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 7 of 42)
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^ Review of Legal Services Corporation's Activities Concerning
Program Evaluation and Expansion (HRD-80-103, Aug. 28, 1980).

^Legal opinion to Representative Benjamin A. Gilman (B-1 63762,
Nov. 24, 1980).



67



to statutory lobbying restrictions until May 1981 and did not
approve more specific lobbying regulations for LSC-funded
programs until 1983.

In our August 1980 report we noted that exceptions to the
statutory prohibition of lobbying activities by LSC-funded
programs gave the programs wide latitude to engage in these
activities, which had raised congressional concerns about the
propriety of such lobbying. We recommended that LSC (1) revise
its regulations to more specifically define the legislative
restrictions on local programs' lobbying activities and the
types of activities that are not permissible and (2) implement
procedures to insure compliance with the lobbying restrictions.

In our November 1980 legal opinion, we again addressed
LSC's authority to expend appropriated funds for lobbying
activities. We concluded that LSC's authorizing legislation and
restrictions on the use of its appropriations prohibited LSC and
its grantees from expending appropriated funds for publicity or
propaganda purposes, such as "grass roots" letter writing and
telephone campaigns, designed to induce the public to contact
elected representatives for the purpose of influencing legisla-
tion pending in the Congress or in any state legislature. We
pointed out that LSC's regulations did not clearly define
which lobbying activities were prohibited and which were
permitted. We again recommended that LSC revise its regulations
to clarify its policy guidance on lobbying activities and fully
explain the statutory restrictions on those activities. We also



68



reconimended that LSC include appropriate restrictions in grant
instruments and contracts with providers of legal assistance to
insure that LSC-funded recipients had actual knowledge of these
restrictions on grass roots lobbying.

In a December 2, 1980, letter, LSC's president told us that
its general counsel would raise the issues covered in our
November 1980 legal opinion with the board of directors.
Although LSC approved revised regulations in March 1981, they
did not address the concerns which led to our recommendations.

In February 1981, a member of Congress asked GAO to review
documents he had obtained from LSC relating to its survival
campaign and determine whether any of the activities described
in the documents violated statutory anti-lobbying restrictions.
In a May 1981 legal opinion* we again concluded that LSC had
erroneously construed its authorizing legislation so as to
enable LSC and its fund recipients to expend appropriated funds
to solicit the public to contact members of Congress concerning
legislation affecting LSC or the recipients.

LSC's president responded to our May 1, 1981, opinion by
stating that LSC disagreed with GAO's interpretation of the
applicable legal provisions restricting lobbying activities. He
said that LSC's view was that it and its recipients had author-
ity to expend federal funds on grass roots lobbying campaigns



^Legal opinion to Representative F. James Sensenbrenner, Jr.
(B-202116, May 1, 1981).



69



concerning legislation that affected LSC or the recipients.
However, the president told us he had directed all LSC employees
to stop all activities coming within our definition of grass
roots lobbying and would notify the board of directors of our
opinion and request that the board consider changes in regula-
tions applicable to fund recipients.

Although we first recommended that LSC change its regula-
tions restricting grass roots lobbying by fund recipients in
August 1980, it was not until June 5, 1981, that LSC's president
advised the board of our recommendation. In March 1983, about
2-1/2 years after we first recommended that LSC revise its
lobbying regulations, LSC published revised anti-lobbying regu-
lations for LSC-funded programs.

LSC INVOLVEMENT IN THE
SURVIVAL EFFORT

Numerous LSC memoranda and discussions with former senior

LSC staff5 indicate that during late 1980 and 1981, LSC's top

priority was to build a local base of support to insure

continued federal funding of legal services to the poor and

oppose additional restrictions on LSC fund recipient

activities. While former senior LSC staff acknowledged playing

a leadership role in LSC's survival effort, they told us they

did not require local programs to implement the strategies they



^Former senior LSC staff includes the president, the vice
president for finance and management, the director and deputy
director of the office of field services, the director of the
research institute, and the director of the office of
government relations.



