges R. SUnton WeUick,
Livingstone M. Johnson and Ray-
mond A. Novak; Thomas Carres,
director of Children and Youth Ser-
vices; Helen O'Bannon, secretary of
the state Department of Public Wel-
fare; and the county commissioners.
Smith lives with her husband,
David, and another daughter, Bren--
da, 2. Both she and her husband
completed the 10th grade and their
only monthly income is J381 in
public assistance, which has been
reduced to $318 since their daugh-
ter, Christine, was removed from
their home.
The suit charged that Smith took
Christine to Allegheny General Hos-
pital on Dec. 1 for treatment of a
runny nose, sneezing, diarrhea and
an ear infection.
Hospital officials contacted a
caseworker at Children and Youth
Services. The suit said Christine had
been hospitalized on three previous
. occasions for failing to gain weight
or for losing weight.
The caseworker, Robert Rick, ob-
tained a court order preventing the
hospital from releasing Christine to
her parents and requested a shelter
hearing before Johnson. At the hear-
ing on Dec. 4, Johnson determined
that Christine should be placed in
shelter care.
As a result, the suit charged,
Christine was not returned to her
parents but was placed in a foster
home, even though Mrs. Smith had
been attending a parenting skills
program.
According to the suit, neither
Mrs. Smith nor her husband were
told that they were entitled to a
have a lawyer represent them or
have one appointed by the court if
they could not afford one. That was
in violation of Smith's civil rights
a na m violation oi tne siate Ju"veriile
~Set, the suit c harged .
James U. Belliveau, a -lawyer
with Neighborhood Legal Services,
said the bmilhs believed cnrisbne
was in an institution under the cus-
tody of the county and did not know
until this week that she was in a
foster home. He said thpir other
daughter, Brenda, in in good health
and that "disputed medical evi-
dence" bad been presented at the
hearing.
He said state law requires that
the court tell people that they are
entitled to legal counsel and provide
an attorney if necessary. This has
not been done, be said.
NLS has been representing poor
peop le in cases involvinE depend ent
children, he said, but funding cut s
have resulted in a reduction in NLS
statl and it no ionger has the man-
power to represent them.
A hearing is scheduled today at
II a.m. in U.S. District Court before
Judge Barron P. McCune, asking
him to order that an attorney be
appointed to represent Smith at a
dependency hearing set for Jan. 6 in
Juvenile Court.''
320
?-.^l-2/
Band marches
one more time
^';^^
^â– ^
Its drums have been taken away,
but mat vcon I stop uie t^,(igewooo
High School band from playing one
more time.
About 30 musicians, â– replete in
maroon sweaters and while pants,
-will wind their way through the
borough's tree-lined streets Satur-
day nomatterhowmuchj*^^
hood Legal services Associauon
objects.
But it could be the band's last
performance; Edgewood .High-
School is no more.
.Legal Services made plenty of
noise lliis weelc when it caught wind
of the band's plan to march in the .
Edgewood Community Day parade
~ this weekend. \^
The association apparently inter-
preted what it beard about the
parade and other community day
activities as being a protest of the
New District school desegregation
merger.
Rumors had been floating that
, the festivities at Koenig Field would
include a dunking l)ooth where a-
- person dressed like U.S. District
Judge Gerald Weber would be the
target.
Last April, Weber ordered Edge-
wood to join the Qiurchill, Swiss-
vale and Turtle Creek districts in a
merger designed to desegregate the
mostly black .General Braddock
School DisUict.
Although the "dunk Weber" idea
was quickly scrapped, booths at the
celebration will raise funds for the
anti-merger Committee to Defend
Edgewood Schools.
Legal Services lawyer Thonnas
Henderson told New District offi-
cials that the band's appe arance in
the para de mightbe construed a s_
^the kind of anti-merger activ i ty^ that
was banned this month byWeber.
Weber decreed that all New Dis-
trict employees and officials could
l« held in contempt for trying to
impede the consolidation.
Henderson pointed out tg New ;
District Solicitor Thomas Rutter_ . .
that a New District teacher. Justin
b'Ambrosio, w ould be directing the
h'dgewood bandT "!
The NLSA lawyer also figured
that the band would be using school
uniforms and school instruments,
thereby lending New District sup-
port to a protest.
Organizers of the festivities were
stunned when the word was relayed,
to them by former Edgewood Super-
intendent John Dunlap, oow a New
District assistant superintendent
"If they wanted a protest march,
I'd have given them a protest
march," Joseph Stabile, parade
marshal, said. "But the borough
asked me for a community day
parade and that's what I'm going to
give them."
Mary Limpert, celebration co-
chairwoman,'' said the event is an .
annual affair designed to bring peo-
ple of the tiny community closer
together.
Although the strong anti-merger
feelings in the community have giv-
en this year's celebration more zest,
it can in no way be interpreted as an
â– anti-merger rally, she said.
' Other celebration events include
games, awards, a performance by
Ralph DeStefano and his Dixieland
Band and fireworks at about 9:30
p.m.
When the New District myestigat-
ed the b an d's performance. ilTounJ"
that its onl y reco urse was to advise
D^Am"&FosTo againsf partfcTpatlDg
and to take aw ay the band's gnuns.
Limpert said a Penn Hills man
quickly volunteered to lend the band
some drums for the performance.
Despite the victory, the music on
Saturday will be bittersweet for the
band and the community. •
Unless a court appeal can over-
turn the merger, it's taps for the
Edgewood High School band. D
By Chel Wade
321
NEWDISTRICT
Objecfiioii To §cli®®l
Elect!©!! PI
By JAMES HUTTENHOWER
OfThe Daily TribHTie
• U.S. District Judge Gerald Weber Wednesday
rejected a motion to increase the number of New
District school board seats up for election this
November.
Neighborhood Legal Services attorneys, repre-
senting black parents in the former General
Braddock School District, had argued that tho^e
residing in that district would be under-represent-
ed in the voting region plan approved two weeks
ago by the New District school board and Weber.
Three board seats are up for election this year
under that plan.
. The NLSmotionrequested the election of atle ast
six members to the board this year, \1 not ail nine
"members. The motion also suggested ibat ihree of
â– 1 the six m embers e lected m 1981 h ave a tour-year
/ jtenn and th ree have a two-year term! \
WsEeFs order states mat adequate representa-
tion for each former school district has been
assured with the three seats now up for election.
• "No former school district is entitled to any special
. representation on the board of the New District.
; Only the people in the nine new electoral regions
are so entitled."
There is "nothing fundamentally unfair" in
having parts of the former General Braddock
; district, joined to adjacent areas of other
-. municipalities under the d^w voting plan, be
represented by current New District board
members livmg in those areas, the order
• continues.
1 Under the voting plan, today is the deadline for
. candidates in voting regions 2, 5, and 7 to get on the
â– ballotfor the November general election.
Democrat and Republican candidates for the
'. -seats were selected by local party committees
â– within the last week. So far, no independent
candidates have filed in any of the districts,
. Allegheny County riLrector of elections Kenneth
Dixon said Wednesday afternoon.
The Democrat and Republican candidates is
each region are as follows :
â– - >^In Region 2 (ail of Rankin and Swiss vale voting
districts 1,2,3,6,13 and 14), Republican William K.
. McFarland, of 1927 Wayne St., Swissvale, faces
Democrat Carl R. Linn, of 422 Duquesne SL,
ejected
Rankin.
McFarland won a Republican nomination in the
pre-merger primary election this spring in
Swissvale Area School District, whDe Linn was
unsuccessful in this year's Democratic primary in
the former General Braddock area.
*^In Region 5 (all of Forest Hills except voting
district 4), Democrat Elaine Drisko, of 403
WoodsideRd., faces Republican Lester Longan, of
120 Watt Lane. Both candidates were members of
the former Churchill Area school board and serve
on the New District advisory committee. Longan
is also a former president of the (ZhurchUl board.
*^In Region 7 (all of Turtle Creek and East
Pittsburgh ward 3), Democrat Donald Wukick,
current New District school board member, of 308
Albert St., Turtle Creek, faces Republican Regis
Durmis, of 147B Watson Dr., Turtle Creek.
Wukich, whose term on the New District board
expires this year, is former president of tie Turtle
Creek Area school board.
The decision by Region 2 Democrats to select
Linn, a resident of the former General Braddock
school area, has produced mixed reactions in
Swissvale, tlie other municipality making up the
voting region and part of the former Swissvale
Area school district.
The Region 2 areas of Swissvale contain roughly
2,600 registered voters — approximately 1,100
more than in Rankin, and some Swissvale
residents had expected to lock up another seat on
the New District board in the election. Board
president James Kelly is also from Swissvale.
Diann Jenkins, president of the anti-merger
Swissvale Committee for QuaUty Education,
accused Swissvale Democratic chairman Jack
Bell of selling the community "down the tubes"
and of "totally ignoring his responsibility to the
voters in Swissvale Area."
Jenkins claimed that BeU decided on his own to
align Swissvale and Rankin Democrats, instead of
meeting with Swissvale Republicans to choose a
common candidate for the ccmmunity — some-
thing Bell indicated last week he might trj-.
BeU could not be reached for comment last
night.
s.
1
2
3
4
5
6
7
9
L
1'
1!
Y,
U
2C
2J
23
25
2S
31
34
3£
3$
40
42
4S
47
U
5:
»
5'
5i
6(
6J
6:
62
64
6j
6i
67
6S
72
73
74
75
76
77
7f
322
323
APPENDIX A
NATIONAL SUPPORT CENTER FISCAL YEAR 1980 FUNDING
Center for Law and Education
Cambridge, Massachusetts $ 601,47 2
Center on Social Welfare Policy and Law
New York, N.Y 691,258
Migrant Legal Action
Washington, D.C 565,827
National Center for Immigrants' Rights
Los Angeles, Calif 130,000
National Center on Women and Family Law
New York, N.Y 187,500
National Center for Youth Law
San Francisco, Calif 625,153
National Clients Council
Washington, D.C 550,000
National Consumer Law Center
Boston, Mass 675,632
National Economic Development Law Project
Berkeley, Calif - 423,669
National Employment Law Project
New York, N.Y 5 20,7 60
National Health Law Program
Santa Monica, Calif 630,061
National Housing Law Project
Berkeley, Calif 740,234
National Legal Aid and Defender Association
Washington, D.C 53,000
National Senior Citizens Law Center
Los Angeles, Calif 609,079
National Social Science & Law Center
Washington, D.C 317,090
Native American Rights Fund/Indian Law Support Center
Boulder, Colo 238,337
324
IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA
DIANN JENKINS, JERRY
MALLEY, BONNIE ROTONTO,
and NANCY TIRPAK,
Plaintiffs,
vs.
NEIGHBORHOOD LEGAL SERVICES
ASSOCIATION, a non-profit
corporation,
Defendant.
Civil,
DIVISION
No.
IssuebNA.J > "
225/0
Comi)laint
In ICtjuity
No Real Estate
Involved
Code
Filed on behalf oC DIANN JENKINS,
JERRY MALLEY, BONNIE ROTONTO,
and NANCY TIRI'AK, Plaintiffs
Counsel of Record for this
Party:
Ira Weiss, Esquire
Pa. I.D. #1740B
Goldman & Weiss
Firm #373
Suite 530 Grant Building
Pittsburgh. PA 15219
(412) 562-0L12
325
IN THE COURT OF COMMON PI. MAS OF At.I.DCIIMNY COUNTY, I'KNNSYLVANIA
CIVIL Df VISION
DIANN JENKINS, JERRY
MALLEY, BONNIE ROTONTO ,
and NANCY TIRPAK,
Plaintiffs,
vs.
NEIGHBORHOOD LEGAL
SERVICES ASSOCIATION,
a non-profit corporation.
Defendant.
No.
In Equity
No Real Estate Involved
NOTICE rn ni:Fi:r)i)
You have been sued in cotirL. If yon wish to d<>fcnd
against the claims set forth in th<> followinq [i.ujr.-s, you must
take action within twenty (20) dny;; afti.T this croniplaint and
notice are served, by onterin<j a wriltcn a|>[)c;iii .inct; p'.-rsonally or
by attorney and filing in wriLinq with Llie court your defenses or
objections to the claims set forth n().ninst yon. Ycju are warned
that if you fail to do so, the cas<' iiiny procec^cl without you and
a judgment may be entered against you by the court without further
notice for any money claimed in th<^ cf)ni|)l-T i n t or for nny claim or
relief requested by the plaintiff. You may lose money or property
or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR I,AWYi:U AT (KICK. IK YOU DO NOT
HAVE OR KNOW A LAWYER, THEN YdU SIIOULI) C.n Tf) OR TKI.FPIIONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHKRi; YOU C/vM C.KT LI^GAL HELP:
LAWYER REFERRAL SKUVICK-
Tlio Allegheny County H.u Aijstjci.ii ion
920 City-County nnildi-iq
Pittsburgh, Pennsylvania 1S219 /
Telephone: 4 1 2-201 -0'. 1 H /
326
IN THE COURT OF COMMON PLEAS OF AIJ.IICIIENY COUNTY, PENNSYLVANIA
CIVIL DIVISION
DIANN JENKINS, JERRY )
MALLEY, BONNIE ROTONTO )
and NANCY TIRPAK, )
)
Plaintiffs, )
)
) No.
)
NEIGHBORHOOD LEGAL ) In Equity
SERVICES ASSOCIATION, )
a non-profit corporation, ) No Kcal Estate Tnvolved
vs.
)
Defendant. •)
COMPLAINT
AND NOW, come the Plaintiffs, above n.imod, and by
their Attorneys, IRA WEISS, ESQUIRE and GOLDMAN >, WEISS,
file the following Complaint in Equil.y aqainsL i he Defendant,
above named:
1. Plaintiff, DIANN JENKINS, is an udult individual
residing at 1622 South Braddock Avenue, Swissvale, Allegheny
County, Pennsylvania 15218.
2. Plaintiff, JERRY MALLEY, is an adult individual
residing at 2114 Lloyd Avenue, Swissv.ile, Alle'iheny County,
Pennsylvania 15218.
3. Plaintiff, BONNIE UOTDNTO, is an .idult individual
residing at 104 A Harper Drive, Turtle Creek, Ali<r<jlieny County,
Penns^'lvania '145.
327
4. Plaintiff, NANCY TlliPAK, is an adult individual
residing at 143 D Watson Drive, Turtl(> Croek, Allcyheny County,
Pennsylvania 15145.
5. The Defendant, NEICIIBOHIIOOD LECJAL SERVICES
ASSOCIATION, is a Pennsylvania Non-Profit Corporntion having
its registered office at 535 Fifth Avenue, Pittsburgh,
Allegheny County, Pennsylvania 15219.
6. All Plaintiffs are taxpayers of the Conunonwealth
of Pennsylvania and the United States of America.
7. The Defendant was granted a charter by Order
of the Court of Conunon Pleas of Allegheny County, Pennsylvania
dated March 23, 1966 at 3579 April Term 1966.
8. The purposes of incorporation as stated in
Article 3 of the Articles of Incorporation were " t <j make
available legal services to all resiclentti of the city of
Pittsburgh and the County of Allegheny, Commonwealth of
Pennsylvania, who because of their financial inability are
unable to procure such legal aid and to undertake educational
programs in which indigent residents may bo instructed in and
advised of their fundamental private legal rights and obliga-
tions, to the end that their perforin.ince, rootiv.it ion and
productivity as citizens may l)i' improvi-d and thr-ir respect
for the law increased..."
9. The Defendant is funded wholly by. public
funds from the United States of America and the Cuinnionwealth
of Pennsylvania under the Legal .Services Corporation Act of
1974, Pub. L. 93-335, 88 Stat. J71i, ^2 IJ.S.C. 2')'Jf, , et seq.
328
and the regulations promulgated to implement said Act,
45 C.F.R. 1600.1, et seq.
10. The Defendant is under Icqal obliqation to ex-
pend said public monies in a manner consistent with its
charter, applicable statutes and the Code o£ Professional
Responsibility.
11. The Defendant has failed to expend said monies
in the aforesaid manner in the following particulars:
A. It has represented the Plaintiffs, Ann
Scott and Maryann Razzaq in litigation against the Port
Authority of Allegheny County in the Court of Common Pleas
of Allegheny County at GO 80-24371 in which the Defendant
has expended in excess of $6,000.00 in expert witness fees
for which its clients have assumed no ultimate liability.
This use of public monies is in direct violation of
Disciplinary Rule 5-103 (B) adopted by the Supreme Court
of Pennsylvania February 27, 1974.
B. It has represented the Plaintiffs,
Dorothy Hoots, et al, in litigation against the Commonwealth
of Pennsylvania andothersin an action to compel the reorcjaniza-
tion of School Districts in Eastern Allegheny County in the
United States District Court for the Western District of
Pennsylvania at Civil Action No. 71-038 in whicli the Defendant
has expended large sums of money in expert witness fees and
other costs of litigation for which its clients have assumed
no ultimate liability. This use of public monies is in
direct violation of Disciplinary Rule 5-103 (D) as aforesaid.
329
12. The said abase of public monies constitute
illegal acts as said abuse offends ;jublic policy and is in
direct violation of the Rules of the Supreme Court, as
aforesaid.
13. The Board of Directors of the Defendant
recently adopted a policy whereby the staff attorneys employed
by the Defendant would no longer represent persons cliciible
for their services in cases involvin<j divorce, support,
custody, visitation or termination of parental rights.
14. Said action of the Board of Directors is in
direct contravention of the stated purpose of the Defendant,
Corporation, to wit, making legal services available to
those persons where financial circumstances make it impossible
for them to secure legal representation.
15. The aforesaid expenditure of public funds in
contravention of the laws of i'onnsylvania and the Rules
of the Supreme Court injures the Plaintiffs and all others
as taxpayers, in that it constitutes a waste of public-
funds.
16. The refusal of the Defendant to undertake
the representation of the aforedescribcd persons constitutes
a direct violation of the Cliartcr of said corporation and
constitutes an ultra vires act.
17. The Plaintiffs have no adccjuatc remedy at
law under the Corporation - Not - for - Profit Code,
15 Pa. C.S.A. 7101, et seq. or at law.
WHEREFORE, Plaintiffs pray this Honorable Court
grant the f c " )wing relief:
330
a. Permanently enjoin the Defendant from
advancing litigation costs without client's responsibility
in violation of Disciplinary Rule 0-103 (B) .
b. Permanently enjoin the Defendant from refusing
to represent eligible clients in matters involving divorce,
support, custody, visitation and termination of parental
rights in violation of its charter and the conditions surrounding
its receipt of public monies.
c. Appoint a receiver to manage the affairs
of Defendant, Corporation, so as to ensure compliance with
Rules of the Supreme Court and to prevent waste of public
monies.
d. Such other relief as the Court may deem
appropriate.
GOLDMAN & WEISS
Ira Weiss, Esquire
Attorney for Plaintiffs
331
APPENDIX It
LEWIS. RICE. TUCKER. ALLEN AND CHUBB
ATTORNEYS AT LAW
SUITE 140D RAILSA/AV E X C H A M G E BUILDING
ST1 OL.IVE STREET
ST. LOUIS. MISSOURI S3101
314/231- 5B33
F V\/M McCALPIN CABLE LRTAC - TELEX 43 4359
Ma„ in 1983 TELECOPIER 314/241 6056
Hon. Orrin G. Hatch
United States Senate
Committee on Labor
and Human Resources
Washington, D.C. 20510
Dear Senator Hatch:
Re: Legal Services Corporation
I wish to thank you once again for providing me the oppor-
tunity to testify during the hearing on the reauthorization
of the Legal Services Corporation. As you know, many questions
and issues were raised during the hearing about which I was
requested to seek further information or clarification. This
letter is my response to that request-.
You asked that I provide you with additional information
regarding states' utilization of funds under Title XX of the
Social Security Act to support the provision of legal services
to poor people. In my written statement, I said that only a
handful of states had ever used Title XX funds for legal ser-
vices and the number was declining. The information I was rely-
ing upon comes from the Legal Services Corporation. In 1982,
fourteen states spent a total of $12,102,939 in Title XX funds
to support the work of 62 programs. In 1983, the programs
anticipate receiving $12,707,700 in Title XX funds, but the
number of states drops to 12 and the number of programs to 58.
More importantly, about 60% of the total dollars are being
received in one state--Pennsylvania. Given these figures, I
believe the point I was trying to make in my written statement —
that generally most states will not utilize undesignated block
grant funds to support legal services for poor people--is a
legitimate one.
A second issue that arose during my testimony involved
the filing of controversial litigation by local programs during
my tenure as Board Chairman. You specifically raised concerns
about actions brought by programs in Connecticut and Iowa liti-
gating issues related to the rights of transsexuals. In my
332
testimony I explained the case in Hartford, Connecticut, which
I had personally investigated. I understand that John Barrett,
the Director of the Legal Services Corporation of Iowa (LSCI) ,
has written to you explaining his program's participation in
Pinneke v. Preisser , 623 F.2d 546 (8th Cir. 1980). That case
was filed in 1976 by a county-funded legal aid program in Iowa,
not the program funded by the Legal Services Corporation. In
1978, the county-funded program merged with LSCI, and LSCI as
part of the merger agreement became attorneys of record in all
of the cases pending in the county-funded program. The United
States District Court decided the case favorably for the plain-
tiff and the state's appeal was unsuccessful. For your infor-
mation, I am attaching a copy of the opinion of the Eighth Circuit
Court of Appeals in that case. The facts are that an eligible
client was represented in a case initially filed by a non-
federally funded program but a case not prohibited by the Legal
Services Corporation Act or Regulations so there was no impro-
priety in its being assumed as part of the merger.
Howard Phillips, in his testimony in opposition to legal
services programs filing class action suits, cited as an example
of program abuse of the class action device a case initiated by
Greater Orlando Area Legal Services (GOALS) . Mr. Phillips said
that the program filed two class actions which required more
staff attorney time than the 4,000 other cases the program
handled. These are allegations which were made against this
program in a letter from Garry L. Curran of the American Life
Lobby to the editor of the New York Times dated December 7, 1982.
The allegations are baseless, as indicated in the attached letter
from the Director of GOALS to the New York Times responding to
these charges. The letter not only cites facts and figures
which refute Mr. Curran 's assertions, but also contains a descrip-
tion of a not untypical response of the private bar to a request
to play a role in the provision of legal services to poor people,
specifically in the handling of class actions. For the record,
I am also enclosing additional information about one of the law-
suits. The program was successful in both suits, and these
victories have directly benefited thousands of poor people in
the state of Florida. Yaris v. Special School District of St.
Louis County, et al. , 558 F.Supp. 545 (E.D.Mo., March 2, 1983)
is an example of a somewhat similar case which was undertaken
by members of the private bar.
In your opening statement, you referred to a "gag order"
obtained by Camden Regional Legal Services to prevent a witness
333
from testifying before a Congressional committee. I have also
looked into that situation and am enclosing materials and docu-
ments for the record which will present the program's explanation
of this matter. In essence, a U.S. Magistrate prohibited an
attorney, who was seeking an injunction against an LSC grantee
for alleged violation of the Act, from testifying before a House
of Representatives Committee concerning the matters in litigation.
In fact, the attorney's attempted conduct would appear to
violate the Disciplinary Rule DR 7-107 (F) or (G) of the ABA
Code of Professional Responsibility. In the chronology of events
which is enclosed you will note that on March 24, 1981, Judge
Brotman wrote as a part of his denial of the attorney's appeal:
"I do not consider Judge Hammill's determination a gag
order. As to any other matter, not the subject matter
or issue or issues in the instant litigation, counsel
is certainly free to participate."
Indeed, testimony was given the very next day before Congressman
Kastenmeier ' s Subcommittee; and the party who alleged that a
"gag order" had been entered did testify. This is another example
of an incident that has been cited time and again which, I believe,
has no basis in fact.
You also raised concerns about the purchase of real estate
by LSC-funded programs. You specifically cited the example of
Birmingham Area Legal Services purchasing a $500,000 building.
During my tenure as Board Chairman, I can remember several occasions
where either Congressional committees or the Government Accounting
Office requested the Corporation to look into the issue of real
estate purchases by programs. The Corporation has developed
very thorough procedures and approval processes that local pro-
grams must comply with prior to purchasing real estate. I am
attaching a copy of a memo sent to the Regional Directors of LSC
in 197 9 which states the Corporation policy and the procedural
steps required of programs. It is my belief that the policy
and procedures are sound and adequately protect the resources
of local programs.
The example you cited in Birmingham occurred in 1982, which
was after my tenure on the Board of the Corporation. However,
upon inquiry, I have learned that the Birmingham program failed
to follow the proper procedures in purchasing a building and
did not receive the required Corporation approval for the pur-
chase. As a result, the entire amount expended became a questioned
29-379 O— 84 22
334
cost in the program's 1982 financial audit. Where the matter
currently stands, I do not know; however, I do believe the
Corporation has acted appropriately in this area in the past
applying its policies and procedures strictly.
You asked for information on how many buildings have been
purchased by legal services programs and what amount of funds
have been spent on these purchases. I have no way of collect-
ing and providing that information, but I am certain that the
Corporation staff will provide it to the Committee. I will
say, however, that I believe the purchase of real estate to
be a legitimate use of LSC funds as long as the purchase can
be justified from a cost-benefit perspective and is in the
long-term interest of the client community. The policies and
procedures adopted by LSC appear to be adequate to accomplish
these objectives.
During the hearing a question was also raised about a
booklet entitled "Lobbying on a Shoestring" published by the
Massachusetts Poverty Center. The booklet was published in
1982 after I left the Board. I am advised, however, that
that organization is not a recipient of Corporation funds
and that the publication was not financed by the Corporation.
Finally, you raised a question concerhing the apparent
failure of legal services program attorneys to keep time
records, pointing to the almost universal practice in private
law offices. My hasty research indicates that salaried lawyers,
particularly those in public employment, are much less apt
to maintain time records. This would seem to be true in many
prosecutor and public defender offices, city and county
counselor's offices and some state attorneys general offices.
Apparently, even U.S. Attorney's offices only keep track of
time for certain specified activities and then not by reference
to the particular case. I am told that most corporate legal
departments also do not keep time records in the law office
sense. Thus, the practice of legal aid lawyers is not as
aberrant as might first appear.
I hope that the foregoing--as well as my answers to
Senator Denton's inquiries, which are being sent simulta-
neously — will assist you and your Committee in framing
335
constructive legislation for the future conduct of the Legal
Services Corporation. If I may be of further assistance,
please do not hesitate to call upon me.
Very truly yours,
lTtjLfcfV\c
F. Wm. McCalpin
FWM:np
Enc.
P.S. Since dictating the foregoing there has come to my
attention and I enclose herewith a clipping from the
New York Times of May 4, 1983. It describes yet
another instance of the absolute necessity of per-
mitting legal services programs to bring class actions
against governmental entities.
FWM
336
Verna PINNEKE, Appellee.
V.
Victor PREISSER, Commiasioner of Iowa
Department of Social Services, and Mo-
nica Murray, Director of the Cerro Gor-
do County Department of Social Serv-
ices, Individually and in their Official
Capacities, Appellants.
No. 79-1551.
United States Court of Appeals,
Eighth Circuit.
Submitted Feb. 12, 1980.
Decided June 27, 1980.
Suit was brought by medicaid claimant,
who had undergone sex reassignment sUr-
gery, seeking remedial injunction and de-
claratory relief from the denial of her con-
stitutional rights to equal protection and
due process and her statutory right to med-
icaid benefits after local and state medicaid
officials refused funding for the surgery.
The United States District Court for the
Northern District of Iowa, Donald E.
O'Brien, J., required state and local officials
to reimburse claimant and awarded $500 as
compensation for mental anguish and suf-
fering, and state and local officials appeal-
ed. The Court of Appeals, Floyd R. Gibson,
Senior Circuit Judge, held that: (1) Iowa's
policy of denying medicaid benefits for sex
reassignment surgery, the only medical
treatment available to relieve or solve the
problems of a true transsexual, constituted
an arbitrary denial of benefits based solely
on diagnosis, type of illness or condition,
and (2) Iowa's policy of denying medicaid
benefits for sex reassignment surgery when
it was a medical necessity for treatment of
transsexualism was not consistent with the
objectives of the medicaid statute.
Affirmed.
1. Federal Courts «=>192
In suit by medicaid claimant against
state and local officials seeking to recover
expenses incurred for sex reassignment sur-
ger>', district court had jurisdiction of
claims regarding equal protection and due
process and it was irrelevant that district
court did not reach merit of those claims.
28 U.S.C.A. § 1343: Social Security Act,
§ 1901, 42 U.S.C.A. § 1396; U.S.C.A.Const.
Amends. 5, 14.
2. Social Security and Public Welfare
«=» 241.95
A state medicaid plan absolutely ex-
cluding the only available treatment known
at this stage of the art for a particular
condition must be considered an arbitrary
denial of benefits based solely on diagnosis,
type of illness or condition, and thus Iowa
could not deny medicaid benefits for sex
reassignment surgery, the only medical
treatment available to relieve or solve the
problems of a true transsexual, for treat-
ment of transsexualism under the medicaid
program. Social Security Act,
§§ 1902(13KB). 1905(a), 42 U.S.C.A.
§§ 1396a(13XB), 1396d(a).
3. Social Security and Public Welfare
«=» 241.95
Iowa's policy of denying medicaid bene-
fits for sex reassignment surgery, the only
known medical treatment to relieve or solve
the problems of a true transsexual, when
such surgery is a medical necessity for
treatment of transsexualism was not con-
sistent with the objectives of the medicaid
statute and reflected inadequate solicitude
for the claimant's diagnosed condition, the
treatment prescribed by the claimant's phy-
sicians, and the accumulated knowledge of
the medical community. Social Security
Act, § 1901. 42 U.S.C.A. § 1396.
4. Social Security and Public Welfare
«=»241.95
Decision whether certain treatment or
particular type of surgery is "medically nec-
essary" so that medicaid coverage is re-
quired rests with individual claimant's phy-
sician and not with clerical personnel or
government officials, and thus claimant,
who proved real need for only medical ser-
vice available to alleviate her condition, and
whose condition improved since surgery,
was entitled to recover reimbursement for
337
PINNEKE V. PREISSER
cite as 623 F Jd 546 (1980)
547
expenses incurred for sex reassignment sur-
gery after funding was denied based on
Iowa's medicaid plan, which specifically ex-
cluded coverage for such surgery. Social
Security Act, § 1901, 42 U.S.C.A. § 1396.
5. Social Security and Public Welfare
'3=241.95
Medicaid exclusions for mental diseases
are strictly limited to situations involving
payment for services in institution for tu-
berculosis or mental disease and do not ap-
ply to mental health problems in general,
and thus claimant's transsexual surgery
came within medical assistance categories
of inpatient hospital services and physi-
cians' services furnished by a physician, and
had to be covered under state's medicaid
plan unless not medically necessary. Social
Security Act, § 1905(a), 42 U.S.C.A.
§ 1396d(a).
Stephen C. Robinson, Sp. Asst. Atty.
Gen., Dept. of Justice, Des Moines, Iowa
(argued), Thomas J. Miller, Atty. Gen., Des
Moines, Iowa, on brief, for appellant.
Dennis L: Groenenboom, Legal Services
Corporation of Iowa, Mason City, Iowa, for
appellee.
Before HEANEY, Circuit Judge, GIB-
SON, Senior Circuit Judge, and STEPHEN-
SON, Circuit Judge.
FLOYD R. GIBSON, Senior Circuit
Judge.
Appellants are state and local officials in
charge of administering the State of Iowa's
Medicaid program. They appeal from the
District Court's ' order requiring them to
reimburse Appellee-Plaintiff Pinneke
$3,024.52 for her expenses incurred for sex
reassignment surgery and awarding her
$500 as compensation for mental anguish
and suffering resulting from the wrongful
denial of benefits, together with attorney
fees. Appellate jurisdiction rests upon 28
U.S.C. § 1291 (1976). We affirm.
1. The Honorable Donald E. O'Brien, United
States District Judge, Northern District of
Iowa.
Pinneke began life as a male, but quickly
became uncomfortable with the male gen-
der identity. After extensive testing, doc-
tors concluded that she had a transsexual
personality, and required sex reassignment
surgery. She underwent sex reassignment
surgery on April 20, 1976. As a Supplemen-
tal Security Income recipient, Pinneke was
eligible for benefits under the Medicaid pro-
gram, 42 U.S.C. § 1396 (1976). She applied
for funding of her sex reassignment sur-
gery under the Medicaid program, but the
Cerro Gordo County office of the Iowa De-
partment of Social Services refused fund-
ing. The Commissioner of the Iowa De-
partment of Social Services affirmed this
decision on the basis that the State of
Iowa's Medicaid plan specifically excludes
covei*age for sex reassignment surgery.
Pinneke then filed this suit seeking remedi-
al injunctive and declaratory relief from the
denial of her constitutional rights to equal
protection and due process and her statuto-
ry right to Medicaid benefits.
On May 11, 1979, the District Court de-
clared that the policy of denying Medicaid
benefits for sex reassignment surgery
where it is a medical necessity for treat-
ment of transsexualism is contrary to the
provisions of Title XIX of the Social Securi-
ty Act, 42 U.S.C. § 1396 (1976), and there-
fore violates the supremacy clause of the
United States Constitution. It declared the
relevant parts of the Iowa State Plan void,
and permanently enjoined the administra-
tion and enforcement of the Iowa Medicaid
program in a manner to deny benefits for
medically necessary care and treatment in-
cident to sex reassignment surgery or sub-
sequent corrective surgery.
Preliminarily, appellants argue that the
Supreme Court's decision in Chapman v.
Houston Welfare Rights Organization, 441
U.S. 600, 99 S.Ct. 1905, 60 L.Ed.2d 508
(1979), requires dismissal of the complaint
for lack of federal jurisdiction. Chapman
held that supremacy clause claims challeng-
ing the validity of state welfare regulations
338
548
623 FEDERAL REPORTER, 2d SERIES
because of conflict with the Social Security
Act do not fall within the ambit of the
jurisdictional grant of 28 U.S.C. § 1343
(1976).
In Hagans v. Lavine, 415 U.S. 528, 536, 94
S.Ct 1372, 1378. 39 L.Ed.2d 577 (1974), the
Supreme Court held that a federal court
may hear a pendent claim based on the
Social Security Act when a substantial con-
stitutional claim is also presented. In his
concurring opinion in Chapman, Mr. Justice
White observed that the Chapman majority
did not question the continuing validity of
Hagans, 441 U.S. at 661 n.33, 99 S.Ct. at
1^15 (White, J., concurring in the judg-
ment). The dissenters in Chapman noted
that "even a welfare recipient with a feder-
al statutory claim may sue in a federal
court if his lawyer can link this claim to a
substantial constitutional contention. And
under the standard of substantiality estab-
lished by Hagans v. Lavine, supra, such a
constitutional claim would not be hard to
construct" Id. at 675, 99 S.Ct. at 1946.
(Stewart, J., dissenting). See also Herweg
v. Ray, 619 F.2d 1265, at 1269 (8th Cir.
, 1980); Oldham v. Ehrlich, 617 F.2d 163, at
166-168 (8th Cir. 1980).
[1] The District Court found that by
J virtue of 28 U.S.C. §§ 1331 and 1343(3) and
(4) it had jurisdiction over Pinneke's com-
' plaint raising issues arising under the equal
protection, due process, and supremacy
clauses of the Constitution. This determi-
nation, filed a few days before the Chap-
man decision, is incorrect in holding that
the supremacy clause allegation could pro-
vide jurisdiction under 28 U.S.C. § 1343
(1976), but the Chapman decision does not
detract from the District Court's finding
that section 1343 encompasses jurisdiction
of the claims regarding equal protection
and due process. It is irrelevant that the
District Court did not reach the merit of
these claims. Hagans v. Lavine, 415 U.S.
2. The State of Iowa does not appear to chal-
lenge the use of "medically necessary" as the
standard for determining when it must provide
coverage, but rather argues that sex reassign-
ment surgery simply is considered not "medi-
cally necessary," but more in the nature of
cosmetic surgery. This standard ol medical
528. 543, 94 S.Ct. 1372, 1382, 39 L.Ed.2d 577
(1974). Appellants' jurisdictional challenge
is rejected.
