[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
CIVIL ACCESS TO JUSTICE ACT OF 2009
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
ON
H.R. 3764
__________
APRIL 27, 2010
__________
Serial No. 111-87
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas DANIEL E. LUNGREN, California
MAXINE WATERS, California DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee STEVE KING, Iowa
HENRY C. ``HANK'' JOHNSON, Jr., TRENT FRANKS, Arizona
Georgia LOUIE GOHMERT, Texas
PEDRO PIERLUISI, Puerto Rico JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois TED POE, Texas
JUDY CHU, California JASON CHAFFETZ, Utah
LUIS V. GUTIERREZ, Illinois TOM ROONEY, Florida
TAMMY BALDWIN, Wisconsin GREGG HARPER, Mississippi
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DEBBIE WASSERMAN SCHULTZ, Florida
DANIEL MAFFEI, New York
[Vacant]
Perry Apelbaum, Majority Staff Director and Chief Counsel
Sean McLaughlin, Minority Chief of Staff and General Counsel
------
Subcommittee on Commercial and Administrative Law
STEVE COHEN, Tennessee, Chairman
WILLIAM D. DELAHUNT, Massachusetts TRENT FRANKS, Arizona
MELVIN L. WATT, North Carolina JIM JORDAN, Ohio
DANIEL MAFFEI, New York HOWARD COBLE, North Carolina
ZOE LOFGREN, California DARRELL E. ISSA, California
HENRY C. ``HANK'' JOHNSON, Jr., J. RANDY FORBES, Virginia
Georgia STEVE KING, Iowa
ROBERT C. ``BOBBY'' SCOTT, Virginia
JOHN CONYERS, Jr., Michigan
JUDY CHU, California
Michone Johnson, Chief Counsel
Daniel Flores, Minority Counsel
C O N T E N T S
----------
APRIL 27, 2010
Page
THE BILL
H.R. 3764, the ``Civil Access to Justice Act of 2009''........... 3
OPENING STATEMENTS
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Chairman, Subcommittee on Commercial
and Administrative Law......................................... 1
The Honorable Trent Franks, a Representative in Congress from the
State of Arizona, and Ranking Member, Subcommittee on
Commercial and Administrative Law.............................. 28
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, Chairman, Committee on the
Judiciary, and Member, Subcommittee on Commercial and
Administrative Law............................................. 29
The Honorable Melvin L. Watt, a Representative in Congress from
the State of North Carolina, and Member, Subcommittee on
Commercial and Administrative Law.............................. 30
WITNESSES
The Honorable Robert C. ``Bobby'' Scott, a Representative in
Congress from the State of Virginia
Oral Testimony................................................. 33
Prepared Statement............................................. 41
The Honorable Tom Harkin, a United States Senator from the State
of Iowa
Oral Testimony................................................. 47
Prepared Statement............................................. 51
Mr. John G. Levi, Chairman, Board of Directors, Legal Services
Corporation
Oral Testimony................................................. 55
Prepared Statement............................................. 58
Mr. Jeffrey E. Schanz, Inspector General, Legal Services
Corporation
Oral Testimony................................................. 67
Prepared Statement............................................. 69
Mr. Kenneth F. Boehm, Chairman, National Legal and Policy Center
Oral Testimony................................................. 88
Prepared Statement............................................. 91
Ms. Rebekah Diller, Deputy Director, Justice Program, Brennan
Center for Justice at NYU School of Law
Oral Testimony................................................. 105
Prepared Statement............................................. 107
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson,
Jr., a Representative in Congress from the State of Georgia,
and Member, Subcommittee on Commercial and Administrative Law.. 31
Material submitted by the Honorable Robert C. ``Bobby'' Scott, a
Representative in Congress from the State of Virginia, and
Member, Subcommittee on Commercial and Administrative Law...... 35
Material submitted by the Honorable Robert C. ``Bobby'' Scott, a
Representative in Congress from the State of Virginia, and
Member, Subcommittee on Commercial and Administrative Law...... 136
Material submitted by the Honorable Trent Franks, a
Representative in Congress from the State of Arizona, Member,
Committee on the Judiciary, and Ranking Member, Subcommittee on
Commercial and Administrative Law.............................. 139
APPENDIX
Material Submitted for the Hearing Record
Response to Post-Hearing Questions from John G. Levi, Chairman,
Board of Directors, Legal Services Corporation................. 152
Response to Post-Hearing Questions from Jeffrey E. Schanz,
Inspector General, Legal Services Corporation.................. 168
Response to Post-Hearing Questions from Kenneth F. Boehm,
Chairman, National Legal and Policy Center..................... 201
Response to Post-Hearing Questions from Rebekah Diller, Deputy
Director, Justice Program, Brennan Center for Justice at NYU
School of Law.................................................. 217
Material submitted by the Honorable Trent Franks, a
Representative in Congress from the State of Arizona, Member,
Committee on the Judiciary, and Ranking Member, Subcommittee on
Commercial and Administrative Law.............................. 237
Material submitted by the Honorable Steve Cohen, a Representative
in Congress from the State of Tennessee, and Chairman,
Subcommittee on Commercial and Administrative Law.............. 249
Material submitted by Rebekah Diller, Deputy Director, Justice
Program, Brennan Center for Justice at NYU School of Law....... 335
CIVIL ACCESS TO JUSTICE ACT OF 2009
----------
TUESDAY, APRIL 27, 2010
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 11:08 a.m., in
room 2141, Rayburn House Office Building, the Honorable Steve
Cohen (Chairman of the Subcommittee) presiding.
Present: Representatives Cohen, Conyers, Watt, Johnson,
Scott, Chu, Franks, and King.
Staff present: (Majority) Norberto Salinas, Counsel; Adam
Russell, Professional Staff Member; and Justin Long, Minority
Counsel.
Mr. Cohen. This hearing of the Committee on the Judiciary,
Subcommittee on Commercial and Administrative Law will now come
to order.
Without objection, the Chair will be authorized to declare
a recess of the hearing. I now recognize myself for a brief
statement.
During the last session, October 2009, this Subcommittee
held a hearing on Legal Services Corporation. Witnesses
testified about Legal Services Corporation implementing
recommendations made by the Government Accounting Office to
improve corporate governance and internal controls within the
Legal Services Corporation and the need for increased funding
for Legal Services to help it fulfill its mission.
Witnesses also briefly discussed H.R. 3764, the ``Civil
Access to Justice Act,'' which will reauthorize the Legal
Services Corporation.
This morning we meet to discuss and have more detailed
conversations about H.R. 3764 in particular, legislation which
a majority of the Subcommittee and myself are co-sponsors.
First, as we learned at the October 2009 hearing, during
this economic downturn grantee programs have increased
significantly in the requests that they have received for legal
services. They have seen more families and individuals hard hit
in this economy ask for legal assistance to obtain public
benefits and to fend off home foreclosures.
Members of the Subcommittee are well aware of the impact
that foreclosures have on our communities and the national
economy. Unfortunately, many of legal services' programs have
not been able to meet the growing urgency.
According to the 2009 report in support of the anecdotal
evidence of our witnesses at the October hearing, not all
eligible potential clients of LSC-funded programs are receiving
the legal assistance they so desperately need.
In fact, the former president of LSC, Helaine Barnett,
testified that for every three people requesting help, LSC only
funded one, turning two out of three people away. Lack of
sufficient funding is the reason.
The Civil Access to Justice Act of 2009 attempts to fill
that void for these families and for others who need legal
assistance. It would authorize LSC, which was last authorized--
reauthorize it--over 30 years ago.
It would authorize a much needed increase in funding to
$750 million, which would help LSC support more legal service
attorneys, providing assistance to the growing poor in our
country, a fact that we see every day as the--and the disparate
amount of wealth between the rich and the poor grows and grows
and grows with the awful end of the 110th Congress--President's
economy.
The bill makes an additional change, one which may have a
substantial impact. It would allow LSC-funded programs to
utilize non-Federal funds more efficiently by removing some of
the current restrictions limiting legal aid programs. This
change by itself would infuse legal aid programs with millions
of additional dollars.
For example, the Oregon Legal Center has calculated that
eliminating the restriction on the use of non-Federal funds
would result in $300,000 of savings, money currently spent on
unnecessary administrative overhead for separate programs.
The Civil Access to Justice Act does more than just provide
legal assistance to our neighbors in need. At the end of the
October 2009 hearing we were assured that implementing these
recommendations made by the GAO will prevent the misuse of
taxpayer funds.
These recommendations attempt to strengthen Legal Services'
governance practices, improve oversight within LSC and improve
management practices. I applaud Legal Services Corporation in
implementing the recommendations, and to guarantee that these
recommendations are implemented--the Civil Access to Justice
Act codifies them.
Perhaps we can do even more to protect taxpayer funds. In
his written testimony for today's hearing, the inspector
general suggests we make several changes. These changes prevent
and detect waste, fraud, abuse, and improve effectiveness,
efficiency and economy of Legal Services' programs.
I look forward to hearing the inspector general's testimony
and that of the other witnesses to determine what changes they
believe may be appropriate to the legislation. I thank the
witnesses for appearing today and I look forward to their
testimony.
I now recognize my colleague Mr. Franks, the distinguished
Ranking Member of the Subcommittee, for his opening remarks.
[The bill, H.R. 3764, follows:]
__________
Mr. Franks. Well, thank you, Mr. Chairman.
Thank you, gentlemen, for being here.
Mr. Chairman, I thank you for calling this hearing. I
welcome the opportunity to look closely at H.R. 3764, the Civil
Rights--Civil Access to Justice Act of 2009.
And I say this because we know that LSC has a deeply
troubling history of mishandling Federal funds. This has been
revealed in news articles, reports from the LSC inspector
general and reports from the General Accounting Office.
It is clear, too, that this historical pattern hasn't
stopped. To the contrary, troubles continue. Last year the
Washington Times and CBS News reported numerous instances of
wasted funds, including unnecessary travel expenses and a
decorative wall costing more than $180,000.
Also, LSC's inspector general reported problems with the
organization's consultant contracts last year. And as we speak,
the GAO is preparing its third report on LSC since 2007. And so
I am concerned about H.R. 3764 because it would greatly expand
LSC's funding, at the same time loosen or lift a number of
restrictions on how LSC uses those funds.
Additionally, depending on how the bill is interpreted,
H.R. 3764 might strip LSC's Office of Inspector General of so
much authority as to prevent that office from fulfilling its
statutory duty to identify waste, fraud and abuse.
Before rewarding LSC with more funds and looser uses of
those funds, we should first have proof that LSC has stopped
mishandling funds. Some witnesses today may point out that LSC
has implemented 11 of the 17 recommendations provided by the
GAO in 2007 studies. But there are still six more of those
recommendations left, and there are still--there is still a
third GAO study coming in the near future.
And despite LSC's efforts to reform itself in 2008 and
2009, multiple news stories emerged in 2009 with new instances
of mishandled funds.
So how, Mr. Chairman, can we trust that the most recent
fixes at LSC will really work unless it is proved through a
track record of responsible fund management over the course of
at least a few years? Should we not first wait and see if LSC
and its grantees improve their performance before rewarding LSC
with this bill?
The 1996 restrictions on funds' use were enacted by
Congress in response to evidence that Legal Services lawyers
were systematically using taxpayer money to further
ideologically motivated lawsuits. The restrictions banned
represented--the restrictions banned representation of
undocumented aliens, persons evicted for drug use, suits in
which attorneys' fees are collected, class action lawsuits,
prisoner advocacy, and challenges to welfare reform.
Not only do these--not only do they keep LSC out of the
partisan area, these restrictions also focus LSC on its true
mission, ostensibly to provide legal aid to the poor.
Even with the restrictions, however, Legal Services lawyers
funded by LSC have apparently attempted to use Federal funds to
engage in prohibited--in prohibited activism.
As recently as 2008, for example, LSC's inspector general
subpoenaed California Rural Legal Assistance to see if it
violated the restriction on representing undocumented aliens.
The National Legal and Policy Center reported in 2009 that a
former CRLA lawyer said the organization had a policy of
providing aid to illegal aliens.
