United States. Congress. Senate. Committee on Labo.

Oversight of the Legal Services Corporation, 1984 : hearing before the Committee on Labor and Human Resources, United States Senate, Ninety-eighth Congress, second session, on review of the Corporation's documents to ascertain whether there are any problems with the agency's policies that need to be online

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Online LibraryUnited States. Congress. Senate. Committee on LaboOversight of the Legal Services Corporation, 1984 : hearing before the Committee on Labor and Human Resources, United States Senate, Ninety-eighth Congress, second session, on review of the Corporation's documents to ascertain whether there are any problems with the agency's policies that need to be → online text (page 25 of 42)
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well orchestrated plan and plot by the "Legal Service Generals"
spearheaded by their Coalition for Legal Services, and its members ,
to inhibit and stall our own investigative efforts, damage our
credibility and that of the President of the United States who had
appointed and nominated us - and to maintain their own positions
and structures .

At that time, we were unaware of the so-called "Survival Plan"
which had been initiated by Legal Services leadership in 1981 which
this Committee subsequently uncovered. Nothwi ths tanding prohibitions
against lobbying, the Coalition For Legal Service included the
National Legal Aid and Defender Association (NLDA) , Project Advisory
Group (PAG), National Clients Council (NCC), the National Organization
of Legal Services VJorkers (NOLSW) , and the Minority Caucus (MC) most
of whom directly or indirectly received LSC funds.

In retrospect, Mr. Chairman, this Survival Campaign did and
has worked with cooperation from much of the press and even members
of the House and Senate . Effective investigation was inhibited,
there has been no confirmed Board in place since 1981 and the



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basic structures and mechanisms of funding, such as National Support
Centers, still remain nothwithstanding our Committee's view that
there should be restructuring of such entities to better serve the
needs of clients. This has been aided and abetted by Congressional
Resolutions passed by a House and Senate whose Members, with a few
exceptions, have looked the other way when it came to the viewpoint
of those of us who were the object of attack by the Survival Campaign
and its agents .

The real tragedy of this situation, including revelations of
questionable legal activities, misstatements of the truth before our
Board's committees, and perhaps even before this Conmiittee, is that
the press which was so eager to crucify our Board shows little
interest in pursuing questions of impropriety which you and Senator
Denton have brought out in your hearings .

I find it almost impossible to believe Mr. Chairman, that people
have refused to honor your request to testify before your Committee
and are free to do so with little or no press attention and little
concern of most Senators on your Committee. This lack of concern
only serves to hurt the poor since its their funds which were used
in a variety of ways to launch and maintain the Coali t i t ion ' s efforts.
Once again, it is the old story of using and defending the poor when
it is convenient for press attention, or political advantage .

How were our efforts impeded and how did the " Legal Services
Generals " and " self-appointed apostles of the poor " manipulate the
press and much of the U.S. Senate and House of Representatives? All
they did was carry out their plan which, in essence, was "get to the
media and Congress".

You will recall that shortly after we were appointed by the



295



President, and during the subsequent period, the Coalition and their
agents went to work to destroy our credibility, nothwithstanding the
fact that all members of the Board had affirmed our support of legal
services to the poor.

My first contact with the Coalition and the Legal Services
community was a letter from the Coalition telling me that I should
not accept the President's appointment because he had no authority
Co make recess appointments to the Board. The campaign had begun!
Shortly thereafter, in January-February of 1982, some members of
the Car ter-Mondale Board filed a law suit attempting to prevent us
from exercising our duties. The suit was subsequently found to
have no merit by the Courts but not until the Department of Justice
had spent many attorney-hours defending against the action.

Subsequently, that same Coalition and its agents and other
"Apostles" went to work to delay the Senate Confirmation process
through attacks on the character, commitment and integrity of some
nominees/appointees with excellent cooperation from the nation's
press.

Concurrent with these efforts, the Coalition's network was able
to create an environment of fear and hostility among the clients of
the program toward the Board and actively worked to impede and stall
the Board's own investigative and oversight efforts. In retrospect,
it is very clear why such efforts were launched - there was much to
be discovered as to where LSC dollars were going, and to whom and
for what purposes.