On the merits of the claim, appellants
assert that Congress conferred upon the
states considerable latitude and discretion
in shaping their medical assistance pro-
grams under Title XIX. and that the State
of Iowa has properly exercised this discre-
tion to formulate an irrebuttable presump-
tion that treatment of transsexualism by
alteration of healthy tissue cannot be con-
sidered "medicaUy necessary."^ Appellants
apparently concede that Pinneke suffers
from transsexualism, but contend that the
state may make an irrebuttable presump-
tion prohibiting a certain manner of treat-
ment, even though medical testimony estab-
lishes that this treatment, sex reassignment
surgery, is the only procedure available for
treatment of the condition from which Pin-
neke suffers, transsexualism, and was medi-
cally necessary for her, based upon an indi-
vidualized medical evaluation.
From this record, it appears that radical
sex conversion surgery is the only m.edical
treatment available to relieve or solve the
problems of a true transsexual. As noted
by the Minnesota Supreme Court in Doe v.
Minnesota Department of Public Welfare
and Hennepin County Welfare Board, 257
N.W.2d 816, 819 (Minn.1977):
Given the fact that the roots of trans-
sexualism are generally implanted early
in life, the consensus of medical literature
is that psychoanalysis is not a successful
mode of treatment for the adult transsex-
ual. • • • The only medical proce-
dure known to be successful in treating
the problem of transsexualism is the radi-
cal sex conversion surgical procedure re-
quested by Doe in the present case:
"It is the alternative that is sobering.
In the light of present knowledge,
there is no known approach to treai-
necessity is not explicit in the statute, but has
become judicially accepted as Implicit to the
legislative scheme and is apparently endorsed
by the Supreme Court. Bea! v. Doe. 432 U.S.
438. 444-45 & n. 9. 97 S.Ct. 2366. 2370-71, 53
L.Ed.2d 464 (1977).
339
ment of transsexualism other than the
surgical route. Nothing else holds
rromise. Granted that the surgical
route is difficult and clearly second-
best to a method of preventing these
tragic reversals of gender identity and
role, yet it seems to be all that there is
to offer at present." Hastings, Post-
surgical Adjustment of Male Transsex-
ual Patients, 1 Clinics in Plastic Sur-
gery 335, 344.
• ••••»
Thus, it is not unreasonable to conclude
that transsexualism is a very complex
medical and psychological problem which
is generally developed by individuals ear-
. ly in life. By the time an individual
reaches adulthood, the problem of gender
role disorientation and the transsexual
condition resulting therefrom are so se-
vere that the only successful treatment
known to medical science is sex conver-
sion surgery.
The State of Iowa, in choosing to partici-
pate in Title XIX, the Medicaid program, by
establishing a Medical Assistance Program,
has bound itself to abide by certain provi-
sions of the federal legislation. Title XIX,
42 U.S.C. § 1396a(13)(B). mandates that five
basic categories of medical assistance be
provided to all categorically needy persons
when the assistance is medically necessary.
These five categories, listed in section
1396d(a) include "inpatient hospital services
(other than services in an institution for
tuberculosis or mental diseases)" and "phy-
sicians' services furnished by a physician (as
defined in section 1395x(r)(l) of this title),
whether furnished in the office, the pa-
tient's home, a hospital, or a skilled nursing
facility, or elsewhere."
The state's plan is subject further to reg-
ulations promulgated by the federal De-
partment of Health, Education, and Wel-
fare. In particular, 42 C.F.R. 449.10(a)(5)(i)
(1977), now codified at 42 C.F.R. § 440.-
230(c) (1979), provides in pertinent part:
3. Senate Report No. 404, 89th Congress. 1st
session, U.S.Code Cong. & Admin. Newi 1965,
p. 1986, states in part:
3(a) Conditions and limitations on payment
for services.
PINNEKE v. PREISSER
Cite as 623 F.2d 546 (1980)
549
[T]he State may not arbitrarily deny or
reduce the amount, duration or scope of,
such services to an otherwise eligible indi-
vidual solely because of the diagnosis,
type of illness, or condition. Appropriate
limits may be placed on services based on
such criteria as medical necessity or those
contained in utilization or medical review
procedures.
[2] We find that a state plan absolutely
excluding the only available treatment
known at this stage of the art for a particu-
lar condition must be considered an arbi-
trary denial of benefits based solely on the
"diagnosis, type of illness, or condition."
Doe V. Minnesota Department of Public
Welfare, 257 N.W.2d 816, 820 (Minn.1977);
see White v. Beal, 555 F.2d 1146, 1151-52
(3d Cir. 1977). Cf G. B. v. Lackner, 80
C.A.Sd 64, 145 Cal.Rptr. 555 (1978) (classifi-
cation of sex reassignment surgery as cos-
metic is arbitrary).
[3] Furthermore, Iowa's policy is not
consistent with the objectives of the Medic-
aid statute. Without any formal rulemak-
ing proceedings or hearings, the Iowa De-
partment of Social Services established an
irrebuttable presumption that the proce-
dure of sex reassignment surgery can never
be medically necessary when the surgery is
a treatment for transsexualism and re-
moves healthy, undamaged organs and tis-
sue. This approach reflects inadequate so-
licitude for the applicant's diagnosed condi-
tion, the treatment prescribed by the appli-
cant's physicians, and the accumulated
knowledge of the medical community. The
Supreme Court has emphasized the impor-
tance of a professional medical judgment in
this context. See Beal v. Doe, 432 U.S. 438,
445 n. 9, 97 S.Ct. 2366, 2371, 53 L.Ed.2d 464
(1977). The legislative history also supports
the conclusion that Congress intended medi-
cal judgments to play a primary role in the
determination of medical necessity.' S.Rep.
(1) Physicians' role
The committee's bill provides that the phy-
sician is to be the key figure in determining
utilization of health services — and provides
that It is a physician who is to decide upon
340
550 623 FEDERAL REPORTER. 2d SERIES
No. 404, 89th Cong., 1st Sess., reprinted in
[1965] U.S.Code Cong. & Admin.News, pp.
1943. 198&-89. See also Dodson v. Parham,
427 F.Supp. 97, 108-09 (N.D.Ga.l977); Rush
V. Parham. 440 F.Supp. 383, 389-91 (N.D.
Ga.l977); White v. Beal, 555 F.2d 1146,
1150-51 (3d Cir. 1977); Comment, Public
Welfare: Medicaid Funding for Transsexu-
al Surgery, 63 Minn.L.Rev. 1037-48 & n.55,
1051-52 & nn.75 and 76 (1979).
[4] The decision of whether or not cer-
tain treatment or a particular type of sur-
gery is "medically necessary" rests with the
individual recipient's physician and not with
clerical personnel or government officials.
And, as stated in White v. Beal, supra, 555
F.2d at 1152, "The regulations permit dis-
crimination in benefits based upon the de-
gree of medical necessity but not upon the
medical disorders from which the person
suffers." (Footnote omitted.) Here Pin-
neke proved a real need for the only medi-
cal service available to alleviate .her condi-
tion, and the record indicates her condition
has improved since the surgery.
[5] Appellants lastly argue that trans-
sexual surgerj- is excluded by the language
of 42 U.S.C. § 1396d(a), providing two ex-
clusions for m.ental disetises. The clear lan-
guage of these exclusions, however, strictly
limits them to situations involving payment
for "ser\aces in an institution for tuberculo-
sis or mental disease." Appellants' only
attempt to fit within these exclusions is the
suggestion that Pinneke's medical condition
requiring surgery was a mental disease.
The statutory limitations, however, do not
apply to mental health problems in general.
Pinneke's transsexual surgery thus comes
within the medical assistance categories of
"inpatient hospital services" and "physi-
cians' services furnished by a physician,"
and must be covered under the state's Med-
icaid plan unless not medically necessary.
The decision of the District Court is af-
firmed.
admission to a hospital, order tests, drugs
and treatments, and determine the length of
stay. For this reason the bill would require
that payment could be made only if a physi-
cian certifies to the medical necessity of the
services furnished. • » •
341
THE END OF AN ERA
ARC/Florida Suit
Closes Institution
** ...Defendants shall continue to Implement
their current plan to depopulate the Center.
After July 1, 1984, the Defendants shall no
longer use the Center as a residential facility
for the developmentally disabled. 99
- Order signed by U.S. Dbtrict
Judge Elizabeth A. Kovachevich
October 1, 1982.
arc
Association for
Retarded atizens/Florida
342
THE END OF AN ERA
Closing the Doors of Orlando Sunland
Training Center
THE SETTLEMENT AGREEMENT AND ORDER OF
U.S. DISTRICT JUDGE ELIZABETH A. KOVACHEVICH
October 1, 1982
...And Other Materials Pertaining to the Suit.
-1- < '.
343
THIS PUBLICATION IS DEDICATED TO THOSE WHO SUFFERED IN
SILENCE AND THOSE WHO SPOKE OUT TO END THAT SUFFERING.
Published by the Association for Retarded Citizens/Florida
with the hope that this information may assist other ARC'S
and advocates in their efforts to improve the lives of
persons with mental retardation everywhere.
Additional Copies $1.00
Send To:
Association for Retarded Citizens/Florida
309 Office Plaza
Tallahassee, Florida 32301
(gOit) 878-6121
-ii-
344
TABLE OF CONTENTS
INTRODUCTION.
STYLE OF CASE 3
TEXT OF COURT ORDER.
TEXT OF SETTLEMENT AGREEMENT 7
POPULATION PHASEDOWN SCHEDULE FOR SUNLAND 18
PERTINENT SECTIONS OF FLORIDA STATUTES 21
-111-
345
The Orlando Sentinel
Saturday, October 2, 1 982
Sunland to close
by July '84
By Rosemary Goudreau
OF THE SENTINEL STAFF
Orlando's Sunland Center for the men-
tally retarded will be closed by July 1984
under an agreement signed Friday by
U.S. District Judge Elizabeth
Kovachevich. . . .
Signing of the agreement marked the
end of a three-year legal battle by the
Florida Association for Retarded Citi-
zens to close the 527-bed Sunland Center
and move its retarded residents into
neighborhood facilities.
"Community placements have the
potential to provide far superior care
than in a large institutional setting," said
association attorney Albert Hadeed.
The suit was brought in 1979 to hasten
the closing of Sunland, which state law-
makers had decided should be closed.
Parents whose children received daily
medical attention at Sunland for compli-
cations that accompanied their brain
damage told the judge they were con-
cerned their children would not survive
unless they were in a medical facility.
Several types of facilities are being
built across the state to house the retard-
ed being moved out of Sunlzuid. Some
offer more medical services than others,
but none qualify as a hospital.
Because of allegations that the state
has moved the profoundly retarded into
homes that cannot handle medical prob-
lems, HRS officials reviewed each Sun-
land resident's medical history to deter-
mine what type of home each would
need.
HRS identified 73 Sunland residents
whose medical problems would preclude
them from fitting into the facilities being
built. ...
Hadeed assured the audience of par-
ents and HRS workers that the smaller
facilities would provide better care
because they must meet tougher federal
standards for funding. Orlando's Sunland
cjmnot receive federal funding because it
fails to meet those staffing and housing
standards.
Please see SUNLAND, C-6
From C-1
In addition to stipulating the date for closing
Sunland, the settlement also requires the Orange
County School Board to coordinate the transition of
educational services for retarded citizens being
moved back to their hometowns. The school system
now provides free education to all retarded persons
ages 5 to 18 living in the community.
The school board also must find surrogate parents
who vdll serve as advocates for the retarded chil-
dren whose parents are not involved in their care.
-IV-
346
INTRODUCTION
On August 50, 1979, ihe Associa-
tion for Retarded Citizens/Florida and
six individual residents of the Orlando
Sunland Center filed a federal class
action lawsuit against officials of the
State of Florida alleging that the State
defendants failed to provide Plaintiffs
with adequate facilities and services
so as to meet constitutional standards
for the mentally retarded residents of
Orlando Sunland.
That bland statement, of course,
fails to touch the drama, the horror,
and the impact of all that surrounds
the history of the Orlando Sunland,
the lawsuit, and the settlement of
.this major case. When the four-story
former tuberculosis hospital was
opened in I960 as a residential facil-
ity for nonambulatory persons with
mental retardation, no one suspected
that its existence would be fraught
with controversy and conflict or
that its residents would eventually
be placed in a series of community
settings that may be a model for
the nation. Yet today, as the law-
suit moves into its implementation
stage, this promise of superior care
and habilitation for some of the
most profoundly handicapped citizens
can be realized.
Since 1972, the ARC, the Florida
Legislature, the press, and indivi-
dual citizens had been concerned with
allegations of warehousing, subhuman
treatment, and dangerous, life-
threatening conditions at the insti-
tution. Blue Ribbon task forces,
investigations, corrective, action
plans were formulated, but action
was slow or non-existent. Two events
finally spurred action. In 1977,
through the efforts of ARC/Florida
and others, the Florida Legislature
passed a revision of Chapter 593,
Florida Statutes, the Retardation
Prevention and Community Services
Act. Encoded into law was a mandate
that the State give greatest priority
to the development and implementation
of community-based residential ser-
vices, and that persons be diverted
or removed from unnecessary institu-
tional placements.
To implement this, the Legis-
lature appropriated money for the de-
velopment of a system of community
"cluster" facilities to serve the
severely disabled populations of Tal-
lahassee and Orlando Sunlands.
These were major steps and rep-
resented Florida's commitrrient to close
the two facilities, eventually. It was
that "eventually" which disturbed the
advocates. It soon became apparent . thai
the clusters were not universally popu-
lar, and bureaucratic foot-dragging be-
came the order of the day. At the
same time, conditions for residents
remained woefully inadequate and dan-
gerous at the institution. Unable
to coax the State to provide firm
timelines and commitments, the ARC/
Florida and the plaintiffs were
forced to file suit to test the con-
stitutionality of further confine-
ment of residents at Orlando Sunland.
It is not to be assumed that
this was in any way a "friendly" suit.
While the State proceeded with the
cluster development plans, it resisted
the plaintiffs at every stage of the
-1-
347
lawsuit, refusing to be bound, to make
concessions, or to initiate major im-
provements in care and treatment.
Faced finally with the possibility of
going to trial on the issues, the De-
fendants agreed to enter into serious
negotiations which, after much effort,
resulted in a settlement entered into
by all parties and an Order approving
the settlement issued by the Federal
District Court on October 1, 1982.
Ihe Settlement Agreement will
benefit the class member residents of
Orlando Sunland in two ways: First,
it calls for significant interim im-
provements in the programs and treat-
ment at the Center, and in physical
plant safety; Secondly, it mandates
the transfer and placement of all
residents into community placements
by July 1, 198'i. and forbids the De-
fendants to operate the Orlando Sun-
land as a residential facility for
the developmentally disabled after
December 31, 198't.
The implications and signifi-
cance of the outcome of this lawsuit
are impossible to overstate. Ihe
placement of the most severely and
profoundly mentally handicapped and
physically impaired citizens of this
State into small community-based
facilities presents an opportunity
and challenge to every person and
every idea in this field. The suc-
cessful treatment and habilitation
of these persons in the community
should forever bury the concept of
institutionalization and elevate
the developmental model to its
rightful level.
residents of the Orlando Sunland
and whose violated rights resulted
in events which brought about tf.is
historical accomplishment: Gwen-
dolyn J. Thomas, Diane Collins,
Charles E. Graham, Constance Mit-
chell, Deborah Lynn Buchanan and
J. C. Scott. The skill and dedi-
cation of the attorneys involved
in the case are much appreciated:
lead attorneys - Larry Morgan of
Greater Orlando Legal Services
(who succeeded William Barker),
and Al Hadeed of Southern Legal
Counsel; the back-up assistance
of the Governor's Commission on
Advocacy for the Developmentally
Disabled, and the Mental Health
Law Project; and the members of
the ARC/Florida Ad Hoc Litigation
Committee.
The essential role of the ARC/
Florida volunteers and members in
prosecuting this suit continues now
in its appointed role as monitor of
the State's compliance with the man-
dates of the court order. To over-
see successful implementation of
the decree, and an improved life
for those persons whom it affects,
is a task of the highest order to
which the ARC dedicates itself.
Glenn L. Lee, President
Thomas P. Carroll, Executive
Director, ARC/Florida
Many individuals were essen-
tial to the success of this cause.
Gratitude should first be extended
to the named plaintiffs who were
-2-
348
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
FLORIDA ASSOCIATION FOR RETARDED
CITIZENS, INC.; GWENDOLYN J. THOMAS,
an infant, by her mother, REBECCA
THOMAS; CONSTANCE K. MITCHELL; DEBORAH
LYNN BUCHANAN; J. C. SCOTT; DIANE
COLLINS, by her legal guardian, C. W.
COLLINS; CHARLES E. GRAHAM, by his
legal guardian, CLARA GRAHAM, on
behalf of themselves and all others
similarly situated.
Plaintiffs,
vs.
CASE NO. yg-US-Orl-Civ-Y
BOB GRAHAM, Governor of the State of
Florida; DAVID H. PINGREE, Secretary,
Department of Health & Rehabilitative
Services; PHYLLIS ROE, Assistant Sec-
retary, Department of Health & Rehabili-
tative Services; ABE LAVINE, Assistant
Secretary, Department of Health & Re-
habilitative Services; CHARLES KIMBER,
Director, Developmental Services Prog-
ram Office, Department of Health &
Rehabilitative Services; LUDY D. HADI,
Administrator, District VII, Depart-
ment of Health & Rehabilitative
Services; NOEL F. WINDSOR, Superin-
tendent of Sunland Training Center,
Orlando, Florida; STATE BOARD OF
EDUCATION; RALPH D. TURLINGTON, Com-
missioner of Education, SCHOOL BOARD
OF ORANGE COUNTY, FLORIDA,
Defendants.
-3-
349
ORDER
WHEREAS, the Complaint herein was WHEREAS, the parties, in settle-
filed on August 50, 1979, on behalf of ment of this action, have entered in-
Plaintiffs and others similarly situ- to a Settlement Agreement which sets
ated, alleging, inter alia , that the forth the terms and conditions upon
Defendants have failed to provide which this case is to be settled, and
Plaintiffs with adequate facilities have consented to the entry of this
and services so as to comply with Order without trial or adjudication
minimal constitutional standards for of any issue of fact or law herein, and
the mentally retarded and Defendants
have, therefore, caused Plaintiffs' WHEREAS, the Court has jurisdic-
continued confinement under condi- tion over both the parties and the
tions that violate Plaintiffs' con- subject matter of this action; and
stitutional rights; and
WHEREAS, the Court, being fully
WHEREAS, the Complaint asserts advised, is satisfied that this Order
causes of action against Defendants has been freely agreed to by the par-
arising under the first. Fourth, Fifth, ties and that the parties' Agreement
Eighth, Ninth, and Fourteenth Amendments is fair, adequate, equitable and rea-
to the Constitution of the United sonable;
States; the Rehabilitation Act of 1973,
29 U.S.C.§79't; the Developmentally NOW, THEREFORE, with the consent
Disabled Assistance and Bill of Rights of the parties hereto to bind themselves.
Act, hZ U.S.C. §6001 et seq .; the Edu- their officers, employees, agents, suc-
cation for all Handicapped Children cessors and all those acting in concert
Act of 1975, 20 U.S.C. §1401 et seq .; or participating with them, it is here-
hZ U.S.C. §1983; 28 U.S.C. §§1531, by:
13't3(3) and Ct) and 1357; 28 U.S.C.
§§2201 and 2202; F.S. 393.061 et seq.;
F.S. 228.001 et seq.; F.S. '.02.22; and ORDERED, ADJUDGED AND DECREED as
Rules 57 and 65 of the federal Rules of follows:
Civil Procedure; and
1. The following class of Plain-
WHEREAS, Defendants have filed tiffs is certified, pursuant to Rule
an Answer denying the allegations in 23(a) and (b)(2) of the Federal Rules
the Complaint; and of Civil Procedure: All persons who
now are or in the future will be resi-
WHEREAS, the parties agree that dent clients in the Orlando Sunland
pursuant to Rule 23 of the Federal Training Center, Orlando, Florida.
Rules of Civil Procedure, this action
may be maintained as a class action on 2. Defendants provided notice
behalf of all persons who now are and of the Agreement and the terms and
in the future will be clients in the conditions of the proposed Settle-"
Orlando Sunland Training Center, ment, in the manner set forth in
Orlando, Florida; and Paragraph II of the Settlement Agree-
-5-
29-379 0—84 23
350
ment, to those members of the Plain-
tiffs'" class who were resident cli-
ents in the Orlando Sunland Training
Center between July 9, 1982, and July
29, 1982. Itie Court finds that such
notice was adequate and satisfies the
requirements of Rule 23(e), Federal
Rules of Civil Procedure.
5. Ihe Agreement, including
each of its terms, conditions and ex-
hibits, is hereby approved and adopted.
't. Defendants, their officers,
employees, agents, successors, and all
those acting in concert or participat-
ing with them shall fully comply with
and enforce the terms of this Order
and the Agreement, which is incor-
porated herein.
5. Ihe taxable costs of this
action, shall be borne in full by De-
fendant Secretary of the Department
of Health and Rehabilitative Services
in his official capacity.
6. Ihe Court shall retain jur-
isdiction over this action for the
purpose of enabling any party to this
Order to apply to the Court at any
time for such further orders as may
be necessary or appropriate, for the
execution and enforcement of com-
pliance with this Order and the
Agreement, and for such other and
further action or relief as the
Court deems appropriate.
Dated:
October 1, 1982
Orlando, Florida
ELIZABETH A. KOVACHEVICH
United States District Judge
351
SETTLEMENT AGREEMENT
THIS SETILEMENI AGREEMENT is en-
tered into by the below listed parties
to this litigation in order to resolve
and finally settle all disputes and
controversies between said parties
arising out of the claims asserted by
the Plaintiffs in their Complaint
regarding the operation, conditions
and delivery of services at the
Orlando Sunland Training Center
(hereinafter "Center") in Orlando,
Florida.
The parties to this Settlement
Agreement are:
1. The FLORIDA ASSOCIATION FOR
RETARDED CITIZENS, INC. (hereinafter
"FARC"), a non-profit corporation in-
corporated in the State of Florida,
individually and as representative of
all persons who are presently or who
hereafter will be resident clients
at the Center, by and through counsel.
2. Plaintiffs, GWENDOLYN J.
THOMAS, DIANE COLLINS and CHARLES E.
GRAHAM, individually, and as repre-
sentatives of all persons who are pre-
sently or who hereafter will be resi-
dent clients at the Center, by and
through counsel.
and through counsel.
5. Defendant, DAVID H. PIN6REE,
as the Secretary of the Department of
Health and Rehabilitative Services, by
and through counsel.
6. Defendant, PHYLLIS ROE, as
the Assistant Secretary for Operations,
Department of Health and Rehabilitative
Services, by and through counsel.
7. Defendant, ABE LAVINE, as the
Assistant Secretary for Program Plan-
ning and Development, Department of
Health and Rehabilitative Services, by
and through counsel.
8. Defendant, CHARLES KIMBFR, as
the Director of the Developmental Ser-
vices Program Office, Department of
Health and Rehabilitative Services, by
and through counsel.
9. Defendant, LUCY D. HADI, as
the District VII Administrator, Depart-
ment of Health and Rehabilitative Ser-
vices, by and through counsel.
10. Defendant, NOEL D. WINDSOR,
as the Superintendent of the Center, by
and through counsel.
3. Plaintiffs, CONSTANCE MIT-
CHELL, DEBORAH LYNN BUCHANAN and J. C.
SCOTT, individually and as representa-
tives of all persons who are presently
or who hereafter will be resident
clients at the Center, by and through
their court-appointed guardian ad
litem, Norman Hull, and their counsel.
't. Defendant, BOB GRAHAM, as
Governor of the State of Florida, by
11. Defendant, STATE BOARD OF
EDUCATION of the State of Florida, as
the body corporate which heads the De-
partment of Education, by and through
counsel .
12. Defendant, RALPH D. TURLINGTON
as the Commissioner of Education, by and
through counsel.
REPRESENTATIONS OF PARTIES
-7-
352
WHEREAS, the Complaint herein
was filed on August 30, 1979, on be-
nalf of Plaintiffs and others simi-
larly situated, alleging, inter alia ,
that the Defendants have failed to
provide Plaintiffs with adequate
facilities and services so as to
comply with minimal constitutional
standards for the mentally retarded
and Defendants have, therefore,
caused Plaintiffs' continued con-
finement under conditions that vio-
late Plaintiffs' constitutional
rights; and
WHEREAS, the Complaint asserts
causes of action against Defendants
arising under the first, Fourth,
Fifth, Eighth, Ninth and Fourteenth
Amendments to the Constitution of
the United States; the Rehabilita-
tion Act of 1973, 29 U.S.C. §79't;
the Developmentally Disabled As-
sistance and Bill of Rights Act,
42 U.S.C. §6001 et seq.; the Edu-
cation for all Handicapped Children
Act of 1975, 20 U.S.C. il'tOl et seq.;
^Z U.S.C. §1983; 28 U.S.C. 11331,
13't3(3) and Ct) and 1537; 28 U.S.C.
§§2201 and 2202; F.S. 393.061 et seq.;
F.S. 228.001 et seq.; F.S. 402.22 and
Rules 57 and 65 of the Federal Rules
of Civil Procedure; and
WHEREAS Defendants have filed an
Answer denying the allegations in
the Complaint; and
WHEREAS the signatories to this
Settlement Agreement represent that
they are authorized to enter into
this Agreement and to take all steps
required of them by this Agreement;
and
WHEREAS, Plaintiffs consider it
desirable and in their best inter-
ests, and in the best interests of
the members of Plaintiffs' class,
to settle the issues set forth here-
in by entering into this Agreement;
and
WHEREAS, Defendants consider it
desirable and in their best inter-
ests and in the best interests of
the Department of Health and Re-
habilitative Services and the De-
partment of Education and the State
of Florida, to settle the issues
set forth herein by entering into
this Agreement; and
WHEREAS, the parties have en-
tered into this Agreement as a com-
promised settlement of their dis-
putes, intending that this Agreement
shall not be construed in any way as
defining constitutional or statutory
minima, thresholds or standards, nor
as an admission that any condition,
policy, rule, procedure, act or omis-
sion of the Department of Health and
Rehabilitative Services or any em-
ployee or agent thereof was or is in
any way in violation of any rights
of Plaintiffs; and
WHEREAS, this Agreement shall
not be admissible in evidence in any
proceedings or trials other than for
the purposes specified in this Agree-
ment .
NOW, THEREFORE, the parties, by
and through their counsel, hereby
stipulate and agree as follows:
I. SETTLEMENT CLASS .
1. This action by agreement of
the parties shall be maintained as a
class action on behalf of all persons
who now or in the future will be resi-
dent clients in the Center.
353
II. NOTICE TO CLASS MEMBERS. and void and without prejudice to
the parties' rights.
1. Pursuant to Rule 23(e), Fed-
eral Rules of Civil Procedure, Defen- V. TERMS OF SETTLEMENT .
dants shall, within ten (10) days of
execution of this Agreement, provide A. Dismissal of Certain De-
notice of this Agreement to those mem- fendants .
bers of the Plaintiffs' class presently
confined in the Center, in a place ac- 1. The parties hereby agree to
cessible to clients, a notice in the the dismissal of Defendant RALPH D.
form attached herein as Exhibit "A" TURLINGTON and the Defendant STATE OF
and by individual notice to all the FLORIDA BOARD OF EDUCATION as party
guardians of the members of the Plain- Defendants, such dismissal to be with-
tiffs' class. The costs of providing out prejudice. Those Defendants
such notice shall be borne by Defen- shall have no obligations hereunder
dants, in their official capacities. and any reference to obligations of
Class members shall have twenty (20) Defendants shall not be read to in-
days after notice to them to file with elude these Defendants,
the Clerk of the Court any written ob-
jections to this Agreement. All ob- B. Compliance with Chapter
jections will be considered fully by 395, Florida Statutes.
the Court.
1. The Defendants take the
III. SUBMISSION TO COURT OF SETTLEMENT position in this litigation that they
AND USE OF BEST EFFORTS TO OBTAIN have at all times been in compliance
APPROVAL. with the reguirements of Chapter 393,
Florida Statutes, the "Retardation
1. Promptly upon execution of this Prevention and Community Act," and
Agreement, counsel for the parties represent as a term and condition to
shall jointly submit each Agreement to this Settlement Agreement that they
the Court for its approval and recommend will at all times comply with the
that the Court approve the Agreement. terms and conditions of said act.
Counsel for both parties also shall take and further represent and admit that
all steps that may be required or re- the undertakings which they agree to
quested by the Court and use their best perform pursuant to this Agreement
efforts to consummate this settlement, are consistent with the requirements
obtain the Court's approval of this of said Chapter 393, Florida Statutes.
Agreement, and obtain entry of a final
judgment. 2. Defendants agree that there
shall be no bathing or toileting on
IV. EFFECTIVENESS OF AGREEMENT . open wards, and further with respect
to bathing and toileting, the Defen-
1. This Agreement shall be ef- dants shall provide complete visual
fective immediately upon entry of an privacy for clients.
Order of the Court approving it. In
the event that the Court declines to 3. Defendants agree that there
approve this Agreement or any portion shall be a full habilitation planning
herein, this Agreement shall be null committee meeting annually for each
-9-
354
client prior to his or her community
placement and one full habilitation
planning committee meeting within one
year after community placement. There-
after, clients shall have habilitation
planning in accordance with Department
of Health and Rehabilitative Services
procedures applicable to all other de-
velopmentally disabled clients.
't. The Plaintiffs or their desig-
nee shall, with respect to class mem-
bers, be allowed to review habilitation
plans, to participate in habilitation
meetings and to receive notice of such
meetings from the time this Settlement
Agreement is signed and concluding
three (3) years after the closing of
the Center. Plaintiffs agree that
their attendance and participation at
habilitation meetings shall be at the
expense of Plaintiffs and said Plain-
tiffs will not look to Defendants for
reimbursement, regardless of any other
provisions of this Agreement. Plain-
tiffs further agree to give Defendants
timely notice of the person designated
to attend said habilitation meeting.
C. Tube Feeding .
1. The Defendants shall imple-
ment within ninety(90) days the gen-
eral and client specific recommenda-
tions of the "Orlando Sunland Review"
authored by Dr. L. 0. Linton in March
of 1981 attached herein as Exhibit
"B". The Defendants shall insure
that appropriate and sufficient staff
at the Center shall be hired, if
necessary, and assigned to evaluate
tube fed class members at the Center,
to dfivelop appropriate programs for
them to implement these programs
and to conduct appropriate follow-
up. The Alimentary Evaluation Team
(ATE) employed by the Defendants
shall have the "Orlando Sunland Re-
view" made available to them. Fi-
nally, the Defendants shall insure
that there is an appropriate transi-
tion of the programming initiated
at the Center for tube fed residents
when they are subseguently trans-
ferred to community placement.
D. Sanitation .
1. The Defendants shall reguest
semi-annual inspections by the Orange
County Health Department. The Defen-
dants shall act on the recommenda-
tions of these inspections and pro-
vide Plaintiffs with copies of the
inspections and with notification
of compliance with the recommenda-
tions.
E. Medication .
1. The Defendants shall comply
with applicable rules and procedures
regarding the administration of drugs
as contained in the Department of
Health and Rehabilitative Services
Manual 160-6 and the Department of
Health and Rehabilitative Services
Regulation 95-3. The Defendants
shall insure that there is an ap-
propriate transition of drug regi-
mens of class members at the Center
when they are transferred to com-
munity placements.
F. Physical Therapy .
1. The Defendants shall con-
tinue to contract for the consul-
tive services of a physiatrist for
a minimum of two (2) hours per
month with the ability to utilize
additional hours up to a maximum of
ten (10) hours per month depending
upon the need for such services as
determined by the medical and physi-
cal therapy departments of the Cen-
-10-
355
ter. Defendants shall provide with-
in six (6) months of the date of
this Settlement Agreement, the
adaptive equipment that has been
prescribed by the P.I. Director of
the Center for all those residents
currently on a waiting list to re-
ceive adaptive equipment. There-
after, the Defendants shall provide
the adaptive equipment for the resi-
dents of the Center as prescribed
by the P.T. Director as needed.
Within six (6) months from the
execution of this Agreement, the Cen-
ter's physical therapy director shall
assess the physical therapy programs
of the Center's residents prescribed
in their habilitation plans to deter-
mine the physical therapy staff hours
necessary to implement such programs.
A copy of this inventory shall be fur-
nished to the Plaintiffs upon comple-
tion. No later than six (6) months
from the execution of this Agreement,
the Defendants shall employ or con-
tract for, at their discretion, suf-
ficient physical therapists and physi-
cal therapy assistants to meet the
staffing requirements shown by the
inventory if they exceed the staff
resources then available at the Cen-
ter. Thereafter, adequate physical
therapy staff shall be maintained to
implement the programming require-
ments of the habilitation plans for
the remaining residents at the Center.
The Defendants shall furnish the
Plaintiffs with notifications that
the staffing requirements have been
met contemporaneously with compli-
ance.
G. Admissions .
1. The Defendants shall not
admit any residents to the Center be-
ginning on July 1, 1983. Prior to
July 1, 1983, no more than a total of
nineteen (19) residents shall be ad-
mitted according to the criteria
presently in effect by the Defendants.
H. Future Staffing .
1. No later than six (6) months
from the execution of this Agreement,
the Defendants shall maintain suffi-
cient direct care staff on each ward
to meet ICF/MR standards as contained
in Rule 10D-38.2't, Florida Admini-
strative Code. For all other staff,
the Defendants shall assess the staff
hours required to implement the pro-
gramming prescribed in the habilitation
plans of the Center's residents.
A copy of this inventory shall be
furnished to the Plaintiffs upon com-
pletion. Within six (6) months from
the execution of this Agreement, the
Defendants shall employ or contract
for, at their discretion, sufficient
staff to meet the staffing require-
ments shown by the inventory if
they exceed the staff resources then
available at the Center. The Defen-
dants shall furnish the Plaintiffs
with notification that the staffing
requirements have been met contem-
poraneously with compliance. There-
after, adequate staffing shall be
maintained to implement the program-
ming requirements of the habilitation
plans for the remaining residents at
the Center.
I. Transitional Services .
1. Defendants shall prepare and
implement a complete operational plan
including a descriptive sequence of
activities and events, time-frames,
accountability and resources which
will insure the continuity and ap-
propriateness of care for clients
-11-
356
moving to community facilities.
The Department of Health and Re-
habilitative Services' Document en-
titled "Living in a House, District
Cluster Planning Guide" shall serve
as the approved operational plan to
the extent it is kept current and
inclusive of all components of the
client placement system including
but not limited to:
a. Policies, procedures, proto-
cols.
b. District procedures and agree-
ments.
c. Standard contracts.
d. Budgeting procedures for clus-
ters and community ICF/MR's.
planning team in developing the plan.
Ihis plan shall specify in detail
the type of residence, programs and
support services needed by the cli-
ent.
6. Mo client shall be placed
until programming and support ser-
vices are in place.
7. The Department of Health
and Rehabilitative Services shall
make provision for filling unexpected
vacancies in community facilities
according to the same standards set
forth above.
Deinstitutionalization of
the Center.
2. Individual district or facil-
ity operational plans shall be in con-
formance with the above-referenced
plan but may include district or fac-
ility specific differences.
5- A habilitation plan for
each client shall be prepared with-
in ninety (90) days prior to the
date the client is placed in the
community and shall include a plan
of placement.
4. There shall be coordination
between the Center staff with staff
at the community placement that is
client specific. Such coordination
shall be in person and shall in-
clude meetings between institution
and community medical personnel
preceding client movement.
5. The clients' community case
worker and a member of the profes-
sional staff of the community facil-
ity will participate with the cli-
ents' institutional habilitation
1. Defendants shall continue
to implement their current plan to
depopulate the Center. After July 1,
198't, the Defendants shall no longer
use the Center as a residential fac-
ility for the developmentally dis-
abled. For six (6) months after
July 1, 198't, the Defendants may
continue to operate the Center if
the Defendants can demonstrate the
impossibility of providing suffi-
cient community replacement facil-
ity beds for the residents remain-
ing at the Center by July 1, 198't.