70



devised because of their belief in local decisionmaking on the
use of LSC funds. Nonetheless, former LSC senior staff said
that they believed it was legal for LSC fund recipients to
engage in grass roots lobbying on LSC ' s reauthorization and
appropriation legislation because these matters directly
affected them.

According to former LSC senior staff, initial plans for the
survival effort were developed at the November 1980 annual meet-
ing of the National Legal Aid and Defender Association in San
Juan, Puerto Rico. An agenda for a meeting in San Juan included
discussions of (1) establishing a national strategy committee to
set strategy and policy to insure LSC's continuation, (2) iden-
tifying conservative supporters of LSC who could influence
congressmen and senators, (3) establishing a communications
network between state coordinators and LSC headquarters, (4)
building coalitions with groups supporting LSC, including labor
unions, church groups, the League of Women Voters, and others,
(5) encouraging editorial support from the media, (6) developing
direct mail and letter writing campaigns, and (7) encouraging
development of an independent committee of conservative polit-
ical and religious constituencies who supported LSC.

Following the San Juan meeting, LSC memoranda, many of
which were included in this Committee's July 12, 1983, hearing
record, indicate that LSC developed a detailed plan designed to
urge persons interested in LSC programs to contact members of
Congress and communicate their support for LSC reauthorization



71



and appropriations measures being considered by the Congress.
These plans were implemented through regional project director
meetings held nationwide during December 1980 and January 1981.
According to LSC memoranda and former senior LSC officials, these
meetings were intended to give program directors the information
and training necessary to build a local base of support, which
they believed was essential to insuring the survival of legal
services. According to a December 4, 1980, memorandum from LSC's
office of field services, the regional meetings were to emphasize
the need to (1) include state coordinators and others who have
been part of "the legislative and political information/action
network" in the survival effort, (2) develop state and sub-state
action plans, and (3) insure that local program directors
released program resources to build the local base of support.
Further, a December 5, 1980, memorandum from LSC's office of
field services directed LSC regional directors to "free up the
resources and time" necessary to help build the local base of
support of every program to assure the survival of that program
and of legal services.

According to LSC's former president, he kept the board of
directors informed of the survival effort through periodic
communications. Board members also attended the regional project
director meetings. The former president indicated that a
January 9, 1981, memo to the board from the director of LSC's
research institute accurately describes LSC's survival effort.
The memo explains the scope of the "potential threat" to legal



72



services and the various coalition-building, networking, and

grass roots lobbying efforts being undertaken by LSC and local

program officials to insure not only the continuation of

aggressive legal services, but the continuation of "aggressive

impact advocacy to improve the lives and power of poor people."

Former senior LSC officials told us that they advised

local programs on the strategies necessary to insure continued

federal funding of legal services, but did not require them to

perform these activities. However, the Denver regional director

told us he viewed these as general directives to be implemented

by local programs, and references in LSC memoranda to

survival-related activities as essential and the top priority

suggest that LSC senior staff intended local programs to

implement these activities.

IMPLEMENTATION OF THE SURVIVAL
EFFORT BY LSC ' S DENVER REGIONAL
OFFICE AND LOCAL PROGRAMS
WITHIN ITS REGION

At the January 1981 Denver regional office project
directors meeting in Boulder, Colorado, LSC-funded programs in
Texas and other states within the Denver region began developing
state plans to implement LSC-developed strategies to build local
bases of support for LSC. Our review of these state
plans and local program efforts to obtain support for continued
funding of LSC indicates that some of these activities were in
our opinion prohibited by federal law.

Even before this meeting, LSC's Denver regional director
was encouraging project directors within his region to solicit



73



support for LSC. In a November 19, 1980, memorandum, he urged

project directors to

"...take immediate steps to broaden our base of support
among elected and appointed officials, urban coalitions,
the judiciary, labor officials, the private bar (all
levels), community action programs, the broadcast and
private media, low income groups, and others."

At the Boulder meeting, project directors from each state
began developing state plans for building local bases of support
in their states through relations with the media, private bar,
congressional delegations, clients, and community groups.

