Executive Director, Bruce Iwasaki

September, 2003

Money that could be paid to each of the 3.3 million people who have lost jobs under the Bush Administration, with $87 billion: $26,363

Factor by which $87 billion exceeds the amount the federal government spends on after school programs: 87

The New LSC and New Priorities

The Compliance Committee will soon be visiting offices to discuss LSC compliance issues. Because of the importance of the topic and because many new staff have joined us since the last compliance road show, all staff need to attend.

This point was underscored to me Monday, at a meeting of California Project Directors where we heard from Jose Padilla, the Director of California Rural Legal Assistance. He recently had his final exit interview with the Office of Inspector General, which had been at CRLA for a total of seven weeks over an 18-month period. During this highly disruptive process, the Inspector General adopted aggressive - not to say unprecedented - positions on LSC regulations, requested multiple documents, including client information, and occupied a good deal of CRLA's time that could have been spent expanding its resources and serving its clients.

This audit was instigated by a hostile Congressman acting on behalf of agricultural grower interests. The LSC Inspector General is viewed as being close to members of Congress hostile to LSC. The IG unilaterally expanded the scope of the investigation upon arrival.

LAFLA has not had an IG visit in recent memory, but that could change. Unless you are confident that every file you have open or have closed since 1999 is clean as a whistle with respect to every regulation under LSC, you should ask questions during the compliance road show.

LSC Board and Management Transition
It is hard to tell where LSC will go with respect to compliance issues because the Corporation is in transition. An LSC board that had been in place for over ten years has now been almost entirely replaced with Bush-appointees. There are some excellent people on the new board, so it will not be nearly as hostile as LSC was in the 1980s, but on the whole it is somewhat more conservative than the previous board.

Until the board settles in, the current counsel for the Office of Inspector General seems bent on pursuing a number of areas that could greatly impede our work. For example, CRLA reported that the OIG auditors were raising questions about Business & Professional Code Section 17200 claims, which are not class actions, but that can benefit nonparties who are not financially eligible. That has never been an issue before, and could encompass any case that sets a legal precedent, any case that results in a change of administrative policy, and of course, any legislative work. This attitude evinces a hostility towards impact advocacy and a desire to keep LSC programs limited to routine one-on-one service.

Thus, for some of us, it is a concern that the OIG announced that it will start auditing programs' private attorney involvement compliance. It will begin with reviews of programs in Rochester, New York and Kentucky. In the recent past, the OIG has been to San Diego and CRLA, but despite scheduling a visit a few years ago, has not come to LAFLA.

LSC management is not happy with the OIG's PAI inquiry because the Office of Inspector General really does not understand how legal services pro bono programs work. For example, if a private lawyer takes a case and is awarded an attorney fee by the court, OIG insists that the case cannot count toward the 12.5% PAI requirement of 45 C.F.R. Part 1614. So far, the OIG does not seem to know what it is looking for and is on a bit of a fishing expedition.

On the other hand, I recently spoke with Phyllis Holmen of Georgia Legal Services. Powerful agriculture interests triggered an OIG investigation of her program as well, arising from legislative testimony that had been offered by the Legal Services advocates. The OIG cleared Georgia Legal Services of any impropriety. Nevertheless, investigations like that drain time and energy and shift focus away from developing aggressive advocacy.

LSC Committees Meet the Community
The new LSC board's committees convened for the first time last week. Don Saunders of NLADA addressed the Committee on the Provision of Legal Services and urged that LSC request higher funding and consider the impact of several of the restrictions including the class action, attorney fees, alien, and use of non-LSC funds restrictions. Representatives from senior organizations, rural advocates, the National Association of IOLTA programs and Native American groups also addressed the committee. Lillian Johnson and Wilhelm Joseph spoke from the African American Projects Association. Luis Jaramillo of CRLA made a powerful presentation on the legal needs of farm workers.

Sarah Singleton, a private attorney from New Mexico, who is a member of the American Bar Association Standing Committee on Legal Aid and Indigent Defendants also urged the committee to seek more funding and revisit the private money restriction.

As you know, I recently joined SCLAID as the only legal services representative. When I was in Chicago last week, I had a chance to meet with Terry Brooks, the staff counsel for SCLAID, and we discussed whether the ABA could take a more aggressive position on easing many of the congressionally imposed restrictions on LSC-funded programs. In order to persuade skeptical members of congress, I will need examples of the effects of restrictions, particularly when it imposes undue inefficiencies.

At its September meeting, the full board adopted a FY 2005 budget proposal of $352.4 million, the same amount it requested for FY 2004. Several board members expressed reservations, arguing that the board seek a higher level. President John Erlenborn replied that the Corporation needed to request levels that have a "possibility of being successful." Obviously, LSC's relations with Congress are delicate and important.

One note of optimism in that regard is that the chair of the House Committee that oversees the Legal Services Corporation is Chris Cannon, a Republican of Utah. He replaces the ousted Bob Barr, who was implacably hostile to LSC. Cannon is conservative, but not an enemy of our work and does not seem likely to launch GAO investigations the way Barr did.

In sum, things are very much up in the air with respect to the immediate future of the Legal Services Corporation. In contrast to seven or eight years ago, the congressional leadership is not openly hostile to Legal Services and bent on its destruction. And in contrast to twenty years ago, the Legal Services Corporation Board and administration are also generally supportive to the field. LSC is poised to go in either direction, toward more restrictions and compliance enforcement, or more efforts to improve and expand services.

Splits within the Corporation
Another area where there may be change is with respect to state planning. While the encouragement of state wide justice communities encompass many elements, for most of us it came down to consolidation. The merger phase now seems to be over. There seems to be a sharp split within LSC management about state planning. The more program-oriented people view encouraging state justice commuinities as the most important legacy of the 1990s, that the development of comprehensive, integrated, statewide systems was the avenue for ensuring that all low-income people, whether or not they were LSC eligible, receive service from someone. On the other hand, the Office of Compliance and Enforcement and the Office of Inspector General are less enamored with that vision and simply want to make sure that no federal money is spent toward anyone who is not eligible.

The implications of all this for LAFLA are these:

1. Overall, we are on the right track: diversifying funding sources, focusing on outcomes and client stories, and pursuing high impact advocacy. The best defense to politically-motivated attacks is to do excellent work and earn a reputation for such work.

2. We need renewed focus on compliance. Five years ago, we devoted a great deal of energy to cleaning house with respect to compliance. We did a great job. LAFLA went from being on the verge of extinction to a model program. We cannot let that slip away.

3. Contacts with community groups and community leaders remain vital. Every advocate should meet with community groups, stay in touch with other advocates and organizers, and develop strong relationships with legislative leaders and their aids.

BGI