If the Defendants are unable
to close the Center by July 1, 198't,
they must submit documentation to
the Plaintiffs demonstrating their
inability to close the Center. IF
the Plaintiffs are not satisfied
with the Defendants' reasons for
continuing to operate the Center
after July 1, 198't, the issue will
be resolved by the Court. Under no
circumstances will the Defendants
operate the Center as a residential
-12-
357
facility for the developmentally
disabled after December 31, 198't.
1. Defendants shall abide by
the construct of community placement
for Center clients as stated in the
document entitled "Population Phase
Down of Sunlands at Tallahassee and
Orlando," dated May 19, 1982, at-
tached herein as Exhibit "C".
K. Fire Safety .
1. Defendants shall employ or
contract for consultation with a
qualified fire safety engineer.
a. To prepare a fire safety
study together with the fire pre-
vention inspector at the Center of
the living units at the Center
within ninety (90) days with the
following objectives:
1) Determine structural
problems concerning horizon-
tal and vertical evacuation
and make recommendations for
overcoming the problems iden-
tified.
2) Determine the number of
staff needed on each ward to
make horizontal and vertical
evacuation feasible and make
appropriate staffing recom-
mendations.
3) Determine the time neces-
sary to horizontally and ver-
tically evacuate each ward.
\) Determine the most appro-
priate method or methods for
moving residents in a horizon-
tal and vertical evacuation of
each ward.
5) Determine the most appro-
priate and meaningful evacua-
tion route diagrams and other
fire safety information that
should be posted in each ward.
6) Determine the appropriate
responsibilities of the fire
department, maintenance depart-
ment employees, supervisory em-
ployees and direct care staff
in a fire emergency involving
horizontal or vertical evacua-
tion.
7) Determine most effective
way to train employees at the
Center concerning horizontal
and vertical evacuation.
b. To review and revise, where
appropiate, the fire safety evacuation
plan for the Center.
c. To prepare and implement a
fire safety orientation program which
will include instructions on:
1) Employee compliance with
the life safety code.
2) Unit evacuation procedures.
3) Identification of types
of fires.
't) Procedures for reporting
a fire.
d. To prepare and implement a
formal, ongoing fire safety program
which shall include:
1) Quarterly fire drills on
all the units and all shifts
with exercises on the control
of fires and on actual hypo-
-13-
358
thetical horizontal and verti-
cal evacuation procedures.
2) Posting horizontal and ver-
tical evacuation plans with dia-
grams that contain clear, accu-
rate and prioritized instruc-
tions.
5) Procedures for assuring that
all mattresses and mattress
covers are made of low-flame, low-
smoke, f ire-retardent materials.
'») Installation of a public ad-
dress system that meets the re-
quirements of the National Fire
Protection Association, State
Number 72 A, "Local Protection
Signal System." this shall not
be interpreted to require in-
stallation of an entirely new
public address system.
5) Implementation of a system
for reaching the switchboard
operator for emergencies which is
given priority over normal ac-
cess means.
6) Implementation of a fire
response program that would em-
ploy a second person qualified
as an operator to assist the
switchboard operator in emer-
gencies.
7) Development and implementa-
tion of an incentive or disciplin-
ary program for obtaining improved
employee compliance with fire
safety code requirements.
8) Implementation of appropriate
identification and labelling meth-
ods at all extinguisher and manual
pull box alarm stations including
a sign identifying the equipment, a
color coded area around the equip-
ment of regulation sites, a red
painted floor area outlined with
white at each location to b'e free
of obstructions.
9) Implementation of a regular,
formal program for identifying
and correcting inoperable fire
safety equipment and fire safety-
related equipment.
10) Such other procedures or ac-
tivities as may be required by
the life safety code or applica-
ble state statutes or regulations.
2. Defendants shall train all the
direct care and living unit staff con-
sistent with the findings and recommen-
dations made as a result of the fire
safety evacuation study within thirty
(30) days after the study has been com-
pleted.
3. The order of priority for re-
ducing the population of the Center
should be:
a. Removal of all residents off
the third floor.
b. Removal of all residents off
the second floor.
c. Removal of all residents off
the first floor.
'i . The Defendants shall furnish
to the Plaintiffs copies of all in-
spection reports conducted by the State
Fire Marshall or his designated agent
within thirty (30) days of their de-
livery to the Defendants. Defendants
shall also furnish the Plaintiffs with
copies of any corrective action plans
prepared by Defendants in response to
State Fire Marshall reports. The De-
fendants shall correct all violations
-Ti-
359
cited by the State Fire Marshall per- right of the Plaintiffs and staff
taining to fire safety. to mutually communicate and confer
concerning compliance with the
VI. ENFORCEM[WT OF DECREE . decree.
1. The Defendants agree that for 5. For a period extending one
a period of one and a half years from and one half (1-1/2) years after the
the approval of this Settlement Agree- signing of a Court Order approving
ment by the Court and the signing of the Settlement Agreement and con-
ii\ Order evidencing such approval, they tinuing for a period one year after
shall submit a written report to coun- the final closing of the Center,
sel for the Plaintiffs and to the Court the Department of Health and Reha-
every three (3) months setting out the bilitative Services shall submit re-
status of the Defendants' compliance ports, as required in Paragraph VI. 1.
with each and every aspect of this every six (6) months, and the Plain-
Settlement Agreement. Said report shall tiffs shall have the same rights as
be due fifteen (15) days after the end are set out in Paragraph VI. 2. with
oT each said quarter. regard to said reports except that
such rights shall extend for an ad-
2. Defendants shall have the ditional period of six (6) months
discretion to document said report after the Department of Health and
as they see fit. However, Plain- Rehabilitative Services' last report,
tiffs, by and through their counsel, This period may be extended upon â–
shall have the right, on reasonable agreement of the parties or upon ap-
notice, to examine the Center rec- plication to the Court by the Plain-
ords and records of clients who are tiffs upon a showing of good and
members of the class, to inspect the sufficient cause.
Center's physical plant and communi-
ty facilities in which class members 4. Plaintiffs, by and through
reside, to visit and speak with said their counsel, shall have the same
class members and staff at the Center rights as set cut in Paragraph VI. 2.
and at community-based facilities, at anytime in an emergency. Plaintiffs
and to receive briefings from employ- must make a request to Defendants to
ees of the Department of Health and exercise the rights as set out in
Rehabilitative Services with regard Paragraph VI. 2. in an emergency. If
to said report. Defendants shall the Defendants do not agree to Plain-
assist and cooperate with Plaintiffs tiffs' request. Plaintiffs can make
in their compliance activities in- their request directly to the Court
volving the applicable community which shall determine the existence
facilities. of an emergency.
Plaintiffs shall keep all in- 5. The Court shall retain con-
formation obtained that is client tinuing jurisdiction to enforce the
identifiable completely confidential Order approving and adopting the Agree-
except to the extent that it is ment upon petition of counsel for the
necessary for disclosure in this Plaintiffs,
litigation. The Defendants shall
provide notice to the staff of the 6. Counsel for the Plaintiffs
-15-
360
shall be entitled, on a periodic basis,
on application to Defendants, for rea-
sonable fees and reasonable expenses
in connection with their activities
under Paragraph V of this Agreement.
If the Defendants are not satisfied
that the Plaintiffs' fees and expen-
ses are reasonable, the Defendants
must contest the reasonableness of the
fees and expenses by motion to the
Court.
Said counsel shall further have
authority, subject to reasonable
necessity, to employ qualified as-
sistants to assist in the discharge
of their compliance responsibility,
and shall be entitled to reimburse-
ment of reasonable expenses for such
employment. The parties agree that
the total of all fees and expenses
incurred by the Plaintiffs shall not
exceed THIRTY-SIX THOUSAND ($56,000)
DOLLARS per annum unless the Plain-
tiffs have shown good cause to the
Court why any additional fee and ex-
penses are necessary and shall have
obtained Court approval therefore.
VII. MEDICAL REPLACEMENT FACILITY .
1. The Department of Health and
Rehabilitative Services shall perform
a study with regard to the necessity
and feasibility of establishing a
twenty (20) bed hospital which shall
serve as a replacement for the
Center's present Constant Care Unit,
to provide in-patient and out-patient
care and medical services not other-
wise available in the community.
VIII. WON-WAIVER OF DEFENSES .
1 . Defendants do not herein
waive any defenses available to them
or any agency or agent of the State
of Florida now or in the future.
In particular. Defendants do not by
entering into this Agreement waive
the defense of the Eleventh Amend-
ment or any immunity on behalf of
themselves or any agent or agency
of the State of Florida.
IX. APPEALABILITY .
1. Neither party will appeal
the Order attached hereto as Exhibit
"D" if such Order is entered by the
Court.
X. COSTS AND FEES .
1. The parties agree that Plain-
tiffs are the prevailing parties in
this action and, as such, are en-
titled under hZ U.S.C. §1988 to
reasonable attorneys fees as part of
their costs. Plaintiffs' counsel
shall submit appropriate papers to
the Court.
XI. ENTIRE AGREEMENT .
1. This Agreement and its ex-
hibits contain the entire agreement
between the parties.
STIPULATED AND AGREED to this
8th day of July, 1982.
FOR THE PLAINTIFFS :
LARRY MORGAN, ESQ.
Greater Orlando Area
Legal Services, Inc.
ALBERT J. HADEED, ESQ.
Southern Legal Counsel, Inc.
NORMAN L. HULL, ESQ.
Guardian Ad Litem for
Constance Mitchell, Deborah
Lynn Buchanan and J. C. Scott
-16-
361
JANE BLOOM YOHALEM, ESQ.
Developmental Disabilities
Rights Center of the Mental
Health Law Project
FOR THE DEFENDANTS ;
SYDNEY H. Mckenzie, hi, esq.
Chief Trial Counsel
Department of Legal Affairs
The Capitol
DOUGLAS E. WHITNEY, ESQ.
District Counsel - District VII
Department of Health and Rehabili-
tative Services.
Orlando Sunland, a four-story former tuberculosis hospital, was opened in I960
as a residential facility for nonambulatory persons with mental retardation.
-17-
362
POPULATION PHASEDOWN
OF
SUNLANDS AI TALLAHASSEE AND ORLANDO
1981-82
Date Tallahassee Date Orlando
Population * 5/15/82 203 5/15/82 572
Other Discharges **
Tallahassee Development 6/10/82 42
Center (Pensacola Care)
Ending Population 6/30/82 161 6/30/82 572
* Thus far this fiscal year, 56 individuals (48 from Sunland at
Tallahassee and eight from Sunland at Orlando) have been placed in
Clusters. An additional three individuals have been placed in
community ICF/MFs. Also, 32 ICF/MR beds continue to operate on
Sunland grounds.
** Community ICF/MR beds shown here are those to be used for Orlando
and Tallahassee placements. They do not represent the total
number of beds in a facility.
-18-
363
POPULATION PHASEOOWN
OF
SUNLANDS AI TALLAHASSEE AND ORLANDO
1982-83
cluster
Nund^er
Action
Date
Tallahassee
Date
Orlando
Beginning
Population
7/1/82
161
7/1/82
572
Cluster
Discharges
17
Lantana
lVl/82
2
11/1/82
22
• 1
St. Petersburg
X2/1/82
X
12/1/82
15
«3X
Bartow
12/1/82
1
12/1/82
23
t6
Tallahassee
1/1/83
24
• 27
TBB^a
2/1/83
20
t30
Palm Beach
2/1/83
24
118
Pensacola
W83
22
4/1/83
2
117
Panama City
4/1/83
18
4/1/03
6
114
Jacksonville
4/1/83
24
IIS
Tallahassee
4/1/83
15
4/1/83
5
130
Jacksonville
4/V83
22
1
»i6
Gainesville
4/1/83
11
4/1/83
12
«24
Daytona
4/1/83
24
t9
Miami
4/1/83
24
113
Gainesville
5/1/83
15
5/1/83
8
128
Broward
5/1/83
24
ts
Ft. Myers
5/1/83
23
t2S
Ocala
6/1/83
2
6/1/83
22
125
Tanpa
Other
Discharges
6/1/83
24
Friendly
Village I
7/1/82
43
Friendly
Village II
10/1/82
43
Fern Court
North
12/1/82
43
Tanpa Develop-
»ent Center
(Pensacola Care)
3/V83
39
Non-ICF/MR
Placements
4
Ending
Population
Due to
Discharges
6/30/83
6/30/83
125
-19-
364
POPULATION PHASEOOWN
OF
SUNLANDS AT TALLAHASSEE AND ORLANDO
1983-8't
Cluster
Number Action
Date
Tallahassee
Date
Orlando
Beginning
Population
Cluster
Discharges
7/1/83
-0-
7/1/83
125
#10
Miami
7/1/83
24
ill
Miami
3/1/84
24
#12
Miami
3/1/84
24
#8
Avon Park
3/1/84
24
#21
Tallahassee
(Lonnie Rd/Other
Non-ICF/MR
Placements
)
3/1/84
24
5
Ending
Population
6/30/84
-0-
6/30/84
-0-
-20-
365
PERTINENT SECTIONS OF FLORIDA STATUTES
593.061 Short title. - This act shall
be known and may be cited as the "Re-
tardation Prevention and Community
Services Act."
393.062 Legislative findings and
declaration of intent. - The Legis-
lature finds and declares that
existing state programs for the
treatment of retarded and other de-
velopmentally disabled individuals,
which often unnecessarily place
clients in large state institutions,
are unreasonably costly, are inef-
fective in bringing the individual
client to his or her maximum poten-
tial, and are in fact debilitating
to a great majority of clients. A
redirection in state treatment pro-
grams for the retarded and other
developmentally disabled individuals
is necessary if any significant
amelioration of the problems faced
by such individuals is ever to take
place. Such redirection should
place primary emphasis on programs
that have the potential to prevent
or reduce the severity of retarda-
tion and other developmental dis-
abilities .
Further, the Legislatur
that greatest priority
to the development and
of community-based resi
ments, services, and tr
rams for the retarded a
velopmentally disabled
which will enable such
to achieve their greate
for independent and pro
ing, which will enable
in their own communitie
e declares
shall be given
implementation
dential place-
eatment prog-
nd other de-
individuals
individuals
st potential
ductive liv-
them to live
s, and which
will p
or rem
tution
Legisl
velopi
and se
develo
privat
corpor
ment,
ble of
client
shall
of ope
by sta
ermit client
oved from un
al placement
ature declar
ng community
rvices for r
pmentally di
e businesses
ations, unit
and other or
providing n
s in a cost-
be given pre
ration of pr
te agencies.
s to be diverted
necessary insti-
s. Finally, the
es that, in de-
-based programs
etarded and other
sabled individuals,
, not-for-profit
s of local govern-
ganizations capa-
eeded services to
efficient manner
ference in lieu
ograms directly
393.066 Comunity services and treat-
ment for the retarded and other de-
velopmentally disabled. -
(1) The Department of Health and Re-
habilitative Services shall plan,
develop, organize and implement its
programs of services and treatment for
the retarded and other developmen-
tally disabled persons along district
lines. The goal of such programs
shall be to allow clients to live as
independently as possible in their own
homes or communities and to achieve
productive lives as close to normal as
possible.
(2) All programs of services and
treatment for clients shall be admini-
stered through the districts and shall
serve all clients regardless of the
type of residential setting in which
the client lives. In addition, all
purchased services shall be approved
by the district.
(3) AH services needed shall be
-21-
29-379 O— 84-
-24
366
purchased instead of provided direct- provide facilities to enable par-
ly by the department, when such ar- ticipants to obtain needed rest
rangement is most cost-efficient, in while attending the program, and
accordance with s. 20.19(1'*). provide social and educational ac-
tivities designed to stimulate in-
Ci) Community-based services shall, terest and provide socialization
to the extent of available resources, skills,
include:
(7) For the purpose of making
(a) Day care services. needed community-based residential
(b) Respite care services. facilities available at the least
(c) Medical care services. possible cost to the state, the de-
(d) Recreation. partment is authorized to lease pri-
(e) Physical therapy. vately owned residential facilities
(f) Training, including develop- under long-term rental agreements, if
mental training. such rental agreements are projected
(g) Social services. to be less costly to the state over
(h) Parent training. the useful life of the facility than
(i) Other habilitative and rehabili- state purchase or state construction
tative services as needed. of such a facility. In addition,
the department is authorized to per-
(5) The department shall utilize the mit, on any public land to which the
services of private businesses, not- department holds the lease, construc-
for-profit organizations, and units of tion of a residential facility for
local government whenever such services which the department has entered
are more cost-efficient than providing into a long-term rental agreement
such services directly by the depart- as specified in this subsection,
ment, including arrangements for pro-
vision of residential facilities. 393.13 Personal treataent of
clients. -
(6) In order to improve the poten-
tial for utilization of more cost- (1) SHORT TITLE. - This act shall
effective, community-based residential be known as "The Bill of Rights of
facilities, the department shall pro- Retarded Persons."
mote the statewide development of day
care services for clients who have a (2) LEGISLATIVE INTENT. -
regular place of domicile and who do
not require 2't-hours-a-day care in a (a) The Legislature finds and de-
hospital or other health care insti- clares that the system of care which
tution, but who may, in the absence the state provides to mentally re-
of day care services, require admis- tarded individuals must be designed
sion to a Sunland Center. Each day to meet the needs of the clients as
care service facility shall provide a well as protect the integrity of their
protective physical environment for legal and human rights. Further, the
clients, make available to all day current system of care for retarded
care service participants at least persons is in need of substantial im-
one meal on each day of operation, provement in order to provide truly
-22-
367
meaningful treatment and habilitation,
(b) The Legislature further finds
and declares that the design and de-
livery of treatment and services to
the mentally retarded should be di-
rected by the principles of normali-
zation and therefore should:
1. Abate the
tutions.
2. Continue
community-based
reasonable alter
tionalization in
least restrictiv
5. Provide t
to mentally reta
will maximize th
independent and
which will affor
outward mobility
use of large insti-
the development of
services which provide
natives to institu-
settings that are
e to the client,
raining and education
rded individuals which
eir potential to lead
productive lives and
d opportunities for
from institutions.
(c) It is the intent of the Legis-
lature that duplicative and unnecessary
administrative procedures and practices
shall be eliminated, and areas of res-
ponsibility shall be clearly defined
and consolidated in order to economi-
cally utilize present resources. Fur-
thermore, personnel providing services
should be sufficiently qualified and
experienced to meet the needs of the
clients, and they must be sufficient
in number to provide treatment in a
manner which is beneficial to the cli-
ents.
(d) It is the intent of the Legisla-
ture:
1. To articulate the existing legal
and human rights of the retarded so
that they may be exercised and pro-
tected. The mentally retarded per-
son shall have all the rights en-
joyed by citizens of the state and
the United States.
2. To provide a mechanism for
the identification, evaluation, and
treatment of persons with mental re-
tardation.
5. To divert those individuals
from institutional commitment who, by
virtue of professional diagnosis and
evaluation, can be placed in less
costly, more effective community en-
vironments and programs.
4. To mandate the development of
a plan which will indicate the most
effective and efficient manner mean-
ingful to individuals with mental
retardation, while safeguarding
and respecting the legal and human
rights of such individuals.
5. Once the plan mandated under
the provisions of subparagraph 't,
is presented to the Legislature, to
fund improvements in the program
in accordance with the availability
of state resources and yearly pri-
orities determined by the Legisla-
ture.
6. To provide programs for the
proper habilitation and treatment
of the mentally retarded person,
which shall include, but not be
limited to, comprehensive medical
care, education, recreation, physi-
cal therapy, training, social ser-
vices, and habilitative and reha-
bilitative services suited to the
needs of the individual regardless
of age, degree of retardation, or
handicapping condition. No men-
tally retarded person shall be de-
prived of these enumerated services
by reason of inability to pay.
7. To fully effectuate the nor-
malization principle through the
establishment of community services
for the mentally retarded person as
a viable and practical alternative
to institutional care at each stage
of individual life development. If
care in an institutional facility
-23-
368
becomes necessary, it should be in
the least restrictive setting.
(e) It is the clear, unequivocal
intent of this act to guarantee in-
dividual dignity, liberty, pursuit
of happiness, and protection of the
civil and legal rights of mentally
retarded persons.
(3) CLIEMT RIGHTS. -
(a) Clients shall have a right to
dignity, privacy, and humane care.
(b) Clients shall have the right
to religious freedom and practice.
Nothing shall restrict or force in-
fringement on a client's right to
religious preference and practice.
(c) Clients shall have an unres-
tricted right to communication:
1. Each client shall be allowed
to receive, send, and mail sealed,
unopened correspondence. No cli-
ent's incoming or outgoing corres-
pondence shall be opened, delayed,
held or censored by the facility
unless there is reason to believe
that it contains items or sub-
stances which may be harmful to
the client or others, in which
case the chief administrator of
the facility may direct reason-
able eramination of such mail
and regulate the disposition of
such items or substances.
2. Clients in residential fac-
ilities shall be afforded rea-
sonable opportunities for tele-
phone communication.
3- Clients shall have an un-
restricted right to visitations.
However, nothing in this provi-
sion shall be construed to permit
infringement upon other clients'
rights to privacy.
(d) Each client has the right to
the possession and use of his own
clothing and personal effects.
The chief administrator of the fac-
ility may take temporary custody
of such effects when it is essen-
tial to do so for medical or
safety reasons. Custody of such
personal effects shall be promptly
recorded in the client's record,
and a receipt for such effects shall
be immediately given to the client,
if competent, or his parent or legal
guardian.
1. All money belonging to a client
held by the department shall be held in
compliance with s. '(02.17(2) and (7).
2. All interest on money received
and held for the personal use and bene-
fit of a client shall be the property
of that client and shall not accure to
the general welfare of all clients or
be used to defray the cost of residen-
tial care. Interest so accrued shall
be used or conserved for the personal
use or berefit of the individual cli-
ent as provided in s. 't02.17(2).
3- Upon the discharge or death of
a client, a final accounting shall be
made of all personal effects and money
belonging to the client held by the
department. All such personal effects
and money, including interest, shall
be promptly turned over to the client
or his heirs.
(e) Each client shall receive educa-
tion and training services regardless
of chronological age, degree of re-
tardation or accompanying disabilities
or handicaps. Clients may be provided
with instruction in sex education,
marriage, and family planning as pre-
scribed in the client's individual
habilitative program.
-2*1-
369
(f) Each client shall receive
prompt and appropriate medical treat-
ment and care for physical and mental
ailments and for the prevention of
any illness or disability. Medical
treatment shall be consistent with
the accepted standards of medical
practice in the community.
1. Medication shall be administered
only at the written order of a physi-
cian. Medication shall not be used as
punishment, for the convenience of
staff, as a substitute for a habilita-
tion plan, or in unnecessary or exces-
sive quantities.
2. Daily notation of medication
received by each client in a residen-
tial facility shall be kept in the
client's record.
5. Periodically, but no less fre-
quently than every 6 months, the drug
regimen of each client in a residential
facility shall be reviewed by the at-
tending physician or other appropriate
monitoring body, consistent with ap-
propriate standards of medical prac-
tice. All prescriptions shall have
a termination date.
't. Pharmacy services at each resi-
dential facility shall be directed or
supervised by a professionally compe-
tent pharmacist licensed according to
the provisions of chapter '♦65-
5. Pharmacy services shall be de-
livered in accordance with the provi-
sions of chapter '♦65.
6. Prior to instituting a plan of
experimental medical treatment or
carrying out any necessary surgical
procedure, express and informed con-
sent shall be obtained from the clien,
if competent, or his parent or legal
guardian. Information upon which the
client shall make necessary treat-
ment and surgery decisions shall in-
clude, but not be limited to:
a. The nature and consequences of
such procedures.
b. The risks, benefits, and pur-
poses of such procedures.
c. Alternate procedures available.
7. When the department is the le-
gal guardian of a client, or the custo-
dian of a client whose parent or legal
guardian is unknown or unlocatable and
whose physician is unwilling to perform
surgery based solely on the client's
consent, a court of competent juris-
diction shall hold a hearing to deter-
mine the appropriateness of the surgi-
cal procedure. The client shall be
physically present, unless the client's
medical condition precludes such pres-
ence, represented by counsel, and
provided the right and opportunity to
be confronted with, and to cross-
examine, all witnesses alleging the
appropriateness of such procedure.
In such proceedings, the burden of
proof by clear and convincing evi-
dence shall be on the party alleging
the appropriateness of such proce-
dures. The express and informed con-
sent of a person described in sub-
paragraph 6. may be withdrawn at any
time, with or without cause, prior
to treatment or surgery.
8. The absence of express and in-
formed consent notwithstanding, a
licensed and qualified physician
may render emergency medical care
or treatment to any client who has
been injured or who is suffering
from an acute illness, disease, or
condition if, within a reasonable
degree of medical certainty, delay
in initiation of emergency medical
care or treatment would endanger
the health of the client.
(g) Clients shall be provided with
suitable opportunities for behavioral
-25-
370
and leisure time activities which
include social interaction.
(h) Each client shall be provided
with appropriate physical exercise
as prescribed in the client's in-
dividual habilitation plan. Indoor
and outdoor facilities and equipment
for such physical exercise shall
be provided.
(i) Each client shall receive hu-
mane discipline.
(j) No client shall be subjected
to a treatment program to eliminate
bizarre or unusual behaviors with-
out first being examined by a physi-
cian to rule out the possibility
that such behaviors are organically
caused.
1. Treatment programs involving
the use of noxious or painful stimu-
li shall be prohibited.
tion and fair compensation for labor in
accordance with the provisions of 29
C.E.R. part 529.
2. All al
paragraph sha
to the chief
the facility
strator, the
district huma
mittee. A th
each incident
a written rep
results of su
be submitted
five officer
district admi
partment head
occurrence or
dent.
leged vi
11 be re
administ
or the d
departme
n rights
orough i
shall b
ort of t
ch inves
to the c
of the f
nistrato
within
discove
olati
porte
rativ
istri
nt he
advo
nvest
e con
he fi
tigat
hief
acili
r and
2h ho
ry of
ons of this
d immediately
e officer of
ct admini-
ad, and the
cacy cora-
igation of
ducted and
nding and
ion shall
administra-
ty or the
to the de-
ars of the
the inci-
(k) Each client engaged in work
programs which require compliance
with federal wage and hour laws shall
be provided with minimum wage protec-
(1) Clients sh
to be free from p
Physical restrain
only in emergenci
client from immin
self or others,
not be employed a
convenience of st
tute for a habili
traints shall imp
ble restrictions
purpose and shall
emergency ends,
cause physical in
and shall be desi
greatest possible
all have the right
hysical restraint,
ts shall be employed
es to protect the
ent injury to him-
Restraints shall
s punishment, for the
aff, or as a substi-
tative plan. Res-
ose the least possi-
consistent with their
be removed when the
Restraints shall not
jury to the client
gned to allow the
comfort.
1. Mechanical supports used in
normative situations to achieve proper
body position and balance shall not be
considered restraints, but shall be
prescriptively designed and applied
under the supervision of a qualified
professional with concern for princi-
ples of good body alignment, circula-
tion, and allowance for change of
position.
2. Totally enclosed cribs and bar-
red enclosures shall be considered
restraints.
3. Daily reports on the employment
of restraints by those specialists
authorized in the use of restraints
shall be made to the appropriate chief
administrator of the facility, and a
monthly summary of such reports shall
be relayed to the district administra-
tor and the district human rights ad-
vocacy committee. The reports shall
summarize all such cases of restraints,
the type used, the duration of usage,
and the reasons therefor.
The department shall post a
-26-
371
copy of the rules and regulations
promulgated under ttiis section in
each living unit of residential faci-
lities. A copy of the rules and
regulations promulgated under this
section shall be given to all staff
members of residential facilities
and made a part of all preservice and
inservice training programs.
(m) 1. Each client shall have a
central record. The record shall
include data pertaining to admission
and such other information as may be
required under regulation by ttie de-
partment.
2. Unless waived by the client,
if competent, or his parent or legal
guardian if the client is incompetent,
the client's central record shall be
confidential. The client's central
record shall not be a public record,
and no part of it shall be released
except:
a. The record may be released to
physicians, attorneys, and government
agencies having need of the record to
aid the client, as designated by the
client, if competent, or his parent
or legal guardian, if the client is
incompetent.
b. The record shall be produced
in response to a subpoena or released
to persons authorized by order of
court, excluding matters privileged
by other provisions of law.
c. The record or any part thereof
may be disclosed to a qualified re-
searcher, a staff member of the
facility, or an employee of the de-
partment when the administrator of the
facility or the secretary of the
department deems it necessary for the
treatment of the client, maintenance
of adequate records, compilation of
treatment data, or evaluation of
programs.
d. Information from the records
may be used for statistical and re-
search purposes if the information Is
abstracted in such a way to protect
the identity of individuals.
5. All central records for each
client in residential facilities shall
be kept on uniform forms distributed
by the department. The central record
shall accurately summarize each cli-
ent's history and present condition.
't. The client, if competent, or
his parent or legal guardian if the
client is incompetent, shall be sup-
plied with a copy of the client's
central record upon request.
Ct) LIABILITY FOR VIOLATIONS. - Any
person wtio violates or abuses any
rights or privileges of clients pro-
vided by this act shall be liable for
damages as determined by law. Any
person who acts in good-faith compli-
ance with the provisions of ths act
shall be immune from civil or crimi-
nal liability for actions in connec-
tion with evaluation, admission, ha-
bilitative programming, education,
treatment, or discharge of a client.
However, this section shall not re-
lieve any person from liability if
such personis guilty of negligence,
misfeasance, nonfeasance, or malfea-
sance.
(5) NOTICE OF RIGHTS. - Each cli-
ent, if competent, or parent or legal
guardian of each client if the client
is incompetent, shall promptly receive
from the Department of Health and Re-
habilitative Services a written copy
of this act. Each client able to
comprehend shall be promptly informed
in clear language of the above legal
rights of mentally retarded persons.
-27-
372
(6) RESIDENT GOVERNMENT. - Each
residential facility shall initiate
and develop a program of resident gov-
ernment to hear the views and represent
the interests of all clients served by
the facility. The resident government
shall be composed of residents elected
by other residents, staff advisors
skilled in the administration of com-
munity organizations, and a represen-
tative of the district human rights
advocacy committee. Ihe resident
government shall work closely with
the district human rights advocacy
committee and the district administra-
tor to promote the interests and wel-
fare of all residents in the facility.
arc
Association for
Retarded Citizens/Florida
-28-
373
2.
Legal Services' Wasteful Involvement in Clas^ Actions
To the Editor:
I have just read your Dec. 5 edi-
torial "More Legal Insults for the
Poor," and I am afraid that you have
not studied the background for the
proposal to ban Legal Services Corpo-
ration (L.S.C.) lawyers from class-
action cases.
If you had, ybu would find that such a
restriction (1) will eliminate duplica-
tion and waste, (2) will actually in-
crease the amount of legal services
provided to the poor and (3) will obvi-
ate an even stronger t>an than the one
proposed by L.S.C. Chairman Harvey;
a ban adopted by the House of Repre-
sentatives on June 17, 1981, by an over-
whelming vote of 241 to 167 [though re-
jected by the Senate — the operative
law is a continuing resolution] .
(1) With the vast expansion of court-
awarded fees under the Civil Rights At-
torneys Fee Recovery Act and the
Equal Access to Justice Act, there is no
need for L.S.C. grantees to take time
and resources away from solving the
Individual problems of individual poor
people so they can engage in time-con-
suming class-action litigation.
For example, on Nov. 20, The Times
reported that private attorneys re-
ceived court-awarded fees totaling
$1.71 million for a class anion relating
to conditions of prisoners — probably
the poorest of the poor. Since Legal
Services lawyers salaries are lOO per-
cent subsidized by the taxpayer, there
Is no need for them to engage in class
actions which result in large fees. To do
so makes the taxpayer pay for the liti-
gation twice. This amounts to institu-
tional Ideological ambulance chasing.
V,
(2) Because of the prospect of large
fee recoveries, class-action cases di-
vert Legal Services lawyers from
providing help for individual poor pe\>
ple. For example, in 1981 the L.S.C. or-
ganization in Philadelphia filed in
Federal court for $4.5 million in fees
for what Is known as the Whitman
Park case.
Even at the rate of $100 per hour,
this means that l*gal Services law-
yers spent 45,000 hours on that one
case, or 24 lawyers working full-time
for a whole year. The sum of $4.5 mil-
lion is equal to two years" worth of
grants to this organization from
L.S.C. In order to spend that much
time on one case, many individual
poor people must have been denied
legal assistance.
Also in 1981 the L.S.C. grantee
Greater Orlando Legal Services had
about 4.000 cases, only two of which
iwere class actions. However, The Or-
lando Sentinel-Star reported on Jan
27, 1981, that "the financial and man
power costs of those two class-action
suits . . . are far greater than those of
the individual cases." In other wonls,
the organization could handle at least
8,000 individual poor people's cases if
the L.S.C. lawyers weren't pursuing
just two class actions.
(3; The amendment to the L.S.C.
Reauthorization bill, H.R. 3480,
adopted by the House in 1981 provides
that "no class-action suit may be
brought against the Federal Govern-
ment or any state or local govern
ment." .
The ban on class actions Is sound
policy that will save taxpayers money
and at the same time increase legal
services to the poor.
GARYL. CURRAN
Legislative Consultant
American Life Lobby Inc.
Washington, Dec. 7, 1982
The NewYorkTimes
Company
22a Wa>t 43d St-. HY. 10036
ARTHUR OCHS SULZBKRCKR, Chairman
SYDMipr GRUSON. Vict Chatrman
WALTER MATTSON. Prtmkrxt
DAVID L GORHAM. Stiuor Vice PrtauUnl
BENJAMIN HANUtLMAN, Senior Vice President
MICHAEL E RYAN. Senior Vict PresuierU
GUY T GARRETT Vicr President
SOLOMON B. WATSON IV. Secretary
DENISK K. FLETCHER Treaaurer
Operating Group*
JOHN D POMf RET, Senior Vice President
CHARLES B BRAKEHKLD, Vice President
WILLIAM H DAVIS, Vice President
JOHN S- HARBISON, Vict President
WILLIAM T KERR. Vict President
374
Greater Orlando Area Legal Serviecs Inc.
lOlf. W Amelia Si
Orl.inilc. l-loridn 32805
(305)841-7777
Please reply to: (check address)
D West Orange
Servicios Legates de la Comunidad
19 East Cypress Slreel
Winter Garden, Florida 32787
Telelono: (3051 656-5515
5^ Downtown
1036 W Amelia SI,
PO Box 1790
Orlando, Florida 32fl02
Telephone (305) 841-7777
a Osceola County
1 200 Central Avenue
SiMlP 705
Kiisiinmpc, Floridn 32741
Telephone 13051 847-0053
Lake County ,
Community Legal Services
Suite 2, 205 N Texas Ave
PO. Box 1 141
Tavares, Florida 32778
Telephone: (904) 343-081 5
January 5, 1983
Editor ,
The New York Times Company
229 West 43rd Street
New York, New York 10036
Re: Response to Letter of Gary L. Curran
in December 27, 1982 Times
Dear Editor:
This is truly the era of Trojan horses: opponents to
the concept of societal responsibility for the poor try
again and again to disguise their attacks on poverty
programs in feigned concern about waste and fraud. Mr.
Curran (letter to the editor, December 27, 1982) tries
to cloak what is simply the old conservative distaste
for sharing any wealth with the poor -- in the form of
free legal assistance or otherwise -- in pious distress
over the "inefficiency" of class-action lawsuits.
Mr. Curran' s choice of examples reflects the weakness
of his assertion that banning poverty attorneys from
handling class-actions would eliminate duplication and
waste. The best he could come up with, it seems, is
our small program. Greater Orlando Area Legal Services,
Inc. ("GOALS") which represents indigents in three
predominantly rural counties of Central Florida. The
finger is pointed at our only class-action litigation
in 1981: two suits concerning gravely unconstitutional
conditions in two public facilities, a county jail and
a stabc-run warehouse for the mnnl.ally rcl-ardeci.
