Law News

Legal Services Corporation Prepares for New Funding Battle

by Dawn Mendez
July 14, 1999

In 1995, when Congress forbid the Legal Services Corporation (LSC) from representing public housing tenants in drug-related eviction cases, people thought that the group had severed its ties to criminal justice cases. They were wrong.

While the legal help provided by the corporation is technically civil, the variety of its cases, which often involve family crises, provides a "social safety net" for persons who could easily fall into the criminal justice system, according to John McKay, the president of LSC.

LSC's client roster shows that 35 percent of its cases concern family violence, mainly domestic abuse between spouses or live-in or common-law couples. "When you go into a courtroom for a domestic violence hearing, typically you see the abuser and his attorney, the prosecutor, but the victim has no one. Our job is to represent that woman," said McKay. The corporation also handles evictions, foreclosures, collections, bankruptcy, child support, visitation, and custody cases.

Twenty-five years after its inception, LSC is once again fighting its critics, redefining its mission, and gearing up to ask Congress for an additional $40 million in funding. The corporation, which funds 269 affiliates or programs around the country with a budget of $533 million-more than half of which is granted by the federal government-is a private, non-profit corporation established by Congress to ensure equal access to justice under the law for all Americans who otherwise would be unable to afford it.


While LSC is accustomed to validating its existence to its detractors, a recent General Accounting Office (GAO) report of the organization might have raised doubts about LSC even among its friends. The GAO auditors released findings that showed several of the major affiliates, namely those in Baltimore, New York, Chicago, Los Angeles, and Puerto Rico, had overstated the number of cases they handled by 75,000 in 1997. Officials at the GAO responded to five members of Congress who had requested the audit. The audit states:

The five grantees we reviewed had substantial errors in the number of cases they reported closed during 1997, as well as the number of cases they reported remaining open at the end of the year. Three grantees informed us that they had overreported closed cases; three informed us that they had overreported open cases; and one informed us that it had underreported open cases. The primary causes for these errors were[:] (1) improperly reporting to LSC cases that were funded by other sources, such as states; and (2) problems inherent in grantees' case management reporting systems.

In its own defense, LSC said that its Inspector General had reached a similar conclusion, but said the definition of what a "case" was was at the root of the problem.

"We welcome these findings," McKay said. "We see this as a self-correction. We have a 20-year old system that has not differentiated clearly enough between 'cases' and 'basic services.' That's where the error occurred; basic services, such as advice given over the telephone, were counted as cases when they should not have been." Basic services also often include criminal referrals, when a prospective client calls a local office to ask for a criminal defender for a friend or relative in trouble with the law. The LSC staffer will point out that the group is unable to help, but they frequently recommend a criminal defense attorney who can assist.

But Virginia Thomas, a senior fellow who researches government accountability and congressional oversight at the Heritage Foundation, a conservative think tank in Washington, D.C., thinks other reasons cause the miscalculation. "I feel they miscount numbers, though not with malicious intent," she said. "Federal funding is dependent on caseload numbers and there's clear impetus to inflate these numbers. Both the LSC's own audit and the GAO audit found this discrepancy. Why? Because there's no clear guidance from the top."


The GAO report comes at a bad time for the corporation, which is planning to go before the House Appropriations Committee to request an additional $40 million. The five Republican members who requested the GAO audit serve on the Appropriations Subcommittee, Commerce, Justice, State, and Judiciary, with jurisdiction over funding LSC, and they could hold the fate of the corporation in their hands.

In 1995, the same subcommittee agreed to let the LSC stay in business, but reduced its federal funding by one-third. Congress also placed restrictions on the corporation, strictly limiting the types of cases it could handle. Since 1996, LSC has been banned from handling class actions, challenges to welfare reform, collection of attorneys' fees, lobbying, litigation on behalf of prisoners, representation in drug-related public housing evictions, and representation of certain categories of aliens. Thomas argues that these changes were needed because LSC was seen as too political. "These were legitimate restrictions that curtailed egregious aspects of what LSC was doing," she said. "LSC needs to be run more like the Public Defender System, providing aid in non-criminal, critical legal services. It should either be part of the government or not, not residing in this grey zone."


The LSC in Washington, D.C., continues to dispense funds to its 269 affiliates while adhering to the new rules. McKay argues that the caseload has not changed since before the rules' implementation. "We've always given priority to the health and welfare of women and children," he said. "Domestic violence, landlord and tenant law, and the elderly; that's where we've always been most helpful."

The attorneys who represent LSC clients serve almost two million clients in a year. In 1997, 3,494 full-time attorneys were on staff. Additionally, 59,041 lawyers provided either pro bono support to LSC or worked in contract, judicare, or some other capacity. (Judicare is legal aid given in rural areas where an attorney may serve a large, very remote part of the country.) LSC, according to McKay, provides invaluable experience for attorneys either to help the poor on a full-time basis or to do pro bono work. "I was a pro bono lawyer for 15 years in Washington state while employed full-time as a prosecutor," said McKay. "At LSC I worked mostly on launching eventual criminal prosecutions in domestic violence cases. In those cases, the victim has no representation, which is where legal aid lawyers come in."


Thomas, while agreeing that attorneys do good work at LSC, nonetheless said much of the "basic service" the corporation provides is done by paralegals and secretaries. "The principle that poor people should be helped by legal aid is necessary to the justice system," she acknowledged. "But oversight is needed at LSC. I believe the federal funding should end and the organization should either be privatized or moved to the (U.S.) Justice Department."

McKay said he's heard these criticisms before and expects to hear them again. He remains optimistic that the Republican-controlled House will grant LSC's request and increase its funding within the next few weeks. "What I'm counting on is that both parties generally support what we do," he said. "The government cannot have a justice system that is not open to poor people. The Founders knew that those who hold power will at one time abuse it; it's to prevent that abuse, and because we believe totally in an obligation to others, that LSC must continue to exist."

Copyright 1999 NLP IP Company -- American Lawyer Media.