I believe that the record will reflect that much of the attack
and "networking" by elements in the legal services community began
with a steady crescendo in May of 1982 when I announced that my Special



296



Committee was going to have a hearing to investigate fund balances,
National Support Centers and contracts/consultants - all three
being "sacred cows" to the legal services leadership. We now know
why. A copy of my opening statement and the Minutes of that meet-
ing are submitted herewtih as Exhibit B.

Please note that I specifically stated in my opening remarks
that the issue before my Committee was:

"is the present grant and contract process providing the
most economical and effective delivery of legal assistance
to the poor? If not, why not? If it is doing an adequate
job, can that performance be improved in this grant /contract
process.

Mr. Chairman, I am pleased that it was as a result of that
meeting that the question of $41 million fund balances/carryover's
was discovered .

Unfortunately Mr. Chairman, it has been subsequently discovered
that we were not told the entire truth about certain other funds at
that meeting with reference to funds received by the National Legal
Aid and Defender Association - a key component of the Coalition .

The minutes reflect that Mr. Eisenberg, Executive Director of
the NLDA stated, in response to my question regarding activities of
grantees, that "overall the grants and contracts awarded by LSC had
been kept within legal bounds."* We now know that may not have been
quite the case.

In response to my question as to how much funding NLDA had
received from LSC, Mr. Eisenberg stated that NLDA had received a
grant for "technical" assistance totalling $1,000,000.** However,
information subsequently made available to your Committee Mr.

* May 10, 1982 Minutes, Page 7.
** Id.



297



Chairman indicate that, between 1981-1982, NLDA had received nearly
$3 million in LSC Grants - exclusive of funds for the malpractice
insurance program which it supplies for LSC program attorneys - a
practice which my Committee recommended should be investigated and
I would urge you to do so.

Hence, even at the early date, we were misinformed in our
investigative efforts.

Another glaring example of how we were misinformed occurred in
October of 1982 at a Joint Meeting of our Committee on the Provision
of Legal Services - chaired by William Harvey, and my special Commit-
tee on Grant and Contract Procedures held in Indianapolis, Indiana.
(Exhibit C) . We had asked representatives of NLDA, the Coalition
For Legal Services, Project Advisory Group and others to appear and
discuss the function and funding of their organizations.

When Mr. Eisenberg of NLDA was asked by Board Member William
Olson about NLDA funding to the Coalition For Legal Services, Mr.
Eisenberg stated that NLDA had provided only "$5,000 over a two year
period total".* Furthermore, Mr. Eisenberg stated to our committees
that "there may be some in-kind"** referring to in-kind contribution.
However, a review of the NLDA Board minutes of August 1, 1982 -
which was obtained by this Committee - shows that one month before
our meeting the Board President, Jerrold L. Becker, told the Board
that NLDA had provided the Coalition between $20,000 - $30,000 in
indirect services in both 1981 and 1982. The minutes also reflect
that the Board moved to pay up to $10,000 for the Coalition's 1982
telephone bill. Again we were not quite given the facts.



* Page 152 of October 16, Transcript.
** Id.



298



The transcript of our October meeting reveals that there was
no question that LSC funds were going to these outside groups for
a variety of purposes - not for providing direct legal assistance to
clients - and the sources and use of those funds was a well guarded
secret within these groups.

Another area where our Board was not totally given the facts and
caused us to operate in a vacuum, was in the area of transfers
of funds. On March 5, 1982, the Board of Directors adopted a reso-
lution regarding funding procedures. Under that resolution, no new
grant or contract obligation to recipients was to be incurred pending
further actions by the Board. The LSC President was directed to
ensure that no recipient funds be transferred to any entity other
than the recipient without the prior, written approval of the cor-
poration. The President was further directed to investigate past
instances of such transfers and report to the Board regarding such
transfers .