Mr. Curran' s statements are reminiscent of the old
Testament false prophets decrying light as darkness
and darkness as light. He purports to believe that if
we had not handled these two class action lawsuits, we
could have doubled our annual caseload from 4,000 to
8,000 cases.
375
A look at the facts suggests exactly the opposite.
Approximately 800 hours of legal" time was spent over a
period of 2 years and 3 months to settle the prison suit.
Making some basic assumptions, 54 individual cases could
have been handled over the same period of time. The
prison suit has already benefited 1,500 inmates per month
or 40,500 at the time of settlement and will benefit all
the poor who pass through the system in the future.
Instead of tangibly remedying overcrowded and dangerous
jail conditions affecting 40,500 inmates over the 27 month
period, t'.r . Curran suggests we should have provided
assistance with little lasting effect to n total of 54
individuals. This is what "Ir. Curran would call efficiency?
The second class-action suit handled by our Legal Services
program was brought on behalf of hundreds of severely and
profoundly retarded citizens in a local institution that
had a very poor reputation for abuse and neglect over the
past ten years. The case took approximately 3 years to
complete, benefiting not only the 700 patients at the
facility but other similar institutions throughout the
state. Through one class-action on behalf of our most
vulnerable citizens, an institution with a history of being
a fire trap, understaffed, and a host of other problems,
has been closed by a federal court order transferring the
patients to smaller community-based facilities where they
will receive better care and attention in all aspects.
Mr. Curran is also misinformed or dishonest about the
willingness of the private bar to handle class-actions for
the poor. He implies that Legal Services attorneys are
wasting federal funds on cases that the private sector
would gladly accommodate. Mr. Curran's case in point, GOALS
and its two class-action lawsuits, belies his message. In
fact, extensive efforts were made to secure private counsel
for both of these suits. GOALS took on the jail conditions
lawsuit at the direct request of the President of the local
bar association. From its membership of 1,200 private
attorneys, the bar association was unable to produce even
one volunteer to represent the indigent inmates. Instead,
our Legal Services Program, with a staff of 7 lawyers, was
recruited for the job.
The idea of banning class-actions (v;hich is included in
H.R. 3480, the bill reauthorizing Legal Services) makes no
376
sense, not only in the GOALS example, but in general. The
overwhelining evidence, if one bothers to look, demonstrates
that the class-action brought against large-scale violators
of poor peoples' rights is an effective and cost-efficient
method of delivering legal services and remedying long term,
systemic wrongs against the poor. To deny advocates for the
poor use of the class-action (a device established by court
rules of procedure) is to scorn the principle upon which our
justice system is based: "equal justice under law".
Yours truly.
'V. Udouj
Live- Director
Ilelanie Malherbe
Staf fi^ Attorjiey
Jay P 3sol
:torjie
Stafff/ Attorney
Greater Orlando Area Legal
Services, Inc.
377
CHRONOLOGY OF EVENTS '
NEW JERSEY COMPLAINTS
1. July, 1980 - GSA sues Camden Regional Legal Services in
New Jersey State Supreme Court saying CRLS tortiously
interfered with business and contractual relations; insti-
gated a strike in violation of LSC Act.
2. July, 198 - GSA withdraws action against CRLS in State
Court within 10 days of filing.
3. August, 1980 - Farmworkers sue Glassboro Service Associa-
tion (GSA) for violation of Wagner-Peyser Act, 29 U.S.C.
S49-49K. GSA sent workers to a farm where a strike was in
progress. 20 CFR §604.1 (i)
4. December, 1980 - GSA attorneys file complaint with LSC
Regional Office against CRLS.
5. February, 1981 - LSC finds no violation.
6. February, 1981 - GSA attorney submits additional evidence
to LSC R.O.; R.O. investigates.
7. March 18, 1981 - GSA asks District Court for leave to file
counterclaim against CRLS; District Court doesn't rule on
Motion for Leave to file counterclaim which alleg^es CRLS
tortiously interfered with business and contractual relations;
instigated a strike in violation of LSC Act (same charges
filed and withdrawn in state court) .
8. March 19, 1981 - GSA Attorney, Cureton, notifies plaintiff
and judge of intent to testify before house sub-committee
on LSC - to testify about matters contained in pleadings on
counter-claim.
9. March 19, 1981 - Plaintiff's attorneys say they object to
testimony about pending litigation.
- Judge does not yet grant leave to
file counterclaim.
- Judge says he will discuss testimony in
conference call next week.
10. Mcirch 20, 1981 - Judge schedules hearing on testimony
for March 24th.
11. March 23, 1981 - GSA files Motion for Preliminary Injunc-
tion against CRLS - who at this point are only proposed
counter-defendants .
- No counter -defendants have been
sejrved to date.
12. March 24, 1981 - Judge hears argument.
- Plaintiffs: move to strike proposed
counterclaim and motion for preliminary injunction.
- FRCP 11 & 12: scandulous
- Object to testimony because it will
prejudice plaintiffs and abuse judicial system.
378
13. March 24, 1981 - Judge issues order prohibiting only
defendant GSA's attorney from testifying and only prohibits
testimony about pending litigation; GSA free to testify.
14. March 24, 1981 - GSA's attorney appeals order of Magistrate
to U.S. District Court Judge Stanley Brotman.
15. March 24, 1981 - Brotman denies appeal and says "I do not
consider Judge Hammill ' s determination a gag order . As to
any other matter, not the subject matter or issue or issues
in the instant litigation, counsel is certainly free to
participate" (in hearing before Sub-Committee) .
- affirms order the Cureton cannot testify
re pending litigation.
- Brotman notes that plaintiffs' attorneys
have stated they do not object to any matter respecting their
alleged impropriety in the litigation being aired before LSC.
16. March 24, 1981 - Defendant's attorney appeals Judge Brotman 's
order to Judge Hunter, U.S. Court of Appeals for the Third
Circuit.
- Judge Hunter denies appeal; finding no
jurisdiction for appeal.
17. March 25, 1981 - Cureton testifies before Sub-Committee
about general improprieties.
- Other Farm Bureau witnesses submit written
statements and testify about alleged improprieties of CRLS;
written from both GSA and another attorney for GSA.
- Chairman Kastenmeier tells Cureton he's
free to submit testimony anytime court allows.
18. April 3, 1981 - Judge Hammill hears Motion for Leave to
amend pleadings to add counter-claim:
allows for tortious interfluence with
business and contractual relations
denies for allegation of violation of LSC
Act (court has no jurisdiction)
19. April 9, 1981 - Three judge panel of the Third Circuit
grants defendants a stay of Judge Brotman 's March 25th order.
- "Chief Judge Seitz would deny the motion"
says order.
379
20. April 15, 1981 - Defendant's attorney, Cureton, submitted
testimony to Committee.
21. May 4, 1981 - DefendcUit's attorney, Cureton, sends Judge
Brotman a letter withdrawing Motion for Preliminary
Injunction stating:
"... the conduct complained of has not recurred ,
nor is the undersigned (Cureton) aware of any
threats which have occurred since the filing of
the motion . "
Following stay by Third Circuit, Cureton submitted
written testimony to Kastenmeier ' s committee and CRLS
sulsmitted a written response.
380
CAMDEN REGIONAL LEGAL SERVICES, INC
FARM WORKER DIVISION
. 631 WOOD STREET
VINELANO. NEW JERSEY 08360
rMONt 1609) •• 1 • 490O
November 3.0, 1982
Robert Kascenneier , Chairman
Subcommittee on Court,. Civil Liberties
and tbe Admj^nis tration of Justice
U.S. House of Representatives
Washington, D.C.
Dear Representative Kastenmeier:
I vant to bring you up to date on the various charges which were made
against the Farmworker Division of Caradcn- Regional Legal Services.
As you know, in the summer of 1980 we provided legal representation
to a group of migrant farmworkers who initially were fired for exercising
the right to organize. We obtained a court order for the reinstatement
of the workers under New Jersey law. The farmer and his labor contractor,
Sunny Slope Farms and Glassboro Service Association , respec tively , respond ed
with a suit against our program for interference with their "contracts"
with each individual worker. New Jersey Superior Court cases Nos.
C-A631-79E and C-A632-79E CCumberland County) .
A month later the migrant farmworkers v:ent on strike against Sunny
Slope Farms. We again represented the migrant farmworkers and when the
labor contractor attempted to put new workers into the labor camp in ways
which violated both state and federal law, we filed suit on behalf of
both the workers on strike and the new group of workers. El Comi te v â–
Sunny Slope F.-j rins, U.S. District Court for New Jersey, I'.o . 80-2682.
Sunny Slope Farms and Glassboro Service Association, defendants,
again responded by attacking our staff and program. A third party coraplaini
was filed against staff members and Camden Regional Leg<- 1 Services alleging
that Camden Regional Legal Services bad organized the strike and damaged
their business .
Attorneys for the defendants also filed complaints against Camden
Regional Legal Services with the Legal. Services Corporation Philadelphia
Regional Office and submitted testimony to your commi ttt e . The testinony
nade various charges about Camden Regional Legal Servict s ' s conduct during
Che strike, including some not so subtle implications tl.ai; Camden Rfrgionr.l
Legal Services 's staff may have been Involved in the buvniLng of a farm
labor contractor's bus.
381
None of these charges have ever been In any way substa :iated or
supported since that time. The complaint filed with the Phladelphia
Regional Office of the Legal Services Corporation was Inves. gated and
dismissed as totally unfounded. Our own investigation of t..- alleged bus
burning established that, contrary to statements made In ccu-t by the
defendant's attorney, there was not ever, a police report of iuch an
incident. The suits In the New Jersey Superior Court have low all been
dismissed on the stipulation of the parties and the federal -ourt case,
El Conite v. Sunny Slope has been settled with the complete lismissal of
all counterclaims and third party claims against Legal Services and
dismissal of the original complaint upon the payment of $1,000 to the
migrant farmworker plaintiffs.
Glassboro Service Association has also filed numerov s complaints witli
your committee charging that the migrant programs of Came er P.egional Legal
Services and Puerto Rico Legal Services were harrasslng Cliissboro with
numerous frivolous complaints for small claims on behalf of individual
fa rmworkers . '
We, too, have recognized the problems involved in litigating numerour;
individual complaints against a slngla corporate defendant, particularly
v;hen that defendant refuses to settle cases without litif.ation and that
defendant has been found by a TJ.S. Pistrict Court to have blacklisted
those farmworkers who did pursue complaints. Horrach v. Qulros . Puerto
Rico District Court No. 77-752.
Thus, in 1978, we filed a class action on behalf of all migrant farm-
workers who worked for Glassboro Service Association during that year for
damages for violations of the Farm labor Contractor Registration Act,
7 U.S.C. Sec. 20A1 et. seq. The New Jersey' 'Farm Bureau was later added as
a defendant when it was discovered to be the parent corporation which
totally owned and controlled Glassboro Service Association.
That case, Pacheco v. New Jersey Farm Bureau , "U.S. District Court for
New Jersey No. 2763, went to trial in October, 1981, and was settled afcor-
tv.'o and one-hair weeks of presentation of the plaintiffs' case. The
settlement calls for Glassboro Service Association to pay $130,000 over
three years, imluding $7,500 to the named plaintiffs, $30,000 to Camden
Uogional Legal Services for the expenses of the litigation and $92,500
which is to be distributed among the class members. The settlement order
also includes extensive Injunctive relief requiring Glassboro Service
Association to comply with the provisions of the Farm Labo.- Contractor
i'-i^eist ration Act and injunctive relief prohibiting the N =w Jersey Farm
Bureau from engaging in farm labor contractor activities without first
r.-gis tering and complying with the Farm Labor Contractor R ;^istraticn Act.
The results in these cases and the payment of substantial monetary
tiinages to migrant farmworker plaintiffs, confirm the meri:s of the
original claims and our programs decision to represent â– them . I believe
29-379 0—84 25
382
these results also demonstrate the political nature of t-,o numerous
charges against the migrant programs of Camden Regional .egal Servicos
and Puerto Rico Legal Services and confirm my original biltef that the
charges were only attempts to prevent us from properly -r.d successfully
representing our clients.
Unfortunately, it takes much longer to vindicate the ights of our
clients through litigation than It does 'to make such tread attacks on
Legal Services before your committee. 1 hope that tht results ue have
achieved in this case will help keep such Issues in tl-ejr proper
perspective in the future and provide a factual basis fcr the continued
support of Legal Services.
Sincerely yours.
MICHAEL W.L. McCROUY
MWLM/jlg
iTkcUU /lr(]u^-^-
383
LEGAL SEIIVICES CORPORATION
MEMORANDUM
DATE: January 19, 1979
TQ: All Regional Officers
FROM: -recline Lyons
SUBJECT: Procedures for Handling Real Estate Purchases by Grantees
A uniform written procedure is necessary for the handling of real estate
purchases by grantees because such purchases have become conmonplace and con-
fusion currently surrounds their operation. Because the Regional Office is in
the position of being most aware of a program's needs, situation, and financial
condition, in the future the approval decision fox these transactions shall
rest with the Regional Director.
I have attached a memorandum put together by an Alabama program which
gives a thoughtful analysis of the benefits and disadvantages of purchasing
versus renting. I urge R.O. staff to make this available to programs con-
sidering such options. (Exhibit A"l
Programs planning on purchasing property shall submit the following to
their Regional Office in a timely manner:
CI) Written memorandum addressing the nine factors set forth in
Charles Jones' memorandum of November 17, 1976 (attached as
Exhibit B).
(2) An appraisal of the property under consideration.
(3) Copy of Board of Director's Resolution approving purchase.
(4) Memorandum of state law on method by which LSC may retain
control over subsequent transfer of property.
(5) Copy of the purchase agreement.
The Regional Office shall review the materials submitted in light of the Jones
memo. Programs retain the responsibility for reviewing their purchase contract,
deed, etc. from a legal stand point. Programs should be encouraged to retain
counsel and should be informed that LSC will not assume any responsibility for
this kind of legal analysis and review. Special attention should be given to
the way in which the grantee anticipates giving LSC control over future transfer
of the property. LSC requires the program to notify and obtain written approval
from tlie Corporation (R.O.) prior to any sale, transfer or encumbrance of the
property. If sucli a condition is unlawful as a restraint on alienation in a
particular state (e.g. California), a clause in which the program agrees not to
384
exoend the funds from such a transaction without prior written approval of
LSC will be required in its place. Examples of such clauses are attached
iereto (ExhiSit C) The Regional Director shall then grant or deny approval
t^the^grantee. attaching such additional requireneats as seen fxt. Approval
should be in writing with a copy (of the approval only) to OFS.
Steve Walters has indicated that in those non-routine j"=^^""^%J"^°J^i"S
leeal questions about LSC control, such as purchase of property wxth LSC and
i^n-is? fu^ds. or enforceability of control provisions, etc.. he wxll remaxn
available to assist in working out these arangeraents.
cc: Steve Walters
385
REAU ESTATE APPRAISERS
TCLt^HONt
September 30, 1977
Mr. Morvin H. Compbsll
Executive Director .
Legal Services CorporaHon of Alobomo, IncP^ â–
Suite 1526 - 121 Building ^ .
Birmingham, Ala. 35203
Dear Mr, Compbell:
From our telephone conversoHon of September 22, 1977 ond your letter of the some
doy, I understand that you ore thinking obout ocquiring office spoce here in Mont-
gomery, ond that the two buildings you ore primorily considering ore the _.-• ^
Building and the Building, both of v*hich are on t. " > 'â– Ctreet. You hove
employed me to advise you since you ore undecided as tov/hether or not it would
be to your best rinancial odvontoge to rent or buy.
In gathering dota, I talked to mony property rnbnagers who gove me the Information
necessary for this study. Unfortunotely, becouse they requested that this information
be kept confidential, I am unoble to give you the names ond oddresses of th; buildings
fhot were used in making the conclusions that follow. However, here is o summary
of the properties that were given primary consideration in this study.
EXHIBIT A
386
No. of Buildings - B
Type - All office ■. . ' -'•
T â– Neighborhood - All in ihe some neighborhood ond v/Hhin 3 blocks of
Ihe sobject properHej.
Age -Varying from 1965 fo 1977, most were built after 1970.
No. of Stories - Both 1 ond 2; one wos 5 stories.
Gross Areo - From 8200 sq. ft. to 45.000 sq. ft. Totol 138,834 sq. ft.
Ne t Rentoble Areo - This varies from o low of 72% lo o high of 87%, with
an overage of obout 80%.
Rents -From July to September of 1977. From S5.90a sq. ft. to $6.50 o
sq. ft. of rentable oreo.
Occuponey -From 92% - 100%, averoging obout 95%.
Rentol Increase - Here 1 studied some buildings outside of the 8 mentioned
obove : ond was oble to get someToirly old rents as compered with current
rents in the some building. All of the buildings showed a steody increase
ofter the period studied but generally rentals oppeared to be running at
about on 8% per year increase.
From the obove doto, I reoched the conclusions listed below. I should point out here,
however, that I have not studied the subject buildings in sufficient depth fo be sure
that they are specifically comparable and applicable to the buildings you are con-
sidering. But 1 do think my conclusions are reosonobly close to what we could expect
in the two subject buildings. These conclusions follow.
Rent per sq. ft. of Net Rentoble Area per year - $6.25
Ratio of Net Rentable Areo to Gross Area - 71%
Gross Area - 10,000 sq. ft.
Gross Rent per year -$6.25 per sq. ft. x .71 x 10,500 sq. ft. = $46,594 (
387
The octuol expenses of severol buildings were ovoiloble to me and the following
expenses have been deduced oi a lesull. ! believe that the annual cxpenies in the
subject buildings could thus be approximated.
Expenses per Sq. Ft. per Yeor
Insurace
.03
Taxes
.25
Supplies
.03
Utilities
.90
Exterminator
.01
Jo nit or
.40
Yord
.09
Rep. & Moint.
.09
1.85
10,500
19,425
Vocancy ond Rent Loss
In on ordinory oppraisal, on ollowonce is made from the gross annuol income for loss
incurred by voconcies or non-collection of Tent, but since the purpose of this study is
for you to look ot your own cost of occuponcy, I hove proiecled this over a period ol
10 years, have assumed thot you would occupy the property all of that time, and,
therefore, 1 have mode no allowance for vacancy and rent loss.
Finoncing
If you purchase o property, I hove assumed thot you would follow the ordinory business
practice of putting a moximum mortgoge on the property, ond 1 think thot either of the
properties you ore considering could be finonced with a loon bosed on 75% of the morket
value of the property, amortized and monthly installments over o period of 25 years, and
bearing interest at 9 1/2%. This is not to imply that I hove concluded the property is
worth $400,000, but that oppears to be the price currently under negotiation, ond 1 did
need some figure from which to derive a debt service. Such finoncing would require o
mortgoge payment of $2,621.09 per month, or $31,453.08 per year.
wou
wou
e
388
App^ec^o^ion
We ore next foccd wllh moving o iudgment os to whether the property will be worth
more or less ten years from now. To form this judgment, 1 gave consideration to v/hat
has been hoppenlng within the neighborhood over the post ten years. There hos been
a great deol of octivity in office buildings, probably more ihon in oil the rest of th-
cify of Montgomery. These buildings hove reoched on occuponcy of between 92% ond
100%. Ten yeors ogo a 50-foot lot could be purchosed for around ten to twelve to
Ihirleen thousand dollots. Todoy they bring more nearly oround $25,000.
The history of rents in the neighborhood hos shown o steady increose ond, incidentally,
the factor to odjust for the purchosing power of the dollar neorly porollels 8% -
indicated by the increosed rents in the oreo. So, I hove figured the subject property
Id increase at 8% per yeor . However, about 85% of the value of the property
_.!d be in the building ond there is olway; physical deterioration. Therefore, we
stimote the building as depreciating at 2 1/2% per year for 85% of the property. This
would indicate a downward adjustment of .0213 to be chorged ogoinst the increose of
8%, leovlng a net increose of .0588% per yeor. This net increase v/ould indicate
the value at the end of 10 years to be:
$400,000 X 1.77 = $707,936
If the building were sold at the end of this period, there would be o sales expense
which we hove estimoted ot 15%, leaving o net sole price of $601,746. During the
fen-year period, however, the mortgage bolance would have been reduced, so 1 would
estimote o reasonable judgment on the sale ot the end of the ten-year period to be:
$400,000x1.77= $707,936
Less Sales Expence 15% = 106,190
Less Mortgage Balance .= 250,827 (300,000 x .83609)
Equity (end of 10 yrs.) 350,918
Pr ojection Period
I reolize that your organization is a non-profit one and lax odvantoges or disadvantages
are-, of no interest to you. However, you ore making o business judgment ond I would
ossume that your thinking would, at least in some oreos, porallel good business proctice.
Mony investors in this type property consider holding it for obout ten years, then disposing
of the property ot the end of thot time. Income tox does tave something to do with that
decision, but there are other decisions. One is that by this time property has generally
increosed in value, the mortgage has decreased, ond they realize thot there is o greet
deal of working capital tied up in a property and that they can convert this to working
capital by either selling or completely refinondng the pioerty. So, in either cose it
really becomes o different financial entity, ond I have used this ten-yeor projection
for your comparison.
1
. 2
Ycor
Rcnr
1
$ /li!i,594 .
2
50,321.52
3
54,347.24
A
58,695.02
5
63,390.62
6
68,461.87
7
73,938.82
.8
79^53.92
9
86,242.24
10
93,141.62
389
5 6
"' 4 Aclvonloge Discounting
( Expense + Debt Service ) = Discounting 15%
$(19,425 + 31,453.08) $-4,284.08 $- 3,725.29
20,979 - 2,110.56 - 1,595.89
22,657.32 236.84 . + 155.7:
24,469.91 2,772.04 1,584.9?
26,427.50 5,510.04 2,739.47
28,541.90 8,467.09 3,660.55
38',825.00 . 11,660.71 4,383.69
33,291.04 15,109.81 4,939.42
35,954.32 18,834.84 " 5,354.04
38,330.66 22,859.88 . 5,650.12
P. V/. Discounts o» 15% per year 107,096.53 " 23,146.77
P.W. of Reversion 350,918x2472 350,918 ^,7A6.92
458,014.53 109,893.70
Less Equity Investment 100.000 100,000
Advantage $ 358,014.53 $ 9,893.70
25 Yeor Mortgage 9 1/2% = 300,000=2621 .09 x 12=31,453.08
Column. 1 identifies the yeor forecast. The se_cond column represents what I think would
be the morlcet tent. Notice that I have increosed this 8% per yeor of your occuponcy.
Columns- 3 and 4 represent costs to you as owner of the subject property . In Column 3 are
the expenses 1 think you would likely incur ond, in my iudgment, these expenses would
increase periodically at approximotely the some rote the rent would increase - 8%.
Debt service (Column 4) would, of course, remain constont throughout your ownership until
the entire debt was paid.
Column 5 represents the annual odvontoge or disodvonloge in dollars derived by you for
ownership. — '
Column 6 is the discounted volue today of Col. 5 bosed on the compound interest premise
thof money due in the future is worth less than cosh in bond today, or on the other side,
money that you don't owe for o year is less of a liability than money you owe today. I
hove used 15% in this column becouse that is obout what it takes to ottract risk capital
in this type morket today.
Several observations should be mode here.- In Column 5 it con be seen that for o short-
term occupancy, the advantoge lies with leosing. It con be seen thot the onnuol expense
.for the first two yeors, the owning is greoter. But because of the foct thot o mojor port of
your ownership expense is debt service which is contont tiiot by the end of |(,g third year,
the expense of owhership is less than thot of leosing. This increoses substontiolly eoch
year until ot the end ot the ten-year period there becomes obaut o $23,000 odvontoge
in owning.
390
mionlng that woi o S 100,000 inveslmsnt. We jee ihoJ iK? lolol of Column 6,
llie preicnt worth of all of ihoie income sUeomi diicounled ot 15% co«neJ Jo obcjf
$23,000 ol ihs end of o Icn-yeor period. We Imve mode o -"lodgment ihol the building
con be : sold, yielding on equity ot that lime of oboot $350,000. Discounting ihii ogoin
ol the 8% per year, if would mean iKjt $350,000 would have preient worth lodoy of only
obout $87,000. These would indicate justifying obout o $1 10,000 investment, showing a
net yield or internal rote of return of o Jittle of over 15% on the $100,000 investment ..
This is obout the rate occeploble itt the market Icdoy.
Josf OS on item of postible interest, 1 have totaled column 5 indicoling on odvon-
toge to the owner of obout $358,000. This Js not a reolistic v/oy and certainly no knwledgs-
oble investor would give it ony weight.
1
2
Year
Rent
1
46,594
2
50,321.52
,3
54,347.24
4
58,695.02
â– 5
• 63,390.62
6
68,461.87
7
73,938.82
8
â– 79,853.92
9
86,242.24
10
93,141.62
TABLE 2
3 4
- ( Expense + Debt. Service)
-(
19,425
20,979
22,657.32
24,469.91
.26,427.50
28,541.90
38,528.00
33,291.04
35,954.32
38,830.66
48,669.69)
-f.W,
P.W. Discounted 15%.
of Reversion .2472 x 2
Advontoge
Discounting
21,500.69
19,327.17
16,979.77
14,444.57
11,706.56
8,749.52
5,555.90
2,106.80
1,618.23
5,641.27
350,918
Advantage
15%
Discount
18,696.25
14,614.12
11,164.47
8,258.7.
_ 5,820.2
3,782.6
2,088.6
688.7
460.0
1, 394.4 1
63,i5*.4i
86,746.9 ^
23,487.5!
Table 2 is quite similar to Table 1 except I hove assumed a different orrongement on the j
finoncing. Here I have assumed ihot there would still be the first mortgoge eXoctly as was |
shown in Tcble, 1, but that in oddifion to this the entire $100,000 equity would be borrow*-,
on a second mortgoge poyable at 12% per yeor ond omortized over the entire ten-yeor perio<
1 doubt seriously that such financing would be ovoiloble either to you or in the ordinory
world of business, but theri I thought that such on onalysis might give you o clearer picture
of the odvonfoge or disodvontoge. " •
** This now would ossume that no cosh would be invested. The annuol expense of ownership
eoch yeor would be greater up until the ninth yeor, but in the end, the odvontoge of some
$23,500 would even bs greater ihon in Table 1.
1
2
Yeor_
Rcnf
1
46,954
2
50,321.52
3
54,347.24
A
• 58,695.02
5
63,390.62
6
68,461.87
7
73,938.82
8
79,853.92
9
86,242.24
10
93,141.62
391
TABLE 3 â– ^ , ^
3 4 AJvonlage Diicounl
(Expense + Dtbt Service) ~ Discouniing 15%
-( 19,425 . 37,350.53) - 10,182 - 8,654
20,979 - 8,008 - 6,055
22,657.32 - 5,661 " _ 3,722
24,469.91 - 3,125 â– - 1,787
26,427.50 - 387 - 193
28,541.90 2,570 1/111
38,825.00 5,763 . 2,167
33,291.04 - 9,212 3,012
35,954.32 12,932 3,678
38,830.66 • 16,960 * 4,912
+ 20,074 - 6,451
P. W. of Reversion (.2472) 416,743 103,012 â–
96,561
Assume Pur chose Price of $475,000
All else the some os in Toble No. 2
In our several conversations you hove indicoted that the owners in the negotiotions roised
the price from $400,000 to $475,000, so thot I thought you might very well opprecio'e
a look at the investment on a $475,000 purchose price. Here you con see thot the total
present worth of the income stream discounted and the present worth of the reversion
comes too little under $100,000, meoning thot'the investment is yielding something
less than 15%, olthough this is certainly not os good on investment as the $400,000, but
even at this it oppeors to be fairly good. Once ogain it should be pointed out thot the
projection in Toble 3 is bosed on the conclusion or assumption that the properJy would
still increase some 76% in value over the ten year projection period.
In conclusion, I fhinlc thc\t if you plan to occupy the building for ten years, the advantage
IS definitely in owning the building rather than renting it, ond the longer thot you own,
fhe greater will bs *he odvontoge.
Flnolly, I think that 1 should point out thot the forecosts and estimotes in the various tables
hove carried things out to 2 declmo! points. The reason for this was thot I mode o computer
progrom, ond these ore whot the computer gcve me. Also, I expect this letter will be
reviewed by occountonts, and they like to see figures odd up exactly. No such occurocy,
however, is implied or intended in this letter. Becouse these ore oil forecasts and estimate:
consideroble vorlotion in these will likely be encountered in the market.
I hoi'e enjoyed doing this study for you. If I hove not mode some things quite clear, pleose
coll me and 1 shall be delighted to exploin.
392
LEGAL SEIU'JCES CORPOf^ATJON
.\lEMORA.\'DUSl
DATE: November 17, 1976
TO: Regional Directors
FRdM: Charles Jones ' ' â– '
SUBJECT: Purchase of Real Estate by Corporation Grantees
A number of Regional Directors have asV.ed for
a statement of Corporation policy governing purchase
of real estate by Corporation grantees. Here is a
preliminary statement of how the question will be
handled. I welcome any suggestions you may have.
â– A program seeking authorization to purchase real
.estate should make written. application to its Regional
Office,' accompanied by an appropriate resolution of the
program's Board of Directors. The application should
be forwarded to the Washington office together with
the recommendation of the Regional Director.
The application submitted by a program should
address the following factors:
1. The source from which the program expects
to obtain funds for a downpayment or for the total
purchase price.
2. The monthly cost of ownership should not be •
greater than the reasonable rental cost of appropriate
space for the program. In calculating cost, the program
should take into account the monthly mortgage payment
(amortization of principal_and ijnterest) ; utility costs,
including 'eiectiricity, gai, ^tjsr, sewage, trash, etc.;
taxes; depreciation; cost of renovation or rehabilitatic
and the predicted amortization period for such expenses;
insurance; age and life expectancy of the property,
. . . including a prediction of how long the space will contin
to be large enough, and appropriate, for use by the proc
3. Property must be for use by the program in
carrying out legal services, but it may include additior
space for rental to others.
393
5. Real estate purchased by a program may not
be disposed of without prior approval of the Corporation,
and the manner of disposing of the proceeds of sale shall
be determined at the time that such approval is re-
quested.
6. Each program will be responsible for maintaining
all necessary records relevant to the purchase and up-
keep of property.
7. The application should state how the program
intends to create a cash reserve to pay for unusual
maintenance or renovation expenses that may occur during
its ownership of the property.
8..- The application should indicate the reasons -
for believing that the purchase price of the property
represents its fair market value, and should also in-
clude a report on the condition of the property and
a plan for its utilization.
9. If a program purchases property and rents
part of it to others, the_rent received from the tenants
would be taxable as unrelated business income. Re-
sponsibility will rest with each program to determine
the tax consequences of its purchase and use of real
estate.
10. If a program merges with another program,
any real property owned shall be transferred to the
successor program.
394
AGREEMENT
• THIS AGREEt'^NT is made and entered into this I O day
August, 1978, by and between the LEGAL SERVICES CORPORATION
(hereinafter referred to as the "Corporation") and LEGAL SERVICES
OF NASHVILLE AND MIDDLE TENNESSEE,. INC. (hereinafter referred to
as the "Program") .
IN CONSIDERATION of the mutually dependent covenants and
agreements herein contained, the Corporation and the Program do
hereby agree as follows:
1. The Corporation authorizes the Program to purchase a
parcel of real property situated at 650 North V7ator Street, Gallatin,
Sumner County, Tennessee (hereinafter referred to as the "Property"),
with funds granted to the Program by the Corporation-
2. In the event that the Program ceases to be a grantee
of the Corporation or ceases to exist for any reason whatsoever, the
Property shall be transferred to an organization with purposes sintilat
to those of the Program.
3. The Property shall not be sold, transferred, encumbered
or in any way disposed of without the prior written approval of the
Corporation.
4. The Program shall amend its By-Laws, place appropriate
language in its deed to the Property, and take all other steps
necessary to insure that the provisions of this Agreement are carried
out.
5. This Agreement may be specifically enforced by the Cor-
poration in any Court of competent jurisdiction.'
LEGAL SERVICES CORPORATION
395
AGREEMENT
The Legal Services Corporation (hereinafter referred to as the Corporation)
and the Peninsula Legal Aid Center, Inc. (hereinafter referred to as the Program)
agree as follows: ''
1. The Corporation authorizes the Program to use Corporation
funds to purchase the real property commonly knov;n as 1214
rf? Kecoughtan Road, Hampton, Virginia (hereinafter referred to
as the Property).
2. The Program agrees that it v/ill notify the Corporation prior
to any sale, transfer or encumbrance of the Property. Any
such sale, transfer, or encumbrance shall be for fair market
value and shall comply v/ith the law of Virginia. The
Corporation expressly approves the Program's borrowing Thirty-
five Thousand Dollars ($35,000) for purchase of the Property
and executing a Deed of Trust to secure the loan.
3. The Program agrees that none of the funds derived from any
such sale, transfer, or encumbrance may be expended or used
for any purpose without the prior approval of the Corporation.
4. In the event that the Program ceases to exist, disposition of
the Property shall be in accordance with the law of Virginia.
To the extent permitted by Virginia law. the Program agrees
that the property will be transferred to another grantee of
the Corporation or, if that is not reasonably possible, to
an organization with purposes similar to those of the Program.
5. In the event that the Program ceases to be a grantee of the
Corporation, the Property shall be transferred to an organi-
zation designated by the Corporation with purposes similar
to those of the Program.
6. The Program shall amend its by-laws, place appropriate language
in the deed to the Property and take all other steps necessary
to ensure that the provisions of this agreement are carried out.
' 7. This agreement may be enforced by either party in any court of
competent jurisdiction.
8. It being understood that the Program is borrowing $35,000.00
by way of a purchase money deed of trust to provide a portion
of the purchase price, it is specifically provided that none
of the provisions of this agreement shall in any way affect
the lien of the deed of trust, and the right of the Trustee and
the holder of the note secured therey shall be in no wise
â– affected by the terms of this agreement.
PENINSULA LEGAL AID CENTER. INC.
Dated:
, A^ // /f.^^ By .^'-Ki^'r.^^-r
EXAm/'LE: /PRIOR APPROVAL TO SELL
^''
396
At..l<l:.Li-i:.tiJ.
The Legal Services Corporation (hereinafter referred
to as the Corporation) and the Legal Aid Society of
Sacramento County. Inc. {hereinafter referred to as the
Program) agree as follov;s:
1. The Corporation authorizes the Program to use Cor-
poration funds to purchase the real property commonly y'
known as 541 Normal Avenue, Chico, California (here-
after referred to as the Property) .
2. The Program agrees that it will notify the Corporation
prior to any sale, transfer or encumbrance of the
Property. Any such sale, transfer, or encumbrance Y
shall be for fair market value and shall comply with
the lav; of California.
3. The Program agrees that none of the funds derived
from any such sale, transfer, or encumbrance nay be
exoended or used for any purpose v;ithout the prior â– "
written approval of the Corporation.
4. In the event that the Program ceases to exist, dis-
position of the Property shall be in accordance with
the law of California. To the extent permitted by
California law, the Program agrees that the property
will be transferred to another grantee of the Corpo-
ration or, if that is not reasonably possible, to an
organization with purposes similar to those of the
Program.
5. In the event that the Program ceases to be a grantee
of the Corporation, the Property shall be transferred
to an organization designated by the Corporation with
purposes similar to those of the Program.
6. The Program shall amend its by-lav7s, place appropriate
language in the deed to the Property and take all other
steps necessary to ensure that the provisions of this
agreement are carried out.
7. This agreement may be enforced by either party in any
court of competent jurisdiction.
LEOi AID SOCIETY OF SACPAIEnSTO COUNTY, OC.
Dated: ^/I^.J^-y /f>f By: ^
<Q^.-^
LEGAL SLHVICrS C0PJ'OPJ\TI0N
Dated:
J^ l I P^f 7 7 By: 7 Cx /y^^.K^^ C^l^ y^U
â– ^w^..T>T^-. r>7c;Dn<; mON OF PROcnr:os
397
AGREBlHTr
The Legal Services Corporation (hereinafter referred to as the
Corporation) and the
(hereinafter referred to as tlie Program) agree as follows:
1. The Corporation authorizes the Program to use Corporation funds to
purchase the real property comonly )cnown as
(hereinafter referred to as the Property).
