Mr. Chairman, I appreciate your calling this important hearing to discuss legal assistance to low-income Americans. During my time in the Senate I have supported efforts to ensure that indigent clients have access to the highest quality legal assistance and representation that is available and I have supported funding these programs. In doing so, we allow all Americans adequate representation to our judicial system. While I have supported these efforts to ensure access to legal aid, I have also staunchly opposed the use of federal funds by legal aid grantees for political or other non legal aid related work. I have insisted that the legal services community be—just like any other government funded operation—accountable to each other, to the national organization, and most importantly, to the American taxpayer.
Working with the Government Accountability Office and the various Inspectors General, I have learned the importance of keeping agencies on their toes. As members of Congress, we owe it to the taxpayers to make sure that tight fiscal resources are spent according to the law. This interest is especially heightened when you have an entity such as the Legal Services Corporation which is a not a government entity but receives a vast majority of its funding from federal appropriations—over $300 million annually.
Past abuses of federal legal aid funding by individual legal aid grantees led to Congress enacting laws that restricted Legal Services Corporation from providing funds to grantees who undertake class actions, represent individuals in criminal cases, represent individuals in fee-generating cases, advocate for a specific public policy, participate in litigation related to abortion, collect and retain attorney’s fees, and encourage political activities. Congress also enacted laws that require Legal Services Corporation grantees to make available to auditors financial records, time records, retainer agreements, client trust fund records, and client names—except for those protected by the attorney-client privilege. These laws and regulations were passed to ensure that funds provided by Legal Services Corporation to grantees are spent on legal services for low income individuals.
Congress has continually supported these restrictions on Legal Services Corporation funding. However, recent reports issued by the Government Accountability Office (GAO) and the Legal Services Corporation Inspector General have called into question the effectiveness of the Corporation’s controls over the management of grants. For instance, last December the GAO issued a report titled, “Legal Services Corporation: Improved Internal Controls Needed in Grants Management and Oversight”. This report found, among other things, that “Weaknesses in Legal Services Corporation’s controls over grants management and oversight…negatively affected Legal Services Corporation’s ability to monitor and oversee grants and left grants vulnerable to misuse.”
GAO also issued a report on Legal Services Corporation last August regarding governance and accountability within Corporation headquarters. Among the many findings, GAO noted, “The governance practices of Legal Services Corporation’s board fall short of the modern practices employed by boards of nonprofit corporations and public companies.” GAO also found that Legal Services Corporation has governance and accountability requirements that are “weaker than those of independent federal agencies headed by boards or commissions and those of U.S. Government Corporations.” The GAO added that “Governance and accountability breakdowns result in a lack of trust from donors, grantors, and appropriators, which could ultimately put funding…at risk.”
The GAO has not been the only office raising concerns about Legal Services Corporation’s oversight of grantees. In March 2006, the Legal Services Corporation Inspector General issued an audit report of Legal Services Corporation’s Office of Compliance and Enforcement. The Inspector General found that Office of Compliance and Enforcement’s operations needed to be improved and that a majority of the work completed by the Office was duplicative to that of other Legal Services Corporation entities. Further, the Inspector General has issued other audit reports over the last few years that detailed excessive spending by Legal Services Corporation officials, including first-class airfares, limousine services to Capitol Hill, and other excessive conference expenses such as $14 cookies.
The Legal Services Corporation Act and subsequent appropriations for Legal Services Corporation clearly state that entities who receive federal funding under the Act are bound by reporting requirements and are subject to audits by Legal Services Corporation and the Legal Services Corporation Office of Inspector General. Legal Services Corporation grantees are also required to make their financial records, client names, retainer agreements, and trust fund records available to Legal Services Corporation and Legal Services Corporation Office of Inspector General with an exception for reports protected by the attorney client privilege. However, one Legal Services Corporation grantee, California Rural Legal Assistance, has declined to allow access to its records. The Legal Services Corporation Office of Inspector General has issued a subpoena for these records and has now had to file a lawsuit in federal court seeking an order for access to these documents. If the Legal Services Corporation Office of Inspector General has had to go to court to get records they are entitled to from a grantee, it raises the suspicion about what those records might show.
Taken together, the reports by GAO, Office of Inspector General, and the current Office of Inspector General lawsuit clearly point to outstanding problems at Legal Services Corporation and Corporation grantees that need to be addressed. It is also important to note that Congress has not expressly reauthorized Legal Services Corporation funding since 1977. Should Congress undertake the task of reauthorizing Legal Services Corporation, it would be wise to listen to the GAO and consider whether or not to, “enact legislation to convert Legal Services Corporation to a federal entity or an independent agency so that the Corporation would be required to follow the same laws and regulations as executive branch agencies.” It is apparent to me that this needs to be done just based upon the reports from the GAO and the Inspector General, as well as my own independent investigations into Legal Services Corporation operations.
In closing, I look forward to working in Committee to address this to ensure that legal aid services offered by Legal Services Corporation grantees can reach as many individuals in need as possible while ensuring a judicious use of taxpayer dollars. The American taxpayers deserve an accountable, open, and transparent Legal Services Corporation that properly oversees federal tax dollars that are provided to grantees.