Evidence like this misuse of Federal funds should stop
before we reward LSC with increased funds, Mr. Chairman.
Congress should not consider giving LSC more money and more
ways to misuse its money at this point in time.
Oversight, not increased funding and loosened restrictions,
is what we need today and in the foreseeable future. Until LSC
has proven over a sustained period of time that its funds are
no longer being used for partisan activism and wasted on
decorative Italian walls, unused casino rooms and lavish travel
expenses, we should not even consider rewarding LSC with
increased funds and loosened restrictions.
With that, Mr. Chairman, I would yield back.
Mr. Cohen. Thank you, Mr. Franks.
I am going to recognize Mr. Conyers, the distinguished
Member of the Subcommittee and Chairman of the Committee. He
has never failed me when I have recognized him before. But
before he makes his opening statement, I do want to give notice
that this young man has a little bit more experience than me,
so I need to ask him a question that I hope he will respond to.
I just wonder when the Department of Defense was exposed
for buying $200 hammers and toilets that cost $18,000 and
things like that, did we shut down the Department of Defense?
Mr. Conyers, you are recognized for your statement.
Mr. Conyers. I reserve the right to answer that question.
[Laughter.]
But I want to thank the Chairman and the Ranking Member,
Mr. Franks of Arizona, who looks at these matters with great
care and with great scrutiny. And I am glad that we are holding
the hearing.
And to have our former colleague Senator Harkin here with
us and the Chairman of the Subcommittee on Crime in Judiciary,
Bobby Scott, I think signals that this is an important issue
that we are charged under our jurisdiction to deal with.
Now, there is a constitutional basis for everyone being
able to receive equal justice. As a matter of fact, it is on
the front of the Supreme Court itself. And as the late Justice
Powell said, equal justice should be accessible to all, without
regard to economic means.
Now, one of our very distinguished witnesses, the chairman
of the National Legal and Policy Center, suggests that we use
mediation and more mediation, and to--that premise I agree
with. But mediation without representation and legal counsel to
get you to mediation I think would be self-defeating.
And so I see three issues, and I am going to yield to our
distinguished senior Member from North Carolina for just a
moment. But the three things that we want to concern ourselves
with is what are the resources that are needed to have equal
justice for those who cannot afford legal counsel.
The second thing I think we need to do is reexamine the
restrictions that have been placed on these agencies.
And third, I think that we ought to make sure, through our
auditing and oversight and the way we look at the way all
Federal money is spent out of the Treasury, that we are doing
absolutely everything that we can to make sure that this meets
the scrupulous inquiry of the gentleman, the Ranking Member
from Arizona. I join him in that. We want to be as careful as
we can about how we use this money.
And I now yield to Mr. Watt of North Carolina the remainder
of my time.
Mr. Watt. Thank you, Mr. Chairman. I don't want to prolong
this because I am so anxious to hear my colleague Mr. Scott
testify on the other side of the desk.
And I am anxious to hear Senator Harkin, too. Although you
reminded us that he was a former colleague, that must have been
long before my time, because ever since I have known him he has
been on the Senate side.
I did want to correct one error that my colleague Mr.
Franks made in his--in his opening statement. I think we often
miss the distinction, at least on the House side--I don't know
how it works on the Senate side--the distinction that we make
over here between authorizing Committees and appropriating
Committees.
There is nothing in this bill that is going to provide any
money to anybody, because we don't have the authority to do
that. Only the appropriators, as I understand it, have that
authority.
And we make that mistake quite often and miss the point
that the role of the authorizing Committee is to--is to set the
rules under which, if money is available and if the
appropriators find it in the public interest to fund, they
will--they will do so.
Most of these restrictions that have been placed on the
Legal Services Corporation have never been acted on by any
authorizing Committee. And this notion that there were
extensive hearings held by the folks who put these restrictions
on--on the bill is just not--that is not the case.
We need to be aware of whatever abuses have been--have
taken place, if abuses have taken place, and we need to set up
a structure in the authorizing Committee to try to prevent
those abuses from taking place in the future.
But we shouldn't abdicate our responsibility to authorize a
Legal Services Corporation to do what it needs to do to provide
justice to the American people, and we should do that not--
without regard to what it costs, really, and let the
appropriators play their role in this process and try to figure
out how much money we can afford to devote to it.
Our responsibility should be to authorize Legal Services at
a--at a level and with--without the baggage that they have been
given by the appropriators to do what the Legal Services
Corporation was set up to do.
So with that, I appreciate the Chairman yielding, and I am
looking forward to the testimony of these witnesses and the
witnesses of the next panel.
Mr. Cohen. Thank you, Mr. Conyers, Mr. Watt. I thank each
of you for your statement.
Without objection, other Members' opening statements will
be included in the record.
[The prepared statement of Mr. Johnson follows:]
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, Jr., a
Representative in Congress from the State of Georgia, and Member,
Subcommittee on Commercial and Administrative Law
__________
I am now pleased to introduce our first panel of witnesses
and hear their testimony. Thank you for participating in
today's hearing. Without objection, your written statements
will be placed in the record. We ask you limit your oral
remarks to 5 minutes and note we have a lighting system. You
are all familiar with that.
Our first witness is Congressman Robert C. ``Bobby'' Scott,
again, serving his ninth term as a Member of Congress in 2009.
Prior to serving in the House he served in the Virginia house
of delegates and in the senate in Virginia.
In November 1992 he was elected to the U.S. House,
currently serves on the Committee on the Judiciary, where he is
the Chairman of the Subcommittee on Crime, Terrorism, and
Homeland Security, distinguishing--distinguished Member of this
Subcommittee, and also serves on Education and Labor and the
Committee on the Budget.
During his 16 years he has become known as a champion of
the U.S. Constitution and the Bill of Rights in particular,
fighting to protect the rights and civil liberties of all
Americans.
Pleased to have worked with him on this--Legal Services
Corporation matters, which he anteceded me on. He is a driving
force and a recognized champion as the author of the H.R. 3764,
the ``Civil Access to Justice Act.''
Thank you, Congressman Scott, and if you would begin your
testimony.
TESTIMONY OF THE HONORABLE ROBERT C. ``BOBBY'' SCOTT, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
Mr. Scott. Thank you. Thank you, Chairman Cohen, Ranking
Member Franks, Chairman Conyers. Thank you, Chairman Cohen,
Ranking Member Franks, Chairman Conyers and other Members of
the Committee.
I thank you for holding the hearing today on H.R. 3764, the
Civil Access to Justice Act. I am honored to be here to testify
on behalf of the legislation to reauthorize the Legal Services
Corporation.
Also pleased that Senator Harkin could join us to testify
on behalf of the efforts being made in the Senate to pass
similar legislation. I look forward to his testimony and the
testimony of those on the second panel.
Supreme Court Justice Hugo Black once said in an opinion
that there can be no equal justice where the kind of trial a
man gets depends on the amount of money he has. So the Legal
Services Corporation was established by Congress in 1974 to
provide legal assistance to people in civil matters who
otherwise could not afford a lawyer.
The LSC directs and supervises Federal grants to local
legal services programs which provide such assistance, and the
importance of this program has not diminished over time. As
President Richard Nixon, who was President when the program was
established, once said, legal assistance to--legal assistance
to the poor, when properly provided, is one of the most
constructive ways to help them help themselves.
I have a special connection, Mr. Chairman, to the LSC. I
was the original board chairman of the Peninsula Legal Aid
Center, which is located in Newport News-Hampton, Virginia
area. And given this experience, I know firsthand the benefit
and needs of legal aid programs around the country as well as
the benefit they provide to those they serve.
H.R. 3764 accomplishes several goals. It increases the
authorized level of--for LSC to $750 million. This is
approximately the same amount appropriated in 1981, adjusted
for inflation. LSC currently is funded at $420 million, which
is well below the amount needed to meet the recognized need for
legal services.
Currently more than 80 percent of individuals who need
civil legal representation do not have the means to obtain it,
and nationally 50 percent of the eligible applicants for legal
assistance from federally funded programs are turned away
because these programs lack ample funding.
Moreover, given the state of the economy the number of
individuals who will qualify for legal representation will
likely increase. We need to ensure that resources are available
to provide legal services to those who cannot afford adequate
legal representation.
The $750 million authorized in the bill will enable each
LSC program to begin to address the legal needs of low-income
residents in their communities.
The bill also lifts most of restrictions placed on the
program through appropriations bills over the years, including
the restriction on collecting attorneys' fees, the prohibition
on legal aid attorneys bringing class action suits, and the--
and the prohibition on what programs can do with non-Federal
funds.
The bill does maintain the prohibition on abortion-related
litigation and incorporates some of the limits on whom LSC-
funded programs can represent, including prisoners challenging
prison conditions and people convicted of illegal drug
possession in public housing eviction proceedings.
Additionally, the legislation provides for more effective
administration of LSC. Government Accountability Office reports
do emphasize the need for better corporate oversight and
management, so this bill seeks to improve corporate practices
of LSC.
I am pleased that we have a companion bill in the Senate.
Overall, the bills are similar but do have some differences.
One example is the issue of class action lawsuits. The House
bill allows class action suits with the approval of the project
director, which is what the original Legal Services Act
allowed. The Senate bill permits class actions if the suit
arises ``under established state or Federal statutory or
judicial case law.''
Even with these differences, however, it is my hope that
both bills can be passed by this Congress, reconciled and sent
to the President for his signature. And I am not the only one.
As of this morning, the House bill has 44 co-sponsors,
including a majority of the Members of the House Judiciary
Committee.
The bill also has the support of over 150 national, state
and local organizations, including the--including the American
Bar Association, the Brennan Center for Justice New York
University Law--School of Law, the National Legal Aid and
Defender Association, and the Virginia State Bar.
Mr. Chairman, I would like to submit for the record a
letter signed by all of the groups supporting the bill.
[The information referred to follows:]
__________
Mr. Scott. And the end of the--I would like to end with a
quote from Justice Lewis Powell during his--who, during his
tenure as president of the American Bar Association, said,
``Equal justice under the law is not merely a caption on the
facade of the Supreme Court building. It is perhaps the most
inspiring ideal of our society. It is one of the ends for which
our entire legal system exists. It is fundamental that justice
should be the same in substance and availability without regard
to economic status.'' This is the goal that H.R. 3764 seeks to
achieve.
So thank you, Mr. Chairman, for holding the--this hearing
and giving me the opportunity to speak on behalf of the Civil
Access to Justice Act. I hope we can mark it up in the near
future.
[The prepared statement of Mr. Scott follows:]
Prepared Statement of the the Honorable Robert C. ``Bobby'' Scott,
a Representative in Congress from the State of Virginia
__________
Mr. Cohen. Thank you, Chairman Scott, and appreciate your
testimony.
Was Justice Powell from Richmond?
Mr. Scott. Yes, he was.
Mr. Cohen. So I think I visited his grave when I was there.
Yes.
Our second witness is Senator Tom Harkin. Senator Harkin
has represented Iowa in the United States Congress for 35 years
and is the first Iowa Democrat to win a fifth term in the
United States Senate. First winning election to the House in
1974, he served 10 years representing the Fifth District, and
then he challenged an incumbent senator and won.
He currently Chairs the Senate Health, Education, Labor and
Pensions Committee and as a senior Member of the Senate
Appropriations, Agriculture and Small Business Committees.
Since arriving in Congress he has been a champion of the issues
that I think touch every American's life in a special way--
health care, education, and equal rights.
He has worked to transform America into a wellness society
focused on disease prevention and improving public health and
is a staunch defender of America's working families. He has
made Iowa proud and is a great representative of Iowa in the
great tradition of Henry Wallace and Governor Hughes and other
great Iowans. He did run for President and would have made a
great President.
Senator Harkin is the author of S. 718, the ``Civil Access
to Justice Act of 2009,'' which is the companion to
Representative Scott's bill.
We thank you for taking time out of your schedule and
coming back to visit us and share your testimony, Senator.