2. The Prograa agrees that it will notify the Corporation in writing
prior to any sale, transfer or encumbrance of the Property. Any
such sale, transfer, or encumbrance shall be for fair market value
and shall conply with the law of The Corporation
expressly approves the Program's execution of a Deed of Trust to
secure a note for the anount of .
3. The Program agrees that none of the funds derived from any such
sale, tramsfer, or encumbrance may be expended or used for any
purpose without the prior written approval of the Corporation.
4. In the event that the Program ceases to exist, disposition of the
Property shall be in accordance with the law of . lb the
extent pemitted by law, the Program agrees that the
property will be transferred bo another grantee of the Corporation
or, if that is not reasonably possible, to an organization with
purposes similar to those of the Program.
5. In the event that the Program ceases bo be a grantee of the
Corporation, the Property shall be transferred to an organization
designated by the Corporation with purposes siiailar to those of
the Program.
6. The Program shall place appropriate language in the deed to the
Property and talte all other steps necessary to ensure that the
provisions of this agreenent are carried out.
This agreement may be enforced by either party in any court of
canpetent iurisdiction.
canpetent jurisdiction
8. None of tlie provisions of this agreeraent shall in any way affect
the lien of the deed of trust, and the right of the Trustee and
tlie holder of the note secured thereby shall oe in no wise
affected by the terras of this agreement.
For: For: liegal Services Corporation
(Program llatae)
(Mane) (Dane)
(PositionAitle) (Position/Title)
(Date) (Date)
'^
29-379 0—84 26
398
APPENDIX 5
RESPONSE TO SENATOR DENTON'S QUESTIONS
Set forth below are the questions submitted by Senator
Denton as appended to the Chairman's letter to me dated
May 11, 1983, and my responses to the same.
1. Mr. McCalpin, as Chairman of the Board
of Directors of the Legal Services Corporation
during 1980-81, you are undoubtedly aware of
the allegations of widespread abuse within the
Corporation and its grantees. Do you have any
comment on these allegations?
As Chairman of the Board of Directors of the Legal Services
Corporation and previously I was aware of allegations of abuse
within the Corporation and its grantees. Such reports came to
me both in my capacity as a director of the Corporation and in
my capacity as an officer of the organized bar. To the best
of my ability I made sure that all such reports of alleged abuse
were transmitted to the appropriate staff of the Corporation and
investigated.
In my experience, the vast, overwhelming majority of such
reports were inaccurate or unfounded. Some such reported
abuses were raised at the hearing on May 4, 1983, and the re-
sponses to them are set forth in my letter to Hon. Orrin G.
Hatch dated May 19, 1983. In addition, at that hearing Hon.
Thomas F. Eagleton produced and entered into the record the
report of an investigation into more than 20 of such allegations
by the St. Louis Post-Dispatch which concluded that the great
majority were without foundation. This reflects my experience.
399
Almost without exception the investigations of alleged
violations of the Legal Services Corporation Act or of regu-
lations adopted by the Corporation revealed that there were
no such violations. The same result has been reached in the
great majority of lawsuits brought against the Corporation,
its officers, directors and grantees. Indeed, it has usually
appeared that most accusers were unfamiliar with the provisions
of the Act or regulations and were simply acting on the basis
of their own biases or preconceived ideas.
It would be remarkable if, in a program involving a corpo-
ration with several hundred employees, dispensing nearly
$1 billion to 325 or more grantees employing in the aggregate
thousands of persons and serving millions of clients, there
were not some transgressions. The astonishing thing is that
there have been so few proven violations of the statute or the
regulations.
The Act and the regulations in general prescribe only the
outer limits of authorized activity. Within those limits
lies a large area in which the Board of Directors, officials
of the Corporation and grantees may act at their discretion.
Such actions are really judgment calls. These have been the
focus of a great many allegations of wrongdoing. They do
not involve allegations of misconduct so much as charges of
errors of judgment. In this respect there is no wrongdoing
but only difference of opinion. In evaluating such judgments
or opinions it is important to realize that the perceptions of
400
clients, the needs of clients, who are all poor and many from
minority groups, and the responses of legal services programs
to those perceptions and needs may be very different from the
views of white, middle class and affluent citizens as to the
needs of clients of legal services.
In summary, my response is that I am aware of numerous
allegations of alleged abuse, that in my experience such
allegations are almost always inaccurate or unfounded, that
violations of the Act or regulations have been miniscule in
a program of this scope and breadth and that the real complaints
go to questions of judgment, not legality. In spite of the
numerous complaints, I submit that the legal services program
has been as well, or better, administered than any governmental
program of comparable size and complexity.
2. Mr. McCalpin, in November, 1981, the Corpo-
ration put out a publication entitled "Media Access."
What in the world does media access have to do v^ith
providing routine legal assistance to poor people?
The response to this and the following question requires
a background and perspective. Section 1001(2) of the Legal
Services Corporation Act contains a finding and declaration of
the Congress of the need "to continue the present vital legal
services program." The legal services program existing at the
time the Act was adopted included representation of groups as
well as individual clients, class actions, client education
components and client advocacy training programs.
Section 1006(a)(1)(B) authorized the Corporation to make
grants and contracts necessary "to carry out the purposes and
401
provisions of this title" and Section 1006 (a) (3) (B) authorized
the Coroporation directly or through grants or contracts to
provide training and technical assistance for activities relat-
ing to the delivery of legal assistance. In Section 1007(a)(2)(C)
the Corporation was directed to insure that grantees consider
the relative needs of eligible clients for outreach, training
and support services and provide appropriate training and sup-
port services.
In 1981, the Corporation's Office of Program Support let
contracts to produce somewhere between 35 and 50 training manuals
to be made available to the grantees, regional training centers
and client groups in connection with education and training pro-
grams. The publication, entitled "Media Access", was one such
publication. It was, as I understand, intended to round out
the client advocacy training endeavors designed to permit clients
to become as self-sufficient as possible, thereby minimizing
the need for, and application for assistance to, legal services.
I would concede that this particular publication may be
at the outer limits of the education and training activities
of the Legal Services Corporation and its grantees. I do not
believe that the publication of this pamphlet violates any
statute or regulation. It was a judgment call on the part of
program administrators with which we might not agree but cer-
tainly does not represent any illegality.
3. Mr. McCalpin, please note the following quote
from a September, 1981 LSC publication entitled "Strategic
and Tactical Research," page 13.
402
"Information gathering and most important, its
application is an essential element in the power
equation that defines the relationship between
'us' and 'them.' 'Them are the small number of
people who control the lives and livelihood of
the rest of 'us. '
"They ('them') have money and all the advantages
it brings, including control of the media which
often present a view of the world that supports
and justifies inequality of power.
"'Us' have: people (our greater numbers), spirit
(the determination to work for our interests and
needs), and truth.... This 'power equation' is
not an equation in the strictest mathematical
sense, since the two sides of the equation, 'them'
and 'us' are not yet equal. Making that equation
balance is our goal."
These are the types of things that gall me and a
number of other people. This is the type of activity
that has been going on in the name of providing legal
assistance to poor people, but that is never publicized.
Congress puts restrictions on and they are ignored.
With legal services programs claiming that they turn
people away, is this the type of activity that the
Corporation should have been engaged in? How much did
it cost to produce this training manual?
The pamphlet entitled "Strategic and Tactical Research" was
one of the group of 35 to 50 published pursuant to contracts let
by the Corporation in 1981. It was intended to assist in the
education and training of client groups and program personnel.
Although I was unaware of the existence of this publication
prior to receipt of the question and have still not seen it in
full, I understand that the question contains an accurate quote.
My own view is that the quoted portion is an unfortunate and
unnecessarily divisive statement; and, if it is reflective of the
publication as a whole, I would say that the publication was
an unwise venture, which I understand cost something less than
403
$5,000. Again, the intended purpose of the publication was
one within the scope of activities permitted or mandated by
the Act. Whether it well served those activities may be A-'
debatable. r"
F. Wm. McCalpin -
-L^^rn- Ja.:,.
Dated at St. Louis, Missouri
this 19th day of May, 1983.
404
. - APRIL 5, lrS3
COVJTROLLER GENERAL OF THE UNITED STATES
WASHINGTON D.C. 2CS48
APPENDIX 6
ADVISORY OPINION
IN
THE MATTER OF
PERSONNEL PRACTICES WITHIN
THE
LEGAL
SERVICES CORPORATION
We have been asked to examine certain possible iiuproprie-
ties relating to personnel practices within the Legal Services
Corporation, and to determine specifically —
A. Whether 5 U.S.C. 5503 prohibited payment of -â– .
compensation to members of the Corpora-
tion's Board of Directors who were
appointed when the Senate was in recess in
December 1981, January 1982, and January
19 8 3;
B. Regardless of the application of 5 U.S.C.
5503, whether payments made to those Board
members in 1982 were consistent with law
and accepted practices; and
C. Whether amounts payable under an employment
agreement concluded by the Corporation with
its new president in the fall of 1982 were
excessive or in violation of law, whether
irregularities in the negotiation of that
agreement rendered it invalid, and whether
the agreement was affected by the limita-
tions imposed by Public Law 97-377, Decem-
ber 21, 1982.
Our advi sory opinion js that 5 U.S.C. 5503 did jiot
preclude payment of compensation to "the' Board members, "and
that the rate of their per diem compensation did not_exceed
that prescribed by law. Whether any member submitted false or
fraudulent claims for payment, and whether they were paid in a
manner consistent with acceptable practices applicable to the
Legal Services Corporation and other public corporations
generally, are matters which are the subject of ongoing audit
and investigation by our Office and will be addressed in a
subsequent report. The circumstances leading to the
employment of the Corporation's current president and rela'ced
matters are also the subject of continuing audit, but it is
our opinion that the particular arrangement in question is
405
B-210338
subject to the specific limitations imposed by Public
Law SI -211 , December 21, 1982.
BACKGROUND
The Corporation was established by the Legal Services
Corporation Act of 1974, Public Law 93-355, approved July 24,
1974, 88 Stat. 378. It was designed as a private nonprofit
corporation, functioning outside and independently of the
Federal Government, to administer legal assistance programs
for the poor. See, generally, H.R. Rep. No. 247, 93rd Cong.,
1st Sess., reprinted in 1974 U.S. CODE CONG. & AD. NEWS 3872.
The Legal Services Corporation Act is currently codified
in 42 U.S.C. 2996 e_t seq . Section 2996c provides that the
Corporation shall have a Board of Directors consisting of
11 voting members appointed by the President, by and with the
advice and consent of the Senate. It further provides for
staggered 3-year terms of office for those members, but
directs that, "Each member of the Board shall continue to
serve until the successor to such member has been appointed
and qualified."
On December 30, 1981, and January 22, 1982, while the
Senate was in recess prior to the convening of the 2nd session
of the 97th Congress on January 25, 1982, the President
appointed 10 new members to the Board of Directors of the Cor-
poration to replace 2 sets of members appointed earlier. The
terms of office of the 2 sets of Board members so replaced had
expired in July 1980 and July 1981, and the members who were
replaced had all been holding over in office under the provi-
sion of 42 U.S.C. 2996c which authorized them to continue to
serve until the appointment of a successor. On February 25,
1982, the replaced Board members filed a complaint in the
District Court for the District of Columbia ( F. William
McCalpin, et al . v. Howard H. Dana, Jr., et al . , C.A.
No. 82-542) challenging the legality of these recess appoint-
ments. Among other things, they contended that the President
had no authority to appoint their successors through recess
appointments without Senate action — a procedure available
under the Constitution to fill certain "Vacancies" in
office — since they were still serving as Board members under
the hold-over provision of 42 U.S.C. 2996c and their offices
were therefore not "vacant." On September 30 and October 5,
1982, the District Court entered an order and a memorandum
opinion dismissing this complaint. The District Court judge
406
B-210338
held, in part, that the offices of the replaced Board members
had become "vacant" when their terms expired in July 1980 and
July 1981, notwithstanding their continued service under the
hold-over provision of 42 U.S.C. 2996c, so that the President
was not precluded by their holding over in office from
replacing them under the recess appointment procedure. An
appeal is now pending before the Circuit Court of Appeals for
the District of Columbia.
During 1982, the Board members holding recess appoint-
ine>its received compensation at the rate of $221 per day when
they performed services for the Corporation.
Section 2996d, title 42 of the United States Code, pro-
vides that, "The Board shall appoint the president of the
Corporation." On October 29, 1982, the Board of Directors
passed a motion selecting Mr. Donald P. Bogard as the new
president of the Corporation. The employment agreement then
negotiated with Mr. Bogard included provision for payment of
his basic salary, together with additional monetary benefits
in the form of payment for membership in a private club, and
continued salary for up to 360 days in the event of involun-
tary termination during his first year of service. That
agreement was ratified by the Board at its December 17, 1982
meeting. However, a provision of Public Law 97-377, approved
December 21, 1982, 96 Stat. 1876, specifically limited such
payments by directing that: "* * * no officer or employee of
the Legal Services Corporation * * * shall be reimbursed for
membership in a private club, or be paid severance pay in
excess of what would be paid a Federal employee for comparable
service."
The appointments of members of the Board of Directors who
had received recess appointments in December 1981 and January
1982 expired December 23, 1982, upon the final adjournment of
the 2nd session of the 97th Congress. The Ist session of the
98th Congress was subsequently convened on January 3, 1983,
and the Senate was then recessed until January 25, 1983. On
January 21, 1983, 3 new recess appointments were made to the
Board to replace 3 of the recess appointees whose appointments
had expired the previous month.
The questions presented relate to the propriety of these
transactions.
407
B-210338
VALIDITY OF RECESS APPOINTMENTS
It is our policy to refrain from commenting on matters
pending litigation before the courts. See, e.g., 58 Comp.
Gen. 282 (1979). Hence, it would not be appropriate for us to
express any opinion relative to the validity of the recess
appointments at issue in the case of McCalpin v. Dana , cited
above, which is now on appeal before the Court of Appeals for
the District of Columbia Circuit. Of course, if the courts
find that those appointments are invalid, the appointees'
eligibility to perform official acts and be paid would become
questionable for that sole reason. Consequently, for purposes
of the following discussion a judicial^determination upholding
the validity of the appointments will be assumed.
APPLICATION OF 5 U.S.C. 5503
The language of 5 U.S.C. 5502(a) and 5503(a) is pertinent
.to this discussion. Those subsections provide:
"(a) Payment for services may not be made
from the Treasury of the United States to an
individual acting or assuming to act as' an
officer in the civil service or uniformed
services in an office which is not authorized
by existing law, unless the office is later
sanctioned by law.
"(a) Payment for services may not be made
from the Treasury of the United States to an
individual appointed during a recess of the
Senate to fill a vacancy in an existing office,
if the vacancy existed while the Senate was in
session and was by law required to be filled by
and with the advice and consent of the Senate
* * * ^ "
These provisions of the Code are derived from section 2
of the act of February 9, 1863, ch. 25, 12 Stat. 646, which in
its entirety states:
"SEC. 2. And be it further enacted . That
no money shall be paid from the Treasury of the
United States to any person acting or assuming
to act as an officer, civil, military, or
naval, as salary in any office, which office is
not authorized by some previously existing law,
unless where such office shall be subsequently
sanctioned by law, nor shall any money be paid
408
B-2T0338
Out of the Treasury, as salary, to any person
appointed during the recess of the Senate, to
fill a vacancy in any existing office, which
vacancy existed while the Senate was in
session and is by law required to be filled by
and with the advice and consent of the Senate,
until such appointee shall have been confirmed
by the Senate."
That section was adopted to prevent recurrence of further
recess appointments to positions which had not been authorized
by Congress. Irregularities specifically referred to at the
time included the use of the recess appointment procedure in
1862 to appoint nearly 400 individuals as brigadier general
officers of the Army even though the Congress had limited the
number of such officers to 200. Significantly, the provision
was designed to cover only "offices in the Government." See
S. Rep. No. 80, 37th Cong., 3d Sess. pages 4 and 5; and CONG.
GLOBE, 37th Cong., 3d Sess. 564-565 (1863), particularly the
statements of Senator Trumbull and Senator Harris. Under the
act of June 27, 1866, ch. 140, 14 Stat. 74, the clauses of the
provision were adopted without substantive change as sections
1760 and 1761 of the Revised Statutes. See GOULD & TUCKER,
NOTES ON THE REVISED STATUTES OF THE UNITED STATES (1889).
Those provisions of the Revised Statutes have in turn now been
codified in 5 U.S.C. 5502(a) and 5503(a). In the codification
of 5 U.S.C. 5502(a), the words "in the civil service or
uniformed services" were substituted, with no substantive
change intended, for the words "civil, military, or naval,"
which appear in the original enactment. See Historical and
Revision Notes under 5 U.S.C. 5502 (1970 ed.}; and S. Rep.
No. 1380, 89th Cong., 2d Sess.
Although 5 U.S.C. 5503(a) states that it applies to any
"individual," the subsection is incorporated in the United
States Code as a part of title 5, "Government Organization and
Employees," and it thus could be taken as having a more
limited scope of application. The derivation of the
subsection, described above, therefore becomes pertinent to
the question of its coverage.
A statute incorporated into a code is presumed to be
incorporated without substantive change even though it is
reworded and rephrased and in the organization of the code its
original clauses are separated. See 1A SUTHERLAND, STATUTES
AND STATUTORY CONSTRUCTION 28.10 (4th ed . CD. Sands 1972).
Kence, our view is that 5 U.S.C. 5503(a) may not properly be
construed separately from and without regard to 5 U.S.C.
5502(a), since both code sections are derived from the same
statute, and that 5 U.S.C. 5502(a) and 5503(a) therefore have
409
B-210338
application only to a Government officer "civil, military, or
naval," i.e., to a Government officer "in the civil service or
uniformed services."
Concerning members of the Board of Directors of the Legal
Services Corporation, 42 U.S .C . 2996c( c) provides:
"(c) Status . The members of the Board
shall not, by reason of such membership, be
deemed officers or employees of the United
States."
And 42 U.S.C. 2996d(e)(l) provides:
"{e)(1) Except as otherwise specifically
provided in this title, officers and employees
of the Corporation shall not be considered
officers or employees, and the Corporation
shall not be considered a department, agency,
or instrumentality, of the Federal Government."
Even though Government corporations generally are executive
agencies as defined by 5 U.S.C. 105, it is our view that these
specific provisions applicable to the Legal Services Corpora-
tion take the Corporation out of the executive branch of the
Government. Furthermore, 5 U.S.C. 5502 and 5503 are not among
the sections of title 5 of the United States Code relating to
Government personnel which have specifically been made appli-
cable to officers and employees of the Corporation under
42 U.S.C. 2996d(f).
It may be that the members of the Corporation's Board of
Directors could properly be regarded as "officers of the
United States" under the Constitution. This is an issue now.
pending consideration by the Court of Appeals in the case of
McCalpin v. Dana , cited above, and we therefore offer no
comment concerning that issue. However, it is well settled
that officers of the United States may by law be exempted from
coverage under 5 U.S.C. 5503 and other sections of title 5 of
the United States Code. See, e.g., 16 Comp. Gen. 36 (1936).
Our view is that the Bo a rd me mbers of the Legal Services
Corporation may not properly be considered of f icers'ih' the
civil service of the Federal Government for purposes of
title 5 of the United States Code, except to the extent speci-
.fically provided by statute. See 42 U.S.C. 2996c(c) and
2996d(e)(1), quoted above. The provisions of 5 U.S.C. 5502
and 5503, which apply generally only to Federal officers in
410
B-210338
the civil service and the uniformed services, have not
specifically been extended by statute to the Board members.
See 42 U.S.C, 2996d(f). It is t herefore our further view that
5 U.S.C. 5502 and 5503 have no appl'lcatlon-to the-Legal
~S'ervices~CoTporation'~and,' accordingly, our opinion is that the
â– Board members in question were not and are not precluded by
5~U . S . C^.__^5 5 3 from receiving compensation for their services.
PAY FOR RECESS APPOINTEES GENERALLY
In response to the inquiry concerning generally^ accepted
law and practice regarding payment of recess appointees, in
decisions binding as precedent on the accounting officers of
the executive agencies it has been held that a public office
does not become "vacant" at the end of a term if the regularly
appointed incumbent holds over in office with specific statu-
tory authority to do so; hence, when the President through
recess appointment replaces a holdover in. office whose term
expired when the Senate was in session, the vacancy in office
occurs at the time of the appointment during the Senate
recess, and the recess appointee is therefore not precluded by
5 U.S.C. 5503 from receiving payment for services. See
57 Comp. Gen. 213, 215 (1978); and 5 Comp. Dec. 594 (1899).
See also S. Rep. No. 80, 37th Cong., 3d Sess., cited above, at
pages 2-3. On the other hand, after the eligibility of an
interim, recess appointee to hold office expires upon the end
of the next succeeding session of the Senate, 5 U.S.C. 5503
generally operates to preclude payment of salary to a second
recess appointee. See 7 Comp. Gen. 329 (1927); 6 Comp. Gen-
147 (1926); and 14 Comp. Dec. 90 1 (1908). Compare also
36 Comp. Gen. 444 (1956); and 28 Comp. Gen. 30, 36-37 (1948).
We recognize that the principles contained in those
decisions concerning the application of 5 U.S.C. 5503 are not
entirely consistent with certain comments made in a recent
Federal district court opinion in the case of Staebler v.
Carter , 464 F. Supp. 585 (D. D.C. 1979), at page 600
(footnote 38), which involved the question of whether an
executive agency office was "vacant" even though occupied by a
holdover incumbent, and which was followed in the district
court's holding in McCalpin v. Dana , described above.
However, we are not prepared at the present time to consider
whether our earlier decisions should be revised, since
judicial opinion on the issue does not appear to be firmly
411
£-210338
settled and the structure of the Legal Services Corporation
differs significantly from that of an executive agency.
RATE OF COHPEKSATION
As previously noted, during 1982 the Board members
received compensation at the rate of $221 per day.
Officers and employees of the Corporation are
specifically authorized compensation at rates not to exceed
"the rate of level V of the Executive Schedule specified in
section 5316 of title 5, United States Code (5 U.S.C. 5316)."
See 42 U.S.C. 2996d(d). A bylaw of the Corporation adopted in
1980 authorized members of the Board of Directors to receive
compensation "not in excess of the per diem equivalent of
level V of the Executive Schedule specified from time to time
in section 5316 of title 5, United States Code, for their
services * * * and reimbursement for travel, subsistence, and
other expenses necessarily incurred therewith." See 45 F.R.
58363, September 3, 1980; and 45 C.F.R. 1601.14 (1981 ed . ) .
The level V pay rate of basic pay or salary, as pre-
scribed by 5 U.S.C. 5316, is "the rate determined with respect
to such level under chapter 11 of title 2, as adjusted by
section 5318 of this title * * *." (That is, the rate fixed
under the quadrennial review provisions of 2 O.S.C. 351-361/
as adjusted yearly following the comparability increases in
rates payable under the General Schedule.) During the period
in question the annual rate of compensation for level V posi-
tions was fixed at $57,500 under sections 101(g) and 141 of
the act of December 15, 1981, Public Law 97-92.
Generally, the per diem compensation of persons inter-
mittently employed in the Government service is computed under
the provisions of 5 U.S.C. 5504 and is based on an hourly rate
assuming a 52-week year of 40 hours per wee)c. In the present
case, the per diem compensation rate of $221 for the Board
members in 1982 is appropriate under that computation based on
the per annum rate of $57,500 for level V. Me therefore
conclude- that- the._$221 per di_em compensation rate estdblisihed
"for the Board members in 1982 did not exceed the fate
authorized by law.
412
B-210338
EMPLOYMENT OF CORPORATE PRESIDENT
The negotiation process that resulted in the employment
of the current president of the Corporation remains the sub-
ject of ongoing audit and investigation by our Office.
However, to the the extent that the employment agreement
plrovided for benefits in the form of payment of private club
dues, and severance pay exceeding that payable by law to civil
service employees, limitations were specifically imposed by
Public Law 97-377 in December 1982. This law prohibits pay-
ment of. club dues, and limits the amount of severance pay to
that payable to a Federal employee in similar circumstances.
Since the president has not applied for reimbursement of dues
paid to a private club, nor is he in a position to claim
severance pay, those limitations have not been exceeded. Our
opinion is that these limitations prohibit expenditures for
the purposes in question, and that no such expenditures may be
allowed. Should the president of the Corporation believe he
is entitled to payment under either of those provisions of his
employment agreement he would, of course, be able to pursue
his remedy in the courts.
Comptroller General
of the United States
413
APPENDIX T
May 26, 1983
Honorable Orrin G. Hatch
Chairman
Committee on Labor and Human Resources
United States Senate
SD-420 - Dirksen Bldg.
Washington, D.C. 20510
Dear Senator Hatch:
Enclosed please find my responses to your written questions regarding my
testimony on the reauthorization of the Legal Services Corporation.
May I thank you again for the opportunity to testify on this most important
matter.
Very truly yours.
Jelwynne HoUie
President - N.C.C.
ENCLOSURE:
NH/gh
29-379 0—84 27
414
PRIVATE ATTORNEY DELIVERY
There are three major issues of concern to the client community with
regard to the growing use of private attorneys in the delivery of services to
eligible clients. These are, quality control, accountability to the client
community and the scope of representation.
As we examine the various delivery models, we find that staff programs
have almost universally established systems for on-going review of the quality of
the legal wori< being performed. The methods for doing so vary from program to
program but, the existence and viability of such systems are reviewed, at least
annually, by the Corporation when the program is monitored. The same is not
true in regard to services provided by private attorneys.
In too many instances, the only check on the work of private attorneys is
related to the fees charged. Corporation grantees have established a "schedule
of payments" and examine the billings for a particular case type against this
schedule. This does not establish the quality of the work performed. It does not
even insure that the attorney has identified the correct issues. The situation
with regard to pro -bono representation is even less structured. Here, the major
emphasis is placed on insuring that the referral system works and not that
adequate legal work was done.
At minimum, each program should be required to adopt a method for
determining client satisfaction at the time of case closing. Further, there should
be a summarization of the issues and the steps taken submitted by the attorney
along with the final request for payment. This report should be reviewed at the
local level on a routine basis and maintained on file for spot checks by the
corporation. At maximum, we believe that programs should establish a system
of peer review so that the actual legal work of private attorneys could be
examined.
The client community recognizes that there are ethical issues involved in
the review of private attorneys' work produce. Also, we are aware of the
potential danger that fewer private attorneys would participate in reduced fee or
pro-bono work if the standards for review exceeded what they considered
415
reasonable. However, it is essential that there be an awareness by the private
attorney that his/her work is subject to review and that reduced fee does not
mean reduced quality.
The role of the Legal Services Corporation is the same in this regard as is
the case with staff programs. That is, while the Corporation, by statute, may
not interfere in the client/attorney relationship it can act to insure that each
grantee has a system in place which monitors the quality of the legal work of the
private attorney.
ACCOUNTABILITY
It is important that work done using Corporation funds be responsive to the
real needs of eligible clients. Staff programs have governing bodies which
contain client directors who can insure that this is true. When private attorneys
or bar associations are the Corporation's grantee, too often this element of
control is not present. The Corporation can improve its functioning In this area
simply by enforcing its own regulations. These regulations require that every
grantee have a governing body composed of both attorneys and clients. This
requirement has, on a case by case basis when the need arose, been waived in
part to allow an advisory body where a governing body was not a legal or
practical reality. However, enforcement of these provisions have become less
and less stringent as time has past. It is, we think, essential that the
Corporation review Its activity in this area to insure that all delivery models
that It funds are accountable to the client community and not simply operating
at the whim and caprice of attorneys.
SCOPE OF REPRESENTATION
The Corporation has not, as far as we know, taken any steps to insure that
private attorneys involved in delivering services to eligible clients have agreed
to undertake representation in the forum which is most likely to result in the
accomplishment of the client's goal. There are some attorneys who feel that
only certain kinds of cases should be undertaken by any legal services program.
Others have a bias against the use of certain remedies. The Corporation and
local programs should insure that every private attorney who is involved in
416
delivery systems funded under the Act provide assistance in any matter
permitted by the enabling legislation and in the most appropriate forum. The
Corporation could develop a standard form for this purpose which could be used
by all of its grantees be they staff programs or otherwise.
Legal Services Corporation grantees are currently precluded by P.L. 97-377
from providing representation to eligible clients before legislative bodies. This
is a new restriction and in my view a most unfortunate one. As indicated in my
written testimony, there is benefit to the legislator, the client, the courts and
the society as a whole when such representation is permitted.
The current Corporation regulations, in the view of the client community,
provide ample safeguards against the use of legislative advocacy in the pursuit of
"attorney goals." These regulations require that in every instance there be on
file a retainer agreement which, at minimum, sets forth the identity of the
client, the issue for which relief is sought, the legislative body to be addressed
and the program which is authorized to provide the representation. Further, the
regulations require that the governing body of each recipient make a
determination as to the need for the establishment of any full time legislative
effort on a program's part. The board must explicitly find doing so is, the best
means to provide economical and effective delivery of services to eligible
clients.
I believe that Corporation oversight of compliance with this regulation
would be enhanced if the programs, during their priority-setting process, made
public their legislative advocacy undertakings.
LOCAL GOVERNING BODIES
It is my strong belief that the local boards of directors are an essential
element in the operation of all recipients of Corporation funds. It is through
these bodies that policy is set, priorities established and accountability rendered
to the legal and client communities. This local control is both a necessary and
highly desirable in view of the highly variable conditions which exist throughout
the country.
417
The existence of the local boards of directors allows each program to
determine what delivery system, or mix of systems, is most appropriate in that
community. These boards are in a position to determine suitable eligibility
levels taking into account available resources vs. local needs. Through their
policy actions, local boards can insure that resources are being used in the most
economical and efficient manner. Further, they are in a position to insure that
client grievances about program performance are considered on an expeditious
basis.
418
APPENDIX 8
LEGAL SERVICES FOR THE ELDERLY
132 Wesl 43rd Slreel. 3rd floor j^j^
New York. NY 10036
(212) EX 1-0120
Jonathan A Weiss
Dirtctor
May 13, 1983
The Hortorable Orrin G. Hatch
Chairman
Committee on Labor and
Human Resources
Washington, D. C. 20510
Dear Senator hatch:
Thank you for your kind words of May 9th. It was my pleasure
to testify and I will be pleased to make myself available in the
future for any inquiries or projects that I can capably handle.
In response to your questions:
1) There is a general sense that once a local organization
becomes a grantee that it will always be a grantee. The rationale
for this sense would seem to be the necessity for continuity on
cases, continuity with the community, and the continued accumulation
of valuable materials and facilities. I note that Senator Goldwater
has introduced a bill concerning cable television with presumptive
renewability. No such rationale, of course, should in any way impede
serious and thorough evaluation of the legal activities of the grantee
with appropriate actions based on properly conceived conclusions by
the funding source.
2) I think it is difficult to characterize how legal service
organizations are concerned. Any inquiry should distinguish between
the rehetoric and "priorities" of the management of the programs, on
the one hand, and the activities of the lawyers of the program on
the other. My experience is that the vast majority of neighborhood
lawyers are primarily concerned with the legal needs of individual
clients. It would be, in my opinion, unethical to consider the
political ramifications of a class action by the attorney who
represents the class and is in charge of the litigation. I also
believe that "priority" setting is also often a waste of time and
manifests an indifference to clients.
3) I have consistently opposed the payment of any money from
legal services funds to organizations which lobby on behalf of any
cause, including legal services? e.g. NLADA and PAG^on governmental
ethical grounds. Payment to bar associations which provide facili-
ties which assist in representing clients seems acceptable if i^^^"
efficient use of resources. In spite of my objections, money hafe
been deducted from my grant in the past by the funding conduit m
New York to pay NLADA and PAG,
419
4) I heard this reason given for membership in the NLADA
for the first time last year. It is false. Even^if one were to
disregard the NLADA dues paid as part of the premiums paid for
malpractice insurance/ there is cheaper insurance available: -
particularly since there has been a very low rate of malpractice
claims. I participated in New York in arranging for malpractice
insurance which is cheaper than that offered by NLADA.
5) Private law firms do not have Boards of Directors. I do
not see why legal services programs should have them.
The most plausible justification for Boards of Directors would
be that they assist in raising private funds or deflect unjustified
political criticism. Certainly they should be forbidden from
attempting any involvement in a neighborhood lawyer's handling of a
case and their presence may create conflicts of interest. I have
not observed many positive effects in these regards but I have
observed the negative characteristics.
If I can further amplify these remarks, please let me know.
Thank you.
Very truly yours,
JAW:FMD /^ Jonathan A. Weiss
420
APPENDIX 9
AMERICAN BAR ASSOCIATION
Writers Direct Number; kYbjlll -bl'ih
May 19, 1983
The Honorable Orrin G. Hatch
Chairman, Committee on Labor
and Human Resources
United States Senate
Washington, D.C. 20510
Dear Mr. Chairman:
Thank you for allowing me to appear before the
Committee on Labor and Human Resources on May 4, 1983
to testify in support of the reauthorization of the
Legal Services Corporation.
At the conclusion of the hearing, you announced
that the record would remain open for an additional
period of time in order to allow the filing of addi-
tional comments and information bearing on the Corpora-
tion's reauthorization. I would like to take this
opportunity to present some additional remarks to
supplement my prior testimony and I ask that this
letter be made part of the hearing record.
Allegations Against Legal Services Programs
I wanted to advise you that I intend to pursue my
suggestion during the hearing that the American Bar
Association establish a mechanism for investigating
charges against legal services programs. As I men-
tioned, I believe it is time to lay many of these
allegations to rest through an impartial and nonpar-
tisan method.
We will be discussing this issue and possible pro-
cedures at the upcoming meeting of the Standing Com-
mittee on Legal Aid and Indigent Defendants on June 4
in Washington, D.C. If the Committee endorses this
concept, we will proceed to develop a plan which can
be presented for approval and funding through the appro-
priate ABA channels. Although it is uncertain how long
this process might take, I certainly hope that a mech-
anism will eventually be available for resolving these
allegations .
421
As you know, in most institutions the process of designing,
obtaining approval and implementing a program is time consuming.
The ABA is no exception. Indeed, because it is a volunteer
organization the process is even slower. Furthermore, there
may be some who question whether my committee is the appropriate
committee of the ABA to conduct the program in view of my com-
mittee's active involvement in support of the Legal Services
Corporation. If another committee or section of the ABA is to
become involved, the time of implementation will be further
delayed. Consequently, I cannot hold out any promise that the
ABA can get organized to do the job while the current legislation
is pending. However, we hopefully can put in place an ongoing
procedure which will be very helpful to Congress' oversight
function and for future legislation.
Non- acquiescence Practices and Policies of Government Agencies
During my oral statement I mentioned the practice of some
government agencies to refuse to apply court decisions with which
they disagree to other than named plaintiffs. This practice, I
noted, necessitates the bringing of class action suits in order
to provide relief to all aggrieved individuals in an economical
and efficient manner.
In response to your interest in additional information on
this issue, I would call to your attention two examples of non-
acquiescence practices of which I am aware.
The Social Security Administration has a policy of non-acquies-
cence to court decisions. Social Security Ruling #80-llc is an
example. It was issued in response to Levings v. Califano , 604
F.2d 591 (8th Cir. 1979), in which the Eighth Circuit Court of
Appeals held that, under the Social Security Act and HEW s own
regulations, persons residing in certain types of nursing homes
were entitled to receive Supplemental Security Income benefits.
(It is the position of the Social Security Administration that
these agency rulings are binding on the administrative law judges
despite a court decision to the contrary. See 20 C.F.R. §422.408).