In a memo to the regional directors dated March 15, 1982, Mr.
Clinton Lyons had asked the regional directors to inform him by
April 16, 1982 whether or not any recipient within particular regions
had transferred corporate funds to other entities since January 1,
1981. A transfer was to include any grant or contract in excess of
$5,000 between the recipient and another entity by which the other
entity would conduct activities which normally would be undertaken
by the direct LSC grantee. In a memo dated June 30, 1982, which I
have subsequently been able to read and which was not available to
me in 1982, sent to all regional directors by Mr. Askew he stated:
"as you know, current corporation policy does not require prior
approval for the transfer of funds by recipients to another entity.



299



Such matters have been Left to the discretion of Local boards and
managers consistent with the acts and reguLat ions . . . ." The entire
matter of lack of accountabiLity in the history of this Corporation
is a matter addressed by my Committee and which needs thorough review
by the present LSC administration as weLL as this Committee . Mr .
Askew's memo further outLined a list of transfers which were found
to have occurred. These included a $62,000 transfer of funds to a
subrecipient called Advocacy, Inc., $25,000 to a juvenile law
center, $98,000 to the Alabama Council of Human Relations, $100,000
to the Poverty, Education and Research Center, and $104,000 to the
Migrant Legal Action Program, Inc. and the Farm Worker Justice Fund,
Inc. Earlier, in April of 1982, Mr. Askew had received a memorandum
from the Denver Regional Office listing several transfers of funds
through contract or agreement including the following: $20,500 to
be paid in semi-monthly installments for a variety of services
including representation of clients before state legislative and
administrative agencies; $20,500 paid in the same manner for the
same purposes; a $100,000 contract from the Texas Legal Services
Center with the Poverty, Education and Research Center, Inc.; and an
$822,000 contract to the Texas Rural Legal Foundation, Inc.

Mr. Chairman, many of these contracts could have been very well
meaning and they could have been initiated without any intent or
design to subvert the legal services Act or to "squirrel" funds.
However, the real issue here is the fact that such funds were trans-
ferred without any control mechanism or structure whereby the
Washington Headquarters of Legal Services Corporation was informed .
Most importantly in terms of our discussion, is the fact that, to
the best of my knowledge, no member of the board of directors of



300



1982, and particularly myself or any member of the Committee on
Grants and Contracts Procedures, was made aware of such transfers.

As you review the May 10th hearing which 1 conducted on various
issues, you will note that a specific area of inquiry was "contracts/
consultants". Keeping in mind that it could have been interpreted
that all that we were looking for were contracts directly from our
corporation headquarters to outside contractors, it seems to me that
given the newness of our positions that any intelligent reflection
upon the information that we wanted would have required that we were
to be informed of all contracts and grants of this nature, particu-
larly when it was in response to a Board request for information.
At no hearing of any of the Board Committees, to the best of my
knowledge, was this information given to the Board .

Given the fact that the existing regulations of the Board at
that time did not require any prior approval of these transfers,
it seems only natural that, in the Joint meeting of the Committees
in October, that our discussion with the regional directors from
the Chicago, Denver and Seattle and Northern Virginia Regional
Offices, would have elicited information regarding how the regional
office functioned in terms of such funds, - especially since only
a few months earlier there had been a request from corporation staff
on this matter to Regional Directors. However, the issue was
never raised by any Regional Director who was present and, because
we and the Board knew nothing of such transfers, we of course did
not ask.

It is very clear that if the members of the Board conducting
various hearings throughout this country had not taken an inordinate
amount of time reviewing pages and pages of documents on our own



301



that were available, we would not have compiled the vast record
that we did. I particularly wish to commend members Harvey and
Olson for their diligence and hard work in pursuing these matters
at these hearings. Indeed, as you have certainly discovered, we
were only able to barely scratch the surface. For that little bit
of scratching we were able to accomplish much in that short period
of time. For that, we were criticized for being "against the poor"
and for trying to abolish the program. We wanted to look into the
concept of national support centers as we did in my hearings in the
state of Mississippi in August of 1982 (Exhibit D, attached). The
"cry" came out in the Legal Services Community that we were trying
to destroy national support centers.