TESTIMONY OF THE HONORABLE TOM HARKIN,
A UNITED STATES SENATOR FROM THE STATE OF IOWA
Senator Harkin. Well, Chairman Cohen, thank you for the
honor of coming back to my--to the bosom of the start of my
political career here in the House of Representatives. It is
always wonderful to be back here.
I thank you for your leadership on this issue. I would be
remiss if I didn't thank my hero, and I say that with all that
it means, my hero John Conyers.
When I first got here that many years ago--Mr. Watts, I
want to say--reminded me a couple years ago I had--school kids
were out on the Senate steps, and I was telling them about
being a senator, and I said, ``But before I was a senator I
served over there in the House of Representatives in the
Congress.'' But I said, ``That was some time ago.'' I said,
``That was the last century.'' This little kid looked up with
these big eyes and said, ``How old are you?'' I had to explain
what--10 years ago.
But anyway, but John Conyers to me has always embodied what
I think is the epitome of the great public servant. For his
entire lifetime he has fought to make our society a more fair,
a more just, a more caring and compassionate society. And it is
always an honor to be here in front of Congressman Conyers.
And, Representative Franks, thank you also for your
interest in this. I just have a couple things I will say about
a couple of the comments you made about that, about governance,
which--you are right on track, by the way. A lot of that has
disturbed a lot of us.
And to be here with Representative Scott--an honor. He has
been a constant champion again for equal rights and justice. I
couldn't ask for a better partner in this effort to try to get
this legislation through.
Mr. Chairman, when I first came to Washington, D.C., I came
to law school. I went to Catholic University Law School just up
the street here. And we had a dean, Dean Clinton Bamberger, who
decided to start a neighborhood legal service clinic with law
school students.
And he got some money, I guess, from some friends and
stuff, and we opened a clinic up on North Capitol Street. It
was the first neighborhood legal services based out of--out of
a law school in the District of Columbia.
And I can remember going over there to staff that after
class hours, in the evenings, on Saturdays. It was all
volunteer. And having people come in--I can remember--this was
not too long after the Walker-Thomas case here in the district,
a Supreme Court case.
A person came in and--and wife--he and his wife, couple of
kids--I think--I forget, maybe two or three, four kids, and all
their possessions had been taken out of their apartment and
just put out because of an illness that he had had and he had
missed one payment on his rent. And the landlord decided to
just take everything out and put it outside.
I said, ``Well, that can't happen in our society.'' But it
was happening. And so how do you handle a case like that? I
wasn't a lawyer. We were just law students. Our legal clinic
then had to go to law firms in the District of Columbia to try
to find some lawyer that had some free time to help us out. And
that is the way we operated. It was sort of hit or miss. Now,
that was before 1974, obviously.
After I graduated from law school, I went to Iowa, went
back to my home state, and I joined the Polk County Legal
Services--Polk County Legal Services and became a lawyer there
for Polk County Legal Services. I will never forget the first
person that walked into my little cubbyhole where I had my
desk.
She came in. She had a little girl with her, her daughter.
And she came in and she was assigned to me. She came in. She
had these welts on her face and on her--and she showed me her
back and her arms. She had a couple of teeth missing, and her
little kid just so frightened.
I thought, ``Well, surely this is a criminal case. We don't
handle criminal cases. We handle civil cases.'' What it was was
that her husband had been beating her up, and she wanted to
come in to get some protection.
She wanted to know if there was a safe place where she
could go with her daughter. She wanted to know if we could
handle a divorce so she could get away from this abusive
relationship. I will never forget that and how we were able to
help in those cases.
And then through my tenure there, the landlord-tenant
cases, the workers' comp cases, the disability cases that came
through the door, left a lasting impression on me of how
important it is for poor people to have legal--access to legal
services.
Well, then after that, Legal Services Corporation was
started, as Congressman Scott said, in 1974, I might add under
a Republican president, Richard Nixon. And then by the time I
got here to the Congress in 1975, Legal Services was just
starting to get off the ground and make its way across the
country.
So I was able to see it grow until about 1981 when I think
the high point was reached in terms of funding, and then during
the 1980's, during the Reagan years, it just kept getting cut
more and more and more and more, and we reached a low point I
think some time in the 1990's in terms of funding.
But nonetheless, the Legal Services that--Corporation and
those lawyers out there kept at it, kept doing more with less,
until finally it reached a crisis, till what--people just
couldn't handle it any longer. And so we finally started, then,
in the 1990's getting the funding back up for the Legal
Services Corporation.
Even where the funding is now--and right now--it got down
quite a bit. I can get the numbers. But we are now back up to
just about where we were in the mid 1990's, not counting for
inflation. If you count inflation, we are way back. We are way
back.
One of the things that our bill does is it sets an
authorization level that is basically where it was in 1981.
That is the authorization level we have, adjusted for
inflation, so it is around $750 million.
And I think right now we are at about $420 million. So it
sets that as an authorization level, because right now, even
where we are, 50 percent--50 percent--of the people who walk in
the door of a Legal Services office anywhere in America--half
of them--are not helped, not because their cases aren't good or
they don't need help.
Legal Services simply do not have--does not have the money
or the resources to help these people. One out of every two are
turned away because they don't have the wherewithal to help
them. And it is probably getting worse.
I checked with Iowa legal aid. Our Iowa legal aid--just in
the last few years, their housing cases have gone up 300
percent. No surprise, with the housing crisis. That has gone up
300 percent. The chief justice of the Texas supreme court said
this is a crisis of epic proportions. A crisis of epic
proportions. Chief justice of the Texas supreme court.
And it has real consequences for people. Our bill, I think,
would bring this into the 21st century. As I think was pointed
out, this bill has not been authorized since 1981. So if there
is problems out--it is because we haven't brought it into this
century.
The Federal funds, I said, have been cut. When you consider
the inflation, it is way down. So we do need to reauthorize it,
and I think Congressman Scott went through some of the things.
But I mentioned we increase the authorizing level basically
where it would be at 1981.
It lifts some of the restrictions, like collecting
attorneys' fees and things like that, but it also does better
governance, Congressman Franks. One of the things we put in
this bill is we incorporated all of the GAO recommendations.
And believe me, I have watched this with some anger and
frustration as I have seen some of the governance of Legal
Services in the last few years. But we are getting it back. We
have got a new chairman of the board who is excellent, and you
are going to hear from Mr. Levi.
So I think we are now moving in--but we incorporate all
those GAO recommendations and codified them--codified them--in
this bill.
And lastly, I might say one of the things I really wanted
in this bill was it expands the law school clinics. Maybe that
is personal to me, but we can--we can make our dollars go a lot
further by expanding the use of law school clinics, for law
school clinics like the one I started up on North Capitol
Street, where we don't have to go shopping around all the time
to one law firm or other to find who might have some free time,
but where we can go to Legal Services with these cases from the
law school clinics and get people the kind of representation
they need. So we expand those--those clinics in this--in this
bill.
Lastly, let me just say, again, I have never considered
this a Republican or a Democratic issue. Many of the lawyers I
served with in Legal Services in Polk County were Republicans
and are still today. Many of the champions of this have been
Republicans as well as Democrats.
You mentioned President Nixon. I mentioned somebody closer
to home. I worked for years in the Senate with Pete Domenici,
from your neighboring state, New Mexico, one of the great
champions of this.
And here is what Pete said once. He said, ``I do not
know''--we were talking about funding for legal services. He
said, ``I do not know what is wrong with the United States of
America saying to the needy people of this country that the
judicial system is not only for the rich. What is wrong with
that? That is what America is all about.''
So I have never considered this a Republican or Democratic
issue. I consider it an issue of just basic fairness and
justice. That statue of Justice up there with the blindfold is
holding those scales, but the scales get tipped if you put
dollar bills on them. That not equal justice. That is not equal
justice.
We have got to take away that influence of whether or not
you have the money to get a lawyer or not to make sure you get
equal representation in our society.
So I thank you, Mr. Chairman, for having this hearing. I
hope we can move this bill as expeditiously as possible.
[The prepared statement of Senator Harkin follows:]
Prepared Statement of the Honorable Tom Harkin,
a United States Senator from the State of Iowa
__________
Mr. Cohen. Thank you for your testimony, Senator Harkin,
heartfelt and personal, anecdotal, and publicly thank you for
sponsoring the Senate apology for slavery and Jim Crow in the
111th.
We thank each of you for your statements, and we excuse
you.
We know you need to get back to the Senate for duties.
And, Congressman Scott, you have duties as well.
So we thank each of you and we will now empanel the second
witnesses, group of witnesses.
Mr. Watt. Mr. Chairman, you mean I am not going to get a
chance to question Mr. Scott? [Laughter.]
Mr. Cohen. Not here. [Laughter.]
Out of order. Thank you all for participating. The second
panel will come forward.
I would like to thank everybody for participating in
today's hearing, and the same instructions that went to the
first panel go to your panel, except you have to answer
questions.
Our first witness on this panel is Mr. John Levi. On April
7, 2010 he was elected chairman of Legal Services Corporation
board of directors. Mr. Levi is a partner in Sidley's Chicago
office. He represents major professional financial services
firms and corporations in employment and labor matters before
numerous Federal and state courts, government agencies and
arbitration forums.
He regularly litigates claims regarding wrongful
termination for employment issues, restrictive covenants, wage
and hour and other employment-related matters in these various
forums. In addition, Mr. Levi advises clients on their internal
policies and governance.
He has counseled numerous clients regarding their
employment policy handbooks and manuals, prepares and
negotiates executive employment agreements and post-employment
covenants, and has spoken at a number of employment law
conferences as the author of ``Legal Issues Regarding AIDS in
the Workplace.'' That was published in the January 1988 issue
of Commerce magazine.
Anecdotally, he related to me that historically his father,
Mr. Edward Levi, was the United States attorney general under
the Ford administration and served with distinction there.
We thank you for your service and appreciate your
attendance, and you can begin your testimony and the 5-minute
light will start.
I think I forgot to--I dismissed giving the warnings to the
previous panel because they are so used to them. There is a
light that goes on that is green. That means you have got
your--you are in your okay zone. It goes on for 4 minutes. At
the end of 4, it goes to yellow. At the end of that minute,
which is a total of 5, it goes to red. And at red you should be
concluding or have concluded. Thank you, sir.
TESTIMONY OF JOHN G. LEVI, CHAIRMAN, BOARD OF DIRECTORS, LEGAL
SERVICES CORPORATION
Mr. Levi. Thank you, Chairman Cohen. In our profession we
are familiar with lights.
Chairman Cohen, Chairman Conyers, Congressman Franks,
Members of the Subcommittee, thank you for holding this hearing
and providing the Legal Services Corporation with the
opportunity to testify on H.R. 3764, the Civil Access to
Justice Act. I will keep my comments very brief.
My thanks to you, Congressman Scott, for your sponsorship
of this bill and to you, Mr. Chairman, and all of the co-
sponsors.
We wholeheartedly support the authorized funding level of
$750 million because it will significantly strengthen our
ability to provide legal aid to the poor. Higher annual funding
for LSC will help expand the capacity of local Legal Services
programs to meet the needs of their communities.
Those needs are on the rise, especially given the risk that
the economic downturn raises to jobs and homes, the jeopardy of
physical violence and family conflict, and the special needs of
veterans, and yet all these needs are increasing at precisely
the same time that local resources are in decline.
A major source of legal aid funding, IOLTA, is in a
downward spiral because of the drop in short-term interest
rates. LSC programs were hit with a 24 percent reduction in
IOLTA funding in 2009 compared to 2008, and that is a loss of
$27 million.
The near term is just as troubling. Most programs project
declines in their IOLTA funding this year and probably into
2011, so this is a moment when every dollar counts, and the
board is encouraging local programs to think strategically
about partnerships, collaborations with others, such as law
firms, law schools, medical centers, local businesses and
community agencies.
Our programs report that cases closed by private attorneys
increased significantly, up 11 percent in 2009, from the
previous year. And we want to do all we can to continue to
foster commitments for pro bono work from lawyers in every
community.
With the bill's sponsors, I share the goal of improving
governance and accountability so that every dollar is well
spent. With new membership and renewed dedication, the board is
committed to serious improvement in the organization's
accountability and transparency.