Another instance of non-acquiescence by the Social Security
Administration is its response to the ruling in Finnegan v. Mathews ,
641 F.2d 1340 (9th Cir. 1981), which prohibited the application
of current regulations to terminate the SSI disability benefits
of recipients who had been "grandfathered" into the program from
state disability rolls. The Social Security Administration did
not attempt to appeal this ruling to the United States Supreme
Court but instead, in January, 1982, issued Social Security Ruling
#82-10c, non acquiescing in Finnegan (Exhibit A). Louis B. Hays,
422
its Associate Commissioner, Office of Hearings and Appeals, then
instructed all administrative law judges that the agency ruling
was binding upon them and that the Finnegan criteria should be
ignored, "including cases involving claimants who reside within
the jurisdiction of the United States Court of Appeals for the
Ninth Circuit." (Exhibit B) .
Recently, three district courts have held this practice to
be invalid, all ruling that SSA is bound to follow the decision
of the circuit court of appeals within the court's jurisdiction.
Siedleck i v. Schweiker, Civil Action No. 82-61R (W.D. Wash. 1/28/83)
("Exhibit C); Chee v~Schweiker , No. CIV-82-693-PCT-VAC (D-Ariz.
12/14/82) (Exhibit D) ; Hollingsworth v. Schweiker , No. N 81-0035C
(E.D.Mo. 3/3/83) (Exhibit E) . I am advised that further litiga-
tion on this issue is pending.
The Department of Housing and Urban Development has also at
times refused to apply the decision in an individual action to
the class of people affected by its policy. For example.
Underwood v. Hills , 414 F.Supp. 526(D.D.C. 1976). was brought as
a nationwide class action to obtain a congressionally mandated
operating subsidy program for FHA-subsidized projects. HUD's
failure to establish this program resulted in a multitude of law-
suits around the country by tenants of projects, and the ruling
by at least nine district courts that HUD was required to imple-
ment the program. Nevertheless, HUD refused to establish the
subsidy program for any project not encompassed by one of the
district court's orders.
Such actions by government agencies require that an economical
means of obtaining relief be utilized. This is one of the prin-
cipal virtues of the class action. The denial of the use of this
procedural device to legal services programs, as some suggest,
would result in the retrying time after time of the same issue
and the squandering of scarce resources.
But in addition to these practical reasons why government
compliance with court decisions is needed, there is an under-
lying philosophic reason why such compliance must be ensured.
Justice Brandeis stated it well in his opinion in Olmstead v.
United States , 277 U.S. 438 (1928), at 485:
Decency, security and liberty alike demand that
government officials shall be subjected to the same
rules of conduct that are commands to the citizen.
In a government of laws, existence of the government
will be imperiled if it fails to observe the law
scrupulously. Our government is the potent, the
423
omnipresent teacher. For good or for ill, it teaches
the whole people by its example .... If the govern-
ment becomes a lawbreaker, it breeds contempt for
law; it invites every man to become a law unto him- â–
self; it invites anarchy.
National and State Support Programs
During his testimony, William Olson called for the abolition
of national and state support programs. Because of time con-
straints, I was unable to respond to Mr. Olson's position and to
expand on my prepared testimony which expressed ABA support for
the continuation of the activities and funding of the national
and state support programs .
We believe that the support centers are a critical element
in the effective delivery of legal services to the poor. They
provide essential training and support to often inexperienced
legal services attorneys. Similarly, the expertise and exper-
ience they provide are a valuable resource for private attorneys
providing legal services to the poor. Robert Hill, chairman of
the pro bono committee of the American Corporate Counsel Asso-
ciation, recently testified about the usefulness of the national
support centers to his program before the House Judiciary Subcom-
mittee on Courts, Civil Liberties, and the Administration of
Justice (Exhibit F) . The enclosed resolution further demonstrates
our attitude on the issue of support centers (Exhibit G) .
Thank you for this opportunity to supplement the record.
Yours truly,
Robert D. Raven
Chairman, Standing Committee
on Legal Aid and Indigent
Defendants
RDR: sss
cc : Hon. Thomas F. Eagle ton
424
EXHIBIT A
SECTION 1614(aK3)(E) (42 U^.C. 1382c(a)(3KE) SUPPLEMENTAL
SECURITY INCOME— CONTINUANCE OR CESSATION OF A GRAND-
FATHEREE'S D1SA8IUTY-A RUUNG OF NON-ACQUIESCENCE
20 CFR 416.994(e) SSR 82.10c
Finnegan v. Matthews, 641 F. 2d 1340 (1981)
The Social Security Administradon (SSA) does not acquiesce in ne court's deci*
slon.
The claimant, who had been receiving State disability welfare savntenu since
1972. was grandfathered into tne Sucoicmentai Security Income iSSii sro^rzm on
January 1. 197-;. Sec::on IS'i-tCalOKE) o; the ioc:aJ Secuntv Act tre Act) provides
for the continued payment ot S5i seneris to a i^anctameree wno "is cemanemtv
and totally disabieo as defined uncer a State pian.. jo ton; as ne. is continuously
disabled as so detined." Foiiowm<i a continuing oisaotiitv mvesn^jtion. SiA cetsr*
mined that the claimant's SSI benefits wouio terminate oecause ne ~io net rr.eet the
requirements for entitlement at tne time ot tne continuing cisjoilitv invesugauon.
This determination was aitirmea oy the oistnct courL
The court of aooeais. howeyer. r*yersed SSa's cetermtnatton. it round that SSt
disability benefits to a granctstneree may not be lerniinatea unless SSa snowt mat
there was either a material imorovement -r. uie grarctatfieree t meoicai csncition or
a clear and specific error m tne onor Sta:c defermin^tion. Becabse netmer ot tncse
conditions was shown oy SSA to oe met. 'J\e coun helo that SSA s termination ot tne
claimant's SSI benefits was imoroper.
SSA beiieyes (hat the cou's standard for determining whether SSI disabitir.*
benefits to a grandfatheree snouio terminate wouia be imoosiioie to aomin.tter and
that the correct stancard ror making sucn a determination is m 20 C?R ^^S 'i'i-Uty.
i.e.. that disability of a granotatneree terminates wnen his or her "disaoiiity m
shown by current medical or other evidef>ce does not meet tne criteria oi tne ap*
preortate State plan" and doei not meet the F<^eral cnteria. Many grandfatherees
were on State disabiiitv rolls tor yr-in bdo»e comrenion. and Ae evidence on
which they were onginaily allowed may not oe availaole. or may not even eiist.
Therefore, in those cases. SSa could not possibly prove either "material improve*
ment" or "clear and specific error * .n ihe prior state determination. Thus, under 20
CFR 416.994(el the granofatheree prooerly remains m all lenefil status only until it
is found that the xranaratheree s disaoility. a shown o^â– current medical or other
evidence, meets neither the Sute no; hederai definition or anabtliry. SSA believes
that this regulation u fully corsi>ient with the rrquiremenu ot secuon l6l4(ai(31(L]
O^ tne Act and with congressionai mteni.
Consequently. SSa nolds «*iai the standard m 20 CFR 4l6.*rt4(el. and not the onif
set fonh by the court, should apply m aetermintng whether the disability at a lule
XVI grandfaihere* has ceases.
425
EXHIBIT B
279
DEPARTMENT OF HEAt^' R HUKtiUC SERVICES ^•.-
R*l*ru: StS-2 ' â– lirT^'I!*'''^'^' r^tfi-
Memorandum
^8 2 3 1932 Wi fc.., . _â– ~S' JCK)
Or-iS
Qgfic* oC Hearings and ApptlW mSrC^.l^-J 1 j lUj-
suDna.ci 4^ g{ nan-*B]uii(«nni»-CbHHnn«nr> or f^— *«•■'"' a£
ULnbiliSy - SlFCS»nziat'
AU ALUCs
"-"^ All AU3
C6 Apcil 16, 1981 ttw QaitKl StatM Cmki^ of Aa*>ls fta: tfai HiBtta
dccoit inuad a <Wri,«i,(n hnlrting tiitt SnrplTttal Sacurity iBOCBa
(SX) baftaflta basad on disability to a cTaioKit i4» bad baaa UMivw.L*d
fcoB tha StatB u«l£axa xoUj to tlira Vtcdanl SSI yfu^ij a is teaac; 1974
(grand fat h at a aa ) oaoU not ba taaainatad oalaaa SSA AamA that tlsara
«as aitlMr a iifarlal isacewBant ia tiiM rlaiwant-'a irartlraX mnrHtjm or
a claar and t^mr\f^r azxcr ia tba fsler Stxta (Wia i iwlnat latt.
X want to dsm* your attantica to Sorlal S ari uri .^ Ailia? SSX 82-Ue In
tlia January 1982 qoartarly Ikiliogs publieatian, irwH raring tba Social
Sacurity MvLnistrttioa'a nm a rnnia w ri i i a in tba Ooort's dafiTim,
Ikidar SSA policy, it is not oaoassary to ahov that tteia has ba«> is^EOBVBant
la tba rlniiTwmt'a orrifHtinn or any aiiuL la tba pdoc Stata datwnrinaMnn
for bsiafits to ba raaaarl. It ia SSA's rnrlHm tbat a gtandfatfaczaa's
SSI b«e£its basad on disability nay ba oaasad \tmti tba rialmant'i
disability, as ibowt by tba i ii i i m l . inartlral or otbcr cvidenca, doas not
oaat tha siteria of tba apfsoiKiata Stata plan or tfaa Ikdaral edtarla:-*
i.a. , tba isDaiztsant is sucb tbat tba elaiaaot is abla to vigaga ia
substantial gainfol activity (20 OS 41S.994) .
Although tba ruling addrassas oily erltarla for naarlnj disabiU^ for a
TEBndfattersa, you ihould ba auare tiiat tba ^tezla for oa— ing taenaflts
based on disability also apply whaia tha elaisaot is a titla a or SSZ
i«jLi -< j I .u i rtf ■t theroa banafidary. Sua *-—'-' poUcy Is raflaetad ia SSl
81-6 (January 1981, p.27) .
Shrinl Security lulling SSR S2-10c is binding on all vii ii ,<.i> ai i ts of SSA
iadudlrsg administrative law judges and tba Appaals '>?Tid;l (20 GH
422.408) . SSA's policy oust ba fnllrmri in cases involving tba issue of
cassatian of disability/ ijicluding cases invtslving elainants who resida
within tba jurisdictiot of the Ohitad States Court of Appeals for the
Ninth CLreuit.
O ffi o e of Appeals Operatiois
CD-Oeputy O^aixparson, A^aals ODuneil
426
.."i^EeEivED::: i, issa
EXHIBIT C
ji ii..m:\T iiv iir.rKiov iiv tiik cornT
linitrri §'tat£5 iBisirlct Xmx:
rOK THE
WF?TERN DISTRICT OF WASHINGTON
At Seattle
Civil ACTION File No. C82-C1R
RONALD S1EU1.ECX1, et al.
Plaintiff,
JUDGMENT
RICH.\RD sar.;EiKER,
Defendanc.
This Acu'on came on for trial (hearing) before the Court, Honorable Barbara J. Rothstein
. United Stales District Judje, presiding, and the issues having been duly tried
(heard I and a decision havinj: been duly rendered, •
It is Ordered and -A-djudj^d that the defendant's motion for summary judgmant is DENIED
and plaintiffs' notion for summary judgaent is GRANTED. Further, plaintiffs' request
for a permanent injunction under the terms of this court's March 12, 1982 order is
GR.-wN-rED . _
Adverse administrative decisions against members of the plaintiffs' class which
have been rcnJcrcd post- FinncRan (.Vril 16, 1981), where administrative decisions
do not expressly adopt the Finncyan standards are REVERSED.
J^il23l983
^^"^4}'^KIN, Clerk
Sated at Seattle, Washington this 28cli '<iay of January
. 1933 .
427
1
2
3
u
5
7
S
<i\
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
10 pONALD SIEDLECKI. et al.,
11 I Plaintiff,
12 S V.
13 IriCHARD SCWyEIKZR,
li4 ] Oet'endanc.
NO. C82-61R ,
ORDER DENYING DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT
AND GRANTING PLAINTIFF'S
MOTION FOR SUMMARY JUDGMENT
15 1
16
THIS MATTER conies before the court upon cress motions for
17 jsu.Tj.ary judgr.ent by Ronald Siedlecki, who represents tha certified
IS jciass of plaintiffs, and by defendant, Richard Schweiker, Secretary
19 |of the United States Department of Health and Human Services ("the
20 SSecretary" ) . This case involves plaintiffs' challenge to the
21 ^Secretary's use of regulatory standards to cease disability benefit
22 fpayments to "grandfatherees" , that is, benefit recipients originally
23 sdetermined by the State to be disabled. The Ninth Circuit Court of
2<« ^"fP^als in Finneoan v. Matthews . 641 F.2d IS^O (9th Cir. 1381) held
i
25 Jthat benefits to grandfatherees could not be terminated absent
I . . •
26 Jp-ooi of a matesiaj improvement in the medical condition of the
27
2S
ORDE.^
Page -1-
428
1 fdisabled yerson or the commission of a clear and specific error \
2 Scuring tlie prior State determination which awarded benefits. Plain-'
3 jtiffs contend that. this standard should be applied to them, rather 1
U jthan the Secretary's regulations, which contain no such requirerr.en t.
5 (Having carefully considered the motions, memoranda of counsel, and
6 Jthe entire record, the court finds and rules as follows:
7 |l â– BACKGROUND
8 I In October, 1972, Congress repealed Title XIV of the Social
9 Bsecurity Act which had provided federal grants to state-administered
10 '.disability assistance programs. 42 U.S.C. SS 1351-1355, Pub. L.
i
Ij Jno. 92-603, 86 Stat. 1484 S 303 {repealed 1972). ^.Congress estab-
lished a program called the Supplemental Security Income for Aged,
Blind and Disabled ("SSI") under which the federal government as-
jsumed the burden of providing benefits directly to those people whr
were defined as disabled. 42 U.S.C. S 1381-1382. The program
became effective in January, 1974.
As part of the definition of "disability" under the Act, Co.n-'
gress included the following "grandfather" clause:
12
13
li*
15
16
17
18
19
20
21
2:
23
2'.
25 ,
(Aln individual shall also be considered to be
disabled for purposes of this subchapter if he
is permanently and totally disabled as defined
under a State Plan approved under subchapter
XIV or XVI of this chapter as in effect for
October 1972 and received aid under such plan
(on the basis of disability) for December 1973
(and for at least one month prior to July
1973), so long as he is continuously disabled
as so defined .
â– ;2 U.S.C. 5 1302c;a) (3) (F.) (Supp. 19U0) (emphasis added). The
Iftvailabil i ty of Coderal disability benefits to gr.indf a therecs ,
•jthoso who had received aid und^ti a state pla.T for at least o.-.t
Paoe -2-
429
1 [month prior to July 1973, is controlled solely by the operation of
2 |the statutory grandfather clause. See Finnegan v. Matthews , 641
3 5F.2d 13-;0, 1342 (9th Cir. 1981). The following regulation governs
*• ithe cessation of disability benefits to grandf atherees :
5 5 (a) General . When the medical or other
3 evidence in your file shows that your dis-
6 J ability has ended, we will contact you and
tell you that the evidence in your file shows
that you are able to do substantial gainful
activity and that your eligibility for bene-
fits will end. . ; .
I
7
8
9
10
I
13 !
(e) Persons who were found disabled under
a State plan. If you became entitled to bene-
fits because you were found to be disabled
"under a State plan, we will find that your
disability ended in the later of the following
months —
(1) The month in which your disability, as
. shown by current medical or other evidence,
I does not meet the criteria of appropriate
!*« a State plan; or
15 J (2) The month in which your disability
ended under the provisions of paragraphs (b),
16 i (c) or (d) of this section.
17 i20 C.F.R. S 416.994(e) (1932):
I
18 2 In Finneoan , the Court interpreted the grandfather clause.
19 jHr. Finnegan's application for state disability was approved by the
20 Jstate of Washington in 1972. In 1974 he was converted to the SSI
21 3program as a grandf atheree . In December, 1975, he received notice
22 ithat his benefits would cease because his medical condition had
23 Sallegedly improved and his disability had ceased. At the agency
J!
2'i jneai-ing the adir.inis trat iva law judge ("ALJ") found that Finnagan's
I . . .
25 Jmodioal condition had n-ot improved, but that the then Ceparc.T.e.Tt of
i
20 !
27
lioaith. Education and Woll'arc was entiHod, based on agency regula-
23 onOER
Page -3-
29-379 0—84 28
430
1 Itions. to make an "initial determination" of Finnegan's eligibility.
2 iT'-is district court judge affirmed, but the Ninth Circuit reversed
J Ifinding that the Secretary's position violated not only the plain
ci imeaning of the statute's language but common sense as well:
5 I The sole function of a grandfather clause
I is to prevent the harsh and often unfair opera-
g I tion of a statutory change. . . . The unfair-
ness which could have resulted from the statu-
tory change — the undesired potential side
effect of the new disability program — would
have been the discontinuance of benefits to
former recipients prompted solely by a change
in the rules of the game and undertaken in the
absence of any improvement in their disabling
-condition. This harsh side effect was averted
through the inclusion of the grandfather
clause. Yet, by reading the .clause not as an
exemption from prejudice, but as a temporary
delay of the. onset of such prejudice, the
Secretary seeks to preserve the same harsh
side effect which the grandfather clause was
intended to eliminate.
2
8
9
10
11
12
13
1'4
15
16
17
18
641 F.2d at 1346-47.
The instant case is similar to Finnegan . Initially, SSA had
informed Mr. Finnegan that he was medically improved and, therefore
ho longer disabled. The ALJ found that Finnegan had not improved
faut still found him ineligible for disability benefits. The ALJ ' s
19 r
•decision on Sicdlecki includes a finding that his medical conditio:
20 I
21
22
23
7U
25
26
27
23
f
[had improved. See ALJ's decision in the case of Ronald E. Sicdlecki
I
attached to Defendant's Motion to Dismiss, Dkt. No. 42. This court I
|has already found, however, that there is nothing at all in the j
iisdministrative record to substantiate the ALJ's finding. Order of '
\ - i
SAugust 'J, 1982 Denying Defendant's Motion to Dismiss, Dkt. Ho. 59. i
Nowlicre is tbore any f ind i.n<7 or Ji s cuss ion of Siod IccVii * s cond i -icr.
under the stat>i. criteria wh.^ch*mide hira eligible co.T.parcd to his
Page -4-
431
1 Scurrent condition. In terms of what is required by Finnegan . the
2 Hfinding by the ALJ is meaningless. In the various briefs submitted
3 !lby the Secretary, he does not argue that the medical improvement
standard required by Finnegan has been met for either Siedlecki or
any of the other named plaintiffs.
II. LEGAL ARGUMENTS
THE SECRETARY'S AUTHORITY
The Secretary's first argument is that the scope of review by
9 !|this court is limited. Various well known principles of review of
II - â–
agency action are cited: The legality of agency action is presumed.
Schwaiker v. Gray Panthers , 453 U.S. 3^ (1981). iRegulations can be
10
U
12 set aside only if they are arbitrary, capricious, an abuse of dis-
13 |cretien, or otherwise not in accordance with the law. Randolph-
m 'Shaooard Vendors of Amer ica. Inc. v. Harris, 628 F.2d 1364, 1365
15 |(D.C. Cir. 1980). The plaintiffs' position is, of course, that the
e
16 SSecretary's action and official policy is "not in accordance with
17 lithe law". Furthermore, if the Secretary's action and official
IS Jpolicy contravenes the Finnecran standard, as contended by plain-
19 Stiffs, this court is not even called upon to interpret the statute,
il
20 ^because the Ninth Circuit has already spoken on the subject.^
j ^ _ __
21 h^ Detcndant presented the same argument on agency discretion to tl-
jjCourt oC Appeals. The Court wrote:
â– >2 r
" I We are mindful of the maxim that a court should
i give deference to the interpretation of a statute I
' J by the agency charged with its administration. ... |
i It is well established, however, that "Reviewing ' i
i courts are not obliged to stand aside and rubber- j
, I staa-.p their affirmance of administrative decisions j
" ij â– that they deem inconsistent 'wi tli a statutory xai;- j
date 'or.jthat fruitrate the congressional policy !
underlying a statutei"* j
26 i
27
641 F.2d at IS*"? n. 9a. (citations omitted)
2S ORDER
jPage -5-
432
1 ! |b. Tl'-t: SECRETARY'S POLICY VERSUS THE FINtlEGAN STANDAr^D
2 1 The Secretary also contends that the Finnegan decision, by
3 (requiring proof of an improvement in medical condition or a clear
â– ^ land specific error in the prior State determination, ignores other
5 ftactors which could alter an individual's eligibility for benefits,
6 Isuch as vocational adjustment, adaptation, training, augmentation
7 {of educational attainment or advances in medical treatment. 2 De-
S Ifendant points to nothing in the record, nor has the court found,
9 Lvidence that plaintiffs were terminated because of any kind of
10 improvement from their initial condition as found by the State.
11 The issue is, therefore, irrelevant. » ; , .
12 I Also irrelevant is the Secretary's argument that evidence on
13 L^iich recipients' claims were originally allowed "may not be avail-
• I. fable or may not even exist". The Secretary has submitted nothing
s
15 !to support this argument. He does not even allege that plaintiris'
16 jf'les are deficient regarding the initial determination of dis-
17 liability by the State.
18 8 The Secretary next argues that Finneg.Tn does not control here
iq ^because the decision focused on the distinction between grandfather-
i
20 "ees and "rollbacks"^ and did not discuss the termination regulation;
,j .2 I.-i Patti V. Schweix.t;r , 6Ga F.2d 582 (9th Cir. 1902) the Ninth
jcircuiu held thaw, specitic findings of improvement are required in
2J i'orde.r to terminate any SSI recipients, not just y randfatherees . The
ttyue of ixprovenenta was not just medical but extended to other
23 "i.-nuroved conditions. Plaintiffs have stated that they are not
jtrying to restrict SSA to a findiny of miidical iir.prove:T>ent only. As
2^, -explained above, the issue is not properly before the court.
I
25 "3 Tii-i rollback amendmcnc to the grandfather clause requires that
jthe individual be disabled for aX least one month- prior to July
• •>£, "lOTj. The purp'otvs of the inendinont was to ^jrcvcnt states frox.
27 5 • • .
t
28 "p.^-DHR
jp.age -6-
433
1 'therefore, the standard for termination was a peripheral issue. 7*. i
2 lis true that the decision does not dwell on the regulation, but to i
3 Jsay that the standard for termination was peripheral is absurd. •
"» Srhe distinction between grandfatherees and rollbacks was reviewed \
I
5 ssolely to understand the case law in the area and reach the central
6 Question of what standard applies to the termination of grandfather-
7 lees. See 641 F.2d at 1342 n. 1; 1347.
j As for the regulation, the Secretary asserts that the Court in
9 ^innegan made no mention of either the new regulation or the an-
J
10 Snouncement of the Secretary's policy on August 20, 1980. Because •;■•.
11 |the now regulation was part of the record and the arguments pre-
12 Isented to the Ninth Circuit in Finnegan , the Secretary's assertion
13 |is incorrect. See Exhs. & E to Plaintiffs' Response to Defend-
Ik Rant's Memorandum for Summary Judgment. But more importantlv, the
15 argument misses the mark. The issue, as the Ninth Circuit stated
!6 ilin Finnegan , is not the regulation itself, but rather the Secre-
I
17 ijtarv's policy and interpretation of the regulation
"i
!
The interpretation of the regulation by the Secretary has not
19 ijchanged since Finnegan . The Secretary's position in Fin.neoan was
I
20 jthat grandfatherees were subject to initial determination of eliqi-
j
21 Ssility by the Social Security Administration. The ncv; regulation
I
32 ijand the Secretary's announcement of polciy regarding the regulation
J.
yas published August 20, 1980, after thii Secretary's final decision
!r
2U ^transferring welfare recipients onto the disability rolls in ar.tici-1
ipation of the federal ta.>-:eover. Later, these "rollbacks" were |
25 ,cKiEsified as presumptively disabled until an initial deterT.i.naticr. |
;of eligibility could be made. See 42'u.S.C. S 1323 (a) I 4 ) ', U) ( Suoo . '
26 U930); 20 C. F .R'. 'J^ 4 10 . 954 ,' Finneoan v. Matthews, 541 F. 2d at 1342 i
ii . TT i
"i ^ •
28 toROER
rPage -7-
434
Jin Finneoan but before argument to the Ninth Circuit. To a conunent [
~~ !
that a showing of medical improvement should be made before bensfitsj
5 jcould be terminated, the Secretary responded as follows: !
I '
i« |i Response: Our previous regulations dealing {
I with cessation of disability (in cases other
S I than widow's and widower's claims) provided
ithat disability should be found to have ended
when the impairment is no longer of such
< severity as to prevent the individual from
7 I engaging in any substantial gainful activity
J (SGA) . T e regulations have been inter-
8 \ preted b> irae to mean that not only must the
i current e idence show that the individual is
unable to engage in SGA but that the evidence '^,
i roust also demonstrate that the impairment
forming the basis for the previous allowance
(or continuance) has improved. This inter-
pretation can result in the payment of bene-
fits to persons who can engage in substantial
gainful activity and who are no longer dis- O
I abled or blind within the meaning of the law,
15 H . but for whom actual "improvement" cannot be
H shown. These recodified regulations make it
1^ ji clear that disability ends when current evi-
j dence shows that the individual is able to
15 : ^ engage in SGA regardless of whether actual
ji improvement can be demonstrated. We do not
agree
that this position ignores
the
posi tion
talcen
bv
anv
Federal
court. The
decision that
a person
s d
isabilitv
or blindness has ended
will
not
be
oased on
a ree.xaminat ion
of old
evioence
but
will be
based on new ev
idence
^^\
IS i
3 which will have to reasonably show that the
ig II person is able to perform substantial gainful
I activity. Wt; do not agree that a finding tha:
;0 'i a person is disabled or blind should be al-
j lowei to stand in the face of evidence to the
>1 ; contrary simply because of the Inc)c of evi-
dence clearly showing medical iinprovci:-.enu . "
23
|-;5 Fad. Reg. 55533 (August 20, 19U0) (emphasis added). The above
jjquote iraV:es it clear that the Secretary still intends to make ini-
Stial dcter.Tiination.'; of the eligibility for benefits of grandfather-
ilees. This policy is in direct con trav'^en tion to tlic position of
2b
27
2S sORDEH
Ivarious federal courts.
i
Page -8-
435;
1 J Moire particularly, since the decision in Finnegan , the Secre-
2 !tary's policy has become one of official opposition to the law
i
3 Sestablished in the. Ninth Circuit. SSA's policy is not to acquiesce
r
U I'with Finneqan . This policy has become known as the SSA's policy of
5 rnon-acquiescence" :
6 I The Social Security Administration (SSA)
S does not acquiesce in the court's decision
7 I 1 Finneqan ] . ...
I SSA believes that the court's standard for
S I determining whether SSI disability benefits to
5 a grandf atheree should terminate would be
9 i impossible to administer .and that the correct
II standard for making such a determination is in
10 I 20 CFR 416.994(e); i.e.. that disability of a
I "grandf atheree terminates when his or her "dis-
11 i ability as shown by current medical or other
I evidence aoes not meet the criteria of the
12 J appropriate State Plan" and doss not meet the
j Federal criteria. . , .
15 I! Consequently, SSA holds that the standard
I • in 20 CFR 416. 994(e), and not the one set
!U I forth by the court, should apply in deter-
j mining whetner the disability of a title XVI
15 5 . grandf atheree has ceased.
16 jSocial Security Rulings, SSR 82-lOc (January, 1982).
a
17 ij The Chief of the Washington State Office of Disability Ir.sur-
ii
IS lanes, which is SSA's contractual agent for performing evaluations
5
ig of continuing disability has stated:
3
•^0 ; Wc are not obligeU or permitted to consider
H the decisions that have been rendered in the
21 •' past. We are to look at that case as if it
5 were an initial decision and make our judg-
22 ] ments accordingly as we understand the current
ji standards.
23 li
ij Stated another way, we would treat that case
24 'I <>s if it were an initial claim and if we could
i allow it we would continue it. If we could
25 '] deny it we would terminate it,
P
2i jjOeposition of Ed.Djvis, pp., 12, June IC, 1982.
1 ' «"'
?7 • : . â–
23 '-ORDER
page -9-
!
436
reported on SSA's program for reviewing the continuing eligibility
of disabled persons to the Senate Subconmi ttee on Oversight of
Government Management. In the report, Ahart noted that "many of ]
those losing their disability benefits have been on the SSA rolls
several years, still have what we would all consider to be severe
iT.pairâ„¢ents, and have experienced little or no medical improvement.
JThis raises questions about how and why these people are being
10 gterminated, and the fairness of SSA's decisions." Later he stated
11 fthat SSA has instructed state agencies .to adjudicate claims in
12 frenerally the same manner as initial claims. The result of these
13 'instructions was that state .agencies are gathering only current
I
1<» ^evidence and using it to detertr.ine if the beneficiary currently
15 fmeets SSA's criteria for disability. Exh. G to Plaintiffs' Re-
16 rsponse to Defendant's Memorandum for Summary Judgment.
17 I In response to requests for admissions submitted by plaintiffs
IS Bin this case, defendant made the following admissions. SSA policy
19 'on continuing disability was changed in May 1976 to reqviire that
20 'the individual's current condition be evaluated and a determination
il
21 |,ao to continuance or cessation be made based on current medical
22 ijfir.dings. The provisions of the Waaliington State plan from which
â– I
2} llpersons were grandfathered into SSA are different from the curre.-.t
2'i Juniform fcderal-SSA disability standards.
25 i And finally, in Defendant's Reolv to I'laintiff's Response, tt.i
5 • . ■'
20 ijSocretary states, 1 <ltlhe Socreta.ry's position is that a showing of
:i " « ' »
27
2S pRDER
tPage -10-
437
1 jiirprovenient is not necessary in order to terminate benefits where
2 "current evidence indicates that an individual does not meet stats
3 "or federal criteria for disabilil
Lty." The Secretary has failed to
demonstrate that Finneqan is an extraordinary decision.^ Even if
it were, his position, which clearly contravenes Finneqan, cannot
6 i[be justified. 5
7 I Reduced to its essence, the Secretary's argument is that his
S Jdepartment, in spite of the Finneqan decision, should be allowed to
9 Jmake initial determinations of the continuing eligibility for SSI
10 Ibenefits of grandf atherees . This court finds that Finneqan con-
trols. The SSA must follow the Ninth Circuit's decision within
this jurisdiction. Jones i Lauqhlin Steel v. Marshall , 636 F.2d 32
(3d Cir. 1960); ITT World Communications v. FCC , 635 F.2d 32 (2d
'cir. 1980); Mary Thompson Hospital v. HLRB, 621 F.2d 858 (7th Cir.
11
12
13
m
15 'liHO)
16 |l^ The Ninth Circuit's standard is not at all e;'.traordinarv . See
ile.g. . Hayes v. Secretary of HEV? . 656 F.2d 202 (6th Cir. 1981);
17 i :Cassiday v. Schweiker , 663 F.2d 745 (7th Cir. '1901); Husqrove v.
IjSchwe^ker, No. 81-3936 (E.D. Pa., June 18, 1982 ) ,•— Schisler v.
18 hScMweiker , No. 80-573E (E.D.N.Y., August 11, 19Ul)T ~Baye v. Secre-
IJ tnrv of "Tins , 78-CV-662 (N.D.N.Y., April 18, 1901); Bugg v. CalitA no.
19 '-No. C-2-7U-5'll (E.D. Ohio, Hay 25. 1979); Luke v. Schweike r,
IjNo. E80-Q083(c) (S.D. Miss., Sept. 15, 1981); Messjno v."~NathGvs ,
20 ajnemp. Ins. Rpcr., 1] 15,120 (D. Colo., Jan. 27"; l!J77) ; Pine v.
Wathvjws, Unenp. Ins. Bptr. , H 14,709 (D.R.I. , March 24. 1976);
21 liPrevecte v. Richardson , 316 F. Supp. (D.S.C. 1970)
I ~~
22 P The Secretary also argues that the burden of establishing both
iinitial and continuing eligibility for disability benefits rests on
23 ||the cliimant. Torres v. Schwciker , No. 81-2700 (3d Cir. June 2-5,
•(1982); M iranda v. Secretary of HBV . 514 F.2d 996 (1st Cir. 1975).
2^ ;;T!^osc cases do not address the is-^ue presented here and in Fin.-.eo z,-. .
JMorecver, in Pntti v. Schwoiker , 6G9 F.2d 532 (9th Cir. 1982), the"
25 JNinth Circuit reccgniied that the burden rests with the claia.ant
;but found that that burden was not incpnsistent with an improvor.e.-. t
2(i 'standard. Id. at 587.
3 ' ~ " • .- ' ,
27 'i . « *
22 loRDER
bage -11-
438
1 9 IT IS ORDERED that defendant's motion for summary judgment is i
2 JDENIED and plaintiffs' motion for summary judgment is GRANTED.
3 S IT IS FURTHER ORDERED that plaintiffs' request for a permanent
I* fin junction under the terms of this court's March 12, 1982 order is
5 pRANTED.
6 j Adverse administrative decisions against members of the plain-
7 Itiffs" class which have been rendered post- Finnegan (April 16,
8 jl981), where administrative decisions do not expressly adept the
9 iFinneqan standards are REVERSED.
10 S The Clerk of the Court is directed to send uncertified copies
11 Sof this Order to counsel of record. ,
I *
12
DATED at Seattle, Washington this ^d ^ day of January, 1983
13
l"*
15
16
17
18
19
20
21
22
23
2<4
25
»j
"!
28
JORDER
\y^(!M^tctUu
BARBARA J.(HOTHSTEIN
UNITED STATES DISTRICT JUDGE
?age -12-
439
EXHIBIT O
UNITED STATES DISTRICT COURT "^^ ^J3 1982
DISTRICT OF ARIZONA ''i^'rHVl'l^^y>>ci'cl
coua
BEN CHEE,
Plaintiff,
vs.
RICHARD S. SCHWEIKER
Secretary of Health and
Human Services,
Defendant.
rcu«K
No. CIV-82-693-PCT-VAC
ORDER
This action having come before the Court on plaintiff's
Motion to Reverse Administrative Agency Decision, deemed a motion
for summary judgment, defendant's Response thereto, and defendant's
Cross Motion for Sirmnary Judgment, 2uid the Court having considered
the memoreuida, the record and the exhibits, and the arguments
presented at the hearing on December 06, 1982,
IT IS ORDERED that: "'
1) Plaintiff's Motion to Reverse Administrative Agency
Decision is granted. This case is governed by the decision in
Finnegan v. Matthews , 641 F.2d 1340 (9th Cir. 1981) . Defendant's
publication of a ruling of "non-acquiesence" in the Finnegan
decision is contrary to law and is of no force or effect. Defen-
dant must aUaide by the decisions of the courts of the district
and circuit in which a claimant resides, and cannot avoid them by
statements of "non-acquiescence."
440
21 Defendant's Motion for Summary Judgment is denied.
31 Plaintiff's Supplemental Security Income shall be
continued, and plaintiff shall be awarded back benefits to the
last month in which he received S.S.I, benefits.
41 This case is remanded to defendant for implementation
of this order.
Done this /v d ay of December, 1982.
^L^i^
â– f*tS<^
ONITED STATES DISTRiCT
.-.a-
441
EXHIBIT E
UNITED STATES DISTRICT CO'JRT
EASTtKN UISTHICT OP MI;iSOORI
NORTHiiXN OIVISTON
CLINTON HOLLINGS WORTH,
et al. ,
Plaintiffs,
V.
RICHARD S. SCHwEIKER, etc..
Defendant.
FJLED
MAR :? - 1383
EWON f«iNC'i.\K.\LL. CLEP.K
U. i. D;5TKICT COLiRT
E. UlSTftiCT OK MO.
No. N81-0035C
ORDER
A meir.oranduip. dated this day is hereby incorporated
into and made a part or this order.
