Full text of "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 appropriations for the Legal Services Corporation and ways to improve provisions relating to operation of the corporation and legal services programs, May 4, 1983"

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

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

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)

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

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.

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:]

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".

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

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

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

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

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

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

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-

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-

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.

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

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:]

TESTIMONY BEFORE THE SENATE COMMITTEE ON
LABOR AND HUMAN RESOURCES

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

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

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

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

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

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

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.

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.

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-

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?

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-

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

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.

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.

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

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

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.

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

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

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:]

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

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

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

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 ■■' .■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

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-

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

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

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."

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.

********

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

-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.

-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,

-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.

-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 . "

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!

-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!

-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 .

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.

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

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

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

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-

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-

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.

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:]

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

Legal

ai 1 l.OM (•\<it ONI.

(t:(itfiuM\a'-ii hills !ur the Conservative
i.tu. ■.!-.. n-siMHidi'il lu lilt' int|uiriL's He
■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

■ Mnh fi r II an.! i)io!<e off coiituci with

ihc i'iiS!-l)|:,;-ai- It

Nnmy |.<utm ;i( llie allrgiKiuils
..iLtiai- ■■ 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
■' 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
■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

■ 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
■ '■■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

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 <■^a■: 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- ■ 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 ■ 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 ■; '..
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

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

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:]

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

(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

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.

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

■M PaoiieaiMna

SisiiS.PWhes

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 ,

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 '■: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.-

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

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

'^■-''^u■il fiepo.-"

Monroe TnofT^as

Oiwctof

C. rs"?fva'if; ^fani'f-i/o

FtnanciAl Sacraiai-y

Peggy Cross

am* PubilcsTiona

Joyce Roriyon

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-

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

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

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

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:]

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

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.)

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

occurred, prior to any further authorization.

With personal best wishes, I am

Sincerely,

■-//>,' fy-A ■ ■ ,
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.

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 .

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

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

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.

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

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

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.

(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

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

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

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

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:

"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

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.

(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.

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.

■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
'■ 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

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 ■-'- ■
PHASE II
■" - FORM 2-B ■_ ■

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 , •■
'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

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.^^

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

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. - ■

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 ' .'•.•■•■

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 ■ 20. Other: " "" " ' "■■..:

,:' 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

Congress, Carter
■ 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)

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

'National Health Law Program is a Legal Services backup center funded by the Legal Services Corporation, Washington,
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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 ■
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
■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,
■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. ' ■-.■..; '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. ■

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,
■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 ^^■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 ■ .
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-;'- ■

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 ■
carefully apportion their incomes to avoid getting sunk by one.
big bill all at once. •■•-•..■

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 ' ■
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.. ^■
busfare— so that often patients had to walk home. Under tMr
recent settlement, such instances wiD be only a maoarj^^^y

■.'■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

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& ■

■ 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. ■
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 ■
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

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

(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 ■ 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

:. /

1
2
3
4
5

■ 6
7
8
9

"11

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

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 ■ 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
21
22
23
24

(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

2
3

7
. 8

9
10
11
12
13
14 ■
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

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 f