We also greatly appreciate the increase in the
corporation's executive pay schedule from level five to level
three. We are now about to launch a nationwide search for a new
president of LSC, and more competitive pay will help us recruit
an innovative and forceful leader.
Let me close with a couple of observations from my first
few weeks on the job. We held our regular board meeting about
10 days ago in Arizona where we were briefed by the three LSC
programs in that state.
Legal aid programs in Arizona, as in most parts of our
Nation, are unable to provide assistance to a majority of those
who need help and daily turn people away. While board members
were being briefed at Southern Arizona Legal Aid offices,
clients filled every intake desk and the waiting room, with a
line out the door.
In my home town of Chicago, the Legal Assistance Foundation
operates the Foreclosure Project, and its intake telephone
lines usually have to shut down early Monday afternoon for the
rest of the week because of the overwhelming need and limited
staff resources.
Mr. Chairman and Subcommittee Members, the corporation
supports reauthorization because it represents an expression of
ongoing support for the mission of LSC. In particular, the
proposed funding level in the legislation reaffirms that
Congress recognizes the profound importance of the work
performed by the 136 LSC programs across the Nation and located
in every state.
With 54 million Americans--one-sixth of our population--
qualifying for legal assistance, the magnitude of this issue
cannot be overstated.
My father, as you recognized, served as attorney general of
the United States in the Ford administration, in a different
time of crisis. And in his farewell address to the Justice
Department he reminded us that the values on which our country
was founded ``can never be won for all time. They must always
be won anew.''
Every day legal aid attorneys do their best to ensure the
poor receive fair treatment in the resolution of their pressing
legal problems. I thank the Subcommittee for taking up this
legislation. It represents a giant step toward fulfilling our
national promise of equal justice for all.
Thank you, Mr. Chairman. I am happy to respond to questions
at an appropriate time.
[The prepared statement of Mr. Levi follows:]
Prepared Statement of John G. Levi
__________
Mr. Cohen. Thank you, Mr. Levi, for your service and that
of your family and for your testimony.
Our second witness is Mr. Jeffrey Schanz, who was appointed
Legal Services inspector general effective March 3 of 2008. He
has had a long and distinguished career with the Federal
Government, 34 years, the last 32 in DOJ, served 17 years as
director of the Office of Planning and Development, Audit
Division, in the inspector general's office.
Thirty-two years at DOJ have included auditing, program
analysis, investigation, legal analysis of top management
positions. After leaving the Department of Health, Education
and Welfare he served with the Law Enforcement Assistance
Administration, Justice Management Division, and the Office of
the Inspector General, and a recipient of several attorney
general awards.
Thank you, Mr. Schanz, and you can begin your testimony.
TESTIMONY OF JEFFREY E. SCHANZ, INSPECTOR GENERAL, LEGAL
SERVICES CORPORATION
Mr. Schanz. Thank you very much, Mr. Chairman. Mr.
Chairman, Congressman Franks and other distinguished Members,
as you just heard, my name is Jeff Schanz. I have been the
inspector general for Legal Services since March of 2008.
Sorry.
I believe strongly, being in the I.G. community for so many
years--actually, decades; three decades--I strongly believe in
the values of accountability, transparency, effectiveness and
efficiency that are mandated by Inspector General Act.
I fully endorse Chairman Levi's statement underscoring the
critical importance of the LSC mission, and I look forward to
working with Mr. Levi and the new board in fulfilling the
corporate mission by ensuring that Federal funds are
appropriately used to help the indigent, the people that it is
designed to help.
One of my duties as the inspector general is to keep the
Congress fully and currently informed of my findings and
activities and comment on existing and proposed legislation,
that latter function which brings me here today to comment on
H.R. 3764.
At this Subcommittee's hearing last year, Chairman Cohen
asked what steps the corporation had taken to ``protect against
the misuse of Federal funds.'' I will briefly talk about some
of the activities that my office has done in the last 18
months, recognizing I have been here 2 years. A more robust
list of my activities are in the formal statement that I
prepared for today that will be, hopefully, entered into the--
into the record.
We did complete a series of audits of grant management and
oversight, reporting on issues that affected almost $1.5
million in LSC or LSC derivative funds and referred over
$400,000 to the corporation as questioned costs to be recouped.
We launched a number of initiatives to help and detect--
prevent and detect fraud and abuse. We have issued fraud
alerts, an initiative that was undertaken to all of the
executive directors of the programs, the 136 programs, to
highlight vulnerabilities identified in the course of OIG
audits and investigations.
We also took numerous steps to improve the government
practice--governance practices and accountability at LSC by
independently and objectively conducting an audit of the LSC
contracting with respect to consultants.
We also have taken a more robust look at all the IPA
reports, the independent public accountant reports, that come
in to the OIG, and we have also overseen and continue to
oversee the annual corporate audit.
While H.R. 3764 proposes some useful reforms in the areas
of governance, it also contains that--we believe, a number of
provisions that threaten to undermine the I.G.'s work.
If a provision comparable to Section 509 of the 1996 LSC
Appropriation Act is not included, the reauthorization bill
would take the corporation backwards to a time where the
respective roles of management, LSC management, the OIG and the
aforementioned IPAs, the independent public accountants who
audit grantees, were unclear.
The GAO in their first audit has specifically identified
such lack of demarcation as a major factor in LSC's heretofore
weak governance and accountability practices.
Without Section 509 or an equivalent, oversight of grantee
audits would no longer be held to the same standards that the
OMB Circular A-133 makes applicable to audits of states, local
governments and nonprofit organizations receiving Federal
grants.
In addition, the bill as constituted would restrict the
OIG's access to grantee records as it contains no provision
comparable to Section 509(h) of the 1996 act, which provides
the OIG access to the records it needs to perform our statutory
oversight duties.
Moreover, under the proposed LSC bill, grant money would no
longer be considered Federal funds for purposes of Federal
statutes relating to fraud and embezzlement--unfortunately,
issues that we have uncovered.
The bill would also make it difficult for the OIG to
ascertain the source of funding for grantee activities by
repealing current provisions that require recipients to account
separately for LSC and non-LSC funds.
In addition, the bill would repeal the current statutory
requirements that grantees make their timekeeping records
available to oversight entities, OIG, GAO and the corporation
included, and eliminates statutory provisions designed to
foster competition in the grant award process.
I stand ready to work with the Committee and the new board
of directors to ensure that the LSC OIG can function with the
independence and authority it needs to ensure the--that Federal
funds entrusted to LSC are spent with the appropriate level of
transparency and accountability.
I am pleased to answer any questions that the Committee may
have. Thank you for this opportunity.
[The prepared statement of Mr. Schanz follows:]
Prepared Statement of Jeffrey E. Schanz
__________
Mr. Cohen. Thank you, Mr. Schanz. I appreciate your service
and your statements.
Our third witness is Mr. Kenneth Boehm. Mr. Boehm is the
full-time chairman of the National Legal and Policy Center in
Falls Church, Virginia since 1994. Previously he was in a
senior position in Legal Services Corporation, from 1991 to
1994, assistant to the president of LSC and counsel to the
board of directors.
He has received his J.D. and since then he has been a
prosecutor in Chester County, Pennsylvania; treasurer of a top
10 political action committee; chief of staff to Representative
Chris Smith, Republican of New Jersey; and chairman of Citizens
for Reagan--awful young to have done that.
In addition to his legal career, Mr. Boehm spent 5 years as
an award-winning radio talk show host on Philadelphia's WWDB.
His broadcast experience--guest commentator at NPR and guest
interviews on more than 500 radio and TV programs.
We appreciate your being here and look forward to your
melodious voice. I believe you need to turn on the microphone.
TESTIMONY OF KENNETH F. BOEHM, CHAIRMAN,
NATIONAL LEGAL AND POLICY CENTER
Mr. Boehm. There we go. So much for my broadcasting
background.
Mr. Chairman, Congressman Franks and distinguished Members
of the Subcommittee, I want to thank you for this opportunity
to testify this morning on the proposed reauthorization of the
Legal Services Corporation.
If there is one thing that everybody familiar with the
Legal Services program knows, it is that it has had a very
troubled history. A lot of this has been commented on--the GAO
studies, the other problems, et cetera.
One of the reasons that we are here today is because this
program has not been--was last reauthorized in 1977,
authorization that expired in 1980. There are few Federal
programs out there that have been unauthorized for some 30
years.
The reason----
Mr. Cohen. We talk through that.
Mr. Boehm. Oh, okay. The reason that it has been
unauthorized for so long is because of these controversies. It
reached a head in 1996 when there were deep cuts in the
program. Actually, the House budget resolution called for
phasing it out over 3 years.
The people who supported Legal Services said, ``It is time
for an historic compromise. The compromise is this. Let's do
away with a lot of the more controversial programs--lobbying,
congressional redistricting, the class actions, prisoner
litigation--you name it--and in return for that, we will see
how they do, see if these reforms stick, and let's press
ahead.''
That is, in fact, what happened. And most of these reforms
have been repeating year after year since 1996. There has been
a broad bipartisan coalition. There has been no real effort to
gut them in any substantial way. And that brings us to today.
The problem I have with the proposed reauthorization is it
basically would eliminate or weaken almost all of the 1996
reforms. We won't have to wonder what will happen if that
occurs, because we just have to look at what happened before
the reforms were in place.
One of the problems were these series of legal actions that
don't have to do with the day-to-day legal service of the poor
that generated most of the problems. It is almost an 80-20
Pareto principle. Eighty percent of the problems came from 20
percent of the cases, but it was those 20 percent that got an
awful lot of attention.
Prisoner lawsuits--now the current reauthorization would
allow them with the exception of prisoner conditions. This was
highly controversial.
You had a situation in a Pennsylvania prison where a triple
murderer was released back to the general population through
the good services of Legal Services and in a prison break
attempt took 30-something hostages. The governor really was
very, very upset with that. He later became attorney general of
the United States. And it received a lot of bad publicity.
I would argue that in a time and date when we have so many
unemployed and so much traditional legal services to be done,
this is the last time to be wasting scarce resources on civil
lawsuits on behalf of prisoners.
The real outrage is one--I think is congressional
redistricting, or any legislative redistricting. Incredible as
it seems, Legal Services has been involved in this area. When
this reform was proposed, even Congressman Barney Frank said,
``I don't know what Legal Services lawyers are doing in
congressional redistricting cases.'' It is not like the poor
people are wading into the offices saying we feel
malapportioned, we think the 16th Congressional District should
look like this, as opposed to this.
On top of that, one of the problems with these cases is
they are very, very expensive, with computer models and the
rest of it. It is hard to say it is not a politicized program
if it is doing something as political as redistricting. It is
hard to imagine anything less tinged with partisanship than
that.
Another argument is drug-related evictions for public
housing. This was another hot-button issue. Legal Services was
more involved than any other single group of legal groups in
thwarting drug-related evictions up to the 1996 reforms. And
the rule was that--that came in 1996 you can't participate in
these at all.
The new proposed reauthorization allows them to get back in
but draws the line at convicted drug dealers. Well, convicted
drug dealers aren't going to be in that public housing. They
are generally going to be in other public housing. And usually,
they are not even client eligible at all because they tend to
have cash income that makes them uneligible.
I couldn't begin to understand why Legal Services would go
back into this very controversial area and yet allowed under
this legislation.
Then you have class action lawsuits. The reason they were
restricted was because so many of them were very, very highly
political. In many cases you could argue against the interests
of the poor.
One of the more celebrated ones was a class action lawsuit
in the case of Atlanta public housing in which case they were
trying to screen out violent criminals from becoming tenants in
public housing.
Legal Services brought a very expensive class action
lawsuit to try to stop that. I don't think if you polled the
average public housing person they want violent criminals in
their public housing unit, and yet Legal Services was involved.
And so class actions has been for the last--since 1996
restricted and, again, I think opening the door back to that is
a backwards step.
Lobbying, the same argument. The bill would allow lobbying
with non-Federal funds. The trick there is--or the real issue
there is who picks what is lobbied on. It would be the Legal
Services lawyers. And again, I think you could make a good
argument when they were lobbying they were lobbying on a lot of
things that an awful lot of poor people would not agree with.