Having carefully considered the record, the Report and
Recoruf.endation of the United States Magistrate, filed
December 22, 1932, and tha dofendant 's objections thereto,
IT IS HEREBY OKDEBLD that thti aforesaid Report and
Recominendation of the United States Magistrate be and the same is
sustained, adopted, and incorporated herein. In accordance with
said recoruaandation ,
IT IZ HEREBY FURTHER ORDERED thr.t this action be and
it is certified as a class action. The clnss shall include the
naned plaintiffs and all applicants for or recipients of
Supplemental Security Inccrio benefits voluntarily reciding in
Missouri nursing home diptrict nursing hemes and paying for any
services or treatment thjre Who, since August 29, 1979, have been
or will hn adversely affvscnod by an initial detorniination ,
442
reconsideration, ad,-ninistrative hearing or Appeals Council
decision based soialy on the grounds: that each is an "iniriate" or
individual living or residing in a "public institution." Fed. R.
Civ. P. 23(a), 23(b)(1) and (2).
IT IS HEREBY FURTHER ORDERED that plaintiffs' motion
for suminary judgment be and the same is granted. Judgment is
entered separately.
IT 13 HEREBY FURTHER ORDERED that defendc-nt's motion
for summary judgment be and the same is denied*
IT IS HEREBY FURTHER ORDERED that plaintiffs
Hollingsworth, et al . shall submit a bill of costs and motion for
attorney's fees, with affidavits in support thereof, within
twenty days of the date of this order.
Dated this . ' / day of March, 198 3.
UNITED p.yrt:? distR'/ct'/ judge
.J_
443
Fl LED
UNITED STATES DISTRICT COURT
EAS-^ERN DISTRICr OP MISSOURI MiO 0- J9.93
NOP.THERN DIVISION ' ' '
U. S. D;STrvl,T dCUST
E. UlSTRiCT OF iViO.
No. N81-0035C
CLINTON HOLLINGSWORTH,
et al. ,
Plaintiffs,
V.
RICHARD S. SCKWEIKER, etc.,
Defendant.
^^EMOR^^^DUM
This matter is before the Court on various pretrial motions.
Pursuant to 28 U.S.C. § 636(b), this cause was referred to
United States Magistrate David 0. Noce for all pretrial matters.
In response to the Report and Recommendation of the Magistrate,
filed December 22, 1982, defendant filed its objections discussed
below.
Defendant objects to the reasoning and conclusions in
Part IV of the Report and Recominendation pertaining to the merits
of plaintiffs' substantive claims. Specifically, defendant
asserts that the United States Court of Appeals for the Eighth
Circuit would liJcely adopt the Secretary's revised interpretation
of the statutory tern "innate," as set forth in 20 C.F.R. S
416.201, 47 Fed .Reg. 309!) (1982), rathftr than continue to adhere
to that court's previous interpretation in Levinjs v. Califano ,
604 F.2d 591 (Sth Cir . l'}79 ) . Upon review of the opinion issued
in Levir.cs , this Court iinds the f-ropcsition untenable. There
444
can be no doubt that "ttlhe policy underlying the revised regula-
tion is the same policy urged by the aefendar.t Secretary whan
arguing before the Eighth Circuit [in Levings l." (Magistrate's.
Report and Recommendation at: 21).
Furthermore, the judgment of the court of appeals is binding
on all inferior courts and litigants within the jurisdiction of
the Eighth Circuit, including an administrative agency such as
the present defendant. Allegheny General Hospital v. NLR3 , 608
F.2d 965, 970 (3d Cir. 1979); see Hillhouse v. Harri s, 547
F.Supp. 88, 92 (W.D. Ark. 1982).
The Court is compelled to conclude, as did the Magistrate,
that because Levi no s has noc been reversed by any subsequent deci-
sion within this judicial circuit cl- any decision of the Supreme
Court of the United States, the holding in Levincs offers the
binding statutory meaning to be applied to the present class
plaintiffs.
445
Therefore, defendant's objections notwithstanding, the Court
will adept the Report and Reconanendation of the United States
Magistrate and grant the relief sought by the plaintiffs.
I!
Dated thio - . • i
— -~a-
is ^/: ',' da/ of March, 1983.
UWITSD bXATE^ DISTRrCT) JUDGE
29-379 O— 84 29
446
UNITED STATES DISTKICT COUKT
EASTERN DISTRICT OF MISSOURI P ! L E, D
NORTHERN DIVISION
MAR 3- 1563
y. J,. d:£T:UCT cojisT
E. DiSTi^lCr OK MO.
No. N31-0035C
CLIOTO^I HOLLIKGSWOl^TH,
at al.f
Pl&intiffs,
V.
RICHARD S. SCHTOIKER, etc..
Defendant .
JUDGMENT
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
judgment be and the same is entered in favor of plaintiff Clinton
Hollingsworth and all similarly situated applicants for or
recipients of Supplemental Security Income benefits voluntarily
residing in Missouri nursing home district nursing homes and
paying for any services or treatment there who, since August 29,
1975, hav* been or will be adversely affected by an initial
determination, reconsideration, administrative hearing, or
Appeals Council decision based solely on the grounds that each is
an "inmate." or individual living or. residing in a "public
institution," (Hollingswcrth , et al.), and against defendant
Secretary of Health and IJuiTian Services.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
that the policy of the Secretary of Hf;alth and Hunan Services, as
set forth in r-SR 80-llc, 20 C.F.R. S 416.211, denying or
terminating Supplemental Security Incumo I'wnofits to applicants
447
or recipients who voluntarily reside in Missouri nursing hone or
health care facilities, established and operated within a nursing
heme district (Mo. Rev. Stat. S 158. 200 r et seq.), and who pay •
for services or treatment provided therein, solely on the basis
that such applicant or recipient is an "inmate" or individual
living or residing in a public institution, violates the Social
Security Act, as codified within 42 U.S.C. §§ 1382(e)(1)(A) and
1333 (c)(3).
IX IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
that the defendant Secretary of Health and Human Services, his
offices, agents, and employees, be and they are enjoined from
denying or terminating Supplemer.tal Security Income benefits to
the plaintiffs, Hollingsworth , et al., for the sole reason that
each is an "inmate" or individual living or residing in a public
institution.
IT IS HEREBY FUilTHER ORDERED, ADJUDGED, AND DECREED
that the defendant Secretary of Health and Human Services, his
offices, agents, and employees, be and they are permanently
enjoined from maintaining, enforcing, or otherwise applying SSR
80-llc, 20 C.F.R. § 416.231, or any policies, practices, or
rulings wiiich conflict with r.ho cpinion set, forth in Levinqs v.
Califano , 604 P. 2d 591 (tjth Cir. 1979), with respect to
plaintiffs Hollinycv/orth , er al.
IT IS HEREBY FUKTHEil OPDERKD, ADJUDGED, AND DECREED
that the defendant vacate and rovers3 tf'osf decisions previously
issued denying or terminating Supplem;:i.tal Sacurity Income
448
benefits' tcthe plaintiffs based on the solo reason that such
person is or was an "inmate" or individual living or residing in
a public institution. The defendant is directed to allow and
reinstate the Supplemental Security Income benefits of plaintiffs
and all similarly situated persons, as previously defined herein.
-^ /
Dated this â– .^' . '/ day of March, 1983.
vftr7 1 i/M
OtUTED ?T;^ES IJIS'mcjjrw^TUDGE
449
EXHIBIT F
Testimony of Robert L. Hill, Chairman, Pro Bono Committee,
American Corporate Counsel Association and General Counsel,
Aetna Life & Casualty Company, on the subject of Legal Services
Corporation reauthorization before the House Judicial Subcom-
mittee on Courts, Civil Liberties and the Administration of
Justice, April 14, 1983
Mr. Hill.
* * * *
In addition to the assistance received from the local Legal
Services Corporation, the Legal Aid Society of Hartford, et
cetera, the elderly program also receives support in the way of
reference materials, advice and counsel from the national and
regional Legal Services Corporation offices including the National
Consumer Law Center in Boston and the National Senior Citizens
Law Center in Washington, D.C.
* * * *
Rep. Frank.
* * * *
I would like to ask Mr. Hill, I believe, I was impressed
with your statement and very much appreciate the work that Aetna
is doing, and the others. One part in particular on page 9, that
I thought worth commenting on was your reference to the work you
have done with the senior citizens law center and the national
consumer law center. Would you describe what your relations
have been with them, briefly, and how they have been helpful?
Mr. Hill. Yes. In several instances they have sent us
lists of material and materials that are available, that thay
have available and they have put together in sort of a library
to handle various types of cases. Landlord and tenant type cases;
450
Medicare and Medicaid appeals, that type thing. They have, also
attended several of our pro bono committee meetings and have
input in the programs that we are talking about developing. Con-
cerns about guidelines that we should have to make sure that our
programs are aimed at the needy and this type of thing. So they
have been very helpful as consultants and as people, when we r\m
into sticky problems that we can call on and ask for assistance.
Rep. Frank. You agree that the existence of centers such
as this is very valid and important part of an overall legal
services program?
Mr. Hill. They have been helpful to us .
Rep. Frank. Thank you. 1 mention that because as you may
know they have been the source of attacks, the backup centers as
they are called, and there have been people who have suggested
that they ought to be abolished. I think the importance of your
point is that there are many people who have called more reliance
on the private bar involvement. I must say I am struck by the
difference between the way that is described by people who haven't
done it and the way it is described by people who have done. And
I was very appreciative of your very good description of what the
strengths are, what the limitations are, the fact that it is not
a substitute, but it is an important supplement. I take it what
you are saying is that having the backup centers in fact means
that we can take more advantage of the corporate coxmsel who are
willing to come in. But the backup centers in fact -- leverage
451
those private contributions, by helping with this process of •
alerting people and informing people about what is happening.
I was struck also-- you noted that you said there had to be
training programs , because we have had people kind of poo-poo
the idea that there was any specialized knowledge required about
the kind of work legal services lawyers do. I take it as someone
fairly experienced in the corporate law field that you don't
agree that it is something that you just walk in on like that.
Mr. Hill. No- -I don't think--
Rep. Frank. Can you get that in the record?
Mr. Hill. You can find 22 attorneys in our program that
would certainly agree with that. They would feel lost without
the seminars and training sessions we have. It's just--
Rep. Frank. I appreciate that. As you say, the backup cen-
ters are important and that this isn't simply something you waltz
in and do. I think we have benefited very much from what you have
had to say, and I appreciate it.
452
EXHIBIT 6
American Bar Association
RESOUITION ON STATE SOPPORT
Adopted by
Standing Committee on Legal Aid
and Indigent Defendants
WHEREAS, the Legal Services Corporation and its
predecessor, the Office of Equal Opportunity, have
regularly provided special resources to local legal
services programs for the purpose of a coordinated
state support program; and
WHEREAS, the concept of state support encompasses a
variety of activities. Including direct consultation
and planning with the organized bar at the state and
local levels, training on poverty law Issues for
legal services workers and private attorneys,
development of private bar £ro bono publico efforts,
coordination of local projecF"actTvlties , technical
assistance to local programs, centralized advocacy,
data gathering, information dissemination, brief bank
maintenance, legal manual preparation, and other
similar functions; and
WHEREAS, the continuation of state support is viewed
as an integral component of an effective, efficient
system of delivering high quality legal assistance to
low Income persons and a valuable resource to private
attorneys providing legal services to the poor.
HOW THEREFORE, BE IT RESOLVED, that state support
activities should continue to be determined as to
needs, character and quality of service and to be
conducted on a local basis and should be strengthened
and that funding should not arbitrarily be reduced by
the Legal Services Corporation at the national level;
Adopted the 6th day of February, 1983, in New
Orleans, Louisiana.
Robert D.
Chairman
Raven ,
3146T
STANDING COMMITTEE ON LEGAL AID
AND INDIGENT DEFENDANTS
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453
Alliance for
Legal Rights, Inc.
APPENDIX 10
STATEMENT OF
ALLIANCE FOR LEGAL RIGHTS. INC.
BEFORE THE
COMMITTEE ON LABOR
AND HUMAN RESOURCES
UNITED STATES SENATE
May 4, 1983
Board of Directors;
PresidenI: George W Moore
New York, New York
Secretary: Ann Bailey
East Long Meadow. Massachusetts
Treasurer; Doroltiy A Richardson
Pittsburgh, Pennsylvania
Mary-Louise K. Butler
St. Louis, Missouri
Maryellen H Hanr^ilton
New Orleans, Louisiana
Laura de Jesus
Fajardo, Puerto Rico
MaryR Lanier
Washington, D C.
Ellsworth Morgan
Newark, New Jersey
Mary Wright
Rapid City, South Dakota
454
Mr. Chairman and Members of the Senate Labor and Human
Resources Committee, I am George Moore, President of the Alliance
for Legal Rights, Inc. (ALR) . We appreciate the opportunity to
present written testimony on the reauthorization of the Legal
Services Corporation.
The Alliance for Legal Rights is a national organization for
clients of legal services — those who actually need as well as
use the services. The Alliance was formed two years ago when it
became clear that the Reagan Administration was determined to
abolish federally-funded legal assistance for poor people. Since
its incorporation, the Alliance has attracted a following of over
600 legal services clients across the country who have since
established contacts with organizations in their communities,
their Members of Congress, the media, and others to explain the
vital need to continue the federally-funded legal services
program.
It is, indeed, highly appropriate to present the client's
viewpoint of legal services, since only clients of legal services
can give a true picture of why legal services programs are needed
to assist poor people in matters which affect their lives. The
continuation of the Legal Services Corporation, the funding of
legal services programs, the delivery systems used for these
services to poor people, and above all, the quality of the
services that are delivered are crucially important to us.
455
First, let us consider the country in which we live and our
overall governmental process. We have developed a society and a
form of government that is based on the law . Every aspect of our
lives, whatever our economic status, race, sex, religion, is
based and controlled by laws and regulations. Theoretically, we
as citizens of this society vote for our representatives — state,
local, national — who, in turn, make the laws under which we
live, are governed, and protected. These representatives are
expected to make laws reflecting and responding to the needs of
the constituency that voted them into office regardless of their
economic status.
The second part of this theory of government is that all
citizens, to make this form of government work, must have access
to the law. Since this form of government is based on the law,
then all of its citizens must have access to the legal system to
protect their rights and redress grievances. This is an essen-
tial part of our democratic government process. Without access
to the law, low-income citizens, because of their economic con-
ditions, are denied basic rights and equal justice under the law;
this amounts to tyranny not democracy.
Poor clients in this country find it difficult; in fact,
they find it impossible to reconcile the lofty ideals of the
American Dream with abused hungry children, unemployment, slum
lords, meager pension checks, high utility bills and shut offs --
all this without relief. Legal services lawyers assist us by
giving us access to the law to protect and enforce our rights.
456
Denial of legal representation creates a second class
citizenship in our society. For those able to afford justice and
those unable to afford it. We need attorneys zealously defending
and representing the low-income community.
In 1982, LSC was able to fbnd 325 legal services programs."
These programs served an estimated 1.2 million people who would
otherwise not be able to afford lawyers to help them with their
problems. While, at first glance, this may appear to meet the
legal assistance needs of the poor persons, in fact, it does not.
There are an estimated 30 million poor people in America, and a
recent study has concluded that in any given year, about 23% of
them are faced with a legal problem. Obviously, not all of these
6.9 million poor people may even know of the availability of free
legal services, but the fact remains that the demand for legal
services is enormous. The saddening reality is that budgetary
limitations as well as restrictions on the legal activities and
forums, dictate that many applicants must be turned away.
Clients were not jubilant when we learned that LSC's fiscal
year 1983 appropriation was $241 million. We understood, as we
had come to understand previously, that this cut in funding over
prior years funding levels would be a serious disadvantage. We
knew local legal services programs would be forced to shut-off
intake of new clients in order to preserve quality representation
for the vast number of clients already accepted.
Typically, legal services clients are beset by an array of
housing, consumer, and domestic problems, which, if not promptly
resolved, could produce further economic and social turmoil.
457
often leading to devastation of the family. It is unacceptable
to have poor people consigned to such suffering simply because
the national legal services program remains underfunded and
programs in their communities do not have the resources with
which to serve them.
This nation has unyieldingly held out the proposition to all
of its people that our system of justice is oblivious to such
distinctions as race, sex, and income. Prior to the inception of
the national legal services program, poor people were very skep-
tical of the ability of our nation to deliver more than the
rhetoric about equal justice. However, through our contacts with
legal services programs, many of us have come to believe that we
can resolve our grievances through the judicial system and that
the words "equal justice" do have meaning. Any significant cut
in LSC's budget at this time would have a tremendously negative
effect upon the confidence the poor have in our legal system. I
suggest to this Committee that the despair which would result
eunong low-income people would not be worth the minute savings to
the federal budget. That is why the Alliance for Legal Rights
urges this Committee to authorize the Legal Services Corporation
for an additional three years at $296 million for fiscal year
1984 and such suras as may be necessary for the succeeding two
years. Even with a budget of $296 million — which represents a
modest increase over the fiscal year 1983 budget -- legal ser-
vices for the poor cannot attain its maximum effectiveness
because of inflationary factors. However, it will allow some
continued increase in effectiveness.
458
What clients have seen over the past two years has been
extremely unsettling. In many cases, legal services offices con-
veniently located in communities have been forced to close,
requiring clients to assume additional transportation expenses to
get to those offices which remain open. In other instances,
legal services attorneys who would ideally serve all applicants
for assistance have been forced to turn away poor people whose
problems do not constitute dire emergencies. In still other
instances, the backlog of unfinished cases is so tremendous that
some offices are not accepting any new cases at all.
There has been much recent discussion surrounding the
involvement of private lawyers and bar associations in the
delivery of legal services to poor people. Specific efforts have
been made to introduce these attorneys to the range of delivery
models which might be used in a given community. While we cer-
tainly encourage private attorneys to provide the help we need
through pro bono and reduced fee programs, the reality of the
situation is that there is a vacuum which needs to be filled
right now. We cannot wait for two or three years until these
private bar programs are fully operational, particularly when,
based upon what we know now, only 10% of the private attorneys in
this country can be expected to participate. Again, we cannot
conceive of the private bar as a resource in some of our rural
communities where private lawyers are in such short supply that
often the legal services programs are themselves the largest law
£irras.
459
Since the national legal services program was begun in 1965,
many of us have truly come to believe that our grievances can be
resolved through the judicial system and that the words "equal
justice" do have meaning. We know that during these years legal
services has been the subject of considerable controversy.
Everything that legal sevices lawyers do is not appreciated by
everyone. We trust, however, that the authorization process will
not be used as a means emasculating effective representation in
an effort to resolve what some people may feel are weaknesses in
the legal services program. The only purpose that serves is to
make poor people suffer more.
We are particularly concerned about the limitations and
restrictions placed on the representation of eligible clients by
legal services programs. We view these restrictions as limita-
tions on our access to justice and inconsistent with the purposes
of the Act. We ask that the Committee remove all restraints but
recognize the improbability of such actions. Therefore, in the
alternative, we ask that no further restrictions be imposed. New
restrictions on legislative representation, class action litiga-
tion, and the representation of aliens will only further under-
mine, in our belief, the protection of our rights and also our
confidence in the viability of resolution of disputes within our
system of justice.
We are concerned about a series of troublesome aspects to
the employment practices at the central Corporation including:
1. showing an insensitivity to affirmative action and equal
employment opportunity issues;
460
2. making decisions and taking actions without consulting
persons who have knowledge of, or special insights into,
particular situations;
3. applying an ideological and partisan political test to
staffing decisions;
4. ignoring long-term LSC personnel procedures; and
5. sending a conscious or unconscious message to the legal
services community that professionally competent staff
who have given long service to LSC will not be accorded
even a modicum of respect or common decency when the
decision is made to replace them.
We hope that you will use your authority to investigate these
concerns and help restore the capacity of the central Corporation
to exert knowledgeable and creative leadership for the full com-
munity.
In summary, the Alliance for Legal Rights urges this Com-
mittee to act favorably upon the Legal Services Corporation's
authorization at the highest funding level and without further
restrictions in the legal forums in which we may be represented
and type of representation we may receive.
We thank you for this opportunity to present our views.
461
m
jipf
,|ir
ffl
JIMMY OAVIS
COUMTV-OlsmiCT ATTOMNCY
CMMl •4T-«44S
APPENDIX 11
^,s#«»^*»?&.^
mo BcoFoiio vr. ca«t
OIMMITT, IXXAS 7«OS7-a«a«
DIMMITT. TEXAS
May 2, 1983
EXPRESS MAIL
RETURN RECEIPT REQUESTED
The Honorable Orrin Hatch
Chairman
Committee on Labor & Human Resources
United States Senate
Washington, D. C. 20510
RE: Legal Services Corporation
Dear Mr. Chairman:
The Senate Committee on Labor & Human Resources will consider the
matter of funding for Legal Services Corporation on Wednesday, May
4, 1983. Castro County has had unfortunate experiences with one
group funded by Legal Services Corporation. That particular group
is Texas Rural Legal Aid. Texas Rural Legal Aid has not concerned
itself with giving poor people equal access to justice and the legal
system. This group has concentrated its efforts in "social legis-
lation" and attempted to determine economic and social benefit to
certain migrant groups. These efforts have actually harmed the
people that Texas Rural Legal Aid intended to represent.
Texas Rural Legal Aid has refused to practice in the State Courts.
Virtually every case that has been filed by this organization has
been a Class Action Suit in U. S. District Court. Texas Rural Legal
Aid lawyers have refused to represent migrants, indigents, minor-
ities, or anyone else on criminal matters, divorces, child custody
disputes, child support payment matters, or any of the more usual
type legal problems. These problems are matters that effect all
people regardless of income. Migrants and indigents could have
received legal services through the federally funded Legal Services
Corporation program had it not been for the decision of Texas Rural
Legal Aid to seek sensational and provocative litigation.
Texas Rural Legal Aid has concerned itself in this area with strikes,
union activity, and the legal rights of illegal aliens. There have
been published newspaper photographs of Texas Rural Legal Aid
attorneys in apparent participation and leadership of union strikes,
29-379 O— 84 30
462
in direct violation of the charter of Legal Services Corporation.
These charges have been denied by Texas Rural Legal Aid, and Texas
Rural Legal Aid has contended that their attorneys were "advising"
the various persons involved in the union strike. Texas Rural
Legal Aid has sued the adjoining county (Deaf Smith County) and has
sought to involve the surrounding counties in a suit involving
allegations against the Innnigration and Naturalization Service and
the Texas Department of Public Safety involving the questioning and
detention of suspected illegal aliens. This suit has not been
litigated and Castro County has not been involved in this suit.
Texas Rural Legal Aid filed litigation against Castro County in 1979
which forced a redistricting plan before the 1980 elections. No
preliminary complaint was ever filed with local officials. Texas
Rural Legal Aid also joined forces with Southwest Voter Registration
Project and the Mexican-American Legal Defense Fund to file similar
suits against at least 12 Texas counties at approximately the same
time. Castro Coxinty was forced to spend more than $50,000.00 in
attorneys' fees on this particular matter. Approximately $30,000.00
was spent to pay the three groups, including Texas Rural Legal Aid,
for their attorneys' fees and expenses on this particular matter.
Texas Rural Legal Aid also filed a Class Action suit against our
local hospital in Dimmitt, Texas regarding the alleged denial of
emergency services to the family of a child who died in Castro Covinty
in 1978. This particular litigation is still continuing and has
cost a great amount of tax dollars to defend this particular action.
Texas Rural Legal Aid has also filed a vast number of minimum wage
claims against farmers in this area. During much of this litigation,
Texas Rural Legal Aid has successfully sought major media coverage.
Texas Rural Legal Aid also filed a major suit against the local
housing authority in Castro County. Once again, no major effort was
made to settle the dispute and resolve the greivances prior to the
litigation being filed in U. S. District Court. The housing project
was later donated to the lender, Farmers Home Administration. The
net result has been a substantial loss in the total amount of temp-
orary housing available for migrant workers.
A new article entitled "Refine, Don't Destroy Legal Services" which
appears in the May, 1983 issue of the American Bar Association Journal
discusses the problems involved in the Legal Services Program. In
that article, Mr. Duley and Mr. Houseman indicate that "Legal Service
agencies and attorneys should be careful that the ends sought by
their representation will provide true benefits to the poor, because
the risk of harming, rather than helping, poor people is real." That
situation has occured in Castro County. Instead of helping migrants
and indigents, Texas Rural Legal Aid has caused many employment
opportunities to disappear. Propective employers and potential
industry for the area has been harmed because of the social activists
which are connected with Texas Rural Legal Aid. The net effect, in
opinion, is that poor people have been Kurt and not helped. Poor
people have some of the same legal problems which are experienced by
463
Legal Services Corporation
page 3
more prosperous people in our society. These problems could be
successfully addressed by the Legal Services Corporation, if it
were not for the fact that groups such as Texas Rural Legal Aid
have determined to seek media coverage and promote their own
organization rather than to help solve the more typical problems
of the migrants, minorities and indigents of our area.
I appreciate the opportunity to share these observations with your
Committee. The money which has been allotted to Legal Services
Corporation could be used in a proper and helpful manner if re-
strictions and safe guards were applied. I appreciate the work
which your Committee is trying to do, and thank you for the
opportunity to have these opinions considered.
^_^^ Yours very truly,
( /'Jimmy F. Davis
JFD/jh
^
.^°-'"
464
APPENDIX 12
«
LEGAL SERVICES CORPORATION OF IOWA
311
CENTRAL OFFICE
316 East Fifth • Suite 22 • Des Moines. Iowa 50309
I51SI243-21S1
Toll Free I-800-532-127S
6 May 1983
The Honorable Orrin Hatch, Chairman
Senate Labor & Human Resources Committee
Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Hatch:
I have been advised that during a recent
subcommittee meeting, you criticised my program
specifically and me by name in connection with a
case involving Medicaid coverage of a transsexual's
surgical treatment.
My purpose in writing to you is to request
your assistance in setting the record straight. As
I understand it, you made reference to the case as
being unimportant and implied, furthermore, that it
was brought by the Legal Services Corporation of
Iowa (LSCI) 'at the same time John Barrett says his
program' was able to take only one of every two
applicants for legal assistance. {I regret that I
must operate without the benefit of a transcript of
your remarks, but I believe this is a reasonably
accurate paraphrasing) .
It is unfortunate that you or your informants
did not take the trouble to contact me or to check
more thoroughly into the actual facts of the matter.
Had you done so, you would have learned that the case
you refer to was filed by a county legal aid program
which was entirely funded by county money. You also
would have learned that the case was accepted by that
program in 1976, fully a year before LSCI was created
and about eighteen months before I was hired as LSCI ' s
first director.
The case later became known as Pinneke v. Preisser.
It was begun by Cerro Gordo County Legal Aid Society, a
program controlled by the county board of supervisors and
the county bar association. At the time this suit was
LSCI BRANCH OFFICES
Cedar Rapids • Council BlufTs • Davenport • Des Moines • Dubuque • Iowa City
Mason City • Ottumwa • Sioux City • Waterloo
465
filed, Cerro Gordo County Legal Aid Society was receiving
no federal funds from any source.
About a year after the case began, LSCI was created.
We then began an intensive effort to expand throughout the
state of Iowa, trying to establish fifteen offices in time
to meet the Congressionally-mandated "minimum access" goal.
Under an agreement negotiated by a Governor ' s committee and
chaired by the Chief Judge of the Iowa Court of Appeals,
LSCI was obligated to offer a "merger" opportunity to each
locally- funded legal aid office as this expansion effort
reached out to new parts of the state.
Accordingly, in mid-1978 I began discussions with
officials of Cerro Gordo county over the possibilities of
a merger in Mason City. Eventually, it was agreed to with
two provisos which are pertinent here. One was that LSCI
would accept full responsibility for completing all pending
cases then being handled by the county legal aid office.
Another was that for at least two years, the county board
of supervisors would continue to appropriate $15,000 per
year to assist us in that effort.
Among the pending cases which we thus inherited was
Pinneke v. Preisser , then set for trial in the United States
District Court. Eventually, a decision was rendered and it
was favorable to the client's position. By that time, of
course, LSCI had been substituted as attorneys of record.
Shortly thereafter, the State of Iowa appealed the
decision to the Eighth Circuit Court of Appeals. Still
operating under the terms of the merger agreement and using
funds being appropriated for this purpose by Cerro Gordo
County, we defended the district court decision. The appeals
court sustained the lower court's decision and the State's
appeal was dismissed on the merits. A copy of that opinion
is enclosed with this letter for your benefit.
I know that you have in the past advocated for
substantial local control of legal aid programs. In this
instance, at least, it was just such local control that
led to the filing of the Pinneke case. The appeal taken in
1979 and decided in 1980, of course, was the responsibility
of the State. In losing that appeal, the State was required
to reimburse LSCI for our costs and time expended.
466
Hon. Orrin Hatch
May 6, 19 83
Page Three
In suiranary, if I have heard an accurate rendition
of your remarks about me and LSCI, then I believe the
record should be corrected and an apology given. The
Pinneke case was filed by a locally-funded legal aid
program well before the creation of LSCI. It was assumed
by LSCI only as part of a merger, under the terms of
a planning document developed by a Governor's committee.
It was finished by LSCI once we had to accept continuing
responsibility for the case, but with the assistance of
an annual grant from the county given in part to help
complete all pending cases which LSCI assumed from Cerro
Gordo County Legal Aid Society.
Any implication that this case was filed by LSCI,
or reflects substantive priorities of LSCI, or was in any
way the cause of LSCI not being able to accept other cases
is simply unfounded and contrary to fact.
JOHN C. BAR!
Executive Director
/cb
ENCL.
cc: Ranking Minority Member
467
APPENDIX 13
ARTHUR MCNDELSON
WtSLCf J. FASTI"
oconse J. TiCHT. n
J, R'CNAAD TMtStNG
«LLCN w, TE*Gl-t
ROBCOT M. L'CBCR
JORDAN L. BLOOM
WILLIAM C. Wright
OARRT G. MATHIASOM
AlAM e. CARLSON
RICHAaO M. HARDING
ALAN S. lEWINS
JOHN T. HATOCN
RANDOLPH C. ROEDCR
MAURtEN E. McClAIN
OARt p. SChOLIC"
ROBERT r. HILLMAN
MILLIAM r.TERHETOCN
KAREN MAWTLtT HENRT
NAKC L. OBER
LAMRENCE J. GARTNER
riCmabo J. LOrrus, jR.
L*RRT P. SCHAPiRO
MICHAEL J. MOGAN
NAOM' TOUNO
JOHN M. snONBCRC
ROBERT O. MUlTENG
BARBARA S. M OODONE
BlCMARD J. CURRIER
OAVID 5. DURHAM
ft. BRIAN CIXON
ROBERT n. CARROL
HCNRf D. lEDERMAN
fAULA CHAMAkGNE
PATRICIA P IRHITC
RICHARD N. HILL
MICHCLE J. SILAH
rLOTO J. PALMER
KAREN e. FORD
MICHAEL B. MARGOliS
OCRCK WOOOHOU5C ,
SPENCER H. HiPP
CRESORT M, McCLUNC
MICHAEL P, RICCITICLLO
ALAN 5. GARBCR
RICHARD A. LCASIA
juor s. CCIH
ROBEPT L, IALETEL
SCOTT *. WILSON
M. FRANKLIN NICHOLS. IM
ROBERT w. DRAKE
LINDBERGH PORTER, jR.
PATRICIA M. HELLT
CHARLOTTE AODlNGTON
PATRICIA A. SHEPHERD
THOMAS M. GOSSELIN
SANDRA B. KLOSTER
ROT O. A«ElROD
WEnOt l. TICE-WALLNER
JOSEPH A, SChkKAChTER*
GEORGE e. CHArrtY
kCvin K CHOLAKiAN
JCrrREI H. TANENBAUM
ROBERT P
LiraER.MENDELSON, Fastiff &Tichy
A RROrcSSlONAL CORPORATION
ATTOHNETS AT LAW
650 CALIFORNIA STREET. ZOTM FLOOR
SAN FRANCISCO. CALIFORNIA 94108
1^15) 433-19'SO
May 17, 1983
SAMUEL
Horn
ORD. .
LOS anoelES orncE
l»SB CCNTuRT PAPH east, suite 050
LOS ANGCLtS. CALIFORNIA 00067
1813| B53-030B
PALO ALTO OFFICE
706 COWPCn STREET
. PALO ALTO. CALIFORNIA 0^301
:«15l 3ZO-5732
FR£SNO OFFICE
I900 N. GATEWAY aoULCVARO. SUITE lOI
FRESNO. CALIFORNIA 93727
(20fll Z52-*oes
SAN JOSE OFFICE
III ALMADCN BOULEVARD. SUITE 400
SAN JOSE. CALIFORNIA 95113
(«0Q) 99a-«l50
SAN DIEGO OFFICE
lOiO SECOND AVENUE, SUITE I906
S*N DIEGO. CALIFORNIA 92101
(619) 232-0-»<l
•aDmi
TED 1
STATES OTHER T
« CALIFORNIA
Kevin McGuiness, Counsel
Committee on Labor and Human
Resources
United States Senate
Washington, D.C. 20510
Re: Legal Services Corp. Hearings Of May 4, 1983
Dear Mr. McGuiness:
I have been informed that the Senate Labor and
Human Resources Committee is in the process of reviewing
certain practices of the Legal Services Corporation. Re-
cently, our law firm was involved in litigation against two
California agencies which receive substantial federal funding
from the Legal Services Corporation. I believe that the
activities by those agencies clearly demonstrate abuses of
which the Committee should be made aware.
I have enclosed copies of the letters which I
wrote last year to certain government officials seeking
correction of the abuses. To date, I have not received any
indication that corrective action was taken on these matters.
I urge that the Committee incorporate my letters
to Mssrs. Orrin G. Hatch, Henry A. Waxman, Thomas Lantos,
David Stockman and Jack Brooks in the record of proceedings
before it, and that the Committee consider these matters in
its review of the activities of the Legal Services Corpora-
tion.
WESLEY
WJF/sm
468
August 31, 1902
Tlic Honorable Orrin n. Hatch
The United States !?enate
Runtrell Building, Room 125
V'ashlngton, D. C. 20510
Dear Senator Hatch:
I sira writing tliis letter to inform you of a flagrant
misuse of foderal funua which I holicvc violates federal
statute, violates the administration's current budgot-
tiglitoning efforts, and improperly dcprivcB truly dencrving
citizcnc of federal assistance whicli thoy dcnperatoly need.
Our law firm rcproncnt!3 i:c.nl ]\'Odr., Inc., a grov.'or
of miishroomc in California. In the .sunror of 19ni, Tent
Foods' collective bargaining agreement vdth the United Farm
\7or):crs Union expired, and in Tlovombor of l:hat year, the
employees went on strike. Despite thr fc-.ct that the employees
voluntarily refused to accept work wlijch v/as available, and
despite the fact that under California lav/ employeoa v/ho
strike are disqualified from receiving unom.ployment benefits,
the CT^ployees filed unemployment ini:urance claims v;ith the
State of California. Tlic State denied these claims.
ClaijnantG, throvigh their union, the l.nitrd Farm, vtorkers,
then appealed the denial of benefits to tlie California
Unemployment Insurance Appeals Ponrd, ilic State agency
authorir.ed to determine such matters. The matter is nov;
pending before tlie CUI.\B. Any dcciriion ).iy the CUIAB is
Bul'joct to appeal in tlie state court r--/r.tom,
Pespite the pendency of proccf.dingn before the
CUIAB, California Rural Legal Assistance (CRLA) , and Channel
Counties Legal Services Association, rigrant Component
(CCLSA) — two agencies v/hich rrccsive substantial federal
funding from the Legal Services Cornoration — recently
469
sovyjiit n writ of nnnc'ato before t!^,c r.diforni.a Tvaporior
Court. In this action, the two agoncion requested the Court
to direct the CUIAD to pay bonofitn dor.pitc t]\<i pondoncy of
the CUI7\B proceedings.
The action brought by the affoncioG is patently
frivolous for several reasons. Firnt, \;rits of nand,:unus are
available in California only where adr'.inintrative remedies
do not c::ist or have been exhausted, and only where a final
order exists. Clearly, the agenciey arc: attempting to avoid
the ad^ninintrative process which is fully capable of resolving
the natter. Second, the type of relief nought by the agencies
is available only where there is irrctv-iraJle harr.' shown.
