ILLEGAL SERVICES ON THE HILL

Set up in 1974 by President Nixon as a compromise between opposing forces in the War on Poverty, Legal Services receives 60 percent of its funding from the federal government. Its stated mission is to represent the poor in routine civil matters. But its ambitions have always been far more grandiose than helping the poor with run-of-the mill landlord disputes and the like. Why dispense store-front lawyering, when you can change the social structure through class-action lawsuits?

When its original legislation expired in 1980, Congress continued to fund LSC on a yearly basis. In 1995, the GOP slashed the corporation’s budget from $ 400 million to $ 278, set a three year sunset on federal funding, and saddled the agency with a host of reforms. Every year since, the Appropriations Committee has sought to cut its funding almost by half. And every year, Democrats, with the aid of some Republicans, have been able to restore full funding on the House floor.

“The GOP goes through this game every year — cutting it in committee and then fighting it out on the floor,” says Democrat Howard Berman, a staunch LSC backer. “And their leadership knows they’ll lose. I think they realize it and still go through this pro forma dance.”

That Democrats come to LSC’s rescue isn’t surprising. But what about Republicans, 57 of them just last year? Having reformed LSC in 1995, it seems, many Republicans now have a proprietary interest in its future. Says Rep. Jim Ramstad of Minnesota, who last week received the LSC’s “Outstanding Commitment to Justice” award: “Certain members are still fighting against Legal Services from the old days. Most of those abuses were taken care of in our reform bill.” Rep. Tom Davis says, “Understand this: In 1995 we put a number of prohibitions on where they could sue, how they could sue, who they could sue. We eliminated all that stuff,” meaning prosecutorial abuses.

Is the agency truly reformed? Hardly. In December 1998, LSC, which is restricted from political activities, held a “youth issues” conference in a Puerto Rico beach resort and casino featuring a variety of left-wing advocacy groups. In February 1998, LSC lawyers were caught on videotape in Mexico recruiting ineligible and alien migrant farm workers to sue North Carolina farmers.

And now a new reason to be wary of the agency: In May 1998, LSC handed over to Congress its annual Fact Book, which contains information members use to set funding. The Fact Book stated that LSC’s caseload had increased in 1997 to nearly two million clients. Six months later, Congress appropriated an additional $ 17 million for LSC. But LSC had grossly inflated its caseload. What’s more, evidence suggests that it did so knowingly. “They knew in the summer that the numbers were completely false,” says Ken Boehm, chairman of the National Legal and Policy Center and a former LSC board member. “They had an obligation, to put it mildly, to tell Congress that their numbers were not accurate.”

Meanwhile, in June 1998, just a month after the Fact Book was issued, LSC’s inspector general, its ethics watchdog, informed the agency’s brass of “astounding” discrepancies between LSC’s actual caseload and what it reported. In September, the IG disclosed in an internal document that “the numbers provided to Congress were inaccurate.”

But, in his semi-annual report to Congress a month later, the IG didn’t even mention it. When asked about “significant problems, abuses and deficiencies,” the IG said there were “none.” House appropriators only found out about the chicanery in late February 1999, when Republican Tom Latham of Iowa was contacted by a whistleblower in the IG’s office. Days later, at a March 3 funding hearing (LSC requested $ 340 million for this year), the LSC finally owned up to cooking its numbers — partly. Doug Eakeley, LSC’s current board chairman, counters disingenuously, “The IG’s report was only in its draft form,” and thus not official.

Two months later, Republican overseers, led by majority leader Richard Armey, instructed the General Accounting Office to audit the five largest LSC grantees: Baltimore, Chicago, Los Angeles, New York, and San Juan. In its preliminary report, the GAO reveals that, of the 221,000 cases these grantees reported as closed, nearly 75,000 were “questionable.”

The GAO found that LSC “reported duplicate cases for the same legal service to the same client”; “some cases showed no documentation, as required,” that the client was a U.S. citizen, an eligible alien, or financially eligible; other cases were listed as closed although “case files showed no grantee activity during the 12 months” prior. One lawyer who quit LSC out of disgust recently wrote that “virtually every telephone call [was counted] as a ‘case’ in order to build up numbers to report to the LSC and other funding sources.”

The GAO also found that New York City’s LSC grantee misreported 36 to 48 percent of their 1997 caseload. Two weeks ago, the Justice Department awarded the Brooklyn LSC, which falls under the New York umbrella, an additional $ 572,000.

The LSC has responded by “revising” its reporting guidelines. “It was a very outmoded system,” says Eakeley, LSC’s board chairman. As to the lies LSC told Congress, he says the inspector general had a “beef” with the agency and that he “exaggerated what happened in the field and its significance.” Besides, Eakeley says, LSC’s funding isn’t determined by the corporation’s caseload, but by the number of people living below the poverty line. Which is technically true.

But, Congress and LSC both know the importance of the caseload numbers contained in the Fact Book. Republican Hal Rogers of Kentucky said, “We do make our judgments based on the volume of the load that is presented to us.” A year earlier, LSC president John McKay said of the Fact Book: “We think this publication provides overwhelming documentation of LSC’s success in achieving its mission, and we hope that it will build further support for the program in Congress and among the public.”

Support for LSC has eroded somewhat among House Republicans, but don’t expect much. “Lawyers always misrepresent their caseload to clients,” says Rep. Davis, as he launches into a joke about a lawyer who dies and goes to heaven. “I’m only 38, what am I doing here?” the lawyer asks St. Peter. “Yeah, we bring lawyers in based on the number of hours they’ve billed,” St. Peter answers. Davis will probably support the LSC again, as will others. Legal Services “is on the hit-list,” says Rep. Castle of Delaware, “but in the end everybody has enough sense not to get rid of it.”

In a recent letter to attorney general Janet Reno protesting the Brooklyn award, Armey wrote, “LSC must be held accountable to the American people. We simply cannot reward this kind of misrepresentation.” Republicans, too, should be held accountable if LSC goes unpunished.

Sam Dealey is a staff writer for the Hill newspaper.