The most important provision of all is the one that says
that you cannot do with non-LSC funds--the restriction--you
cannot do with non-LSC funds what you can't do with LSC funds.
And the reason that that was a problem up to 1996 was that
so many of the individuals that were involved in Legal Services
at the time, frankly, didn't--you couldn't tell whether it was
Federal money or other money, and the tools weren't there. The
oversight wasn't there. And so that was a major problem.
If you allowed it, essentially it would be anything goes,
and they would be doing lots of restricted activities and it
would be impossible to sort it out.
The final argument I would make is this, that we are going
backward when we eliminate all these common-sense restrictions,
and we should instead keep them.
And I think ultimately Legal Services would have a better
chance of getting funding if it weren't engaged in these highly
political and controversial subjects and instead was actually
helping the traditional legal needs of the poor. Thank you.
[The prepared statement of Mr. Boehm follows:]
Prepared Statement of Kenneth F. Boehm
__________
Mr. Cohen. Thank you, sir.
Ms. Diller is our next witness, Ms. Rebekah Diller. She is
deputy director of the Brennan Center's Justice Program,
coordinates the Brennan Center's legislative and public
education campaign to eliminate private money restriction on
Legal Service programs and other initiatives.
Prior to joining that center, she served as staff attorney
at the New York Civil Liberties Union Reproductive Rights
Project. She oversaw litigation and other initiatives there.
She represented low-income citizens in housing and government
cases, legal service of the elderly--basically the panoply of
good things.
Now, if you would be so courteous as to watch the 5-minute
limit, I would appreciate it, and you are recognized for your
testimony.
TESTIMONY OF REBEKAH DILLER, DEPUTY DIRECTOR, JUSTICE PROGRAM,
BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW
Ms. Diller. Good morning, Chairman Cohen, Chairman Conyers,
Representative Franks and other Members of the Subcommittee.
The Brennan Center thanks you for holding today's hearing and
for permitting me to testify in support of the Civil Access to
Justice Act.
I will start by saying that we have heard various views
about particular provisions of the bill, but one thing I hope
we can all agree on is that the need right now, as others have
so eloquently testified, is tremendous.
Americans are facing foreclosure at record rates. The ranks
of the unemployed have swelled. Many of those folks are facing
long-term unemployment. And all of this is giving rise to
tremendous legal need. Often a Legal Services lawyer is a
lifeline. It is the one thing standing between a family and
homelessness and a downward spiral into--into more crisis.
I think it is a critical time and this bill will reinforce
our Legal Services program at a time of great need and allow
for the infrastructure to serve more people.
We heard today some claims about some old cases regarding
restrictions. These are some cases out of a program that serves
nearly a million people a year. I would like to tell you about
how the restrictions are affecting Legal Services clients
today. And they are affecting them in ways that have nothing to
do with ideological-crusade-types of cases. They are affecting
them in their daily bread-and-butter-type cases.
First of all, the most harmful restriction that we have
seen has been the restriction on non-LSC funds. This is the
restriction that says if you take one dollar from LSC, all the
money you receive from state, local governments, IOLTA
programs, private donors--all of that is restricted.
And that restriction hampers $526 million a year, or 60
percent of the funding at LSC recipient programs. So the
Federal Government, which is in essence a minority stakeholder,
if you will, here, is dictating to all these other players how
their money gets spent.
And what we have seen is that this restriction has been
tremendously wasteful for a system that already has scarce
resources. In many places, state and local funders have not
wanted their money tied up by the Federal restrictions, and so
they have had to form duplicate legal aid systems, which means
you are paying two sets of rent, two computer networks, two
copy machines. All of these extra expenses could go toward
serving more clients more effectively.
Second of all, that restriction sends exactly the wrong
message. We should be welcoming private participation. We
should be welcoming a leveraging of the Federal funds. And
instead, it says to private donors, ``We will restrict how your
money, your donations, are spent.''
Second of all, as to the restrictions on advocacy tools,
there is simply no justification in a country that promises
equal justice for all for telling a low-income client that he
or she cannot have access to the same legal tools that are
available to a client with means.
And I would like to tell you about some of the ways this
has been playing out, particularly as low-income communities
and communities of color have faced crises with predatory
lending and other consumer scams.
A number of providers across the country have reported this
alarming incidence--this is just to give you one example--of
foreclosure rescue scams. These are companies that promise you
that they will refinance your mortgage. They take your money
and then they are never heard from again.
And the effective way to deal with that kind of operation
would be to bring a class action on behalf of your client and
all others who have been affected. Unfortunately, because of
the restriction, programs can't do that. They can represent one
victim at a time, maybe achieve a result in that one particular
case, but they can't seek the broader relief that would stop
the illegal practices and bring those companies to justice.
So instead of performing some sort of ideological screening
test, what the restriction has been doing is it has been really
insulating those who prey on the poor from accountability and
from being brought to justice.
The other thing I will just mention is we heard from the
inspector general a number of suggestions for changing and
improving the bill, and I would just say that we are eager to
work with Subcommittee staff on a number of those which I think
we could reach agreements on.
The one area where I would disagree is that--is the need to
access confidential information such as client names and the
like. There has simply not been a showing that there is a need
to get that information. There is a way to ensure
accountability by using other means without violating state
confidentiality protections.
Thank you, Mr. Chairman----
[The prepared statement of Ms. Diller follows:]
Prepared Statement of Rebekah Diller
__________
Mr. Cohen. Thank you, Ms. Diller. I appreciate your
testimony.
And I will now recognize myself for questions.
Mr. Levi, first of all, we--Ms. Barnett's contract ended at
the end of 2009. Where is the board in finding a permanent
replacement for her?
Mr. Levi. Well, this afternoon our search committee will
have its very first meeting and will issue a request for
proposals and begin the process of getting a high-quality
search firm to help us. And then we intend to conduct a
nationwide search and bring in somebody who is absolutely
outstanding, with a distinguished career, to help in this very
important problem in our country and to lead us in an
innovative and forceful way.
Mr. Cohen. As new chair of the board, what are your goals
and how do you see that the past problems can be rectified and
the public to embrace LSC and Mr. Franks to wrap his arms
around LSC?
Mr. Levi. I hope to convince our Congressman Franks to----
Mr. Cohen. Particularly about the fraud and abuse, because
that is important to all of us.
Mr. Levi. Absolutely. And I would say we have--I have a
number of priorities, but four in particular. The first, we do
have to conduct a first-rate search. I have done that for other
organizations. I am confident that we can get an outstanding
president in.
The second is that we have to call attention throughout the
country, here and elsewhere, to the existence of this problem,
encouraging not only Congress but the--but private individuals,
the law firms, to step up and do as much as they can to help
with this situation.
The third is certainly to--and they are not in order here,
but they are my priorities--to make sure as a--look, our board
wants to make sure that our internal controls--my understanding
is that of the GAO recommendations all 17 have been addressed.
But look, we are--we are new. We are going to take a deep
dive in here and make sure to--for our own selves that
appropriate controls are in place, that you and the American
people can have confidence that money is being well and
properly spent. And I look forward to working closely with the
inspector general on that.
And finally, we have to come up with a new strategic plan.
The current plan expires this year, and I look forward to
developing such a plan for the corporation.
Mr. Cohen. Mr. Levi, I imagine, looking at your vitae, you
do employment law. You generally represent management.
Mr. Levi. More often management, yes.
Mr. Cohen. Business.
Mr. Levi. Yes.
Mr. Cohen. You don't see any contradiction in any way in
doing that and yet looking out for the equal justice for the
poor.
Mr. Levi. Not at all. In fact, I have been in my private
life involved in doing just that for many, many years.
Mr. Cohen. Thank you, sir.
I join you and Mr. Franks and others in wanting to see the
money properly spent. It galls me when I see people having
trips, monster meals, limousines on government money that
should be going to the public's needs and particularly to the
poor.
So I appreciate the inspector general's reports, and there
are things that are not in our bill that are in the Senate
bill. I would like to see them get into our bill and make it as
strong as possible, because that is one of the--you know, that
is one of the ways you go to hell, I think, is taking money
from the poor.
Mr. Schanz. Yes, sir. Thank you. We have worked with both
staffs on the Senate side and the House side, and my long
statement for the record will include most of those amendments
that we need to have inserted into the bill to increase, not
decrease, governance.
Mr. Cohen. Thank you, sir.
Ms. Diller, let me ask you a question about--Mr. Boehm made
a point about talking about the drug situation. In drug-related
cases, the change in the law would simply say that if you are
convicted of a drug offense. Would you remind us something
about innocent till proven guilty?
Ms. Diller. Yes, Chairman. I mean, that is exactly the
point. You are innocent until proven guilty. And this
legislation would only change the existing provision to honor
that principle, so that if you have not been convicted, there
are cases where charges are brought, and then they are dropped
later. People are acquitted. And in the meantime, you can lose
your home.
So the only thing that this would do is make sure that for
that set of cases where there has merely been a charge brought,
you are eligible for representation, whereas once you are
convicted there is no representation.
Mr. Cohen. And might people that have drug charges brought
against them have families and children and----
Ms. Diller. Absolutely. I mean, the sort of classic case is
the grandmother living with her grandson or whoever----
Mr. Cohen. Right, extended family.
Ms. Diller [continuing]. Faces eviction.
Mr. Cohen. Is there a distinction in the law between
felonies and misdemeanors, possession and sale?
Ms. Diller. I would have to double check that. I mean, my
understanding was that this is a pretty far-reaching
restriction.
Mr. Cohen. Thank you very much.
I now yield to the--Mr. Franks for 5 minutes of
questioning.
Mr. Franks. Well, thank you, Mr. Chairman.
Mr. Boehm, I guess the first question I would ask--I know
that of the poor who need legal services that are not able to
afford it themselves that probably only a certain percentage of
them actually gain some outside help of some kind. I don't know
what that is.
And you know, just for the record, you know, I certainly
want to do everything I can to see that the poor receive the
appropriate legal representation that they deserve under our
Constitution.
With that said, I don't know what the percentage of the
total poor that actually get help, but of those who get--that
do get help, isn't it about 10 percent or a little less than 10
percent of them get help from LSC?
Mr. Boehm. That is the case, sir. There have been studies
of this. One was a study by a former LSC inspector general
looking at pro bono activities, activities representing the
poor pro bono from groups not getting LSC funding, and the
figure came out as less than 10 percent of the poor who do get
some kind of legal advice and representation get it from Legal
Services.
But there is another statistic, and it was mentioned by Ms.
Diller, which is 60 percent of the money that goes to LSC-
funded groups comes from non-LSC or non-Federal sources. So you
take those figures and you actually look at it, and it is a
very small percentage of the poor who get money from the LSC
program.
And then, when you have all of these more politicized types
of cases, prisoner cases and the rest of them, that takes away
from the money that is available to the more deserving poor, to
use an archaic phrase.
Mr. Franks. Yes. Well, I guess that is the point I wanted
to make, Mr. Chairman, is that, you know, those of us that
object to the Federal funds being spent in a way that it is--
that is counterindicative of what the mission statement of LSC
is, do so on the basis that as far as, you know, the private
sector doing what they can--you know, Ms. Diller mentioned that
the private sector--they want to encourage that. And certainly
if this was a private endeavor I don't think there would be a
hearing here. You know, you could represent who you wanted, how
you wanted.
But if the Federal Government is going to take tax money
from its citizens and--you know, under a obligatory scenario
and give it to Legal Services, I think it has the right and
responsibility to make sure that there are restrictions on what
they do, what organizations that they fund.
And if we have an organization that 60 percent of which is
privately funded, and they help less than 10 percent of the
poor who actually get legal service help from someone, which is
probably--I don't know what percentage of the poor actually get
help, but I am sure it is less than it should be--then you
begin to understand why there is hesitation on our part to see
monies from taxpayers go to an organization that uses it for
ideological purposes rather than the stated purpose of helping
the poor.