At the Texas state meeting, for example, Texas project
directors agreed to organize local grass roots campaigns to
persuade their respective members of Congress to support LSC's
reauthorization .

LSC's Denver regional director told us he was responsible
for monitoring local program survival activities and insuring
that they were consistent with LSC survival strategies.

Our review of survival activities in Texas and other states
within LSC's Denver region identified grass roots lobbying
activities that violated federal law.
Texas

In March 1981, the Denver regional director and LSC
headquarters approved the creation of a Texas reauthorization
project to develop an extensive information network to keep
local programs in Texas informed of legislative developments in
Washington, D.C. The reauthorization project, which was funded
by a $60,392 LSC grant, frequently asked local program staff to



74



contact members of Congress to urge their support for LSC ' s
reauthorization. While our review of documents related to this
project and discussions with the project's director identified
instances of lobbying activities which in our opinion violated
federal law, the project was not engaged in an extensive grass
roots lobbying effort.

The director of the reauthorization project told us that
her interpretation of the LSC act and appropriation restrictions
was that local program directors and staff could contact members
of Congress to urge their support for LSC's reauthorization.
However, they could not, unless on their own time, ask indivi-
duals not employed by LSC or local programs it funded to contact
their congressmen.

We also identified instances of grass roots lobbying by
other LSC-funded local programs in Texas to generate support for
LSC's reauthorization. These activities included generating
support from numerous bar associations, judges, elected
officials, community organizations, and others.

In May 1981 the director of the reauthorization project
established Texans for Equal Justice (TEJ), a privately funded
bipartisan group of distinguished Texans, to lobby for LSC's
preservation. This group included attorneys, judges, elected
officials, bar association officials, religious leaders, labor
leaders, and law school professors and deans.

According to the reauthorization project director, TEJ was
established without LSC funds because it was going to be involved



75



in activities prohibited by federal law. To avoid engaging in
prohibited activities during working hours, she reduced her
employment with an LSC-funded local program to half-time, and
worked on TEJ matters out of her home on her own time. She told
us she was not compensated for her TEJ activities.
Arizona

According to LSC ' s Denver regional director and the Arizona
state plan, LSC funded programs in Arizona performed various sur-
vival-related activities, including

— soliciting supportive resolutions from local bar
associations,

— soliciting favorable media coverage and editorial
support,

— persuading clients to engage in letter writing and
telephone campaigns to congressional offices, and

— soliciting support from and forming alliances with
community organizations.

LSC's Denver regional director acknowledged that performing these

activities likely would have taken considerable time.

Colorado

The state plan for LSC-funded local programs in Colorado

detailed various survival-related activities, including

— soliciting supportive letters from individuals and
community groups,

— establishing letter writing quotas for employees of one
local program, and

— obtaining favorable media coverage and editorial support.



76



A Statement in a January 1981 newsletter from the Colorado

Coalition of Legal Services Programs, the state support center,

summarizes activities local legal services staff were encouraged

to undertake:

"...each local office and each individual staff,
client and board member will be called on to become
effective advocates. It is absolutely essential that
each of us become involved, identify supporters, develop
media contacts and respond to requests from the national
and state progrcuns."

New Mexico

LSC-funded programs in New Mexico organized a statewide

committee for the survival of legal services which developed a

list of specific tasks to insure LSC's survival. The tasks

included

— getting clients to send weekly letters to members of
Congress,

— providing clients with information to be used in letters
to congressmen and cautioning that this information not
be used for form letters,

— arranging for client groups to meet with members of
Congress, and

— encouraging staff to write letters supporting LSC to

local newspaper editors and obtaining favorable radio and
television coverage.

According to a New Mexico program memorandum, the caseloads

of certain local program attorneys were reduced by 10 or 15

cases to facilitate performing these activities.