Mr. Chairman, I could not discuss this matter today without
making reference to our final board meeting in December of 1982.
First of all, you should realize that when Mr. Olson and Mr. Harvey
appeared before the House of Representatives, they were highly cri-
ticized because we decided to have our final board meeting at the
Hyatt Regency Hotel in Washington, D.C. What Mr. Harvey and Mr.
Olson did not tell the Committee at that time because they did not
feel that it was necessary, was the fact that one of the main
reasons for taking that hearing to the Hyatt Regency was the need
for additional security due to threats against the life of at least
2 members of the Board as well as Mr. Bogard , and his family . I am
enclosing a copy of the transcript of that hearing as Exhibit E
for your re'cords so that you will be able to understand exactly
under what circumstances and atmosphere we had to conduct and carry
out our duties. There were outbursts from the audience, profanities
shouted by attorneys from the legal services program, and there



37-965 0-84 20



302



was every effort made to impede the progress of that meeting as
well as put on a great show and "theatre" for the members of the
press. Because we knew exactly what might occur, we decided to
have the entire two day hearing of December 16 and December 17,
1982 video taped. I would urge you Senator and any member of the
Senate who wishes to see it to review those video tapes to see for
yourselves what we were up against.

It is really a shame that, for one year, a small group of
people who considered themselves and their programs beyond review,
reproach or inquiry by anyone but those they considered friends
were able to impede the confirmation process and effective Board
oversight. Most of these people felt that their viewpoints were the
only correct viewpoints and that any person who would disagree with
options and alternatives were out "to get the poor". The meetings
of my committee and that of Chairman Harvey raised questions as to
how funds were being used, the role, function and activities of
national support centers, as well as to what extent and why LSC
funds or indirect benefits were going to outside organizations not
providing direct legal services to the poor. For these efforts, we
were constantly attacked and, even more importantly, three of our
members - Mr. Harvey, Mr. Olson and Mr. Parras, - were held hostage
as a price for the confirmation of the rest of us. I am pleased
that the President of the United States held firm and did not compro -
mise on the Confirmation issue .

The record will reflect a close parallel between Board Committee
efforts to question the use and expenditure of funds of recipients
and the negative publicity in the Congress and the press against
certain board members. It was not a matter of mere "coincidence"



303



that Mr. Harvey and Mr. Olson were called before a House "oversight"
committee after Chairman Harvey had taken action to reemphasize to
all grantees that no 1983 grants would be issued without Board
approval and after he and Mr. Olson had proposed controversial
regulations to restrict class action suits. Those in the Coalition
for Legal services, with knowing or unknowing assistance from the
press and the staffs of certain Congressional Committees, always
seemed to orchestrate a scenario whereby when the Board "got too
close", some other matter arose to divert attention of the American
people from the true issues .

As you know those House hearings led to the red-herring and
"smokescreen" issue of consulting fees and an attack on the Board's
choice in the selection of Mr. Bogard as its President. The press,
certain Congressional critics of the Board, of Mr. Bogard and of
the President of the United States had a field dayl This eventually
led, as I referred to earlier, to a prohibition in the LSC continuing
resolution against terminating the funds or grantees until a Board
was confirmed. The survival campaign had worked againl Unwittingly
the Congress of the United States had provided certain segments of
the legal services heirarchy with a "safety net" whereby it was most
difficult to deny refunding and created a situation where the board
was virtually paralyzed in that regard .

As a former staff member of two U.S. Senate Committees, I con-
sider the Congressional oversight process to fundamental, basic, and
essential to good government. The efforts undertaken by the "legal
services generals", self-appointed "apostles of the poor", and the
legal services "network" to create a smoke-screen of confusion,
innuendo and distortion of fact for the press and Congess regarding



304



Che real goals of the 1980 Board, was detrimental to that process
and basic administrative procedure. Even more unfortunate is the
fact that the legal services lobby was able to enlist, even if unwit-
tingly, many quarters of the national press, the House of Representa-
tives, the United States Senate, The American Bar Association and
others in its campaign. And today, all is well with those who launch -
ed this effort .