So, Mr. Boehm, I guess I--you know, the 1996 restrictions I
am understanding have been violated using the so-called mirror
corporations that enable restrictions to be circumvented. I
know you have written about that. Could you explain that, that
kind of underscores one of the reasons why we are hesitant in
this case?
Mr. Boehm. Certainly. One of the ways that programs have
dealt with the restrictions is to set up a closely connected
but legally distinct organization. And there is a set of rules
within the LSC regs as to what you can and can't do.
There was an investigation by a prior LSC I.G. into
programs where they were working out of the same office.
Individuals were wearing both hats. The net result was lots and
lots of restricted activities were being conducted in very,
very close coordination with Legal Services.
And in one case, the rent by the non-LSC group that was
doing all the restricted activities hadn't been paid to the
federally funded LSC group over a long period of time.
And it was basically a loophole to get around what Congress
said shouldn't be done with Federal funding.
Mr. Franks. Well, I think, again, Mr. Chairman, that is
another point that is a concern to us. The taxpayers that fund
this--oftentimes, you know, they are obligated to do it under
the laws. They do so to help poor people gain legal services
that they need.
And so when they find themselves funding these ideological-
driven issues that they may not necessarily agree with, then of
course they--I think they reject that.
So my last question is can you give us a little bit of a
sense of what types of ideologically motivated lawsuits brought
about the 1996 restrictions?
Mr. Boehm. Yes. There are an awful lot of cases that I
think were ideological, if not political. There was a
celebrated case in 1997 where Legal Services tried to overturn
an election in Texas by invalidating 800 absentee ballots filed
by servicemen and women.
These are people in Kosovo who were fighting for their
country, received notice that they had to answer a 20-
something-page case within 3 days because Legal Services was
trying to overturn the election.
Now, in that particular case, they also asked for
attorneys' fees, although attorneys' fees had just been banned.
Fifty-eight United States senators wrote a letter, and the
letter was drafted by Barbara Mikulski of Maryland, and it went
to Janet Reno, the attorney general, saying, ``What in the
world is Federal tax money going to try to invalidate service
people's absentee ballot?'' If there is anybody in this country
who should be entitled to an absentee ballot, it is somebody
serving their country.
I think that was a very celebrated case, but that
illustrates the type of mischief there can be if there aren't,
in fact, real reforms that operate in a real way.
Mr. Franks. Well, thank you, Mr. Chairman. It also
illustrates how difficult it would be in the U.S. Senate
without those stalwart conservatives like Barbara Mikulski.
[Laughter.]
Mr. Cohen. The gentleman's time has expired.
I now recognize the distinguished Chairman of the
Committee, Mr. John Conyers of Michigan.
Mr. Conyers. Thank you, Mr. Chairman.
I hesitate to bring up my relationship with the Levi family
because if the distinguished gentleman from North Carolina
didn't know the senatorial witness that came over when he was
in Congress, I don't know how ancient the history would be for
him to find out that I knew his father, Ed Levi, when he was
the attorney general. That could go back to maybe the Hayes-
Tilden controversy or---- [Laughter.]
God knows where that would lead, but I think I ought to
make full disclosure before he finds this out anyway.
So I am happy to welcome Mr. Levi here today and I fondly
remember his father. I was Subcommittee Chairman of Crime at
the time that I appeared in the Department of Justice pretty
regularly to have consultation with him.
Now, Mr. Schanz, with your background, could--we want
everybody to sleep more comfortably in their beds tonight.
Could you help Mr. Boehm out on anything that you think would
make him more receptive to the fact that moving ahead and
making the improvements that are embodied in the Scott
legislation more palatable?
How can we make him feel better about this whole
proposition that brings us here today?
Mr. Schanz. I want to say a snide remark, but I won't. He
and I will work behind the scenes, or me lobbying him
successfully. But the real answer to your question, Mr.
Conyers, is transparency. I mentioned that in my prepared
statement. I mentioned that in my 5-minute monologue.
But I firmly believe that if the funds maintain their
Federal character all the way through the system and are
transparent in their use, then there should not be a problem
that we have found in the past in a lot of cases prior to my
tenure here.
I do believe that with my staff and with a new president
and a new chairman we can make a lot of progress in the areas
of accountability, responsibility and transparency. Now,
whether I can convince Mr. Boehm of that remains to be seen. It
depends on my lawyerly skills, how good I still am.
Mr. Conyers. Well, I think for the short time that I met
and heard and know him that he is a reasonable person. And the
one thing I am so relieved about is that he did not call for a
abolition of Legal Services, and you don't harbor that thought,
or do you, sir?
Mr. Boehm. I spent my first part of my adult career--I
spent the first part of my adult career being a supporter of
Legal Services. I wouldn't have gone over to work there if I
hadn't. I worked for a congressman, who was a Republican
congressman, who had supported Legal Services.
Where I became very disenchanted was I saw firsthand the
resistance to reforms that I thought were common-sense reforms.
I think the real question is is the--is this program capable of
the types of reforms that I think would have broad bipartisan
support and then sticking to them.
My concern is that the proposed reauthorization does away
with the reforms that we have had since 1996. And I think most
of them were pretty reasonable reforms. If it can't, I don't
believe spending Federal money for a program that can just
basically do whatever it wants, without even releasing--one of
the things that is cut out is a list of the cases, the
litigation cases.
I don't know what policy reason you would give that the
public and the Congress and even a taxpayer shouldn't know what
cases are litigated with Federal funds. And yet that is one of
the things that is on the cutting room floor with this
legislation.
So the real answer I think is if the program were
accountable and did the reforms that I think there is broad
support for, I don't think there would be any problem. I have
got plenty of other things to do. But if it is just going to be
a blank check and do whatever you want, including
redistricting, I have serious problems with that.
Mr. Conyers. Mr. Levi, can you give him any comfort in this
discussion?
Mr. Levi. Well, first of all, as it relates to the spending
of the taxpayers' money, we want to make sure that every dollar
is well spent.
And I look forward to working with the inspector general
and to making sure and assuring us internally that we have the
best practices, modern practices, brought in to LSC throughout
the country--there are 136 grantees--making sure that they are
conducting their business affairs in the manner that you and we
would hope.
Mr. Conyers. Feeling better?
Mr. Boehm. There are a couple of other issues we need to
discuss.
Mr. Conyers. All right. Last question. You co-founded the
National Legal and Policy Center back in 1991. You are proud of
that, I presume.
Mr. Boehm. I was on the first board. And they were not
involved in any of these activities because it was a one-person
operation then.
Mr. Conyers. With whom did you co-found it?
Mr. Boehm. Peter T. Flaherty, who was its president.
Mr. Conyers. Is he still around?
Mr. Boehm. He is still around.
Mr. Conyers. And then, finally, you are treasurer of one of
the 10 largest political action committees in the country. What
committee is that?
Mr. Boehm. That was in 1980. I am much older than I think
Mr. Cohen thought I was. I am 60. But that was in 1980. It was
the Fund for a Conservative Majority. It was the third-largest
political action committee in the country in the 1980 election
cycle.
Mr. Conyers. And so you are--you are, rightfully so, a
proud Republican.
Mr. Boehm. I have been a Republican. Sometimes I have been
proud of that. [Laughter.]
Mr. Conyers. Well, you are--well, let me ask you this. Are
you proud of--sometimes proud of being a conservative
Republican?
Mr. Boehm. Yes.
Mr. Conyers. And are you other times proud of being a--
proud of being a neoconservative Republican?
Mr. Boehm. I don't know if I am a neoconservative, because
I don't know what the official definition is. That used to
apply to former Democrats, I think, in the Reagan years who
went over and joined the Reagan administration.
Mr. Conyers. Yes. I yield.
Mr. Franks. Well, neoconservative means new conservative.
It really is a--it is a liberal with a daughter in high school.
[Laughter.]
Mr. Boehm. Yes, that doesn't apply to me. I actually
started out as a Democrat, if that makes you feel any better.
Mr. Conyers. Well, a lot of people--Jarvis started out, I
think, as a Democrat.
Now, you believe that there is a constitutional right to
everybody receiving equal justice.
Mr. Boehm. A constitutional right, and you do also, under
the Sixth Amendment, have a constitutional right----
Mr. Conyers. Right.
Mr. Boehm [continuing]. To an attorney.
Mr. Conyers. Exactly. And the Sixth----
Mr. Boehm [continuing]. Criminal cases.
Mr. Conyers. Exactly. And do you have an idea--are you
forming some ideas about a counter bill to the one that Scott's
introduced? I mean, we seem to be reaching some agreements on
some very significant points here.
Would you submit to the Chairman of this Subcommittee the
ideas around which you would find a bill to continue to promote
Legal Services more to your liking?
Mr. Boehm. Well, Congressman Conyers, I would be happy to.
I testified before a Senate Committee 2 years ago on things
that can be done that help the poor get better access to
justice, and I would be happy to forward along those ideas.
And there are a lot of very good ideas that aren't touched
in this that I think ought to be considered that I think cross
party and ideological lines, because the real problem is
getting good legal representation is not only hard for the
poor, it is hard for the middle class.
And there is a lot of things that can be done that increase
access to justice that can only be done on the Federal level
that should be done.
And again, I would be happy, Chairman Cohen, to forward
along that information.
Mr. Conyers. Thank you very much.
Mr. Cohen. Thank you, Mr. Conyers.
I now recognize the gentleman from Iowa, Mr. King.
Mr. King. Thank you, Mr. Chairman.
I thank the witnesses for their testimony, and I am
swinging back and forth here as I listen to this. Now that I
know about Mr. Boehm's complete and detailed political
pedigree, all the way back 30-plus years, it looks pretty
stellar to me.
And I also am looking at a list here--but I direct my first
question to Mr. Schanz, and that would be as you understand
this legislation that is proposed that is the subject--H.R.
3764--does it remove the prohibition to Legal Services
Corporation and engaging in representing cases involving
illegal aliens?
I am going to give you the list--illegal aliens, abortion-
related litigation, prisoner advocacy, class action lawsuits,
challenges to welfare reform, and congressional redistricting
cases. Are those prohibitions all removed, as you understand
the language in the legislation?
Mr. Schanz. As I understand the language, no. My concern is
a little more fundamental from an inspector general's point of
view to being able to have the tools I need to enforce whatever
restrictions this body--whatever Congress imposes on the Legal
Services Corporation.
I need to have access to the records. I need to have the
specific identifiers of Federal versus non-Federal funds. There
is a lot that--within the I.G. community----
Mr. King. Okay.
Mr. Schanz [continuing]. That I need to----
Mr. King. Excuse me.
Mr. Schanz [continuing]. Be able to have put into this
legislation so we don't revert back to the days that Mr. Boehm
remembers so vividly.
Mr. King. And I would want you to have all of those tools
to examine that thoroughly, and I would want transparency and
sunlight. So I would turn to Mr. Levi.
And of this list that I have read, is it your understanding
that these prohibitions are removed under H.R. 3764?
Mr. Levi. That is not my understanding.
Mr. King. Could you then clarify to this Committee your
understanding as to which provisions would be removed under
3764?
Mr. Levi. This is an issue that we are going into in terms
of the corporation's view about restrictions, and I am
concerned here because LSC is charged with enforcing the
restrictions throughout the country. And in fact, we are
currently doing that in court.
We have staff in the field ensuring that our programs are
complying with the restrictions. So as chairman of the board, I
am really not comfortable speaking about any particular
restrictions, and we will continue to enforce the will of
Congress, whatever it would be.
Mr. King. Okay. I thank you, Mr. Levi, and I am going to
take it, then, that you are not speaking to the language in the
bill but the current practice and the current statute in your
response. Is that accurate?
Mr. Levi. That is accurate.
Mr. King. Okay, thank you. And then I would turn to Mr.
Boehm.
Your response to this--have you reviewed H.R. 3764 that was
testified to by Senator Harkin? And would you understand that
it removes restrictions?
Mr. Boehm. It removes most of the restrictions--removes
most of the restrictions that were put in in 1996. Otherwise
are modified.
On the prisoner restriction, it allows prisoner litigation
but not for prisoner conditions. With respect to illegal
aliens, it broadens the category exceptions of illegal aliens
that can be represented, but it doesn't allow wholesale
representation of illegal aliens.