77



. Denver Regional Director's Interpretation
|of Permissible Activities

According to LSC's Denver regional director, grass roots

lobbying activities, such as those described above, were

permissible under the LSC act because the lobbying concerned

legislation directly affecting LSC and the local programs it

funded. Although he acknowledged that LSC-funded programs

within LSC's Denver region engaged in grass roots lobbying

activities in early 1981, he told us these activities stopped in

May 1981 after he directed the local programs in his region to

comply with GAO's May 1981 legal opinion.

This concludes our statement Mr. Chairman. We would be
happy to answer any questions you or other members of the
Committee have at this time.

The Chairman. Well, thank you for your statement, Mr. Curtis.
The conclusions made in your statement seem to mirror the obser-
vations that Senator Denton and I and others on the committee
made last year, that the Legal Services Corporation was engaged in
a nationwide effort to organize a grassroots lobbying campaign to
protect its own budget and its agenda.

Now, our observations were much criticized at the time that we
made them, but your testimony today seems to vindicate those ob-
servations and the previous work done by this committee, so we ap-
preciate that.

Obviously, there's been much confusion over what constitutes il-
legal lobbying by the Corporation, its grantees, and contractors. In
order that all of us here today can understand the legal standards
that you were using in your investigation, would you please ex-
plain how GAO interpreted the various statutes governing the Cor-
poration's involvement in lobbying or legislative advocacy?

Mr. Curtis. The basic matter for consideration, Mr. Chairman,
seems to be whether it was direct lobbying for the individuals in-
volved, or whether it was grass roots lobbying. I have with me
here, this morning, John Lupton of our Office of General Counsel
to answer questions such as this and other legal questions you may
wish to ask.

The Chairman. Go ahead, Mr. Lupton.

Mr. Lupton. Yes, sir. Mr. Chairman, first, there is a general re-
striction against lobbying that has been in effect since 1952 which
is a part of the Treasury, Postal Service, and General Governnient
Appropriations Act. It is applicable not only to the appropriations
in that act, but to the appropriations in all other appropriations
acts as well. It restricts the use of appropriated funds for grass
roots lobbying; that is, lobbying whereby Government officials or
officials of Government corporations exhort members of the public

37-965 O— 84 6



78

or other people outside of their organizations to contact Members
of Congress to influence legislation that is pending before the Con-
gress. That is a general restriction on the appropriations of all Gov-
ernment agencies, including the Legal Services Corporation prohib-
iting grassroots lobbying.

Direct lobbying is lobbying by an official of a Government agency
directly with the Congress. The Legal Services Corporation has
some limited authority to engage in direct lobbying of the Con-
gress. There are two provisions within the Legal Services Corpora-
tion Act, one of which affects employees of the Corporation, and
the other which affects employees of recipients. In the case of the
Corporation, there is a narrow exception that permits it to engage
in direct lobbying when it is requested to do so by some govern-
mental body, such as this committee. The other exception allows it
to engage in direct lobbying when a matter affecting the Corpora-
tion is before the Congress. In such a case representatives of the
Corporation may appear before the Congress and explain the Cor-
poration's position on such legislation.

Those are the only two exceptions that are applicable to the Cor-
poration.

In regard to recipients, there are three exceptions. Recipients
have the same two exceptions that the Corporation has, to engage
in direct lobbying, and they also have an exception that allows
them to engage in direct lobbying on behalf of a client who has a
particular need for some legislative remedy.

These are the restrictions on the Corporation's use of its appro-
priated funds for lobbying.

The Chairman. Let me make sure that I understand your expla-
nation of what was or was not illegal in 1981. Under your defini-
tion, as I understand it, in 1981, could the Corporation instruct
members of its staff or even its entire staff, if it chose to do so, to
lobby Congressmen and Senators to continue funding of the Corpo-
ration or to oppose additional restrictions being placed on Corpora-
tion activities?

Mr. LuPTON. Yes; the Corporation and its recipients, under this
exception that I mentioned, could, in fact, engage in survival lobby-
ing; that is, lobbying for legislation that directly affects the Corpo-
ration.

Mr. Chairman. So the answer is yes on that question. Was the
same standard applied to grantees?

Mr. LuPTON. Yes, sir.