To conclude Mr, Chairman, I could not terminate my discussion
without a few remarks regarding the racial overtones and implications
of this entire process of the last few years. I noted with interest
that most of the leaders of the legal services survival campaign both
within and without the legal services corporation were white . When I
started reviewing the National Support Center structure, I noticed
with interest and raised the question as to why - out of 17 national
support centers - there were only 2 black Directors . In the area
of state support, there was only 1 black person out of 26 State
Support Center directors who were black. In the 9 Regions, out of
the 9 Regional Directors at the time we came aboard, I believe there
were only 2 blacks. In fact, the Director of the Southern region in
Atlanta was a white man and it seemed rather ironic for that to be
the case when there were so many black clients in the Southern states
and a great number of black project directors. Our Board did place
a black Director in that position and made Mr. Lyons a Vice President.
I also wondered why the minority caucus, which became a key part of
the Coalition For Legal Services had not been active in this issue.
The answer seemingly was obvious. The legal services generals dished
out the money, set up their own lobby operation and set their strategy
to determine what was best for the poor people and blacks in the pro-



305



gram. It was the same old story of them saying, "just sit back and
be quiet poor people, we will tell you what is good for you; we will
tell you who your friends are".

Mr. Chairman, I still believe that a certain degree of the hos-
tility directed toward me, as the black Vice Chairman, was because
I did not fall "hook, line and sinker" for the "business as usual"
practice of many of these self annointed white "apostles of the poor".

I have always been sensitive to and question Che motives of
those white persons who on one hand tell you how liberal they are
and on the other hand have few blacks in their organizations other
than those who express agreement. My views were affirmed by conver-
sations in private with black clients and some black attorneys in
the program on several occasions.

A black client once told me that she had considered the entire
LSC structure - headquarters. Regional Offices, Support Centers,
etc. - as "racist as it could be" . On another occasion, I was told
that the "leadership of the legal services community had a liberal-
minded white mentality" . They wanted clients to "be seen and only
heard when it would look good for some friends or receive good press" ,

In this regard, I noted often to my colleagues and the board
that I had had many communications from clients themselves telling
us to proceed and that there were many problems in the legal services
community. However, they were very clear in making certain that
their names would not be revealed because of reprisals . The same
applied for both black and white project directors in the legal ser-
vices program around this country who had called me saying, " pursue
your investigations because there's a lot to be discovered" . They
too did not want their names revealed . There was fear and outright



306



intimidation because the "network" which had been in conLrol since
the days of the OEO were goins to make sure that only their friends
and sympathizers were to have any positions of authority and influ-
ence . An example of such a communication was a letter to me dated
August 30, 1982 from a Northeastern State Client's Council. I would
like to read excerpts from this letter excluding certain references
to names where necessary. It reads as follows:
"Dear Mr. McKee:

Since hearing of your appointment to the L.S.C. Board
of Directors, I have heard many rumors as with any appointee
anywhere. Since then, ( name deleted ) and I have talked and
I was privileged to read a copy of your speech to the
Louisiana State Client's Council. Now I feel as though the
clients have found a friend.

Many of us have worked long and hard to bring about
greater involvement of clients in the legal services move-
ment . We have been used and misused by many of the very
people who are supposed to be our advocates and our friends .
The very agency or agencies that you would think would be
our strongest advocate, leaves a lot to be desired (N.C.C.).

The corporation gives N.C.C. some money we feel that
this is just to keep other clients' organizations quiet.
Everyone appears to be prospering on money that is supposed
to be used to provide quality legal services to clients .

Clients have received training but there is very
little they can do with the training. It is like a dead
end if clients become too vocal, they are harassed and
"discredited. But when Legal Services' funding is threatened
suddenly they want all the client participation they can
"get. As soon as the funds are restored, we go back to the
same old frustrations ..." (emphasis added).

I do not feel that I should devulge the name of the client's

council in question since the letter was written to me in confidence

for fear of reprisals. Many of the clients are not in a position

to risk offending some of the people who have been directing the

survival campaign. If Carlton Sherwood, formerly of WDVM-TV, Channel



Online LibraryUnited States. Congress. Senate. Committee on LaboOversight of the Legal Services Corporation, 1984 : hearing before the Committee on Labor and Human Resources, United States Senate, Ninety-eighth Congress, second session, on review of the Corporation's documents to ascertain whether there are any problems with the agency's policies that need to be → online text (page 25 of 42)