One of the real problems with all of these restrictions is
that--is in the LSC act, which is if LSC does not enforce
something--they are the only legal body to do this. And this is
one of the reasons Senator Grassley has been so interested in
Legal Services, is he was involved in this battle in the
1980's.
If LSC doesn't enforce any restriction--illegal aliens, you
name it--nobody else has legal standing to do it. And the one
time where a program was illegally lobbying, a Federal judge
did a judicial finding that they were illegally lobbying, and
Legal Services challenged that and said, ``Hey, we don't have
to--we are not subject to judicial review. We are a
501(c)(3).'' And they won, and they should have won, because
legally they don't.
And so essentially, they can do anything if LSC doesn't
enforce it as a practical matter, and that is pretty----
Mr. King. Okay. So there are two components, then. This
proposed legislation loosens the restrictions, some
dramatically, some incrementally, and the point that the
enforcement of the restriction has to be within LSC themselves,
then.
Mr. Boehm. Right.
Mr. King. And so let me pose this question, and it is
really at this point not hypothetical, under current law or
under H.R. 3764 as proposed, could the Legal Services
Corporation be enlisted to join in a class action lawsuit
challenging the constitutionally of ``Obamacare?''
Mr. Boehm. Well, LSC itself wouldn't do it. It would be a--
a program can do that sort of thing. If they are allowed to do
class actions, and they have a client and there is waiting
rooms full of clients, I don't see why they couldn't bring the
lawsuit.
The problem is the decisions as to class actions, like
lobbying, can be very, very subjective. Unlike all other
Federal benefit programs, nobody has a right to be represented
by Legal Services, and so the Legal Services lawyers have
pretty wide discretion as to which cases they will take or
don't take.
Mr. King. Would you concede, Mr. Boehm, that I have
proposed about the most improbable case that could be taken up
by LSC----
Mr. Boehm. Well----
Mr. King [continuing]. Or their surrogates?
Mr. Boehm [continuing]. Yes, that is pretty improbable.
Mr. King. And that is because if I listened to your
testimony that it sounds to me as though LSC has been very high
percentage intensively populated with liberal activists. Could
you explain to me why that would be, why that is--why we are
looking at this from a political perspective?
The Chairman, Mr. Conyers, asked you a whole series of
questions about your political pedigree. But as I listen to the
testimony here, I would suspect that the political pedigree of
the people that are--a significant percentage of those within
LSC would be the exact opposite of the pedigree that he has
talked with you about. Why is that? What has brought that
about?
Mr. Boehm. Well, that has been the history since it was
founded.
Mr. King. Yes.
Mr. Boehm. It was founded as part of the Great Society.
Over the years, poor people who were home-schooling their kids
who had legal needs and met the legal definition of poor
invariably found Legal Services' doors were closed. You know, a
poor gun owner who thought the registration rules--they
wouldn't get the time of day.
And so there always has been a double standard, and the
double standard could be enforced because the decision to take
or not take a case was so subjective and it was in the hands of
the local Legal Services----
Mr. King. Is the LSC to the right or the left of the ACLU?
Mr. Boehm. I think they are----
Mr. Cohen. I believe that question is beyond your
knowledge.
Mr. King. I would ask unanimous consent the gentleman be
allowed to answer the question.
Mr. Cohen. Five minutes has expired.
Mr. King. Okay.
Mr. Cohen. And so we are going to----
Mr. Conyers. I ask unanimous consent that the gentleman be
given an additional minute.
Mr. Cohen. We always play bad cop and good cop, and he is
the good cop.
Go ahead.
Mr. Boehm. I appreciate that. Well, I mean, the fact of the
matter is frequently in the past they joined together in cases
with the ACLU. That is public record. There are a lot of
instances of that, so----
Mr. King. And an adequate answer for me, and I thank you
very much, all the witnesses.
Mr. Chairman--Chairmen, I yield back the balance of my
time, and I say thank you.
Mr. Cohen. Thank you. Thank you, Mr. King.
Before I recognize Mr. Watt, just to the--I was a history
major. You said that Legal Services was formed during the Great
Society. Wasn't it 1974?
Mr. Boehm. In 1974 it became a corporation--in 1974 it
became a corporation. It was actually the Office of Legal
Services in the 1960's under the Great Society. It was very
controversial. They decided they would spin it off as a
corporation.
And so the Legal Services program itself began in the
1960's. I believe it was 1966. In 1974 what happened is it
became a corporation. It was reauthorized once in 1977 and then
that expired in 1980 and it has been the way ever since.
Mr. Cohen. Well, I thank you. I mean, people can define the
Great Society as being 1974. It just depends on your
perspective. But----
Mr. Boehm. Well----
Mr. Cohen [continuing]. Thank you.
Mr. Watt, you are recognized.
Mr. Watt. Thank you, Mr. Chairman. I want to try to get us
back to a less philosophically based discussion here, if I can,
by asking a couple of practical questions.
Mr. Schanz, Ms. Diller objected to one aspect of--what she
understood your testimony to be, having to do with personal--
identification of personal information. Is this something that
you would think would be an irreconcilable problem, or did you
understand what she was saying?
Mr. Schanz. Yes, sir, I did.
Mr. Watt. Explain that to us a little bit and tell us how
we might be able to reconcile that.
Mr. Schanz. Well, first off, I don't think anything is
unreconcilable. Secondarily, in order for me to perform the
statutorily required duties of an inspector general, there are
instances where in cases of fraud or embezzlement or potential
fraud or embezzlement I would need access to client records to
be able to identify whether or not a fraud has been perpetrated
on the--on the Federal----
Mr. Watt. So--so something that gave you that access under
those circumstances might----
Mr. Schanz. In this legislation----
Mr. Watt [continuing]. Serve the purpose.
Mr. Schanz [continuing]. That would be very helpful.
Mr. Watt. Yes, okay. And what is the status of your access
to that information now?
Mr. Schanz. We have to litigate for that, and----
Mr. Watt. So you are saying you don't have that access to
individualized records now under existing law.
Mr. Schanz. That is correct.
Mr. Watt. Okay.
Mr. Schanz. We have to litigate for that.
Mr. Watt. So you are saying we need to amend existing law
to try to tweak that in such a way that you can serve your
purposes.
Mr. Schanz. If I was to have the full powers of a
presidentially appointed inspector general, yes. I would have
those powers.
Mr. Watt. All right. I am just trying to make sure I
understand what we are trying to accomplish here, and--Mr.
Boehm, Ms. Diller said--and I obviously agree--that it is a lot
more efficient to litigate cases that have a class impact
rather than doing it one by one by one, to do it as a class
action.
If we can put aside for the moment the categories of things
that you would not want Legal Services to be involved in on a
class action basis, would you agree with that general basic
proposition?
Mr. Boehm. Yes, I would.
Mr. Watt. Okay. So if we could find some satisfactory way
of delineating the--those kinds of cases, would you have some
particular problem with Legal Services having the ability to do
class action cases in some limited number of cases?
Mr. Boehm. If you could come up, I think, with a screen or
a set of criteria that would address the thing that I think
most of the critics, especially in Congress are concerned
about--that is, redirecting the focus toward good legal
services--traditional legal services----
Mr. Watt. All right. I----
Mr. Boehm [continuing]. That is the criteria.
Mr. Watt. Yes. So but you agree that it would be more
efficient to do some categories of things through class action
litigation than to individual by individual--I mean, the two
things that I think of--I think it was Legal Services in North
Carolina that actually stopped the kind of individual by
individual setting of tenants out on the street.
But it was a class action lawsuit, as I recall, that said
landlords in general have to go through a process before they
can set tenants out on the street.
And I think it was actually a class action lawsuit in North
Carolina that resulted in substantial benefit to disabled
veterans and people with disabilities under--to be able to be
eligible for Social Security benefits.
Those kinds of things that are not controversial in a
philosophical sense you wouldn't--you wouldn't have any problem
with.
Mr. Boehm. I think I would go beyond that, and I would say
if those were the types of cases that Legal Services stuck to,
there wouldn't be a controversy. The unfortunate history was--
--
Mr. Watt. Well, I am not dwelling on how we got here. You
know, I heard a lot of discussion on how we got here. I am
trying to--I am trying to pick up here and move us beyond where
we are and get us back to some kind of rational set of rules
going forward.
You know, it is just--it is hard for me to get in--involved
in a discussion about whether Legal Services is to the right of
or left of the ACLU and all of that stuff. That is history. I
am trying to figure out how we can move forward in a very
constructive way.
So my time has expired, and I will--I will hopefully segue
to some more rational discussion with my colleagues down the
way here. I will yield back.
Mr. Cohen. Thank you, Mr. Watt. I appreciate it.
And now with the burden of having more rational discussion
is the Chairman of the Constitutional--the Committee on--on
Antitrust, Mr. Johnson from Georgia.
Mr. Johnson. Well, thank you, Mr. Chairman.
And a little rationality here in the face of a lot of
intellectual gymnastics that we have been playing this
morning--poor people, people without the means to participate
in our justice system, without any assistance whatsoever from
either government or from the private charitable interests that
exist is indeed unsettling to me.
And I am not one of those who grew up in a gilded setting
as a child--you know, nannies, trips to Europe on vacation,
spending weekends at the vacation home down on the ocean, you
know, participating in horse riding activities, polo and all of
the other----
Mr. Cohen. Cotillion? Were you in cotillion?
Mr. Johnson. I was not even in the cotillion.
Mr. Cohen. Oh, my God.
Mr. Johnson. Not in the Jack and Jill or any of those
organizations. And that was so unfortunate.
Mr. Cohen. The Chairman is coming to tears. Please.
Mr. Johnson. I have been so deprived, and--of the finer
things in life, and--but I did get a chance to meet a couple of
poor people during my matriculation through school.
I knew some who didn't smell the best--we used to make fun
of them--some who did not wear the finest clothes, and some
who, you know, just were good people, but they were doing their
best but their circumstances were limited.
And I have always been for the underdog. I have always been
for the people who don't have the power. That is my prejudice.
That is where I am coming from. My views are prejudiced.
And so when we talk about waste and fraud and abuse in a
$420 million budget item, Legal Services Corporation funding--
and right after I come from an Armed Services Committee hearing
where at some points the armed services has to declare a period
of time for vehicles to be turned in, Humvees, tanks, all kinds
of vehicles, to be turned into--or back into the military's
accounting system, if you will, or inventory system, after they
have been lost track of, billions of dollars, and inspector
general's not able to eke out a savings for the taxpayers in
five, $600-billion-a-year budgets, and then I come over here
and I hear from folks who want to say that--or imply that a
$420 million program is riddled with fraud and waste and abuse.
It pains me. It makes me angry, especially knowing that
there has been a onslaught, an assault, against the Legal
Services Corporation and against the movement to help poor
people be a part of this system of equal justice for all,
especially when I know that since 1980 we have been getting
government off the backs of the people.
After we had a campaign kickoff in Philadelphia,
Mississippi where only 13, 14 years prior three--Viola Liuzzo
from Detroit had been murdered, Turner--I mean----
Mr. Cohen. Schwerner, Chaney and Goodman. Liuzzo made a----
Mr. Johnson. Well, I think----
Mr. Cohen. Liuzzo was an Alabama victim.
Mr. Johnson. Less than 13, 14 years later we have an
announcement for president in Philadelphia, Mississippi where
those killings took place. And then we have been opposed to any
efforts to help people, to help poor people.
I am just astounded by, you know, what I have heard here
today, the heartlessness that is on display when folks have not
even met a poor person, don't have any feeling for them one way
or the other--mostly, though, despise them and wish that they
could be avoided.
And so those are my impressions of our political climate.
It is not about making sure that it is--government monies are
used effectively. It is about depriving people of their right
to legal services that they cannot afford so that business can
go on as usual, so that we can--we can continue to use our
voting laws in a way so as to deprive people of their right to
vote. And our history of doing that in this country is well
documented.
And we don't want people to be able to be able to address
those concerns through government money to LSC. We don't want
government funds to be used to file class action lawsuits
against entities like the old Fleet Finance that was found to
have engaged in predatory lending back in the 1990's.