The Chairman. OK. Could the Corporation establish and fund an
organization to lobby Congress about issues other than the Corpo-
ration's survival?

Mr. LuPTON. No; the Corporation could not legally use its appro-
priated funds to support a grassroots lobbying campaign to influ-
ence legislation pending before Congress, whether it did this direct-
ly or through another organization.

The Chairman. So it could not fund an organization to do that?

Mr. LuPTON. That is correct.

The Chairman. Was the Corporation permitted to finance an or-
ganization designed to campaign against a State ballot measure as
it did in California with the campaign to defeat proposition 9?



79

Mr. LuPTON. It had no authority to engage in such activities.
This activity is expressly prohibited by the Legal Services Corpora-
tion Act of 1974.

The Chairman. So it was illegal to do that?

Mr. LuPTON. That is correct.

The Chairman. Was the Corporation permitted to direct or en-
courage local programs to lobby Congress for continued funding for
the Corporation, or to oppose any restrictions from being placed on
Corporation activities as it apparently did in the Denver regional
meeting in January of 1981?

Mr. LuPTON. It is our view that the Corporation may not encour-
age, or direct its recipients to engage in that kind of lobbying be-
cause that is grassroots lobbying.

The Chairman. So that would be prohibited lobbying?

Mr. LuPTON. Yes, sir.

The Chairman. We are talking about what went on in the
Denver meeting in 1981?

Mr. LuPTON. Yes, sir.

The Chairman. OK. Could local programs ask eligible clients and
members of the community to write letters to Members of Congress
or coordinate or even arrange client visits to Members of Congress
as they did in Texas, Kentucky, Florida, and elsewhere?

Mr. LuPTON. No, this would be prohibited because it is grassroots
lobbying; and of course, our investigation only covered Texas

The Chairman. But if that happened in those other states, that
would also be prohibited?

Mr. LuPTON. It would be.

The Chairman. OK. Was the Corporation or its grantees permit-
ted to use their resources to facilitate the operation of grassroots
lobbying campaigns to pressure Congress to continue funding of the
Corporation or to oppose additional restrictions from being placed
on Corporation activities through such methods as appointing staff
members as State or national coordinators, distributing memoran-
dums, notifying recipients of upcoming political events, and demon-
strations or providing hotlines, mailing lists, or other such means
of communication? Were they permitted to do that?

Mr. LuPTON. No; the Corporation has an obligation to ensure
that appropriated funds are not utilized for grassroots lobbying
campaigns to influence legislation.

The Chairman. I see.

In your prepared statement, Mr. Curtis, you state that last year
you issued a legal opinion in the fall and based upon materials sub-
mitted to you by the committee, that this year you have investigat-
ed activities in the Denver regional area. But as I understand,
GAO's investigation of the Corporation, has not been as restrictive
as your summary implies; is that correct?

Mr. Curtis. That's correct, Mr. Chairman. We also included, at
your request and Senator Denton's, as Senator Denton referred to
earlier, mirror corporations, transfers of property, fund balances,
RIF's, and some other matters. We restricted our work to comply
with the timeframe for these hearings, and we are testifying pri-
marily today on the survival activities.

The Chairman. I understand you did receive hundreds of docu-
ments at LSC headquarters; you interviewed most of the former



80

senior staff, and even some of the current staff members. Is that
correct?

Mr. Curtis. That's correct.

The Chairman. When you conclude in your prepared statement
that during 1981— or 1980 and 1981, LSC's top priority was to build
a local base of support to ensure continued Federal funding and to
oppose additional restrictions on LSC activities, were your observa-
tions based on the massive volume of information, documentation,
and interviews that you undertook?

Mr. Curtis. They were, Mr. Chairman.

The Chairman. Would you then agree with the observations
made by Senator Denton and myself that in 1981, officials at the
Corporation used Federal funds to organize a grassroots lobbying
campaign to protect the Corporation's budget and, of course, to at-
tempt to oppose additional restrictions being placed on the Corpo-



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 7 of 42)