The Iiarin claimed by the agencies -- tlie unemployment of the
various claimants — ir. directly attributable to the claimants'
own refur.al to accept \'or'k \diich liar; 1 ron repeatedly offered
l;iy tJie company. "'liun, any Iiarn .'-.uff e-^(^<l by the claimantn
was duo to their o\-m. action:::.
The Superior Court sum!\ari]y (fir.nissed the agencies'
petition for writ of mandate, ar; did t'le Court of Appeal on
review of the lov;er court's docinion. bonrning nothing from
the actions of both tlie Fuperior Cou^-f- ai>.d the Court of
Appeal, b>owcver, tl\e agencies have ndv; :') ooaled to the
California fupreme Court. '"'hat r.:^-\-tc'>' ir now pending.
A more wasteful ey.pond i Lure n'' '\\(\o,rnl funds could
hardly bo imagined. T\t n. tine wlion tbc federal budgetary
deficit is well in excess of 100 billion dollars, and every
agency is being scrutinized to ensure of ! tcient operation,
it is truly appalling that tax revenue in being spent in
this manner. The claimants are fully rej)resented by their
own union and its extensive legal ntaff a;id they have the
full panoply of protections afforded Yy the California
ad:;;inistrative and judicial process. ['^Mipitc the ejtistence
of those protections, the CRbA and CCT.'.'a )iave embarked on a
quixotic and utterly wasteful campaign to avoid that process.
The mac^nitude of tlio waste in shown in t}!e fact that the
petition filed with the Tviporior rourl wan 3 5 pages long and
\.'as suTjported by over 350 pages of argrniMit and declarations.
In the proceedings before tl^e apj^ollate < ourt, the .agencies
filed a '17-page petition and over GDO iv-cns of exhiliits.
Tlic cost to the taxpayers in attorney tire alone in preparing
these documents must be staggering.
470
Porhapn the r.-ior-t appal] ipxr nr.i-t at of the natter in
that the use of anv federal fuml.s v/an totally unneconsciry
BincG the claimants are all rppronontcl l^y the United Farra
VJorkers Union and have the cytcnnlvc rnnonmos of the- UFU'b
legal staff at their disposal. Tn fact, VFM representatives
prcGonted the claimant:?' case before- i Iv I'nonployncnt Insurance
Appeals P.oard hoarina on the nattor. 'I'lis v/as not, therefore,
a case v;hcn citizens v-/ould have l!C'-!n ilf- -irived of lc<jal
representation unless tlicre had I'L-.on '^' -^l' ral assistance. It
was, rather, a totally unnecessary orrrMKiiture of federal
funds at a time when fully conpntont It^qal representation
was already available-.
I submit that the CRIJV ."ind crr/.'A have made the
Ktronyest possible arau:-.ont for rr.duci'd fi:ndinq of the T.cgal
Services Corporation. Vexatious and v/.:i.';teful litigation of
this type only siphons :,'.ucli }ieedc(l tn:: dc ll.-.rr; a'.;ay from
underprivileged citizens with qcnuine nc-nis.
I urge you to investigate tl-l;; flagrant abuse of
federal funds and to cause its ironed iato cessation.
Very truly yours.
rKSLT;v J. TA5:'['irF
v;jr:kc
471
Auguot 31, 1982
The Honorable Henry A. l-T.-^^man
The House of RoprosentatlvcB
Rayburn House Office Building, Roon 2-118
Washinnton, D. C. 20515
Dear Congressman Kaxnnn:
I am writing this letter to inform you of a flagrant
micuoo of federal funds which I believe violates federal
statute, violates the administration's current budget-
tightening efforts, and improperly deprives truly deserving
citizens of federal assistance which they desperately need.
Our law firxA represents Vent Foods, Inc., a grower
of miifihrooms in California. Tn thr^ sui-nor of 19^31, Meat
Foods' collective bargaining agrccmont with the United Tarn
V.'orkors Union expired, and in IJov«al:'cr of that year, the
employees went on strike. Despite the fact that the employees
voluntarily refused to accept work v/hich was available, and
despite the fact that under California law employees who
strike are disqualified from receiving unemployment benefits,
the employees filed unemployment insurance claims with the
State of California. Tlie State uoniod these claims.
Claimants, through their union, the United Farm Workers,
then appealed the denial of benefits to the California
Unonployment Insurance Appeals noard, the f.tate agency
authorized to determine such matters. I'he matter is now
pending before the CUIAB. Any decision l-y the CUIAE is
subject to appeal in the state court system.
Despite the pendency of prccocdingn before the
CUIAD, California Rural Legal Assistance (CRLA) , and Channel
Counties Legal Services Association, Migrant Component
(CCLSA) — two agencies which receive substantial federal
funding from the Legal Services Corporation — recently
472
sought a writ of mamlnto before Lhc CilJfornin fluporior
Court. In this action, the two v-ngcnctcn rcgucotod the Court
to direct the CUIAB to pay benefits despite the pendency of
the CUIAD proceedings.
The action !:)rought by the aqoncioB is patently
frivoloun for Bovcral rcanono. rir:L, \nitc. of rr.nnd.irp,un are
availal:ile in California only v;hcrc .^.cnilnintrative reincdicn
do not exist or have been exhausted, and only v/here a final
order exists. Clearly, the agencien aro attempting to avoid
tlie administrative process which is fu]ly capable of resolving
the natter. fecond, the type of relief sought by the agencies
is available only where there is irreparable harm shown.
The harm claimed by the agencies — the unemployment of the
various claimants — is directly attributable to the clair.ants
own refusal to accept work which lias been repeatedly offered
by the coirlpany. Thus, any harm suffered by the claimants
was due to their own actions.
The Superior Court summarily disrainsed the agencies'
petition for writ of mandate, as did the Court of Appeal on
review of the lower court's decision. Learning nothing from
the actions of both the Puporlor rnurt and the Court of
Appeal, liowever, the agencies have nov; appealed to the
California Ruprejno Court. That matter is now pending.
A more wasteful expenditure of f(yleral funds could
hardly be imagined. At a time when the federal budgetary
deficit is well in excess of 100 billion dollars-, and every
agency is being scrutinized to ensure efficient operation,
it is truly appalling tliat tax revenue is being spent in
this manner. The claimants are fully represented by their
own union and its extensive legal staff and they have the
full panoply of protections afforded l^y tlic California
administrative and judicial process. Tiospite the existence
of those nrotections, the CRLA and CCI.SA have embarked on a
quixotic and utterly wasteful caiiipaign to avoid that process.
The magnitude of the waste is sliovn in the fact that the.
petition filed with the Superior Court v.-as 3 5 pages long and
v;as su^">ported by over 350 pages of arn\uK'nt and declarations.
In the proceedings before the app(^llat(> court, the agencies
filed a 47-page petition and over GOO pages of exhibits.
The cost to the taxpayers in attorney tine alone in preparing
these documents must be staggering.
473
Perhaps the most appalling n':;r<'ct of the natter is
that the use of any federal fundn v/ar; totally unnececsary
since the claimants are all reprcoi^ntod by the United Farm
Workers Union and have the extonsivo ror^ourcos of the UF\7's
legal staff at their disposal. In fact, TlFU rcprenontatives
prcr.ontcd the clainants* catjc lic.-forc^ the (inoriploynont Inr.uranco
Appeals Board hearing on the matter. Tl)iri was not, therefore,
a case vhen citi'zens vrould have been deprived of legal
representation unless there had l)cc.n federal accintance. It
was, rather, a totally unneccsnary oxj^cnditure of federal
fundn at a time when fully competent legal representation
was already available.
I submit that the CRIJV and ccj.SA have made the
9trongc::t possible argiunont for ri-duced funding of tlio Legal
Fervicos Corporation. Vexatious and w.intoful litigation of
this tyno only siphons much needed tar. dollars away fror.
underprivileged citizens v;ith genuine needs.
I urge you to investigate this flagrant abuse of
federal funds and to cause its immediate cessation.
Very truly yours.
I-TESLPY J, FACTIFF
V7JF : l:c
474
August 31, 1982
The Honorable Thomas Lantos
The House of Representatives
Longworth House Office Building, Room 1123
Washington, D. C. 20515
Dear Congressman Lnntos:
I am writing thin letter to inforra you of a flagrant
misuse of federal funds which I believe violates federal
statute, violates the administration's current budget-
tightening efforts, and improperly deprives truly deserving
citizens of federal assistance which they desperately need.
Our law firm represents V?cnt Foods, Inc., a grower
of mushrooms in California. In the svurinor of 1901, I-.'est
Foods' collective bargaining agreement with the United Farm
Workers Union expired, and in November of that year, the
employees went on strike. Despite the fact that the employees
voluntarily refused to accept work which was available, and
defipito the fact that under California law employees who
strike are disqualified from receiving unemployment benefits,
the employees filed unomployr.iont innuranco claims with the
r>tato of California. The State denied those claims.
Claimants, through thoir union, the United Farm Workers,
then appealed the denial of bcnofitn to tlie California
Unemployment Insurance Appeals Board, the Ftate agency
authorized to determine such matters. Tlio matter ic now
pending before the CUIAB. Any decision by the CUIAD is
subject to appeal in the state court nyritcm.
Despite the pendency of proceedings before the
CUI7U3, California Rural Legal Assistance (CRLA) , and Channel
Counties Legal Services Association, Migrant Component
(CCLSA) — two agencies which receive substantial federal
funding from the Legal Fervices Corporation — recently
475
Gought a writ of mandate before the California Superior
Court. In this action, the two aqonclon roqnestnd the Court
to direct the CUIAD to pay benefits donpite the pendency of
the CUIAB proceedings.
The action brought by the aqoncion is patently
frivolous for nevcral reasons. Firnt, writ.o of nandanun are
available in California only where admlnintrative romedies
do not exist or have been exhausted, and only vrhore a final
order exists. Clearly, the agencies am atterapting to avoid
the administrative process which in fully capable of resolving
the matter. Second, the type of relief nought by the agencies
is available only v/hore there is irreparable harm shown.
The harm claimed by the agencies — the unemployment of the
various claimants — is directly attributable to the claimants'
own refusal to accept work v;hich has been repeatedly offered
by the company. Thus, any harm suffered by the claimants
was due to their o^-m actions.
The Superior Court summarily dismissed the agencies'
petition for writ of mandate, as did the Court of Appeal on
reviev; of the lower court's decision. Learning nothing from
the actions of both the Superior Court and the Court of
Appeal, however, the agencies have now appealed to th.e
California Supreme Court. That matter is now pending.
A more wasteful expenditure of federal funds could
hardly be imagined. At a time v/lien tl^e federal budgetary
deficit is well in excess of 100 billion dollars, and every
agency is being scrutinized to ensure efficient operation,
it is truly appalling that tax revenue is being spent in
this manner. The claim.ants are fully represented by their
own union and its extensive legal staff and they have the
full panoply of protections afforded by the California
administrative and judicial process. Por.jiJte the existence
of those protections, the CRLA and CCI.SA have embarked on a
quixotic and utterly wasteful campaign to avoid that process.
The magnitude of the waste is shovm in the fact that the
petition filed witli the Superior Court was 35 pages long and
was supported by over 350 pages of argvimont and declarations.
In the proceedings before the appellate court, the agencies
filed a 47-page petition and over COO pages of exhibits.
The cost to the taxpayers in attorney tine alone in preparing
those documents must be staggering.
476
Perhaps tho noct appalling aijj'oct of the natter is
that tho use of any federal fundn was totally unnecessary
since the claimants are all represented by the United Farm
Korl:crs Union and have the extensive mrjourcen of the UFW's
legal staff at their disposal. Tn fact, un; representatives
presented the claiif.ants ' case before the I'ncnploiincnt Inr;urance
Aljpoals Hoard hearing on the natter. "V.ln wan not, therefore,
a case when citi7.ens v;ould luive lieon dr-prived of legal
representation unless there l\ad been redern] assistance. It
vns, rather, a totally unnecessary expenditure of federal
funds at a tine when fully competent legal representation
was already available.
I submit tliat the C"RLA and m.rh liavo made the
strongest possible arnumcnt for rodviccd Junding of the Legal
Fervices Corporation. Vexatious r\n(''i ^.'nrdoful .litiga1-.ion of
this type only siphons inv;ch needed ta;: dollars av;ay from
unilerprivileged citizens v.-ith genuine r.oods.
I urge you to investigate this flagrant abuse of
federal funds and to cause its irTr.ediato cessation.
Very truly yours,
m^CT.bY J. I'ASTIFF
V;JF : kc
477
August 31, 1902
Mr. David Stockman
Director of Office of Management & Hvidget
Executive Office Building
Washington, D. C. 20503
Dear Mr. Stockman i
I eim writing this letter to inform you of a flagrant
misuso of federal funds which I believe violates federal
statute, violates the administration's current budget-
tightening efforts, and improperly deprives truly deserving
citizens of federal assistance which they desperately need.
Our law firm represents V7cst Foods, Inc., a grower
of mushrooms in California. In the summer of 1981, West
Foods' collective bargaining agreement with the United Farm
Workers Union expired, and In November of that year, the
omployoGO went on strike. Despite the fact that the employees
voluntarily refused to accept work which was available, and
despite the fact that under Californin law employees who
strike are disqualified from receiving unemployment benefits,
the employees filed unemployment insurance claims with the
State of California. The State denied those claims.
Claimants, through their union, the United Farm Vtorkers,
then appealed the denial of benefits to the California
Unemployment Insurance Appeals Doard, the State agency
authorized to determine such matters. The matter is now
pending before the CUIAD. Any decision by the CUIAE is
subject to appeal in the state court nystem.
Despite the pendency of proceedings before the
CUIAB, California Rural Legal Asnistanco (CRLA) , and Channel
Counties Legal Services Association, Migrant Component
(CCLSA) — two agencies which receive substantial federal
funding from the Legal Eorvlccs Corporation — recently
29-379 0-84 31
478
sought a writ of mandate before the CTltfornia Superior
Court. In this action, the two agcncien rcquosted the Court
to direct the CUIAD to pay benefits despite the pendency of
the CUIAB proceedings.
Tlie action brought by the ngoncien is patently
frivolou55 for several reasons, rirnt, v/rits of mandamus are
available in California only v.-liore adnini strative ronedion
do not exist or have been exhausted, and only where a final
order exists. Clearly, the agencies arc attempting to avoid
the adminintrntivo procena v/hich is fully capable of renolving
the natter. Second, the tyi^e of rclii^f nought by the agencies
is available only where there is irreparnl)lo harm shown.
The harm claimed by the agencies — tlio unernployment of the
various claimants — is directly attributable to the claimants'
own refural to accept work which ha;; boon repeatedly offered
by the company. Thus, any ham nufferrri ijy the claimants
was duo to their own actions.
The S\ipcrior Court sunmarily dismissed the agencies'
petition for writ of mandate, as did the Court of Appeal on
review of the lower court's decision. T.oarning nothing from
the actions of both the Superior Court and the Court of
Appeal, however, the agencies have now appealed to the
California Supreme Court. That matter in now pending.
A p.ore wasteful expenditure of federal funds could
hardly be imagined. At a time when t?ic federal budgetary
deficit is well in excess of 100 bill ion dollars, and every
agency is being scrutinized to ensure efficient operation,
it is truly appalling that tax revenue is being spent in
this manner. Tlie claimants are fully roprocented by their
own union and its extensive legal staff and they have the
full panoply of protections afforded by the California
ailnini:jticitivo and judicial procior;:;. P- rpi to tlio exintonco
of those protections, the CRLA and CCT /^A liave embarked on a
quixotic and utterly v/asteful campaign to avoid that process.
The magnitude of the v/asto is shoxvn in Llie fact that the
petition filed witli the. Superior Court was 35 pages long and
v/ai- fiupportod by over 350 pages of arguru nt and declarations.
In 1)ie proceedings before the appellate '^ourt, the agencies
filed a 47-page petition and over GOO pages of exhibits.
The cost to the taxpayers in attorney time alone in preparing
tliese documents must bo staggering.
479
August 31, 1902
The Honorable Jack Brooks
The House of Representatives
Rayburn House Office Duildinrj, Roon 2''.70
Washington, D. C. 20515
Dear Congressman Brooks:
I am writing this letter to inforrn you of a flagrant
misuse of federa;L funds which I believe violates federal
statute, violates the administration's current budget-
tightening efforts, and improperly deprives truly deserving
citizens of federal assistance which thoy desperately need.
Our law firm represents VJest Foods, Inc.,, a grower
of mushrooms in California. In the summer of 1981, West
Foods' collective bargaining agreement with the United Fanti
V7orker8 Union expired, and in November of that year, the
employees went on strike. Despite the fact that the employees
voluntarily refused to accept work which vms available, and
despite the fact that under California law employees who
strike are disqualified from receiving unemployment benefits,
the employees filed unemployment insurance claims with the
State of California. The State denied these claims.
Claimants, through their union, the United Farm V7orkcrs,
then appealed the denial of benefits to the California
Unemployment Insurance Appeals Board, the Htate agency
authorized to determine such matter n. The matter is now
pending before the CUIAB. Any decision by the CUIAB is
subject to appeal in the state court nyr.tcn.
Despite the pendency of prococdings before the
CUIAB, California Rural Legal Assistance (CRLA) , and Channel
Counties Legal Services Association, Migrant Component
(CCLSA) — two agencies which receive substantial federal
funding from the Legal Services corporation — recently
480
Perhaps the most appalling nr.pcr.t of the natter is
that the use of any federal funds was totally unnecensary
since the claimants arc; all roprcsontod by the United Fam
Workers Union and have the extensive ronources of the UFl^J's
legal staff at their disposal. In fact, UFW representatives
presented the claimants' cane before thr- r'rcnnloym.ent Insurance
Appeals Board hoaring on the matte: . ':'hin uas not, therefore,
a case when citizens v.-ould liavo loen ccprlvrd of legal
representation unless there had been ffv.loral assistance. It
was, ratlior, a totally unnecessary expondituro of federal
funds at a time when fully conpetont Irrr.Tl roprosentation
was already available.
I submit that the CRLA and rcr.r.?. linve made the
strongest possible argum.cnt for reduced funding of the Legal
Services Corporation. Vexatious and v;.\;;leful litigation of
this type only niphonn much needed 1m:: ''ollars away from
underprivileged citizens with genuine ncod.T.
I urge you to investigate thir flagrant abuse of
federal funds and to cause its Immodiato cosnation.
Very truly yours,
UTSLI'V J. vr.TirT
V7JF : ):c
481
sought a writ of mandate before the California Superior
Court. In thiB action, the two agencies requested the Court
to direct the CUIAB to pay benefits despite the pendency of
the CUIAB proceedings.
The action brought by the afrcncicn is patently
frivolous for sevoral reasons. Fir:3t, writs of nandainuB are
available in California only where adninistrative remedies
do not exist or have been exhausted, and only v;here a final
order existn. Clearly, the agencicv' are attempting to avoid
the atiminiatrative process v;hich is fully capable of resolving
the m.atter. Second, the type of relief sought by the agencies
ie availablQ only where there is irreparable harm shown.
The harm claimed by the agencies — the unemployment of the
various claimants — is directly attributable to the claimants'
own refusal to accept work wlilch has 1 oen repeatedly offered
by the company. Tlius, any harm suffered by the claimants
was duo to their ov.-n actions.
The Superior Court summarily dismissed the agencies'
petition for writ of mandate, as did the Court of Appeal on
review of the lower court's decision. T,oarning nothing from
the actions of both the Superior Court and the Court of
Appeal, however, the agencies have nov; appealed to the
California Supreme Court. That matter Ir. nov; pending.
A more wasteful expenditure of federal funds could
hardly be imagined. At a time when the federal budgetary
deficit is well in excess of 100 billion dollars, and every
agency is being scrutinized to ensure efficient operation,
it is truly appalling that tax revenue is being spent in
this manner. The claimants are fully represented by their
own union and its extensive legal r;l. \f f nnd tjiey have the
full panoply of protections afforded \>y llie California
administrative and judicial procor.n. Pcr.pite the existence
of tlione protections, the cni.A nnd f'CI.r.A liave embarked on a
quixotic and utterly wastcf)il camyiaign to avoid that process.
Tlio magnitude of the waste is shov.Ti in tlie fact that the
petition filed with the fuperior Court v/as 35 pages long and
was supjxDrtod by over 3 50 pages of argunont and declarations.
In the proceedings before the appellate court, the agencies
filed a -IT-page petition and over COO pages of exhibits.
The cost to the taxpayers in attorney time alone in preparing
these documents must be staggering.
482
Perhaps tho nost apnallinfj a.';;jf>ct. of the matter is
that the use of any federal funds was totally unnecessary
since the clainants are all represented by the United Farm
Workers Union and have the extensive resources of the unv's
legal staff at their disposal. In fact,- tTFV7 representatives
presented the claimants' case before tlio I'nenployment Insurance
Appeals r.oard hearing on tlio T;\atter. 'iliis wa53 not, therefore,
a case vhcn citi^.ens v;ould have boon (â– :(^j)rivcd of legal
representation unless there had loon iiKlrrcl asrjintance. It
was, rather, a totally unnece!:sary oxtiencilturo of federal
funds at a time when fully competent legal representation
was already available.
I Gubmit that tlie CRI.A and cThHA liave made the
8trongo;-t possible argument for rcduci^d ftmding of tlie T,cg^
Services Corporation. Vexatious and v.-n-teful litigation of
tliis typo only siphons much needed tax dollars away from
underprivileged citizens with genuine needs.
I urge you to investigate? i.hir. flagrant abuse of
federal funds and to cause its immediate cessation.
Very truly yours,
VrESLPY J. PAGTIFF
VJJF : he
483
APPENDIX ih
Mountain States Legal Foundation
MAXWELL A. MILLER
Senior Attorney
Testimony before the Senate Committee on Labor
and Human Resources
May 4, 1983
484
My name is Maxwell Miller. I am presently employed as a
senior attorney for the Mountain States Legal Foundation, a
public interest law firm headquartered in Denver.
In April of last year, I recommended to a Senate
Subcommittee on Appropriations that the Legal Services
2
Corporation Act be amended to establish for the first time a
means of outside, impartial and practical enforcement of the
Act's restrictions against political activity. My testimony
was premised upon personal experiences with legal services
programs, both as an insider and an outsider. From these same
perspectives, I again recommend to you that aggrieved persons
be given a cause of action against the Corporation and its
grantees for violating the Act's prohibitions against diverting
public funds for political ventures.
As an insider, I was managing attorney of the Provo, Utah
office of Utah Legal Services from March of 1977 to November of
1978. Our office handled mostly routine cases, meaning that
they usually turned upon factual disputes within established
parameters of state and sometimes federal law. These cases
involved disputes in domestic relations, consumer transactions,
3
landlord-tenant, public benefits, and juvenile. Most field
offices throughout the country were like mine in providing
access to the judicial system for the nation's poor in such
485
routine matters. Though perhaps non-glamorous to legal
services lawyers, such cases often determined critical issues
in the lives of clients affected: whether a mother would have
her child placed in a foster home, whether a disabled man would
receive a social security check; whether someone was given due
process before commitment to a mental institution. Of course,
everyone along the political spectrum would consider these
services admirable and necessary. That is what legal services
lawyers are supposed to do.
To recognize that legal services programs help the poor,
however, is not to suggest that they are wholly virtuous or
that we ought to disregard serious blemishes because the
program's heart remains pure. I also observed, as an insider,
that programs used public funds to promote political causes
espoused by their leaders, in total disregard of the Act's
prohibitions and the individual routine cases Congress intended
them to handle. Cases were thus selected according to their
perceived social utility. Where this view prevailed, "[a]ccess
to legal aid in and of itself [was] seen as an empty shell,
important only because law [was] viewed as a method of
4
promoting social change." I often heard it argued that
reforming the law in the name of the poor was more effective
than providing access to the judicial system. It is better to
fill a hole, runs the argument, than to keep pulling people out
486
of one. While there is nothing inherently wrong with that
thinking, how best to fill a hole is usually a policy question
legal services lawyers are neither elected nor paid to answer.
Taxpayer dollars should not support partisan political action.
As an outsider, and as a lawyer for the Mountain States
Legal Foundation, I represented five United States Senators,
one United States Congressman, and an Iowa State Senator in a
lawsuit against the Legal Services Corporation and the Legal
Services Corporation of Iowa which was filed in 1981 in the
United States District Court for the District of Iowa. Our
plaintiffs complained that the Corporation had spearheaded and
funded a massive political movement in violation of the Act.
Some of the evidence we amassed to support our claim was
submitted in my previous testimony and included such items as:
1) interoffice memoranda written by high officials in the
Corporation urging recipients to lobby Congressmen; 2)
transcripts from a legislative advocacy seminar where speakers
openly described the Corporation's goal as "meaningful welfare
reform [and] . . . meaningful redistribution of wealth;" and
3) flyers printed by Legal Services recipients and others
Q
evincing an effort to organize political coalitions.
487
There has been an avalanche of examples coming to my
attention since our lawsuit was filed. For instance, in an
editorial written for the Wall Street Journal, Professor Gerald
Caplan, former acting president of Legal Services Corporation,
described additional horribles in the parade. Caplan writes:
The political character of the program is most
clearly revealed through its publications. The
lead article of a 1982 issue of Youth Law News
declares: "Once again. President Reagan's
proposed budget declares war on our nation's
children. Apparently, Reagan chooses to blame
welfare recipients . . . for the economic woes of
the United States."
In another corporation-funded periodical, the
Economic Development Law Center Report, a Legal
Services attorney argues: "We must recognize and
strengthen the natural links between working
people and the poor .... If we have not
helped our -clients to increase their political
and economic resources, we have failed."
And the newsletter of the National Health Law
Program advises: "If you have eligible clients
who will be affected by [proposed cutbacks] the
most effective thing they can do for themselves
is to contact as many senators and
representatives. ... as possible.^
Despite volumes of similar evidence, the court dismissed our
case because "Congress, in enacting the Legal Services
Corporation Act of 1974, did not intend to create an, implied
cause of action," Essentially, the court said it could do
nothing to stop the Corporation's unlawful use of taxpayer
dollars, even if our allegations of wrongdoing were taken as
true. The upshot of the decision was to throw the
responsibility for restraining the Corporation back to
488
Congress. If there is ever to be an effective restraint
against the Corporation's misuse of taxpayer dollars. Congress
must provide one.
Yet Congress has not. It has, instead, simply restated the
prohibitions against political activity, with perhaps firmer
language, but with the same historically unfounded reliance
upon the Corporation and its recipients to police themselves.
The sole effort to amend the Act and provide for a citizen
cause of action has not been taken seriously.
In April 1982, Senator Steve Symms of Idaho introduced a
bill to provide a citizen cause of action under the Act for
violating its provisions. The bill was basically sound,
yet could have been more carefully drafted. For example, it
gave any citizen a cause of action against the Corporation for
any alleged violation of the Act. Thus generalized grievances
about the most trivial aspect of legal services would have been
given a public forum in federal court. Also imprudent, the
bill gave prevailing plaintiffs the right to punitive damages,
thereby making the poor suffer twipe, once for having the
Corporation unlawfully spend funds meant for their legal
representation and again for having to pay punitive damages to
private parties. But after weighing its defects, the Symms
bill was a step in the right direction. It should have been
given serious attention. There remains an unsatisfied need for
such a bill for a number of reasons:
489
First, the three hundred and twenty-three (323) local
programs (grant recipients) are not subject to the Freedom of
Information Act, making it virtually impossible to completely
monitor and account for $300 million in taxpayer funds.
Second, the Corporation's investigation of alleged
wrongdoing has, up to this point, been wholly one-sided and
prefunctory. In investigating complaints, the Corporation has
1 2
not even bothered to interview the complainant.
Third, the present Act prohibits judicial review of client
eligibility. A cumbersome administrative proceeding is
provided to resolve complaints of ineligible client
representation. Because this process does not work speedily,
the complaint becomes moot.
Fourth, even a well-intentioned Corporation cannot
adequately prevent the misuse of taxpayer funds. To the extent
that the Corporation's new Inspector General does his job, the
number of lawsuits that would be filed under an amended act may
conceivably be fewer than otherwise. So much the better. Yet
the Inspector General cannot give relief to those aggrieved by
a program's misuse of taxpayer dollars.
Fifth, the Inspector General cannot develop a body of law
that will endure despite changes in administration.
490
The approach taken to restrict political activity in the
continuing resolution as passed December 20, 1982 is impotent
and possibly creates more problems than it solves. An initial
defect in the continuing resolution is that it once again
relies upon legal services programs to restrain their own
political activities. Unlike the original Act, which made
14
three exceptions for lobbying, the continuing resolution
provides for only one. No funds can be used to influence any
elected official, except for "communications made in response
to any federal, state, or local official, upon the formal
request of such official." As tough-sounding as that
language appears to be, the Corporation and its recipients are
restrained only by precatory language with no teeth.
The resolution further hamstrings the Corporation by
preventing a reevaluation of all programs for future funding
until a Board of Directors is confirmed. " [Njotwithstanding
any regulation, guideline or rule of the Corporation, funds
appropriated . . . [must be distributed] so as to insure that
funding for each current grantee is maintained in 1983 of the
annualized level of which such grantee was funded in
1982]". â– 'â– ^ Unfortunately, freezing present funding is
potentially harmful to many. Programs cannot be reevaluated
for additional funding based upon the 1980 census rather than
the 1970 census. For some programs, operating in states
increasing in population since 1970, the difference in funding
491
could be as much as $200,000 based upon the dollar allocation
per eligible poor person. Though some programs may conceivably
receive less funding, the resolution prevents the Corporation
from making any decisions, even equitable ones. Besides that,
the resolution conflicts with the Act's mandate that the
Corporation "insure that grants and contracts are made so as to
provide the most economical and effective delivery of legal
assistance to persons in both urban and rural areas."
It appears, therefore, that almost no one in legal services
is accountable for anything. To quote another former legal
services lawyer, "Congress' worst gift to legal services was
freedom from accountability. . . I [have] learned that programs
around the country, insulated from accountability by Congress,
treated the restrictions imposed by Congress as of no account
18
since they were not enforceable." At least at the moment,
field programs are not accountable to the Corporation. Whether
they deserve more or less funding they will receive the same.
The Corporation, having no Board of Directors, cannot act and
is not accountable. These problems may be potentially remedied
by naming a Board. Yet the Corporation and its recipients
would remain unaccountable to anyone but themselves for
unlawful expenditures.
Under a Symms-type proposal accountability is ensured. A
cause of action under such a proposal could be limited to
aggrieved persons, that is, those directly impacted by the
Corporation's unlawful expenditures, rather than any citizen.
492
Though punitive damages are inappropriate, a potential award of
attorney's fees to prevailing parties would both deter
frivolous actions and reward meritorious claims brought in the
public interest. Surely such a change in the Act is a modest
proposal. It gives practical effect to the often-repeated but
just as often ignored prohibitions against lobbying and
political activity. It ensures that an impartial arbiter will
interpret the law.
The greatest advantage to a Symms-type amendment in the Act
is that the poor have funds spent for their direct
representation rather than diverted to unlawful political
action.
493
FOOTNOTES
1. Hearings before a Subcommittee on the Committee on
Appropriations , 97th Cong., 2nd Sess. 176 (1982)
(Statement of Maxwell h. Miller) .
2. 42 U.S.C. S 2996 (1976) .
3. My caseload was evidently similar to most legal
services lawyers. The largest percentage of total
cases handled by legal services lawyers in 1980 --
over 30% — related to family matters. One half of
these were divorce cases and the other half included
custody, visitation, guardianships and wills.
Eighteen percent (18%) of the total caseload involved
housing problems, the largest category of which was
landlord-tenant disputes. Typically, a legal services
lawyer represents a tenant about to be evicted.
Seventeen percent (17%) could be classified as public
benefit cases including social security, welfare and
unemployment compensation. Another fourteen percent
(14%) of the legal services cases fall into consumer
problems, e.g. collections, repossessions,
garnishments^ deficiencies, warranties and contracts.
The remaining 18% come under miscellaneous categories
such as unemployment disputes, wage claims, and
administrative matters. Legal Services Corporation,
Characteristics of Field Programs Sponsored by the
Legal Services Corporation , at 5 (Feb. 1981) .
4. Breger, Legal Aid for the Poor; A Conceptual
Analysis , (60 N. Car. L. Rev.) 2, 287 (1982).
Professor Breger claims that promoting social change
is the "conventional justification for the federal
government's provision of legal aid. . ." Id. at 286.
5. Grassley v. Legal Services Corporaton , 535 F. Supp.
818 (D. Iowa, 1982).
6. Memorandum by Alan Houseman, Director of the Legal
Services Research Institute, to State Coordinators and
Other Interested Parties (December 29, 1981). The
Houseman Memorandum is a call to political action with
such statements as the following: "In the short run,
a strong local political base will be critical if we
are to successfully obtain support from Congress for
the continuation of an aggressive legal services
program." Id. at 7.
494
7. Seminar presentation by Bari Schwartz, lobbyist for
the Food Research and Action Center, in San Juan,
Puerto Rico (Nov. 9-14, 1980). Schwartz stated:
What all of us ultimately care about — what
every single support center cares about —
ultimately, is meaningful welfare reform, and in
meaningful redistribution of wealth and income m
this country. Well, getting from here to there
is easier said than done. It so happens that
there's not a majority in this country, or in
Congress, for doing that right now, and, what
Congress has responded to us is not giving
low-income people dignity that comes with
meaningful cash assistance — what they've
responded to is these individuals' needs. We'liy-
hand them some food stanps — we'll give them a -â–
section 8 certificate ~ which all of us get
frustrated about sometimes, because that's not
really doing anything to eliminate poverty or
change the conditions of poverty, in any event,
you have Congress responding to individual
needs. They're not responding to a poor peoples
platform — they're responding to individual
needs. And, whether I like it or not, because of
my own personal political and social views, I
know that on the food issue, I get the most
mileage out of doing a bleeding heart, kind of
churchy, feed-the-poor kind of thing.
8. The National Client's Counsel is a member of a
coalition political group that includes members like
Tom Hayden's Campaign for Economic Democracy. A
newsletter published by the group says "we need to
build a political machine. That will take massively
increased resources, staff and money." The newsletter
continues to say it must "use the tools of grassroots
organizing to focus on local elections." Policy
Networks Newsletter (May, 1981). The Executive
Director of the Coalition, Heather Booth, explained
the coalitions goals in Booth, Left with the Ballot
Box, 8 No. 3 Working Papers 17 (May/ June 1981).
9. Caplan, Should Reagan Kill Legal Services? , The Wall
Street Journal (Dec. 9, 1982).
10. Grassley v. Legal Services Corporation , 535 F. Supp.
at 825.
495
11. S. 2393, 97th Cong. 2nd Sess. (1982).
12. In one instance. United States Senator Charles
Grassley of Iowa complained that the Fort Dodge Office
of the Legal Services Corporation of Iowa was
organizing political groups. The local office denied
the charge. The Corporation followed up by a letter
concluding there was no evidence of wrongdoing. This
conclusion rested exclusively upon interviews that a
Corporation official held with legal services workers
at the Fort Dodge Office. The complainant was never
interviewed; nor were his allegations investigated
through independent sources. Letter of Charles
Gressley, United States Congressman, to John Barrett,
Executive Director, Legal Services Corporation of Iowa
(February 28, 1980). Grassley stated: "It has been
alleged that staff employed by the Fort Dodge office
of Legal Services Corporation of Iowa is in the
process of organizing a welfare rights unit or
organization." Barrett responded, "These activities
are largely carried out under the express terms of our
ACTION grant, and would not be covered by regulations
of the National Legal Services Corporation." Letter
of John Barrett, Executive Director, Legal Services
Corporation of Iowa, to Congressman Charles Grassley
(March 4, 1980). Grassley replied "I am afraid your
letter is not responsive to my questions." Letter of
Charles Grassley, United States Congressman, to John
Barrett, Executive Director, Legal Services
Corporation of Iowa (March 7, 1980). Mary Bourdette,
of the Corporation's Office of Government Relations,
finally issued a report concluding that all activities
at the Fort Dodge Office were legal after she had
"interviewed the entire sta 