If we had been able to file class action lawsuits, legal
aid, against banks that participated in predatory lending
during the early years of this century and the late years of
the previous decade, we could have avoided a $700 billion
taxpayer bailout.
And so if we had been able to claim attorneys' fees for
engaging in that litigation, then we could have had money that
would replenish the operation--the operating budget of LSC at
no cost to the taxpayers.
And my last comment, Mr. Chairman, is this. Here I see a
letter from the Chamber of Commerce opposing H.R. 3764 which
Mr. Scott has offered and which is a very important piece of
legislation. Chamber of Commerce, opposed.
Thank you, Mr. Chairman.
Mr. Cohen. Thank you, sir. I appreciate your statement.
And now Mr. Scott, the Chairman of the Subcommittee on
Criminal Law and the sponsor of this legislation and
distinguished champion of justice, is recognized.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Levi, somebody made a comment--I think it was Mr.
Boehm--that the receipt of these funds would not be categorized
as Federal funds for the purpose of the antifraud statutes. Did
you want to respond to that?
Mr. Levi. I am sorry. I am not familiar with that question.
I am sorry. I didn't hear that.
Mr. Schanz. Mr. Scott, that would have been me. I do want
to correct for the record that also. As the current law exists
in 1996, the 1996 law, we do have access to client names and
records through Section 509(h). We want to see that maintained
in your piece of legislation.
The one thing as an inspector general that we have to be
very wary of is that we trace the Federal dollars. The former
chairman of the board of the LSC said, you know, find where the
money goes. And it is part of the I.G.--that is, part of my
statutory responsibility--to find out where the Federal
dollars--that they continue to maintain their identity.
And that is why there has been a distinction between LSC-
funded programs and restrictions inherent in that, and non-LSC
funds have been in the past subject to the same restrictions as
the federally funded LSC monies.
Mr. Scott. So that if you receive Federal funds and
essentially steal it, it is not--it is a Federal offense? I am
trying to understand what--I can't imagine Mr. Levi has a
problem with someone being charged with a Federal offense for
abusing Federal funds.
Mr. Levi. No, not at all.
Mr. Scott. And so we will--well, we will follow through
with that.
You mentioned, Mr. Schanz, the access to client names. This
isn't the only agency that involves state bar regulations on
ethics and confidentiality. How do other agencies deal with
maintaining confidentiality and ethical--and avoid ethical
violations and still allow oversight and accountability? How do
other agencies deal with that?
Mr. Schanz. Well, my most recent example would be my 30-
plus years in the U.S. Department of Justice where we were, as
an I.G., able to obtain confidential informants' names to
determine whether the funds were being protected properly or
whether they were being sold back on the street.
So we were able to, as an inspector general--in that
situation we had top-secret clearances, and in some cases M
clearances, to make sure that nothing ever came out of the
I.G.'s office that would in--that would put into danger any
confidential informant or any drug buys----
Mr. Scott. That is confidential informant. I am talking
about normal legal representation. Do you have access to client
files in other agencies?
Mr. Schanz. Yes.
Mr. Scott. And----
Mr. Schanz. Ones that I am aware of, yes.
Mr. Scott [continuing]. If we could see what you have done
in other agencies, that would help us deal with the problem we
have got with the legal aid programs.
Mr. Schanz. I will get back to you on that very shortly.
Mr. Scott. Now, Ms. Diller, you mentioned the drug-related
evictions. If someone can prove--if a defendant can prove his
innocence, what happens in the meanwhile to the relatives that
live in that household?
Ms. Diller. Well, they may well have been evicted during
that time, because as the law stands right now, just the mere
charge of some sort of drug-related crime is enough to
disqualify you from eligibility. So when you have----
Mr. Scott. Well, when----
Ms. Diller [continuing]. A whole family----
Mr. Scott [continuing]. When you say--when you say ``you,''
you mean the whole family?
Ms. Diller. Well, that client who may have family members,
may have children living with them--they are not eligible for
representation at that point.
Mr. Scott. And they can be evicted. Do they have any
recourse?
Ms. Diller. At that point there is nothing you can do. And
so that is why this language would be a big improvement to
address that problem.
Mr. Scott. And if you are not allowing class actions, how
would you--Ms. Diller, how would you deal with systematic
ripoffs, systematic abuses like failure to comply with Fair
Labor Standards Act, failure to pay minimum wage, failure to
withhold Social Security? How would you deal with that if you
can't use a class action?
Ms. Diller. Well, you simply can't deal with it in the most
effective way. What you can do is you can represent one client
at a time, which is the most labor-intensive and inefficient
way to go about dealing with those problems.
You can't really mount an effective deterrence to those who
are implementing these schemes on low-income communities. And
you can't get broad widespread relief. So you can represent an
individual client, but then you have got to keep doing that
over and over and over again, and you don't reach as many
people.
Mr. Scott. Thank you.
Thank you, Mr. Chairman.
Mr. Cohen. Thank you, Mr. Scott.
I now recognize----
Mr. Scott. Mr. Chairman, could I ask unanimous consent to
enter into the record a letter from numerous organizations in
support of the legislation?
Mr. Cohen. That can be done, and I believe Mr. Franks wants
to enter into the record a letter from an organization that is
against the legislation, and that will be granted without
objection as well.
[The information referred to follows:]
__________
Mr. Franks. Actually, Mr. Chairman, I have three, the
letter from the U.S. Chamber of Commerce to you and to me, and
the letter from Senator Grassley and Mr. Issa and myself to LSC
Inspector General Jeff Schanz, and then the October 15th letter
from LSC I.G. Jeff Schanz to you and to me.
Mr. Cohen. Anything personal in those letters to me? I
didn't----
Mr. Franks. Yes, I just think you should read them.
Mr. Cohen. Thank you. Thank you. Without objection, they
will be entered into the record, all of them.
[The information referred to follows:]
__________
Mr. Cohen. Ms. Chu, the distinguished lady from the state
of California, is recognized for 5 minutes.
Ms. Chu. Thank you, Mr. Chair.
Ms. Diller, there have been many questions about the
restrictions in the Civil Access to Justice Act and the effect
of these restrictions on both Federal and non-Federal funds.
Can you clarify how the restrictions in the bill will affect
organizations that accept LSC funds and distinguish between the
LSC funds or non-LSC funds?
Ms. Diller. Sure. So first of all, it is a very important
distinction. What the bill would do primarily is lift
restrictions on non-LSC funds, with some exceptions--notably,
the exception related to abortion litigation. That would be
prohibited with any funds.
And then the bill would treat differently some of the
prohibited categories of representation under the 1996 rider
with Federal funds. So for example, class actions would be
permitted to be brought with Federal funds. Certain types of
administrative and legislative advocacy could be done.
But there are some categories where Federal funds would not
be allowed to be used, and those are prison conditions cases.
Those are the cases that have been restricted under the
original LSC act, that have been restricted for all these
years. So there still are a number of restrictions in place
both on Federal funds and this one restriction still on non-
Federal funds.
Ms. Chu. And it is important to distinguish the fact that
certain funds would be allowed for non-LSC versus LSC funds.
Ms. Diller. Yes. I mean, it is completely out of line with
the way the Federal Government treats grantees. LSC grants
money to independent local nonprofit organizations. And as I
said earlier, they receive funds from a variety of sources.
Sixty percent of the funds come from non-LSC sources.
And it is completely out of the ordinary for Congress to
restrict how states spend their money, how local governments
spend their money, how private donors spend their money. That
is not the norm by any means. This is virtually the only
program that operates under that kind of really overarching
Federal restriction.
Ms. Chu. My office was recently contacted by the Chamber of
Commerce who argued that--they say this ``Class action
litigation is known for providing very little benefit to class
members and great benefits to those attorneys involved in the
litigation. Scarce taxpayer dollars should not be used to fund
such an expansion of speculative, costly and unwise private
litigation at any time, and especially not in today's
vulnerable economic climate.''
Can you explain how LSC grantees will use class action
lawsuits if these restrictions are lifted? And also, the
chamber charges that attorneys involved with class action
lawsuits for indigent clients will benefit monetarily from the
litigation. Can you respond to all of this?
Ms. Diller. Yes. I mean, it is simply not true that
attorneys will benefit monetarily from that litigation. These
are not the type of class actions that we hear so much about,
like securities class actions or product liability class
actions, where an attorney gets a third of the proceeds of the
class action.
I mean, these are not that kind of class action. These are
class actions usually for broad injunctive relief, usually to
stop the kind of predatory practices that Mr. Scott mentioned
and that we have talked about earlier today. These are not
money-making things by any means.
And these are Legal Services attorneys who work on, I
should say, the lowest salaries in the profession to help low-
income people. And so there is not a monetary incentive for
them to bring these big class actions.
What the language change would do is it would just allow
them to help more people more efficiently.
Ms. Chu. In fact, what options are available to low-income
families on the--on the foreclosure issue? I know you talked
about that earlier in your testimony and the fact that these
low-income persons are subject to lots of scams. What
alternative is available to them without this class action
ability?
Ms. Diller. Well, I should say that, first of all, the
programs are representing individual families and individuals
in foreclosure cases. They are overwhelmed with them. I believe
former president Helaine Barnett at one point testified that
they were having to turn away two for every case that they
could take.
But the problem that we have seen is that in a lot of
places foreclosures were the product of predatory lending
practices, and so there has not been an effective way to combat
those practices without the class action mechanisms. Then there
is the subsidiary issue of things--businesses cropping up,
scams cropping up, that are preying on the very distress of the
homeowners who are facing foreclosure.
And again, Legal Services offices have not been able to
effectively combat those because of the fact that when you
handle an individual case, the defendant or the--you know, it
may be a plaintiff depending on the case--but the entity that
has perpetrated the scam can write off an individual case as
merely the cost of doing business, whereas if you are able to
get broader relief, able to get relief for the whole class of
victims affected, you have a much more efficient and effective
response to those kind of practices.
Ms. Chu. Thank you.
I see my time is up, and I yield back.
Mr. Cohen. Thank you so much.
Before we adjourn and allow me to quelch my hunger, I do
want to ask Ms. Diller or Mr. Boehm, is current law that if you
are charged with the possession of a drug offense that you
can't get Legal Services representation?
Mr. Boehm. No.
Mr. Cohen. Excuse me?
Mr. Boehm. No.
Mr. Cohen. No. What is----
Mr. Boehm. Current law, meaning the 1996 restrictions----
Mr. Cohen. Yes, sir.
Mr. Boehm [continuing]. Was sale or distribution----
Mr. Cohen. Okay.
Mr. Boehm [continuing]. Only, and it had another thing,
which is public housing only. So those were the two key factors
as to what was restricted.
Mr. Cohen. Great. It is not as onerous as I thought. It is
still onerous, but not onerous to the end.
And I thank each of the witnesses for their testimony
today.
Without objection, Members will have 5 legislative days to
submit any additional written questions--the witnesses, as you
answer promptly as you can and be made part of the record.
Without objection, the record will remain open for 5
legislative days for the submission of any other additional
materials.
Again, I thank everyone for their time and patience and
participation and service. This hearing of the Subcommittee on
Commercial and Administrative Law is adjourned.
[Whereupon, at 1:13 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Response to Post-Hearing Questions from John G. Levi, Chairman,
Board of Directors, Legal Services Corporation
Response to Post-Hearing Questions from Jeffrey E. Schanz,
Inspector General, Legal Services Corporation
Response to Post-Hearing Questions from Kenneth F. Boehm, Chairman,
National Legal and Policy Center
Response to Post-Hearing Questions from Rebekah Diller, Deputy
Director, Justice Program, Brennan Center for Justice at NYU School of
Law
Material submitted by the Honorable Trent Franks, a Representative in
Congress from the State of Arizona, Member, Committee on the Judiciary,
and Ranking Member, Subcommittee on Commercial and Administrative Law
Material submitted by the Honorable Steve Cohen, a Representative in
Congress from the State of Tennessee, and Chairman, Subcommittee on
Commercial and Administrative Law
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